Bankrupt Governments Likely To Confiscate Wealth And Independence

Excellent article from Gold Silver Worlds on what appears to be a probability as the US Government not only increase the national debt limit but did not put a cap on the limit on how much the government can borrow. I am not posting this article by Claudio Grass to suggest you run out and buy Gold. Although I believe in having Gold and Silver on hand, it is only one aspect of total preparedness.  I am posting this for overall situational awareness.  

I am also posting this article as it supports the the 100% probability of an economic collapse unless things change drastically and soon.  Whether you call it a financial or monetary collapse or a super depression really doesn't matter.  What matters is the likelihood of the government confiscating not only precious metals but other forms of wealth in order to perpetuate their control.  They (the Government) will have no choice if they want to retain control and power.    


The first Liberty Forum will take place between December 4th and 8th. The conference has a focus on asset protection, wealth preservation and the preservation of liberty. Some off-the-chart successful investors, metals and resource experts, offshore service providers, and international legal and accounting professionals will be on hand to help with personal preservation strategies.

Keynote speakers are Peter Schiff, Doug Casey and Mark Skousen. One of the many lectures will be held by Claudio Grass, a passionate advocate of free-market thinking and libertarian philosophy. Mr. Grass is convinced that sound money, i.e. gold and silver, and human freedom are inextricably linked to each other. In his function as Managing Director at Global Gold in Switzerland he offers investors a safe, convenient and competitive Swiss solution for buying, selling, storing and delivering a variety of physically allocated bullion coins and bars, completely outside of the banking system and protected under Swiss law.

Claudio Grass has written several white papers, research notes and articles. In them, he has clearly explained that the most likely outcome of the current global debt situation is that governments will try to inflate their debts away. That is what has always happened throughout history. The current evolution of events has not changed his view. The latest actions by Bernanke, in particular his decision not to stop QE, underlines the validity of Claudio Grass’ view. “Taking Yellen’s history into account, I am certain she will follow in the footsteps of her predecessor. Therefore, nothing has changed from my point of view.”

The Liberty Forum conference brings up some fundamental statistics about the debt situation

•  The U.S. currently owes 885% of its GDP, more than any other industrialized country.
•  America hasn’t passed a budget since April of 2009.
•  As a country, the U.S. has had a budget deficit in 42 out of the last 47 years.
•  U.S. expenses are 56% higher than its revenues.
•  America expects to double its debt within the next 10 years (the interest on that debt alone will equal $1 trillion a year).
•  Its annual income is $2 trillion, while its total debt obligations are $121 trillion (that’s a debt ratio of 60/1 – typically anything over 1/1 is a HUGE red flag to any investor, indicating that a country is not likely to be able to pay its debts in 12 months’ time).

The true US financial situation remains remarkably underexposed as the mainstream media is mainly concentrating on Europe and increasingly the emerging markets. We asked Claudio Grass about his opinion on that.

German economist Wilhelm Röpke once said: “The theories men construct, and the words in which they are framed, often influence their mind more strongly than the facts presented by reality”.

This sentence nicely describes today’s mindset amongst most people in the western word. It is no wonder because we were raised in a government controlled education system, in which we are indoctrinated from childhood that the path of success is based on memorizing and repeating! We are not taught to question [authority], the reason for this is that it is much harder to manipulate logical or independent thinkers.

This is why I am such a fan of history; our world is the result of thoughts and actions from the past. You see the cause and effect? The problem is that the actual system we live in focuses only on the effects but never discloses the underlying causes, let alone trying to connect the dots. This research needs to be done by the individual. However, research requires a healthy portion of curiosity and bravery as well as independence and self-confidence to stand up for one’s own opinion, which will be in contrast to the story we are told by governments and the mainstream media. The emperor has no clothes; however, it always takes time until the child that reveals it will be heard.

The world reserve currency is still the U.S. Dollar (USD) and more than 60% of all the reserves with central banks are still based on the USD, and only approximately 25% are in Euros. Therefore, many more governments and pressure groups are dependent on the USD and have an interest in not disclosing the truth about the actual state of the dollar. Also, in terms of global trade the USD is still the prevailing currency, especially as long as the USD keeps its hegemony over the Middle East and its oil reserves. In addition, specifically related to the USD, there is a single institution that has decisive power. It is therefore much more reactive than the Euro system with different central banks and different nations, each with their own national political agendas. Therefore, the power of the Euro is much more limited, which makes it also more fragile and vulnerable.

Bankrupt governments likely to confiscate wealth and independence

Claudio Grass goes on to point to a concerning trend: as governments run out of money, people’s sovereign rights to wealth and independence get increasingly trampled. What the world is experiencing for the last 100 years is an ongoing centralization especially in terms of credit – the so called monetary system – and political power in the hands of a few. This is only financeable if existing wealth is redistributed from the bottom to the top, through inflation and taxation. Since 2007 the average U.S. family wealth plunged 40%. Back in 1913 the average government quota was less than 10%. Today, depending on the country, (or the state) government quotas are between 50-70%. The trend is obvious! This system can go on until the remaining 50-30% is nationalized. The result is simple: Slavery!

That’s why it is my conviction that we are going to see “tools of financial repression” kicking in much harder within the next 5 years, which will impoverish most of middle class, but also affluent people. I see some parallels with the Weimar Republic before World War II. Back then, the US government in cooperation with Wall Street, flooded especially Germany with cheap credit by implementing the Dawes and Young Plan during 1924 and 1932. Afterwards it happened what always comes after an artificial boom: destruction and bust. This created a toxic environment for persons such as Hitler, Stalin, Franco and Roosevelt, to name just a few who came to power at about the same time, and more important, promoted more centralized political power and war. People were exhausted and the future was not really bright – and we are facing the same symptoms again today. We have 50 Million Americans living off food vouchers and this figure is still climbing. I believe history does not repeat itself but it rhymes, and therefore people need to understand that within the actual system property-rights do not really exist. People need to realize they are dependent on the whims of government and banks.

The first signs of these trends are already visible. Politicians and mainstream media say that things are improving which does not reflect the above mentioned trends. Most economic reports even expect economic growth. How can expectations be so different while everyone is looking at the same data? Claudio Grass answers that question with a quote of Edward Bernays, Father of Propaganda.

“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in a democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. [...] We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society. [...] In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons … who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind.”

Include a monetary crash in your risk assessment

Claudio Grass looks at the mess the world is in today and suggests to include a possible crash of the actual system as part of one’s risk assessments. Therefore, an investment into a tangible asset, without having any counterparty- risk, makes absolutely sense.

It is impossible to foresee when the system will crash. Inevitable does not necessarily mean imminent. However, “I am convinced that this world will look very different in the coming years and what can be said, too, is that it is not developing in the right direction.”

Anthony C. Sutton (British and American economist, historian and notable author, answered this question once by stating: “It will not stop until we act upon one simple axiom: that the power system continues only as long as individuals want it to continue, and it will continue only so long as individuals try to get something for nothing. The day when a majority of individuals declares or acts as if it wants nothing from government, declares it will look after its won welfare and interest, then on that day power elites are doomed.”

I started buying physical Gold and Silver in 2004 and so far it has been a very good investment. At the same time I explored the fascinating history of money; it reads like a criminal novel or even like a horror story in some cases. I personally support a system that is based on free market money where people can freely decide what they want to use as currency – sound money for a sound society. Money stands in the center of how human beings live together. It must be consequently a property title and not a debt promise. Gold and Silver are money in its pure form! They allow people to exchange goods, based on mutual respect and honesty….. With sound money we used to have production and trade and therefore prosperity. With fake money these periods have been dominated logically by corruption and wars; or in the words of Lord Acton, “Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men.”

UrbanMan's comment: I agree with everything in this article except the very last sentence" "Great men are almost always bad men.” This is simply not true.  Great men are most often common men to rise to meet a challenge. 

Short Questions and answers on SHTF

Survival Team Building "Urbanman, I really get the having a survival team concept since a single man has to sleep sometime. I live in a house by myself in lower income area. It's safe, just older, lower income houses that's probbaly why my Grandma didn't sell it, but let me live here - she is out of state. I don't believe there is anyone under 60 years old in the neighborhood. I live here because it's close to work, close to night classes and rent free although I pay for utilities, repairs and taxes. Even then doesn;t leave alot for prepping. I have some of my old Army gear, a couple rifles and a handgun and some food stored. I am interested in growing a garden too. Do you have some tips for building a neighborhood team that is mostly old foggies?"

UrbanMan's reply: It is good to remember that sometimes old age and treachery wins out over youthful vigor and skill sets. I am serious, but even more serious and to the point, team building, with basically strangers, starts with meeting them, building rapport, edifying yourself meaning building their confidence in you as a decision maker. To start off the bat with having neighbors build bunkers, buy guns, stock pile ammunition, store food etc., may make you seem like a crazy. A neighborhood watch program with a visiting police officer explaining this program for the neighborhood is a good place to start. You knocking on doors and introducing yourself, passing out your cell phone number, asking these elderly people if you can do anything for them will continue the rapport building. At a very minimum you have to know these people before the collapse.

Gold and Silver value After the Collapse I have had several other questions relating to the value of Silver or Gold after a SHTF event and how much value they will hold or should hold. Basically reader's looking for some sort of outline on how they sholuld value their Precious metals by the ounce or silver melt value coins.

I have long held off answering this question but the answer (the value of precious metals) could be as diverase as the people bartering with it. I think the value of silver and gold will go up each day preceding the collapse (if the collapse catalyst is a signficant event) until there is no more food, then the value will go down, meaning more precious metals to buy any commodity. I have cash on hand for the transition period where paper money is scare, then gold and silver for purchasing power after fiat currency loses it value completely and is not accepted, then it will be a pure barter society for the most part. I picked up a sledge hammer, an axe and a tool box with loose wrenches and sockets at the flea market the other day,..$20 for all. My wife say's "Are you really buying more tools! You have an endless supply." My reply: "I got them cheap, they don't take uo much room at all, and they will be good barter items when people stop accept money and precious metals. No go back to geting those cucumbers and tomatoes growing!".

Gold Won't Save You?

I am a proponent of the average survivalist holding some precious metals, such silver bullion and coins that have silver melt value, and, even some gold is they can afford it. This is to use primarily as barter in the phase of an economic collapse where people realize fiat currency has no value or at least will not accept fiat currency.

Others look at Gold and Silver as an investment for hyper inflation. And to be sure there is substantial potential for becoming very well off by having significant holdings of precious metals in the (hopefully) later stages of a collapse where the country and economy are being rebuilt .

Enter Marc Faber's premise that "Not Even Gold Will Save You From What Is Coming", an article published on the well respected Business Insider.

Marc Faber, who authors the Gloom Boom & Doom newsletter, is usually pretty bearish on stocks and bullish on gold. Lately, though, gold doesn't seem like it can catch a bid.

"Despite the continued reverberations regarding the Cyprus bailout and its involvement of bank deposits, gold struggled to maintain the positive momentum created in the first two weeks of March and instead now looks very likely to move lower, towards $1580 an oz," wrote Deutsche Bank commodities analyst Xiao Fu in a note this morning.

So, what does Faber have to say about it?

This morning, on Bloomberg Surveillance with Tom Keene and Alix Steel, Dr. Doom was asked why gold wasn't holding up.

Here's his explanation:

When you print money, the money does not flow evenly into the economic system. It stays essentially in the financial service industry and among people that have access to these funds, mostly well-to-do people. It does not go to the worker. I just mentioned that it doesn't flow evenly into the system.

Now from time to time it will lift the NASDAQ like between 1997 and March 2000. Then it lifted home prices in the U.S. until 2007. Then it lifted the commodity prices in 2008 until July 2008 when the global economy was already in recession. More recently it has lifted selected emerging economies, stock markets in Indonesia, Philippines, Thailand, up four times from 2009 lows and now the U.S.

So we are creating bubbles and bubbles and bubbles. This bubble will come to an end. My concern is that we are going to have a systemic crisis where it is going to be very difficult to hide. Even in gold, it will be difficult to hide.

Faber is, of course, still bearish on U.S. stocks. He told Bloomberg that he sees "considerable downside risk" in the market.

Listen to Mr Faber yourself and see if he makes sense.

Preparing for the Collapse Links, 1 January 2013

Happy New Year All.
Continuing with requests to provide more linked articles to readers, the following are some of the better articles I have came across in the last week pertaining to preparing for and seeing the beginning of the collapse, and,  surviving the chaos and uncertainly of this coming collapse.


Looting the Treasury is the Last Act.
One of the last acts in a failed nation state is the looting of the treasury. Although politicans and their mentors have been looting the U.S. for decades,..nay, centuries, this report is not about the U.S. but on Afghanistan. At least someone sees the value of Gold.

Alternative Gardening.
An excellent article from Peak Prosperity on the Back to Eden Gardening method on using wood chips and a natural method of gardening. Having the ability to grow our own food is essential to long range survival plans. Hope you have a sufficient amount of non-hybrid seeds in your survival stocks.

Demand For Gold "CombiBars" Soaring.
Swiss refiner Valcambi which has created a CombiBar, a credit-card sized, 50 gram block of 99.9 gold, which is precut, and which can easily be broken into one gram pieces which can then be used as forms of payment in an emergency. And since one gram of gold has roughly the value of two ounces of silver, it is a far more practical lowest common denominator unit of exchange than the traditional one ounce minimums in broad circulation. impractical medium of exchange, as the traditional denominations are so large one would be unable to trade one ounce (and certainly one bar) for every day needs.

Nine States with Sinking Pensions.
Illinois is one of the states with an unfunded pension, just 45% of the state’s pension liabilities were funded in 2010. The state labor unions has fought and stalled the legislation to try to fix the underfudning. Standard & Poor’s cut the state’s credit rating in August from A+ to A, pointing to a “lack of action” in tackling the state pension system’s massive unfunded liability. Moody’s Investor Service downgraded the state earlier in the year and warned that further downgrades are possible if no action on pensions is taken. There are many states and many municipalities that are going bankrupt. What happens when there are millions of broke, hungry people who are not getting thier pension check that so are angry at the government?.....

Over the fiscal cliff: How hard a landing?
Set to start in 2013 unless Congress and Obama act to stop them are the following economy killing events: $536 billion in tax increases; $110 billion in spending cuts divided equally between the military and most other federal departments; most real experts believe that this will lead to a big recession, a bigger jump in unemployment and financial market turmoil.
It’s Not a “Fiscal Cliff” … It’s the Descent Into Lawlessness.
Lawless Looting and Redistribution of Wealth that we were warned about by financial gurus in 2008 may be upon us in 2013. As big banks go bankrupt; with bankrupt cities and coming states here in the U.S.; nations in Europe tanking from debtor status and the ones that are afloat using the nuclear options of austerity programs to try and stay solvent....the collapse storm is brewing and moving.

DHS Insider gives report on gun confiscation and martial law (plan) to investigator in face to face meeting.
This is a two part interview claimed to be authentic and posted on the Steve Quayle site. I find it hard to believe there is actually a plan for this, althought I do believe many politicians would make it happen if they could.

Oil prices rise as 'fiscal cliff' talks to resume.
Oil prices rise as Obama heads back to Washington from vacation. This, I fear, is the best prices we'll see for a long time to come, if forever. As the dollar devaluates, as the U.S. debt and fiscal policies slow or destroy any economic recovery, the prices will go up. We could possibly see $200 a barrel oil - $8 a gallon or more gasoline - before the weight of a giant depression collapses the country.

Investors Buying 50 Times More Physical Silver than Gold?
The geist of story is the surprise that the price of silver has remained at such a depressed level compared to gold. Historically, the price ratio between gold and silver has been 16:1, when both were currencies. Today the ratio is 55:1, so what are the numbers telling us? We believe this is one of those times when smart investors will be well rewarded with buying in silver.

Wealth From the Ground

UrbanSurvivalSkills.com has mentioned several times about it being a good idea to become a recipient of the Martenson Newsletters as Chris Martenson publishes newsletters and links to information of value to Survivalists and indicators of the coming collapse.

In one of his latest newsletters, Martenson post’s an article written by James Dines, titled “Owning 'Wealth In The Ground' Is Your Best Bet to Surviving the Coming 'Supernova of Inflations”. Although I have never heard of James Dines, apparently his record of making good calls is pretty strong.

Go here to read the whole article.


Dines made some pretty good comments, among them he sees the excessive credit in the financial system as having placed the global economy on a collision-course with hyperinflation. And of course we know that is true. 15+ Trillion dollar debt by the U.S. Government and really now way to fix it. Too much of an austerity program will induce a collapse as well continued spending. We have fenced ourselves in. And before some of hurl electronic bullets at me, the “we” I’m talking about is America and our elected politicians.....not “we” as Survivalists.

The rapidly increasing demand, increasing prices and shrinking supply of oil may be the catalyst. Dines predicts that at some point, when the military grasps the declining supply, they will seize the remaining supplies and you will not be able to drive your car until the last drop.

Dines states that the price of gold and silver did not go up. It is the fiat currency value that went down. Gold and silver are the ultimate money, coins of which are good anywhere in the world, no matter what is stamped on them, and that is the money. Gold (and Silver) are the only investible asset in the world that has gone up the last 11 years without interruption, and that is because they are just running the printing presses. The more they do, the more value builds into gold and silver. If a Survivalist does not have any precious metals then they run the risk of having a hole, large or small, in the plan.....plain and simple.

The point of the Wealth in the Ground article is about the only assets that would survive an economic collapse and the chaos that went with it is hard assets. Hard assets, in part being, being physical commodities, mining companies, gold and silver. When I first read the title and linked to it, I thought I would find someone advocating Wealth in the Ground” to mean,…a safe and secure survival site; a full time, year round water supply; ability to grow crops to sustain your survival family;......but Dines did not touch n that, but it is a logical extension of the wealth in the ground argument.

Anyway, a good article to read in it’s entirety and the Martenson newsletter at the very least motivates you to prep harder. He is one of many sources I tune to almost each and every day,…sometimes spending 2 or 3 minutes looking for something of interest,…and sometimes spending 20 minutes or more reading something where I’ll think,…”that’s a good point”.

Gold and Silver - Perceptions Changing

UrbanSurvivalSkills received this comment from Anonymous…… ”I remained unconvinced that buying Gold or Silver is a smart move. Historically the prices have fluctuated, caused by the filthy rich people buying and selling large amounts to make enormous profits. Anyway, the ratio of Gold to Silver is constantly changes so people can lose their ass buying silver when it will be devalued against gold. If there is a really bad SHTF situation then all commerce will be conducted by either hyper-inflated dollars or through simple barter or trade goods. I also think there are people who are not thinking clearly about what can happen and scaring them into buying Gold and Silver is doing them a disservice.”

UrbanMan’s reply: Everyone has to make up their own mind on the value of owning precious metals, Gold and Silver, or even silver coins for their silver melt value. I know people in my income group who have spent 4x or 5x the amount I have spent on Gold and Silver. Obviously they value precious metals more; think that during a collapse or SHTF situation that it will be extremely valuable to own; or they are thinking about coming out of a collapse and beginning over with a lot of wealth.

I approach buying precious metals, overwhelmingly Silver, as a hedge against the projected worthlessness of paper money during a collapse and as a way to buy necessary items when barter or trade is not feasible. While I prefer Silver not to lose it’s value as I eventually want the world to return to normal and to pass off my Silver bullion and Silver coins to my family, it does not matter too much to me if silver drops to $10 an ounce. Once an economic collapse occurs, the value will certainly rise significantly. I simply own it to be provide a possibility of commerce after SHTF. I would much rather trade in Silver than in food or ammunition.

If you don’t want to procure precious metals, primarily Silver, as a contingency during hard times then that is your business. I just think the suggestion of making this decision after considering all the facts including historically use and value or precious metals; type of collapse and after affects we may see; and your current state of preparation.

Here are some facts from http://dollarcollapse

The US Mint sells about the same dollar amount of gold and silver coins, which means it sells 50 ounces of silver for every ounce of gold. UrbanMan’s notes: Today’s current prices were (approx): Gold/ounce $ 1,715.00 Silver/ounce $ 33.00 This is a near 52 to 1 ratio.

Ten times more silver than gold is produced each year, and the ratio in the earth’s crust is 15:1, so how can the price be 50:1? Expect a return to the historical norm of 15:1, which implies that silver will outperform gold.

The paper silver markets trade a billion ounces a day and the world only produces 900 million in a year. The amount available for settlement of these futures contracts is something like 1.5 million ounces, ludicrously little compared to the amount of paper. On the physical side most dealers are only seeing buyers not sellers. There are a lot more people who can afford a one-ounce silver coin than an ounce of gold.

UrbanMan’s notes: Consider this as well -

Today’s (Oct 2011) fuel prices were $3.55 a gallon and Silver is $ 33.00 an ounce. So one ounce of Silver would allow you to buy 9.3 gallons of fuel.

One year ago (Oct 2010) fuel prices were $2.90 a gallon and Silver was $ 23.00 an ounce. This would allow you to buy 7.9 gallons of fuel.

Two years ago (Oct 2009) fuel prices were $2.80 a gallon and Silver was $ 17.25 an ounce. This would allow you to buy 6.2 gallons of fuel.

One more thing: Roger Wiegand of www.TraderTracks.com posted the following alert: "Chances of a major problem in Europe have escalated. Chances of huge precious metals moves in this last quarter of 2011 are very good. I am not talking of $60 in one day but perhaps a huge run from this morning’s gold futures at $1707 all the way to +$2,000. There is no where to go with money if bad things happen in Europe except physical PM and quality related shares. I would not touch any kind of bonds and the only stocks of merit are those juniors holding 2-3 three years of corporate cash with good prospects.

Also the intermediate and larger gold companies should be protected and do well. THIS WEEKEND IN THE USA IS CRITICAL. If SOMETHING GLOBAL BAD HAPPENS. It would probably hit after the markets are closed this Friday. Again, I caution everyone to hold a minimum of one month’s cash, fuel and other provisions. This is not a game. This is very serious and in all likelihood nothing happens. But not make a mistake disregarding this apparent danger."

I hope you are not alleging that I am either scaring people into buying Silver. I have nothing to gain from this. I am simply rendering my opinion. What is right for my Survival Plan is to procure Silver both in bullion and in coins for Silver Melt value. Even then the ratio of my silver procurements is much lower than most of the other Survival Preppers I personally know. I am just trying to cover all the bases. But by and large most of my resources are going into food and other material as well as alternate energy. I have bought several solar power kits when they are on sale – and these are for barter. I have bigger units and small man portable solar power solutions for my groups own use.

STHF Prep: The Race for Physical Gold and Silver

From the article: The Global Physical Gold & Silver Reserves Race is the New Nuclear Arms Race. If the ownership of physical Gold and Silver is not important, then why are people, institutions and countries racing toward stockpiling it? Again, the complete Survival Plan must have some Gold and/or Silver. This is the same as having as Bug Out Bag,...having extra magazines for your rifle,....essentially the same as any contingency. Most preppers did not stock 6 months of food overnight, not did they accumulate a SHTF - Prepare for the Collapse Survival firearms battery overnight. This is a continuous process. I would rather have 6 ounces of silver than none; I would rather than 100 ounces when the collapse commenced than just 50 ounces. The purchase of Gold and/or Silver scares people sometimes because it's value can go down,...what about the value of food that you have bought and has spoiled? Or the AR-10 rifle you bought and will (hopefully) never have to use for the purpose you bought it for?

Add JS Kim and the above website to your financial indicators research and tracking list to be prepared for when SHTF otherwise known as the Collapse or Financial Armageddon.

The old Cold War USA-USSR nuclear arms race has been replaced by the East-West Central Bank battle to accumulate physical gold and physical silver reserves. While Western Central Banks and their puppet bullion banks have distracted and goaded private citizens with the invention of fraudulent bogus paper gold and paper silver derivative products, including ETFs more recently, and paper futures contracts for a much longer period of time, they themselves have been making sure to avoid the very fraudulent paper products they have invented and have been diving headfirst into real physical precious metals.

As Central Banks continue to significantly devalue all major global currencies through excessive creation of new supply out of thin air in a digital world where “new money” is never even printed into paper/cotton form but only is created as digital bytes that are sent across international borders, the private families that are the majority shareholders in the world’s most powerful Central Banks have engaged in heavy buying of physical gold in particular, and to a lesser degree, physical silver. In 2010, Central Banks as a group, became net buyers of physical gold after two decades as net sellers. EU Central Bankers became net buyers of physical gold for the first time during the 1st Quarter 2011 since their introduction of the heavily flawed Euro into circulation in January of 2002.

As of April 2011, China was, according to “officially reported” statistics, the sixth-largest official holder of gold, with 1,054.1 tonness, according to World Gold Council estimates. The U.S. was still reported to possess the largest gold reserves at 8,133.5 tonnes. However, all of you know by now that I believe all “officially reported” statistics, whether the statistic is GDP, unemployment, inflation, or gold reserves, to be a charade and mockery of the truth. To this day I am highly skeptical of the US reported reserves of 8,133.5 tonnes, especially since these reserves have neither been independently audited nor independently tested to ensure that they meet good-for-delivery bar status since Dwight D. Eisenhower was the US President in the 1950s. As for China ’s “officially reported” holdings of only 1,054.1 tons, anyone that takes these reported stats at face value as the truth is a fool for any number of logical reasons. One , China reported that its “official” gold holdings were a constant 600 tons from 2003 to 2009 and then reported that it had increased its holdings to more than 1,000 tons overnight in 2009. Since China lied about its gold reserve holdings for more than 6 years, one cannot and should not assume that their “officially” announced 1,054.1 ton level was truthful. Since China made that announcement in 2009, their “official” gold reserve level has not increased at all.

Anyone that believes that China has not accumulated more gold, and lots of it, since that time, does not understand the Chinese government and Chinese bankers. Chinese bankers have been studying the best ways to invest in gold and silver for many years now in preparation for this global monetary war and they realize that one of the best ways to invest in PMs is to own the real thing. Furthermore, there are multiple mechanisms by which China could be secretly increasing their gold reserves out of the scrutiny of the public eye. In 2008, China replaced South Africa as the largest gold producer in the world, but nobody really knows exactly how much gold China produces or how many proven/ probable reserves or how much measured/indicated resources they own. Thus, China could be increasing gold reserves significantly on in-house production alone. Certainly we know that China is increasing its silver reserves through a policy of decreasing its domestic silver exports and increasing its foreign silver imports.

For example, last month, China ’s General Administration of Customs reported that its net imports of silver nearly quadrupled year-over-year in 2010 to more than 3,500 metric tons. Also of important note is the fact that in 2010, China exported 1,575 metric tons of silver, 58% less than in 2009, and imported 5,159 metric tons of the metal, 15% more than in 2009. This is a huge change if one realizes that from 2005 to 2010 China transitioned from a net exporter of 2,900 metric tonnes of silver to a net importer of 3,500 metric tonnes.

From 2005 to 2010, China increased its gold holdings in its State Administration of Foreign Exchange (SAFE) more than tenfold from a very small starting point of USD $4.2 billion to USD $48.1 billion. However, China could be increasing gold (and silver) reserves significantly through purchases in its Sovereign Wealth Fund – purchases that are not made available for public inspection or consumption. For China to publicly announce their buildup of gold and silver reserves that would drive up the price of the very commodity they wished to accumulate more of would be akin to then-Chancellor of the Exchequer Gordon Brown’s foolish decision to pre-announce in 1999 that the UK would be selling half of its gold reserves.

Also of important note are the following facts. China only recently deregulated gold in 2003 to allow gold prices in China to mirror international prices. The Shanghai Gold Exchange only opened in October of 2002. In late 2009, the Chinese started making gold and silver bullion easily accessible to its citizens through introducing physical sales of multiple size bars at its banks and China finally legalized ownership of 99.999% pure silver bullion. The Chinese typically have a tendency to buy PHYSICAL gold and PHYSICAL silver, not the fraudulent paper gold and paper silver derivatives invented by bankers to suppress the price of gold and silver. For the first time ever, Chinese citizens will be able to buy silver futures in Hong Kong this week and later in Shanghai ; however, since the Chinese are fond of owning Physical metals, perhaps even the majority of Chinese may settle these futures contracts with physical delivery. Furthermore, even when the option to buy gold and silver ETFs in China becomes a reality, the average Chinese citizen may shy away from these products due to his or her propensity for owning real gold and real silver.

For Asians in general, gold and silver have always been money. In Thailand , the word for money “ngen” is also the word for silver. In China , the word for bank combines the characters for “silver” and “movement”. In China not only is private demand strong AND relatively young, but even in India , private ownership of gold bullion bars was not legalized until 1990. Thus, the war between East and West over gold and silver will intensify in coming months and coming years. The objective of the East will be to release the gold and silver price from the clutches of Western price suppression schemes while the objective of the West will be to hoard gold in an attempt to prevent citizens of Western nations from owning the asset that will protect them the most from their currency devaluation schemes.

The current talk in the mainstream financial media about gold being a bubble at $1,600 an ounce and of silver having already reached its top of its long-term peak at $50 an ounce is simply rubbish. A bubble is never defined by high prices, the perception of high prices or even a decade long rise in prices. What defines a bubble is a meteoric rise in price that is not supported by fundamental reasons. For example, the US NASDAQ dot.com stock market was a bubble because dot.com stocks that had zero earnings were trading at impossible valuations and sometimes double and triple digit dollar values per share. However, the fundamental reasons that have driven gold from $250 to $1,600 and silver from $4 to its current $39 – $40 range are even stronger today than they were at the beginning of this precious metals bull. Therefore, it is impossible for a bubble in gold and silver to exist at their current prices and at this current time.
And for this reason, this is precisely why the global nuclear arms race has been replaced by a global physical gold race. Welcome to the new global war in precious metals.

J.S. Kim
SmartKnowledgeU

JS Kim is the Managing Director and Founder of SmartKnowledgeU, a fiercely independent investment consulting and research firm that devises investment strategies to protect Main Street from the fraud of Wall Street.

Survival Planning - Food, Labor and Materials,....Not Gold!

UrbanSurvivalSkills.com received this this comment via e-mail: "I really appreciate the practical information on your site, without all the 'kill Bama' crap you get from most sources. I've done my homework and collected my emergency food, learned heirloom gardening, purchased a few firearms with ammo... But I can't wrap my head around the Gold and Silver.....I keep some bug out cash on hand, but after paper money has lost it's value... I'm having trouble picturing anyone trading a box of ammo for a silver coin. I certainly won't be selling any of my ammo for a hunk of metal. A bag of rice on the other hand? I just tend to think of food, tools and labor being the only real currency after TSHTF."

UrbanMan's comments: I rarely get around to other Survival Sites, but I have not seen any real radical written crap about anything including threats to President Obama. It would be unfortunate if Survival Sites became known for that as it would feed one common perception that people who are taking responsibility for their own lives and prepping for bad things to come, aka SHTF, are extremists or even racists. Nothing in my interaction with preppers leads me to believe that most of us are like that. Still you have Homeland Security reports about lumping gun owners, veterans and survivalists with extremists,.....go figure.

I think you are on the right track,...food, firearms, preparing to grow your own food. Keeping some Bug Out cash on hand is also a good idea. I look at Gold and Silver,..primarily Silver,..but the same concept,....as another necessary survival item. The long term value of precious metals is anyone's guess, but I am pretty certain that there will be a time span after the dollar starts to go south (more so than it is now) and before straight barter for food (primarily) and materials (secondarily) where Gold and Silver will be a commonly acceptable (and perferred) commercial exchange method.

Plus these are facts or opinions weigh on the side of having at least some physical silver or gold:

There will certainly be an instance or two of a survivalist bartering with another who does not really need anything, but precious metals may make the deal.

There are just way too many people, among the respected financial advisors and even the unknown that recommend buying physical gold and silver.

If and when QE3 is announced,....QE is Quantitive Easing, where the Government prints more money further reducing the value fo the dollar, .....gold and silver will just go absolutely bonkers. Just way too many people saying you have to own it.

Here's a recent article from Chris Martenson's site: Prepare for Bullion Prices to Go Supernova

I started buying Silver around 1980 or there abouts, when it was $4.50 an ounce. I was lucky enough to inherit a large cigar box of Silver coins as well......I'm holding onto these for their Silver Melt value. I have even bought small amounts of silver rounds at $33 an ounce, just before it went up briefly to $50.

None of this is for investments. This is for straight survival purchasing during or after a collapse. Silver and the small amount of Gold I have hold the same significance to me as does everything else I have collected in preparing for SHTF,....firearms, ammunition, solar power systems, water storage, seeds (both non-hybrid and hybrid), sleeping bags, manual tools, dehydrated foods, cases of MRE's,....as well as all the vacuum packed food and canned or dried pantry food that I stock.

It's just my humble opinion that the complete Survivalist's would hold some Silver (and maybe Gold) just "in case". How much is necessary? I don't know. But say ten ounces in your safe or Bug Out bag is better than not having any at all.

Survival Planning - The Argument Against Precious Metals

Starting to get a "back and forth" on Precious Metals whether or not this is an essential item for the well prepared survivor. Anonymous has left this new comment" "I didn't sink all my available liquidity into gold and silver. I suppose I could have just left it there. My point was that for 20 years I could not make a profit with it and in fact since those were to 20 go-go years of the stock market I probably could have turned all that into a million dollars. So I don't have a problem with some PMs but keep in mind the silver you buy today for $38 may drop like a rock and not reach that price again in your lifetime. I don't like to gamble and PM investing is gambling. Yes it is a viable way to prepare for an economic collapse but hopefully you have other plans as well. Today I am PM free but I am a prepper never the less. When TSHTF I my well sell you some food for gold and silver."

UrbanMan replies: Nor did I sink anything but what I could afford to spend on Gold and Silver,...mostly Silver. I don't think the word "profit" should even in the equation when it comes to talking about the validity of having Gold sand Silver in case of a major collapse.....again, the lifeline purpose as opposed to investment.

Sure there are many investors who think the coming collapse, as bad as it may be, will also be fairly short and the Country will come out of it on the good end and those with Gold and Silver will be the new rich people. This is what George Soros and many others are doing and that is ensuring they have a lot of Gold and Silver so they can ensure they will be among the riches when this Country comes out of a major collapse.

I have been talking to a friend of a friend, who is a local investment advisor from a national chain. Aside from the fact that he is very close to having to find another line of work because of the downturn in investing and returns, he recognizes the probability of a collapse. With two small children under 6 years old, he is very scared. Even this guy who made his living helping people with financial planning and investing has now bought some physical Silver as a lifeline......as well as stockpiled some food and bought a handgun to supplement his hunting firearms.

Without a doubt there are Preppers, and I know some of them, that refuse to buy PM's, even coins for Silver melt value, because they believe they won't be able to buy enough to make a difference. I think that's just crazy. If you didn't have a firearm, would you not buy one even though you couldn't afford a high end AR? To me this is the same line of thinking.

I have never placed PM's in a priority position unless all of your other needs are met. Everyone has to determine what that is on their own. In fact, I would consider many other items more essential than Gold or Silver. Those items would be: firearms and ammunition; food and more food; water purification means (in depth meaning many systems); seeds; tools; radios, flashlights, batteries and recharging systems to include solar panels; good clothing and footwear and other personal survival gear. There should not a major issue with one getting better in all areas at the same time to include purchasing PMs even if you only can afford one Silver ound at a time.

I won't be using Gold or Silver to buy food, firearms, ammunition, batteries, seeds, clothes as I have enough of those items already,...at least for the short term.

I have PM's in case I need something I forgot, or maybe a fuel purchase or just about anything that cannot be foreseen, hence stocked.

Survival Financial Planning - Reader Question on Buying Silver at High Prices

Fluctuating Gold and Silver prices and my advice to buy Silver even at the high prices must have prompted this question: I don't agree with your advice to buy Silver when the prices were high. Granted a person needs to keep on top of the prices and buy when the prices are as low as expected. Most of us out here are trying to prepare on a fixed budget and prepare for all manner of disasters.

UrbanMan replies: Since you did not write your name on the e-mail, I can't attribute this question to you, but will not use your e-mail name (obviously a nickname) to identify you. But, to answer you're question, I first have to ask some questions....

Do you have a price ceiling per ounce for the purchasing of Gold or Silver that you are not willing to buy higher at?

How do you keep on top of the prices? Because at any given time the price you see on the Internet is NOT the price you are going to buy it for. The time it takes for a company to process our order on phone/internet orders, or, the time it takes you to drive to a precious metals dealer will all factor in.

Recently the price of Silver went to right around $50 an ounce and a few days ago it was under $34 an ounce. Did you predict this substantial drop?

Actually, several analysts have predicted this drop and a commonly held assessment is that it may go even substantially lower, maybe to $27 an ounce, before it begins a meteoric rise to never before seen levels. Who knows? I don't! Do you?

But what I do know is that my purpose for stocking precious metals, particularly Silver is for a lifeline and not an investment. But it could be an investment. I have several friends who are less focused on preparing for a major league collapse than they preparing for a big market turn south and the resulting giant depression. So they are safeguarding their investments through the procurement of PM's to be at the higher end of any shift of wealth created by a depression.

I have talked more than one of them into taking physical possession of their Gold and Silver as opposed to having "paper" Gold and Silver....just like the University of Texas did when they took possession of the physical Gold even with the enormous costs of storing such a weight.

I also have a couple people close to me who I'm helping on preps, and they insist on cost averaging Silver and are buying through the Silver Saver program, where a set amount of money is automatically deducted from your bank account every week, 2 weeks or month to buy whatever amount of Silver that deducted amount can purchase until you own enough to have it shipped to you. While I'm not a big fan of this, it is an automatic method to ensure you can buy what you can afford - dollar cost averaging.

The bottom line here is that many people hesitated to buy when Silver went over $20 an ounce. Then when Silver hit $30 an ounce they panicked and bought,...others still hesitated to buy until it hit $40 an ounce. My point is you need to have physical PM's in your inventory for a complete "Surviving the Collapse" plan. How much financial pain you are willing to accept to get there is up to you.

Urban Survival - My Older Friends Getting Prepared

I have some friends, an older couple, not their real names but I'll call them Bill and Betty, both in their early 60's and raising a granddaughter who is 20 years old and attending community college.  Both of them have started a preparedness plan for themselves and their granddaughter.  They recognize what our politicans seemingly do not, that this country is heading for a major collapse,...whether it comes gradual or is an "all of a sudden WTSHTF" scenario is anyone's guess.  I guess their are advantages and disavantages to both scenarios or collapse timelines, but nevertheless, preparation to survive is necessary.   

Anyway , these friends of mine are starting to put some food away.  Betty is a homemaker and Bill works as a supervisor at a local plant.   Betty has started a garden this year, repalcing her flowers with vegetables and has revisiting the ability to can with a procurement of a pressure cooker and a couple cases of mason jars.  Bill has pulled his shotguns and hunting rifle out of the closet and is looking to get a handgun and an semi-auto rifle.

The other weekend both stopped by and asked what else I thought they could do.  They warned me that they are not the type to grab a couple of Bug Out Bags and "head for hills".  I said of course not, but they would have to have some sort of plan (and contingencies - remember PACE planning?) in case their Bug In plan would lead to certain death,.....either through starvation or a violent end.  So they are re-looking that aspect.  It's a hard thing to do,...be older than some.....and look at your retirement years with anxiety.
SO I told them the easy things they could right now are: 

Get Betty a cell phone.  Bill and the granddaughter both have them and Betty should as well.

Get onto the County's emergency notification text system, where the county government sends out warning messages via text alerts on the weather, power shortages, water shortages and natural disasters. 

Get a family locator system for the cell phones, where you can go to a web based application and geo-locate any of your phones. 

Have some safe areas planned for rally points.  For travel to and from the plant, or grocery sore or college, determine best places to hole up if need be.  If natural or man made disasters make a safe place necessary,...and this becomes a rally point where people can find you.

Join or develop a Neighborhood Crime Watch group in your area.  Local Law Enforcement supports this,....and it is free to do,...only costs time.   The great thing about this is two fold:  you get to know your neighbors and you develop some sort of organization and can be very useful when the collapse hits.     
        
I also told Bill that a concealed handgun class and permit would be a good idea both him, Betty and the granddaughter.

Finally, Bill is old enough to know the history of Gold and Silver in this country and understand the value of having some put away. It is not too late to start. I suggested to them to start buying a little Silver as they could.

Survival Planning - The Economy is Not Getting Better!

Don't let the compromise on the Federal FY11 Budget fool you into thinking the economy is better or that we have staved off an economic collapse. The next budget fights are much more important and will have a greater impact on the speed of inflation and the path of an economic collapse.

The first one will be whether or not to extend the debt ceiling - the limit on U.S. borrowing, and the second one being the FY12 Federal Budget.

The best case scenario for continued life as we know it, is a vote NOT to increase the debt ceiling AND NO to new printing of money (called Quanitative Easing or QE) to remedy low cash flow. However this would mean that the Chinese and to a lesser extent the Japanese continue to buy our debt to finance our Federal expenditures. The likelyhood of this hapening is remote. The Chinese are battling their own inflation and also desire to replace the U.S. Dollar as the world's reserve currency...... enroute to seeing the U.S. as a second rate economy and world power. The Japanese are also over their head in debt and face massive rebuilding and political upheaval from the earthquake, Tusnami and nuclear power plant disasters.

So boys and girls, there is nothing to indicate an easing of Survival Preparations,....in fact, recent events and the Federal Government's admission of and inability to fix the debt, ease rising prices on fuel and commodities and inability to divert a collapsing economy all point to a necessary increase in Survival preparation.

Chris Martenson's newsletter with an article by Paul Tustain, sum up the debt issue as it related to a collpasing economy and the value of Gold and Silver:

"When a country's public debt exceeds 90% of GDP, that is the magic number. You get to 90%, there is no way back, and that is the number that the U.S. is going through pretty much as we speak. It is also the number which the UK has gone through; all of the PIGS are going through it, as well. They are all going past the 90% debt to GDP ratio. Obviously, Japan is miles past it already. It's up to 200%+. There does not appear, in the historical analysis, to be any great likelihood of getting back from that level of debt safely. There is this strong evidence that above 90% debt to GDP, you will experience either a cataclysmic default or some form of very serious inflation."

"So observes Paul Tustain, gold market analyst and founder of BullionVault. In his view, gold serves as a beacon who's price is currently signalling the monteary system is in grave danger."

So we are not out of the storm,...if anything we are in the eye of the storm with the backside of it stronger than anyone can predict.

Urban Survival - NIA's 12 Warning Signs of Hyper-Inflation

Here are NIA's top 12 warning signs that hyperinflation is about to occur:

1) The Federal Reserve is Buying 70% of U.S. Treasuries. The Federal Reserve has been buying 70% of all new U.S. treasury debt. Up until this year, the U.S. has been successful at exporting most of its inflation to the rest of the world, which is hoarding huge amounts of U.S. dollar reserves due to the U.S. dollar's status as the world's reserve currency. In recent months, foreign central bank purchases of U.S. treasuries have declined from 50% down to 30%, and Federal Reserve purchases have increased from 10% up to 70%. This means U.S. government deficit spending is now directly leading to U.S. inflation that will destroy the standard of living for all Americans.
UrbanMan's comment: This is like using one credit card to pay the bill of another. Unsustainable and leads the country to the brink of the dollar collapse.

2) The Private Sector Has Stopped Purchasing U.S. Treasuries. The U.S. private sector was previously a buyer of 30% of U.S. government bonds sold. Today, the U.S. private sector has stopped buying U.S. treasuries and is dumping government debt. The Pimco Total Return Fund was recently the single largest private sector owner of U.S. government bonds, but has just reduced its U.S. treasury holdings down to zero. Although during the financial panic of 2008, investors purchased government bonds as a safe haven, during all future panics we believe precious metals will be the new safe haven.

3) China Moving Away from U.S. Dollar as Reserve Currency. The U.S. dollar became the world's reserve currency because it was backed by gold and the U.S. had the world's largest manufacturing base. Today, the U.S. dollar is no longer backed by gold and China has the world's largest manufacturing base. There is no reason for the world to continue to transact products and commodities in U.S. dollars, when most of everything the world consumes is now produced in China. China has been taking steps to position the yuan to be the world's new reserve currency.

4) Japan to Begin Dumping U.S. Treasuries. Japan is the second largest holder of U.S. treasury securities with $885.9 billion in U.S. dollar reserves. Although China has reduced their U.S. treasury holdings for three straight months, Japan has increased their U.S. treasury holdings seven months in a row. Japan is the country that has been the most consistent at buying our debt for the past year, but that is about the change. Japan is likely going to have to spend $300 billion over the next year to rebuild parts of their country that were destroyed by the recent earthquake, tsunami, and nuclear disaster, and NIA believes their U.S. dollar reserves will be the most likely source of this funding. This will come at the worst possible time for the U.S., which needs Japan to increase their purchases of U.S. treasuries in order to fund our record budget deficits.

5) The Fed Funds Rate Remains Near Zero. The Federal Reserve has held the Fed Funds Rate at 0.00-0.25% since December 16th, 2008, a period of over 27 months. This is unprecedented and NIA believes the world is now flooded with excess liquidity of U.S. dollars.

NIA believes gold, and especially silver, are much better hedges against inflation than U.S. equities, which is why for the past couple of years we have been predicting large declines in both the Dow/Gold and Gold/Silver ratios. These two ratios have been in free fall exactly like NIA projected.
UrbanMan's comment: Yesterday's closing Gold and Silver prices are: $1459.10 for Gold and $39.51 for Silver.

6) Year-Over-Year CPI Growth Has Increased 92% in Three Months. In November of 2010, the Bureau of Labor and Statistics (BLS)'s consumer price index (CPI) grew by 1.1% over November of 2009. In February of 2011, the BLS's CPI grew by 2.11% over February of 2010, above the Fed's informal inflation target of 1.5% to 2%. An increase in year-over-year CPI growth from 1.1% in November of last year to 2.11% in February of this year means that the CPI's growth rate increased by approximately 92% over a period of just three months. Imagine if the year-over-year CPI growth rate continues to increase by 92% every three months. In 9 to 12 months from now we could be looking at a price inflation rate of over 15%. Even if the BLS manages to artificially hold the CPI down around 5% or 6%, NIA believes the real rate of price inflation will still rise into the double-digits within the next year.

7) Mainstream Media Denying Fed's Target Passed. You would think that year-over-year CPI growth rising from 1.1% to 2.11% over a period of three months for an increase of 92% would generate a lot of media attention, especially considering that it has now surpassed the Fed's informal inflation target of 1.5% to 2%. Instead of acknowledging that inflation is beginning to spiral out of control and encouraging Americans to prepare for hyperinflation like NIA has been doing for years, the media decided to conveniently change the way it defines the Fed's informal target.

8) Record U.S. Budget Deficit in February of $222.5 Billion. The U.S. government just reported a record budget deficit for the month of February of $222.5 billion. February's budget deficit was more than the entire fiscal year of 2007. In fact, February's deficit on an annualized basis was $2.67 trillion. NIA believes this is just a preview of future annual budget deficits, and we will see annual budget deficits surpass $2.67 trillion within the next several years.

9) High Budget Deficit as Percentage of Expenditures. The projected U.S. budget deficit for fiscal year 2011 of $1.645 trillion is 43% of total projected government expenditures in 2011 of $3.819 trillion. That is almost exactly the same level of Brazil's budget deficit as a percentage of expenditures right before they experienced hyperinflation in 1993 and it is higher than Bolivia's budget deficit as a percentage of expenditures right before they experienced hyperinflation in 1985. The only way a country can survive with such a large deficit as a percentage of expenditures and not have hyperinflation, is if foreigners are lending enough money to pay for the bulk of their deficit spending. Hyperinflation broke out in Brazil and Bolivia when foreigners stopped lending and central banks began monetizing the bulk of their deficit spending, and that is exactly what is taking place today in the U.S.

10) Obama Lies About Foreign Policy. President Obama campaigned as an anti-war President who would get our troops out of Iraq. NIA believes that many Libertarian voters actually voted for Obama in 2008 over John McCain because they felt Obama was more likely to end our wars that are adding greatly to our budget deficits and making the U.S. a lot less safe as a result. Obama may have reduced troop levels in Iraq, but he increased troops levels in Afghanistan, and is now sending troops into Libya for no reason.

11) Obama Changes Definition of Balanced Budget. In the White House's budget projections for the next 10 years, they don't project that the U.S. will ever come close to achieving a real balanced budget. In fact, after projecting declining budget deficits up until the year 2015 (NIA believes we are unlikely to see any major dip in our budget deficits due to rising interest payments on our national debt), the White House projects our budget deficits to begin increasing again up until the year 2021. Obama recently signed an executive order to create the "National Commission on Fiscal Responsibility and Reform", with a mission to "propose recommendations designed to balance the budget, excluding interest payments on the debt, by 2015". Obama is redefining a balanced budget to exclude interest payments on our national debt, because he knows interest payments are about to explode and it will be impossible to truly balance the budget.

12) U.S. Faces Largest Ever Interest Payment Increases. With U.S. inflation beginning to spiral out of control, NIA believes it is 100% guaranteed that we will soon see a large spike in long-term bond yields. Not only that, but within the next couple of years, NIA believes the Federal Reserve will be forced to raise the Fed Funds Rate in a last-ditch effort to prevent hyperinflation. When both short and long-term interest rates start to rise, so will the interest payments on our national debt. With the public portion of our national debt now exceeding $10 trillion, we could see interest payments on our debt reach $500 billion within the next year or two, and over $1 trillion somewhere around mid-decade. When interest payments reach $1 trillion, they will likely be around 30% to 40% of government tax receipts, up from interest payments being only 9% of tax receipts today. No country has ever seen interest payments on their debt reach 40% of tax receipts without hyperinflation occurring in the years to come.

UrbanMan's comment: Things are not looking good for us or the U.S. You add antedotal information from large amounts of people buying Gold and Silver; buying guns; stocking food and you begin to believe that the path is irreversible. I hope not. I would just as soon have my Survival Preparation,....my Silver,...my guns and ammunition all stay on the shelves and in the gun safes. But I fear this is not going to be the case.

Message from NIA: It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at: http://inflation.us

Urban Survival - Are Gold and Silver Going to Be Worth Anything?

UrbanSurvivalSkills.com received the following question: "I understand the desire to have gold and silver in your stock of survival gear, which I do, but the more I think about it the more I wonder about the true usefulness of it. If the SHTF tomorrow or even 10 years from now, why would someone care about a small metallic coin over trading what they really need like food, water purification tablets, ammo, a rifle, gardening tools etc.? I mean the only value in a small silver coin is what the person on the other end of the deal values it at? I am the first to admit that they are small, can be carried in some quantity easily, but from my perspective, what do I care about getting 2 silver fishing weights when what I really want is some toilet paper. (Just an example on the TP by the way).

Would people REALLY want gold or silver when their world comes crashing down around them, or are the basics food, water, shelter, protection and the items associated with them a better bargaining chip? Wouldn’t I be better off stockpiling .22 Ammo or toilet paper or for large deals an extra firearm or two? Thanks."

UrbanMan's Reply: I think Gold and Silver,...or just Silver for most people, are going to have value in two separate phases of a collapse, and possibly, throughout the collapse depending upon collapse, infrastructure and economic factors.

First of all, at some point in the collapse, dollars will be worthless so the exchange of goods and services will be fueled by precious metals or trade goods. PM's could be the commerce unit of choice for 2 days, 2 months or may never end. At some point in the collapse, when food and other essentials become scare, the value will shift to these items. Then we'll see people saying "Gold? Who the hell wants gold? I want food!"

In all societies throughout history an monetary exchange system has been developed, this has historically been Gold and Silver. Afterall, what started this whole mess was the Government coming off the Gold standard for the U.S. dollar. So I think you'll see Gold and Silver being valuable, at some point as the collapse levels off and/or commerce starts to begin again.

The last reason is akin to why that big fat liberal George Soros has reportedly went into a high density Gold buying spree.....because if the collapse isn't too bad and this country does come back, there will be wealth re-distribution. If you are owning Gold and Silver you will be sitting much more prettier.

The bottom line is that to be truly prepared for Survival, you need a location to provide safety and shelter; a Bug Out Plan to another safe location; you need stocks of food, water in order to live; firearms, ammunition and the will/skill to use for protection; and an ability to barter for things you need,....some of the people who have something you need may not take anything other than precious metals.

And one more way to look at it. I'd rather have ounces of silver in my gun safe than to count on my 401K money being there or my ability to get money out of my bank account during the collapse. Plus, that fiat currency from the bank is going to continue to dminish in value whereas the gold or silver wil increase. So if you have traditional savings, like in the bank,...money market, CD's or a 401K - it would not be a bad idea to change some of that into gold and silver kept on hand.

The last thing you mentioned is possibly stockpiling ammo and other items for trade. Absolutely a great idea. I keep many items for possible barter,....I have a kit bag full of clothing and gear and buckets of trade items like butane lighters, tarps, clothing items, hand tools, etc. And in fact I just traded two 20 gallon barrels for 6 five gallon water cans. While most Survivialist may not believe in trading guns, since they may be turned against you, I still have the capability with a couple cheap .22 LR rifles and if conditions are right will used them for trade.

Thanks for the question. Prepare well.

Survival Chronicles of Jim - Chapter 22, Post Collapse Financial Planning

When I told UrbanMan what I have been doing the past month and wanted to write about it, at first he was a little skeptical but relented after I sent him some stuff to read. UrbanMan’s note: I took the liberty of editing Jim’s letter just a little before posting here. However, it is substantially the same as what he sent me. For the past two months I have been in crazy mode reading stacks of books and on-line information concerning economic collapse of nations as well as the predictions of the collapse of this country; and, historical information and data on currency failing, recessions and depressions; etc. I am sure most of you know that the life span on non-gold backed fiat currency is about 40 years. We are past that, and we (the U.S.) is heading for a reckoning.

Maybe you stop there in your research and study on economic collapses,...I didn't. There is no doubt that a currency collapse is coming. It doesn't matter if it is caused by the devaluation of the dollar or by other economic factors. This has taken place all throughout history. We (the United States ) set this course when we took the dollar off the Gold standard. This is an irreversible course now. What this generates, other than pain and suffering, is a giant
re-distribution of wealth......and benefits those who are prepared. Sure, the first order is to get prepared for a total collapse - this is the most dangerous scenario - where the infrastructure is gone and doesn't come back. The ability to protect yourself and your family; survive the hardest period of degradation; have the material and skills to live - grow your own food, etc., are essential,...and again the first order to business.

But what if the collapse is a gradual collapse and rebounds in some fashion, albeit with a different currency and maybe backed by precious metals?

I work as a computer programmer, on contract to the Government, and make a good salary. However, most of my wealth (currently about 65%) comes from my network marketing business. Since I have minimal expenses, other than buying survival equipment, gear, guns and food - ha ha the same boat we are all in, but I don’t have a wife I have to placate. I have taken much of my available money and have bought much more Gold and Silver.

Again, herein lies the rub,…most people are planning for a chaos; an end of the world scenario and are not planning for a rebound sometime in the future. I wasn’t prepared for anything previous to one year ago, now I am somewhat prepared for a worst case scenario. Like I said, I have bought quite a bit of Gold and Silver over the past month as well as long term survival food. I have also purchased a food saver and vacuum packed twelve buckets of food and counting. I am going to buy a couple more firearms and probably trade my old Toyota RAV in for a new and larger pickup or SUV.

The experts I have been reading,....R.G. Allen, Robert Kiyosaki, Gonzalo Lira, Mike Maloney, Mike Dillard, and more recently the National Inflation Association, Porter Stansberry, and Sandy Leeds,….all have great things to say about what you can do to prepare yourself to come out the next crisis (and it will be a big crisis) if, in fact, this coming collapse will have an upswing in the short or long term future. Most of the advisors and experts I read say to buy Gold and Silver (done, but I’m still buying); stocking food (done, but still I’m still buying and stocking); make a Survival plan (done, but still evaluating it and will changes if necessary); and, develop multiple streams of income (done, but still building my networking marketing business) – almost everyone has, or can develop or can sell a product, services or information (PSI) – a good book on this is “Cash in a Flash” by Robert Allen and Mark Victor Hansen. So I am expanding my multiple streams of income, not only to provide more near term income for survival preparation, but to position myself to come out of the giant redistribution of wealth on the high side.

I advise all of you reading this, who are obvious interested in planning and preparing to survive a collapse, to look at developing additional streams of income – this is the Multiple Streams of Income concept so you make your financial situation more stable and therefore better able to take the disruption of losing one or more streams of income. Again look at PSI (Product, Services and Income) as almost everyone has something they can do to create more income. Know the difference between linear income and residual income. Linear income is money earned for performing work for a period of time. Residual income is money generated time and time again from one period of work.

As an example, I know a lady who makes custom greeting cards. This is her passion. She is now marketing them to friends and to friends of her friends. I advised her to start a website or blog site to advertise her cards and generate more business. UrbanMan for instance, generates income from teaching firearms and related classes to private citizens. I know yet another person who does property inspections on the side to generate linear income. Many different ways, beside the network marketing business that I do, to create Multiple Streams of Income. Take a personal inventory of your skills and capabilities then look at your options. Get prepared, not just for the total collapse but prepare to come out of a collapse on the top side of the wealth redistribution curve. Good luck.

Everyone is Recommending the Purchase of Gold and Silver

Not worrying about being overly redundant, BUY SILVER. UrbanSurvivalSkills.com has long stated that Silver is probably a much better investment and more usable than Gold.

What is amazing is that not only people like Glenn Beck are advocating buying precious metals, but mainstream financial guru Robert Kiyosaki, author of "Rich Dad, Poor Dad" and "Cash Flow Quadrant" is not only advocating the purchase of Silver but rails against the Fed and Goldman Sachs.



Silver Saver is a great place to buy Silver from.

Urban Survival Planning - Reader question on Gold

UrbanSurvivalSkills.com received the following question from Jeff in New Jersey:
"Reference to your post Urban Survival - The Coming Economic Collapse Report June 2010,....So what are you saying here? Buy Gold? How much is enough?"

UrbanMan reply: While I am no economist, I do try to make sense out of all the financial indicators out there. Talk of a double dip recession is all over the place. Some people think that Gold make hit $10,000 an ounce. Central banks have reportedly bought more gold last year (425 tons) than at any other time since 1964.
Gold production is no higher now than it was a decade ago and has fallen somewhat in 5 of the past 8 years.

We believe in planning and preparation across all likely scenarios. It is very likely that we'll hit a recession and inflation will be the result, making your money buy less and Gold buy more. If it is bad enough, fiat currency, you know those dollar bills in your pocket? may not be taken in trade. We want to be prepared for that But we are primarily holding Gold and Silver in preparation for a total collapse of our society, be it through a economic crisis, natural mega-disaster(s), nuclear or dirty bomb strike or pandemic disease.

How much is enough? Obviously your personal finances and desire level of preparation will dictate how much you can buy. To tell you the truth, I have very little gold. I have most of my precious metals (PM's) in Silver, both bullion in the form of one ounce rounds and U.S. coins for silver melt value.

I look for the government to try and confiscate gold and silver bullion once again. In the mean time as I finish off with my priority list of Urban Survival Tasks and preparation measures, I'll get around to buying for silver,..maybe some gold if I can afford it. I can afford to concentrate on other Survival Tasks right now, as I have a decent amount of Silver put away, but if you haven't started procuring Gold or Silver yet, then you really need to consider doing so. Even a small amount a month, like purchasing a couple Silver Rounds every pay period would be a start. That's what we started Jim (from Survival Chronicles of Jim) doing and he reports a substantial peace of mind even with the small amount he has.

Stay Safe, Stay Prepared.

Urban Survival Planning – Barter Goods

This post follows the Survival Financial Planning posts concerning possessing Gold, Silver and the various phases of Survival purchasing where very possibly paper cash and precious metals may not be as valuable or even accepted by many. 

As a re-cap, we think that after a infrastructure collapse, we would go through several different periods of commerce where paper money, then precious metals, then material items (barter items) would be distinct.  We can’t even begin to determine how long each period would last.  Paper Money, in a Survival Situation, may only be good for two to three days,…maybe more, maybe less, but certainly no-good after the realization that things are not going to go back to normal hits the people square in the head. 

Gold and Silver had traditionally and historically been of value.  Their value based would fluctuate based on the increasing inflationary value of life saving material, e.g..food, water and material things during a Survival situation.   Commerce using Gold and Silver may rebound if and when various segments of the population achieve some sort organized society. This may be based on locations and access to material goods than it is anything else.

Barter goods in a Survival Scenario will always be of value.  Imagine negotiating with someone for 3 gallons of fuel:  “Yeah, I got 3 gallons of fuel,…what do you have to trade?” “How about 4 Morgan Silver Dollars?”  or  “How about 6 cans of vegetables and a bag of rice?”   What do you think this guy is going to want to trade for?    

In a Survival environment where commodities are in very short supply, what products do you think would be of high value? 
     
Obviously food such as high caloric/high carbohydrate items; Water and devices to carry water such as canteens are a sure bet; Alcohol may be a prime barter item; First Aid supplies especially anti-biotics pills and ointment, aspirin and other pain killers are also good Survival barter items; Lighters and/or butane fuel for lighters; firearms and ammunition would be high, may even be number one on the Survival item Barter List. 

Plant seeds for vegetables are another good bet; clothing items such as socks, sweatshirts, sweat pants; backpacks may be another good Survival barter item. 

The idea is not to try and stock a retail store, just realize that what may be important to your survival is also important of others facing the same commodities shortage.  

The benefit to a total collapse of society as we know it, lapses us into a Survival mode, be it an Urban, Suburban or Rural environment is that your spouse may not be getting on your butt about getting rid of some things.  The ‘Hey, maybe I can use that” excuse for all material things will take on a new meaning.            

Urban Survival Planning – Too Late to Buy Gold or Silver?

We had a recent conversation with a man in his early 50’s. He is currently working as truck driver and is an Army veteran. He, like us, are concerned with the direction the country is heading, and accordingly to him, has long thought about trying to be prepared for a TSHTF Urban Survival type scenario. His current Survival Preparation is centered around having a few firearms and sufficient ammunition and other Survival Gear and Equipment like Sleeping Bags, Cold Weather Clothing, etc.

Our talk turned to financial planning and inevitably to gold and silver. He thought that it is too late to buy Gold and Silver and also rationalized that commodities will be worth more in a barter type environment that Gold or Silver.

He is wrong on one count and half right on the other.

We cannot envision an environment where it is too late to start buying Gold or Silver. Obviously the idea is to buy it at the lowest possible prices, but today’s high prices may be tomorrow’s low prices. As we write this, Gold closed at $1,118 an ounce, Silver at $16.31 an ounce. A pre-’65 Washington Quarter on Feb 8th, 2010 was worth $2.74 at Silver melt prices and a Morgan Silver Dollar at $11.71 Silver melt prices. On Feb 19th, 2010 those same coins were worth $2.88 and $12.34 respectively.

Now we’re not saying Gold and Silver are going up and will never come down. What we are saying is that you cannot predict the market and you cannot afford to wait until prices are where you want them to buy Gold or Silver. Buy what you can, when you can. If your budget only allows the purchase of a roll of pre-’65 Roosevelt Dimes – well, that’s better that not having any Silver at all.

Our friend was half correct when he said commodities or what we call barter items will be much more valuable in a TSHTF Urban Survival type scenario. We think there will be three phases of “Survival purchasing power” following a catastrophic event that plunges everyone into a Survival mode.

The first phase of Survival purchasing power will be paper cash. It will help to have cash on hand as some people will undoubtedly not accept credit or checks but will believe the situation will come back to normal before too long and these people will seek to profit from the situation by charging exorbitantly. So have some cash on hand. We can’t tell you how much,….maybe a starting point would be $1,000 in $5, $10 and $20 bills.

The second phase of Survival purchasing will Gold or Silver. People who will not take paper cash will most probably take Gold or Silver in exchange for commodities or services. They may not know the closing value of Gold or Silver but nonetheless history shows us that Gold and Silver has long been an acceptable world wide currency.

The third phase of Survival purchasing will be barter based on commodities. We will do a post, in the near future, devoted solely to the acquisition and storage of barter items. Some people may still take Gold and Silver but commodities that cannot be acquired anymore will have an exceptionally high value.

We cannot even begin to estimate the duration of these three phases of Survival purchasing. The cash phase may last one day or it may last 2 weeks. The Gold and Silver phase may last one month, maybe three months or continue forever. So, the bottom line is that it is not too late to buy Gold or Silver, just buy it in amounts you can afford – some is much better than none, and, to be prepared for all phases of Survival purchasing - cash, Gold - Silver and Barter items.