Monday, December 19, 2011


How to Predict the Financial Future in 7 StepsYou have heard the phrase that if you do not learn from history, then you are doomed to repeat its mistakes and failures again and again. This is not simply a worn out and overused adage.
Another way that you could look at it is that no matter how so called advanced, civilized, and knowledgeable mankind grows with the centuries and millennium, you are still basically the same animal inside, one that is motivated by fear, greed, and the drive for pleasure.
This makes it possible to predict the financial future if you only look at what has occurred repeatedly in the past, since it is doomed to happen again and again and again. There are seven steps in reliable progression that allow you to forecast the economic future. In the paragraphs below, you will learn what they are and what they portend for the future of the U.S. and world economies.

Step 1: The Beginning – Real Money

An Empire, Kingdom, or Nation Begins with Real Money – Either Gold/Silver, or Backed by Gold/Silver
No country starts out with worthless paper money. When any nation and government arises, it must establish a credible means of exchange for itself, its people, and its businesses. This practically always means gold or silver coinage. In more modern societies, it means bills of exchange or paper that are convertible for gold and silver.
This has been true of the Babylonian Empire, the Chinese Empires, the Persian Empire, the empire and subsequent successor kingdoms of Alexander the Great, the Roman Empire, the Byzantine empire, the Ottoman Empire, the Spanish Empire, the British Empire, and the American Empire, to name the more prominent ones from history.

Step 2: Economic And Social Development

In the Process of Economic and Social Development, it Begins to Pick Up Increasing Numbers of Economic Burdens, Adding Layer after Layer of Public Works and Programs that Benefit Society
Public works and programs that benefit society are often good, and rarely start out as evil in and of themselves. It is when they grow so large that they begin to strain a society and government’s natural resources that this becomes a real problem.
In the Roman Empire, these public works and social programs started out as roads, aqueducts, amphitheaters, arenas. Eventually, they evolved into free bread for hungry citizens to the point where one out of every five people in the city of Rome received this daily ration. Social programs that America organized include social security retirement and Medicare.
Today in the United States, a shocking one out of every four children receives free food from government food stamps. If this looks like an all too familiar trend, it is because it is simply history repeating itself once again in modern day America.

Step 3: Increasing Military Power and Spending

When the Economic Wealth and Influence Grows, Its Political Influence Also Grows, and It Increases Military Expenditures to Build Up an Enormous Military
With money and economic power comes political power that leads to a desire for a large and powerful military with which to protect its new found wealth. This places additional resource strains on the great power. The leaders may start to look for a way to pay for all of these new expenses honestly at this stage, but they have not yet reached the critical point of severe budget imbalance yet. America most recently reached this point before the wars in Iraq and Afghanistan broke out.

Step 4: Military Spending Explodes

Eventually It Uses the Powerful Military and the State’s Expenditures Explode
There has never been a great empire, kingdom, or nation that did not go down the path of military expansion in some form. The Romans pushed into Northern Europe and the British Isles when they did not have any lands left around their original Mediterranean to conquer. The Byzantines reconquered lost Roman lands again.
The Ottomans knocked on the gates of Vienna. The Spanish fought the great civilizations of the Aztecs and Incas in the new world and then made war on the British in the old world. The British expanded in literally every direction on earth. America attempted to stop Soviet influence and expansion in the Korean and Vietnamese peninsulas. All of these conflicts broke the budgets of their respective empires, kingdoms, and nations.

Step 5: Destroying Wealth by Introducing Fiat Money

To Pay for the War- the Most Expensive of Humanity’s Projects- It Plunders the Wealth of its People When It Replaces their Real Money with Fiat Currency that the Government Can Manufacture in Limitless Amounts
Rome debased its silver and gold coinage little by little. America does it in a more sneaky way today. Once the U.S. abandoned the gold standard that it had operated under practically since its founding with President’s Nixon’s decree forty years ago, it gained unlimited license to print money with numbers on a computer screen via its non transparent central bank, the Federal Reserve.
Forty years ago, the U.S. government made this economically tragic and devastating move because it could not pay for the war in Vietnam. In 2007 to 2011, it has done it again by more than tripling the money supply to pay for the costly wars in Iraq and Afghanistan.

Step 6: Price Inflation And Loss of Faith in Currency

Eventually the Wealth Transfer Created Via the Relentless Expansion of the Currency Impacts the Population as Serious Consumer Price Inflation Hits and Causes a Devastating Loss of Faith in the Currency
You can simply explain inflation as the event when the prices of goods and services go up more than comparable payrolls do. The U.S. has finally reached this critical stage, as real food prices rose nearly fifty percent in 2011. Fuel costs are up over seventy percent in the last few years, as are health care costs similarly higher.
The only items that are down in price are home values and stock values, both of which are off double digits since 2007. These of course are the prices that hurt the wealth of some ninety percent of Americans. The loss of faith in the currency has become so acute that there are now several states, like Utah and Montana, that allow gold and silver coins to be used as legal tender alongside paper greenbacks. More than another dozen states are now considering the same type of legislation to reintroduce honest money.

Step 7: End Game – Massive Wealth Transfer

A Race to the Exit Door of the Currency and Into Precious Metals and Similar Tangible Commodity Assets Happens, the Currency Inevitably Collapses, and Enormous Wealth is Transferred Over to those Individuals Who Had Enough Foresight to Move their Money into the Right Asset Classes In Advance
The U.S. sits right on the cusp of this troubling stage of the financial past and future. The forty year long disastrous experiment with fiat money is now grinding to a horrible end. The dollar has already lost over 95% of its value against both gold and silver since 1971.
This is nothing like the losses that it will see when the Chinese, Japanese, British, and Arabs give up on it in earnest. Now is the time to move a significant portion of your money into gold, silver, and other hard commodity assets, while you still can.
Do you think you will still have the time and ability to do this once the entire world is running in panic for the U.S. dollar exits?

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