Physics of Change will feature information in specific sections each month.
The information is intended to inform the readers of this newsletter.
However, it is not advice!! Any decisions made based on this information are to be done
in a self-responsible manner. Mulai de Guise Publishing, LLC cannot be
held responsible for any individual actions based on the information it presents.
May 2010 Newsletter
"One ounce of gold will 'buy' the Dow."Richard Russell
The Dow/Gold ratio bottomed out in January, 1980 at a 1:1. Then it embarked
on a 20-year rise, peaking out on January 14, 2000 at 41:1. The ratio has been
trending down ever since. The ratio is currently 9.6
For the next several years, we expect the ratio to continue to fall,
until it approaches its previous low of 1:1. A good guess would be
gold at $3,000 and the Dow at 3,000 - or perhaps each at 5,000?
Q & A
What's your take on platinum? Is it worth investing in even if it's just
After trying to sort physical gold and silver I realized that if I sold before
money ran out of fashion, I would loose way too much just in
transaction fees and margin between buying and selling price... specially
for silver, which is the one that I can actually afford... so I ran across
this website moneygold.com and bought 60oz of silver. Now I am having a
bit of doubts.
I have never recommended buying gold or silver as paper transactions. I have always suggested that all gold and silver be purchased and possession of the metal taken to a safe place. I read the Daily Reckoning to get their perspective. But I use other sources for selling dates - which will be between late 2011 - and early 2012. Money will still be fashionable even if almost worthless. I will sell my gold and silver STRICTLY for US dollars that will be spent the following day for what I might need.
Platinum is the same as gold and silver - but will need to be sold at a future date - it might be more difficult to find someone who wants to buy your platinum - but easy if it is gold or silver.
I have a question on how to keep the balance between, gold, preparedness, food, and especially sovereignty (mortgage).
This is an excellent question!! The way in which we prioritize these elements will be reflected in how we see global events unfolding in the next few years. If the US stays in a recession with a mild and long recovery, that is one scenario. If the earth tilts on its axis this year and creates global chaos, that's a different strategy. If there is a global economic meltdown and a massive transfer of wealth from the west to the east, then we will need to prepare differently again.
However, in most scenarios, there are basic strategies that will bridge the above possibilities: 1) Being sovereign (the ability to provide all resources necessary for survival) is at the top of the list. You MUST be able to maintain your living arrangements - this becomes your stronghold. 2) It is obvious that all fiat currencies are heading to zero value - meaning that it becomes more and more difficult to pay for necessities. Having gold and silver coins is the best hedge against falling paper currencies. 3) Food and water need to be stored in large quantities and SECURED. 4) Paying off your mortgage is available only to those with additional resources. But having a viable and consistent way to continue paying your mortgage is a NECESSITY.
If you have a home that you can continue to afford, food and water secured, and gold and silver to buy the tangible assets you will need, then you are prepared for most scenarios.
How can I tell that what I bought is the real deal, real silver, without taking it to a shop to have others check it - is there any trick that will do?
Silver is rarely counterfeited - silver is generally too cheap to reproduce as a fake. However, when its value rises to over $100 an ounce, you may begin to see counterfeit silver.
Could you please share your opinion on coin types with me? I'd like to know if it makes any difference when gold/silver coins were produced. Does it matter what kind of a symbol or individuals are displayed on it? Should one look for small coins that allow for more transactions, or buy a larger one if that's the only type available at the time? (Is jewelry good for such purposes?)
Coins are ONLY as good as they can be recognized by the person or dealer you will eventually sell them to. I PREFER one-ounce gold coins, but fractional (1/2, ¼, 1/10) are also good. I do not think we will use gold to barter as much as I see selling it at its peak in late 2011 OR early 2012 to buy the tangible assets you will need to withstand the chaos of a global, imploding economic STORM. Silver is better for barter, BUT, no coins will feed you unless you can exchange them for food. I also plan to sell my silver at its peak to buy the things I will need for a sustained existence.
Jewelry is the most difficult to sell or barter because jewelry is difficult to assess its value. I would suggest you sell all the jewelry NOW to a jewelry store - they will give you a fair market value before the ____ hits the fan!!
If you already have coins that are unique, it may be difficult to know what they are worth - sell them and buy recognized coins - coins from the US, Canada, South Africa, Switzerland, Australia, OR China. Everyone knows what these coins look like and will buy them for their full value.
If you cannot find coins, I can refer you to GoldSilver.com, they ship to 38 countries.
When Americans understand that they have been betrayed in that
they have been working and saving for worthless (non-intrinsic)
money, there'll be holy hell to pay. That's my prediction,
and amid a state of national anger, I believe we'll see the
termination of the Federal Reserve, probably the greatest fraud
ever foisted on the America people. Richard Russell
While the rest of the world suffered through its worst financial
crisis in a half century, China went shopping.
Since 2005, China has made 185 deals worth $100 million or more, totaling more than $222 billion. www.thedailycrux.com
"If gold isn't up at least $500 in the next six months, I will be surprised" John Embry, Chief investment strategist at Sprott Asset Management.
"Gold will be at least $1,650 and most likely higher by Feb. 2011." Jim Sinclair
The Coming Short Squeeze in Silver
One way to measure the potential investment upside of silver is to measure it against gold. Right now the gold/silver ratio is around 63. In the last couple years, it's been in the 80's and as low as 48. At the peak of the last precious metals bull market in 1980, the ratio touched down around 17. I expect that the gold/silver ratio will continue to lower its ratio (maybe 20:1), which is a long term historical norm (i.e. 100's of years). In Rome before The Fall, gold and silver were exchangeable at a ratio of 8.
Given that the total market value of all the available silver in the world is small compared to gold, when the "poor man's gold" effect really takes hold, expect the price of silver to really rocket higher. Eventually that ratio will decline to a level that is much more consistent with the ratio that held for centuries.
For a perspective: If gold sells for $3000 an ounce and the gold/ silver ratio is 20:1, then every ounce of silver would be worth $150.
Check this out: a silver US dime minted prior to 1965, commonly referred to as "junk silver" is currently worth approximately $1.30. And over the last 46 years, since 1964, silver is up about 6% per year (averaged) from $1.40/oz. to $18/oz.
In 1964 a gallon of gas cost $.30 cents- just 3 dimes. Today, a gallon of gas costs approximately $3.00/gallon and those same 3 pre-1965 silver dimes will purchase that gallon of gas, plus a drop or two. In 1960, a cup of coffee was a dime. Today, a cup of Starbucks coffee costs $1.30, still the price of just one silver dime. In 1960, a Chevrolet Corvair sold for $1,980- or 19,800 silver dimes. In today's "fiat" currency climate those dimes are worth $25,740. That's enough to buy a Chrysler convertible.
In other words, using these examples, we need to save and or make nearly 13- times more money today to equal the same lifestyle today as we had in 1960. Ouch!
Viewed from this perspective, it's easy to see that the US dollar is rapidly losing its value precipitously and continuously. The best way to protect yourself from the continuing decline of the dollar is to own some gold and silver.
The Latest Gold Fraud Bombshell: Canada's Only Bullion Bank Gold Vault Is Practically Empty
There is growing talk about gold in depositories ... what's there and what is not. What is allocated, what is unallocated?
Continuing on the trail of exposing what is rapidly becoming one of the largest frauds in commodity markets history is the most recent interview by Eric King with GATA's Adrian Douglas, Harvey Orgen (who recently testified before the CFTC hearing) and his son, Lenny, in which the two discuss their visit to the only bullion bank vault in Canada, that of ScotiaMocatta, located at 40 King Street West in Toronto, and find the vault is practically empty.
S 510, the Food Safety Modernization Act of 2010 may be the most dangerous bill in the history of the US. It is to our food what the bailout was to our economy, only we can live without money.
Farmers are being brought to court for using their own seeds from their own crops.
We are in the business of selling and buying precious metals and we will buy back any quantity that you have to sell, large or small, even if you didn't purchase the metal from us. www.MilesFranklin.com
A License Required for your HOUSE?
We encourage you to read the provisions of the Cap and Trade Bill that has passed the House of Representatives and are being considered by the Senate.
A License will be required for your house...no longer just for cars and mobile homes....Thinking about selling your house? Take a look at H.R. 2454 (Cap and Trade bill).
Beginning one year after enactment of the Cap and Trade Act, you won't be able to sell your home unless you retrofit it to comply with the energy and water efficiency standards of this "Cap & Trade" bill, passed by the House of Representatives. If it is also passed by the Senate, it will be the largest tax increase any of us has ever experienced.
Cap & Trade: A license required for your home: www.prisonplanet.com/license-required-for-your-home.html
A Special Program on Beyond the Ordinary KRSE Webcast Radio!
A student from Italy
Spring and summer 2009 brought me this new adventure: watercolors. I learned the art mostly open-air, and in no time I became good at it. Autumn brought me my first Fiocco Arboreo (Tree Flake) of which you can get a glimpse in the image on the side. Intertwined trees of colored water embrace to form a tree flake, as if to inspire love and independence, individualism and dignity. stfacqualberi.weebly.com
If you need someone to help you with your 2009 tax returns, contact: Billy Gordon, CPA,
P.O. Box 50
302 Binghampton St. W
Rainier, WA 98576
Testimonials / Comments
I have been buying small amounts of gold and silver coins, and I am very happy with the prospect that there value will increase dramatically soon.
"I started reading your book recently, and I have already recommended it to many people. It has helped me a lot, first it comes from a teachers' perspective in your own words different than the Ram. Second, almost everyone has asked at least one question similar to the one in your book, and the response is so simple yet filled with knowledge and wisdom.
Thus, one answer would be worth the price of the book many times over."
When you were discussing the use of a slingshot to protect against a pack of ravenous dogs, it brought a recent event to mind. About seven months ago I felt inspired that my family needed two large dogs to protect it. Listening to the spirit, I went to the humane society and picked up two puppies that looked like they would grow into large dogs. About a month ago that choice paid off. My 13-year-old son was outside late in the evening with the two 8-month-old puppies (Shardas and Gammon) and our small 6-year-old dog (Puff). The adult dog is very protective, but only weighs about 20 lbs.
A huge mountain lion entered our yard. Led by the Puff, Shardas and Gammon assisted in driving the lion off. I know the lion was real and not a figment of an overactive imagination because the lion headed up to the neighbor's house and killed their three goats. I am very blessed that my son is alive and I thank God for the inspiration to get the dogs in time that they would be large enough to drive off the cat.