Welcome to 2013
Welcome to 2013.
I am so excited about 2013, and I am writing to tell you why, and what I see coming in the very near future. If you have already invested in Gold and Silver, congratulations! You have taken one of (many) the first steps to putting yourself on the right side of the Great Wealth Transfer. Recently, the mainstream media has globbed onto a few hopeful words from the Fed that QE3 would wind down this year. That caused gold prices to drop slightly at the end of last week.
And part of being a member of Success Council, includes knowing what is going on when your gold prices fluctuates. I remember when I started investing in precious metals, I watched the prices daily to see how much money I "made" or "lost" that day. And it drove me crazy. So I decided to write this post to let you know exactly what I think is in store for 2013 (and I am still incredibly Bullish about Gold and Silver).
Now, I know over the last few days, gold prices have dipped (1%) because "several" Bernake Boys thought that they "may" end QE3 in 2013. Yeah right. They've been promising false ends since 2008. In case you don't know, here is just part of the 5 year history:
- Nov. 25, 2008: The Fed says it will buy $500 billion in mortgage bonds… Yes, you heard right, as in the mortgages that people are still walking away from daily. Crappy investment. But what do they care? Its only your money.
- Dec. 15-16, 2008: The Fed creates a target range for interest rates and cuts its key federal funds rate to between zero and 0.25 percent. That's a record low. The Fed vows to use all the tools it has to rescue the economy from the worst financial crisis and recession since the 1930s.
- Jan. 27-28-2009: The central bank signals it's prepared to buy longer-term Treasuries and expand other programs.
- March 17-18, 2009: The Fed says it will start buying up to $300 billion in government bonds over six months. Why government bonds? Well, China slows down its purchase of government bonds… and someone has to make up the difference. It also decides to boost purchases of Fannie Mae and Freddie Mac mortgage-backed securities and debt. The actions are aimed at driving down rates on mortgages and other debt. Ha ha! More of your money gone due to high inflation…. turn on the printing presses Bernake!
- Sept. 22-23, 2009: The Fed slows a mortgage-buying program to complete its purchases by March 31, 2010, instead of at the end of 2009.
- Aug. 10, 2010: It decides to use some money generated by its mortgage portfolio to buy government debt, to try to lower rates on mortgages and other loans…. doesn't this sound like the worst idea ever?
- Aug. 27, 2010: In a speech in Jackson Hole, Wyoming, Chairman Ben Bernanke lists several options to boost the economy, including the purchase of additional government bonds…. Shocker! More money to the government?
- Oct. 15, 2010: Bernanke signals the Fed will buy more government bonds to boost the economy, drive down unemployment and protect against deflation. When it hasn't worked for two years, lets just keep doing more of it!
- Nov. 3, 2010: The Fed announces it will buy $600 billion more in Treasury bonds to try to hold down longer-term rates.
- June 22, 2011: The Fed confirms it will complete its purchases of $600 billion in Treasury bonds by the end of the month. The purchases were intended to drive down rates on mortgages and other debt.
- Aug. 9, 2011: It says it plans to keep its benchmark short-term rate at nearly zero until mid-2013. It's the first time the Fed has set a target for keeping the rate at that level for a specific period. The date reflects its assessment that the economy will remain weak.
- Sept. 21, 2011: Through a program called Operation Twist, the Fed says it will sell $400 billion of its shorter-term securities to buy longer-term holdings to try to lower Treasury yields further. The Fed also says it will reinvest its holdings of mortgage-backed securities, which could help keep mortgage rates at super-low levels.
- Jan. 25, 2012: The Fed says it's unlikely to raise interest rates until late 2014 at the earliest, extending a period of record-low rates by at least a year and a half.
- June 20, 2012: The central bank says it's extending Operation Twist through the end of 2012. And it says it's prepared to act further if the economy deteriorates. Its not working? Just spend more!! What a crock.
- Sept. 13, 2012: The Fed says it will spend $40 billion a month to buy mortgage bonds for as long as it deems necessary to make home buying more affordable. It plans to keep short-term interest rates at record lows through mid-2015. And it's ready to try other stimulative measures if hiring doesn't pick up.
- Nov. 14, 2012: The Fed signals that it may be preparing to take further steps to stimulate an economy that remains too weak to reduce high unemployment. The minutes of its October policy meeting suggest it might unveil a bond buying program to replace one that expires at year's end.
- Dec. 12, 2012: The central bank says it plans to keep its key short-term rate near zero at least until unemployment drops below 6.5 percent - as long as expected inflation is tame. For the first time, the Fed makes clear that it will link its actions to specific economic targets. Yikes.
7 Big Probelms In 2013: 1) Fiscal Cliff. Congress just postponed making any real decisions about the fiscal cliff. It simply delayed most of the tax increases and spending cuts. The only decision they did make adds $4 Trillion to the deficit over the next 10 years. And, as Ron Paul said a few months ago, the Fiscal Cliff is bullshit - we are way to far gone. But don't be surprised when mainstream media keeps babbling on about the "Cliff."
2) Debt Ceiling. Get ready for some more drama on your T.V.s about a debt ceiling increase (for the 75th time). You may recall the same Soap Opera from 2011. The result? August 2, 2011 the debt ceiling was raised. August 3, 2011? Gold hit all time highs. Fast forward to January 2013: In a weekly video address, President Obama stated, "One thing I will not compromise over is whether or not Congress should pay the tab for the bills they have already racked up. If Congress refuses to give the United States the ability to pay its bills on time, the consequences for the entire global economy could be catastrophic. Last time Congress threatened this action, our entire economy suffered for it." First off, I love how when he spends the money, he takes credit for "stimulating the economy" and when the bill comes… its Congress' bill to pay. Regardless, a rise in the Debt Ceiling is coming your way, so stay tuned, and buy gold.
3) Eurozone Crisis. Greece, Spain, Italy, Ireland… all these economies are crumbling into a greater recession. Germans grow resentful as taxes increase due to their relatively successful economy. German taxes support weak Eurozone, possibly leading to a recession in Germany. The Euro is barely alive and in intensive care… for now.
4) Iran. Iran wants its nuclear program. Obama does not want them to have a nuclear program, and has issued sanctions, crippling Iran's economy, in an attempt to bully them into submission. Iran is also nearly at war with Syria and Turkey, countries which, Iran believes are puppets for Western interests. Iran may just contract around the sanctions, like they did with India, when they agreed to allow India to buy oil for gold. China and Russia may be next to deal with Iran in an oil-for-gold swap. China and Iran have already switched from the dollar to bilateral trade, because the US sanctions any bank that facilitates these transactions. Yes, this means the dollar is devalued further, and if they start trading in gold, this will help gold prices will rise.
5) Disaster Relief Funding. Congress has just approved huge federal disaster relief funding. The below chart shows the amount of funding for disaster relief paid by the federal government vs. private insurance companies since Hurricane Katrina. Pre-Katrina? Feds paid only 26%. Post Katrina? 69%. Ask yourselves, why? Oh, yeah, so the tax payers can make up for the insurance companies' losses.
6) Mortgages / Foreclosures. Above, when I mentioned that the Fed had bought up all this bad debt / mortgages from the banks. Guess what? The foreclosures haven't even started to unfold. I predict that banks are holding onto these properties in an effort to falsely prop-up the housing market so everyone in a non-recourse state doesn't just walk away from their upside down mortgages. Not to mention, in many states and countries "eviction outrage" has led to the public demanding that banks stop foreclosure proceedings, even when they have a legal right to continue. This means the market is not allowed to work, and the other shoe will drop very shortly, leading to another drop in home prices.
7) Student Loan Debt. For the first time on record, the delinquency rate on student loans has jumped above the rate for credit cards, car loans, or any other kind of consumer loan. It has basically gone parabolic. And we are not talking small numbers. The total Federal debt (not including state debt is $956 Billion.
These are just some of the things that are going on as we enter 2013. I don't bring these things up to depress everyone. I bring them up as a reminder of the opportunity on your doorstep. If you haven't signed up to attend our live webinar teaching you how to get on the right side of the World's Great Wealth Transfer, now is the time. If you're already a member. Congratulations! You are about to take over the world! To Your Success, Jarrod
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