The Start of the Economic Armageddon

Things have been going crazy in the world, now Syria is in problem as i predicted, Gold is now at 1550 USD/Oz reaching a all-time international, all history high. The gold Bull run is well underway full steam ahead.

Now the mainstream media is shockingly quiet about the true news that affect the world, smokescreens have been pulled over our eyes.

Here is the top 3 news that seals the fate of the world economy on a downward spiral (the Start of the End of the United States) and why gold/commodities will go even higher.

1. The Dicussion for Bretton Woods III
Now why is this important? The Bretton Woods agreement is a historic agreement whereby world currencies are discussed upon and where a new global currency is decided. (Whether the US dollar will remain the global reserve currency)

Big names like George Soros are attending, if this new world currency is gold backed even by 10%, the price of gold will easily exceed 3000/Oz. If a new fiat currency is agreed upon, then gold/commodities will still rise because fiat currency is still funny (magical) money.

Every 30-50 years there is a new monetary system, and it has been at least 40 years now.

For your Viewing Pleasure: http://www.youtube.com/watch?v=3bnL9L5jT1M

2. China Will Surpass US Economy by 2016

The IMF finally admits this, after so long, this has been baked into the cake at least a decade ago. Although China might experience a property bubble soon (its massive construction of Ghost Cities), its nothing compared to the Parasitic effect the US economy has on the world.

Do take a Read: http://www.thenewamerican.com/economy/economics-mainmenu-44/7263-imf-chinese-economy-to-surpass-us-by-2016

3. The US Federal Reserve's Chairman's Statements

Ben Bernanke said nothing conclusive about the Federal Reserves movements. Although no further Quantitative Easing is expected (printing money), interest rates are still kept at a nominal Zero. Real interest rates are still very negative.

'Those invested in precious metals saw something special—gold climbing to uncharted new territory to over $1522 an ounce as Bernanke sparred with reporters. By the end of the day, silver was up $2 near levels not seen in 31 years. You could feel the symbolism in the air as Bernanke, the keeper of the U.S. dollar, lost ground in real-time to the only money that can't be printed by an overzealous central bank—gold and silver'

-Mike Maloney

psssst, S&P Downgraded US credit Rating :)

The Gold Bubble or Is it?

Is Gold in a speculative bubble? Is the bubble going to pop anytime soon? 1420++ USD/oz, what a ludicrous price isn't it. From 350 USD just almost a decade ago. Introduce gold into my portfolio? Are you crazy?



If gold is in a bubble, i would call it in phase 2, the exponential phase isn't here yet, so there is still time to breathe. But won't it spell great news if Gold isn't in a bubble yet? I personally believe gold is developing bubble like-symptoms but hey, the markets could always prove me wrong.

Lets look at Charts from The Aden Sisters, Mike Maloney & Jordan Roy-Byrne.

1. The Aden Sisters' Chart

'The rule of thumb is, when gold’s rise reaches a new high for the bull market, it’s a super strong market. And as we’ve just seen, when it’s combined with the stronger phase of the bull market, it makes for an explosive rise.

And explosive it has been! With gold now approaching $1500, it’s near our first important target level for this stronger phase. Gold will most likely resist near $1500 before moving clearly above this level into the next phase of the bull market.

In the big picture and on the upside, once $1500 is well surpassed, the $2000 area will then be the next target. Will $5000 - $6000 or more end up being the final target?

As good as it’s been, gold is far from being in a bubble. And you must admit, it’s been the quietest bull market in history. Just ask the average person.'

- Aden Sisters

2. Mike Maloney's Charts

'The top chart shows global financial assets and gold’s nearly miniscule role. While many have called gold’s early bull run a bubble, they fail to note the bubble levels still present in stocks (equity securities on the chart) and debt (private and government debt on the chart).

The second chart below shows gold’s role in the global financial system as a percent of the total. Ten straight years of increases in the price of gold and gold is still hardly past half of one percent of all the paper assets floating around. The world really is awash in a flood of paper assets, and these charts prove that fact today.'

-Mike Maloney


3. Jordan Roy's Chart

'As you can see in the chart, Gold was in a steady uptrend for the first five or six years. It was contained within lines 1 and 2. The market began to accelerate from the very end of 2005 into 2008. The retracement in 2008 bottomed essentially at line 2. The fact that the market held above it meant that the market remained in a new acceleration mode, which started at the end of 2005. Following the 2008 bottom, the market slowly but gradually accelerated its way past line 3.

Note the change in the market’s character. At the first phase of the acceleration (2005-2008) the market saw sharp impulsive advances and long consolidations. This time around the market is showing more strength. Although the impulsive advances are smaller and shorter, the ensuing corrections are comparatively shorter and smaller (relative to 2005-2008). In other words, the market is gaining strength because the corrective periods are shorter. The final resistance is channel 4, which parallel to 1,2 and 3, connects the 2008 high and highs of late 2010. Channel 4 at present is ~$1,460 and increases to about $1,600 at year end.

A strong move past channel 4 means the market has little in its way until $2,100 and $2,300. There is a strong Fibonacci target at $1,500 which intersects with channel 4 in early summer. That could mark a top.'

-Jordan Roy

The American Military Adventure & The Japan Quake (Part 2)

Noble Peace Prize Winner Barrack Obama has declared war on Libya through a coalition allied attack with NATO and her allies like the french. The air in Washington has perhaps the thickest level of hypocrisy since the ousting of Saddam on WMD (weapons of mass destruction) that somehow didn't exist.


“For generations, the United States of America has played a unique role as an anchor of global security and as an advocate for human freedom. Mindful of the risks and costs of military action, we are naturally reluctant to use force to solve the world’s many challenges.”

-President Obama

It seems like a real unnatural co-incidence that Libya has the world's top 25 Gold Reserves and is a major oil exporter and oil-well.

'Libya has the largest proven oil reserves in Africa with 42 billion barrels of oil and over 1.3 trillion cubic metres of gas. With only 25% of Libya’s surface territory explored to date there is every chance that actual reserves could see this figure dwarfed in coming years.'

-oilandgaslibya.com

It is true that Gaddafi is perhaps a mental-case and is oppressing his people, but does it give USA the right to challenge the nation's Sovereignty?

What is US's True agenda?


'Military intervention in Libya has cost the Pentagon an extra $550 million so far, mostly for bombs and missiles'

- The Washington Post

Adding to its already massive debt of 14-15 Trillion Dollars (Which excludes unpaid liabilities and the Freddie Mac & Fannie Mae Govt Debts), half a billion dollars and counting just for bombing Libya is the worst way to spend tax-payers money. Interest rates are still near zero, Real interest rates are negative. Where is Washington going to get the money to continue funding this war? 2 options, print more money or use more tax payers money.

Gold Simply reacts to the chaos that America: War with Libya/ Operation Odyssey Dawn started around the 18-19th of March. When markets reopened on the 21st (monday), Gold shot up almost instantly 10-15 dollars.

'The way to crush the bourgeoisie (middle-class) is to grind them between the millstones of taxation and inflation'
-V.I.Lenin

Japanese Quake & Another American Freedom Crusade (Part 1)

What is in the headlines lately today? The horrible tragic quake that rocked the long Island near the ring of fire, and the 'land of the free, home of the brave' launching yet another war on an oil-rich nation.

Cryptic talk, cryptic messages and perhaps a hidden agenda lies below the rubble of all these chaos, but enough speculation, lets look at the 2 theatres and how their events though separate contributes to the same inevitable outcome of the economy.

The Japanese Theatre: The Earthen God Awakes

We all know what is affecting the Japanese peninsular, but is the Japanese government taking the right measures to help save the Japanese Economy?

"It's panic-selling … Everybody just wants to dump shares," said Retela Crea Securities general manager Yosuke Shimizu in Tokyo. The Nikkei closed 1,015.34 points lower at 8,605.15, having fallen as low as 8,227.63 intraday, when it was down more than 14 per cent

-TODAY online

Suffering a massive plunge, the Japs had a few routes to choose to help prop back their economy. Instead of choosing the proper monetary actions, it chooses to practise the Keynesian dance by printing and flooding the market with cash.

TOKYO - Japan's central bank continued to flood money markets with cash yesterday, bringing its total emergency funding to ¥55.6 trillion (S$882 billion) as it tries to soothe fears about the economic impact of the catastrophic earthquake, tsunami and unfolding nuclear crisis.

-TODAY online

Is such a move justified? In my humble opinion, partially yes, after such a catastrophe, the government should take actions to prop up its economy. But lets ask ourselves, where did the money come from? Did Japan really sell ALL its gold reserves which is estimated to be around 765.2 tons of gold or 46-50 Billion dollars worth of gold.

NEW YORK — Commodity markets reeled on Friday as the massive earthquake that hit Japan sent oil, softs and grain prices sliding on fears over its impact on demand, deepening their biggest decline in months. -Reuters

So even if the Government did sell ALL its gold reserves, where did the rest of the 800+ Billion dollars come from? Tax Payers money? Or did they use the Zimbabwean School of Economics route of unnaturally lose fiscal policy and a quick draw Quantitative easing/ Printing money/ stimulus package solution?

How it affected Commodities/Gold market: Yes, Gold took a temporary tumble from around 1415 all the way down to below 1370, almost a fifty dollar tumble within a few days. But with the middle eastern problem getting worse, and the loose fiscal policy the Japs have, more money is added to the money supply. Where is gold today? Almost breaking the All time High @ 1440 per ounce.

What the Japs should have done: Raising interest rates and contracting money supply, divert resources from consumption to the rebuilding efforts! Expand liquidity when an economy expands, contract the money supply when the economy contracts, the earthquake flatten lots of the Japanese industries, if that isn't a contraction, i don't know what is. The best move they should have done was to escape and cash out the US T-Bills ($900 Billion worth) or Bonds, what good are those treasury bills when your not even going to use it for emergencies!

The Keynesian World

Lets get down a bit to economics. Its futile to understand markets, finance and even gold without understanding the underlying ideologies and thinkings of macro-economics.

'We are all Keynesians now'

- USA President Nixon ,1971 after abolishing the Gold Standard

Oh how true, this 5 words caused the start of almost all the monetary crisis of all the world.

What is Keynesian Economics? How does it affect us? What does it predict for the future?

Keynesian Economics is a subset of Macro-economics

Keynesian Economics:
A belief that the private sector decisions leads to inefficient macroeconomic outcomes, they advocate active policy responses by the public sector. They encourage and embrace monetary policy actions by central bank, government deficit spending and fiscal policy actions by government to stabilize output over the business cycle.

- Keynesian Multiplier & Deficit spending
- Interest rates manipulation

Lay-man Terms:
A system that believes government need to intervene and lead the economy of its nations together with the private sector. Its the governments responsibility to bring about stability in the financial world through policies.

-Lowering interest rates, printing money, stimulus package.

Most Western governments and developed countries are practicing Keynesian economics to one degree or another. But none as prevalent as USA. US economics is almost totally Keynesian.

A very interesting article i found explains quite a bit about why Keynesian rules are chipping away on the economic health of the world: http://ilene.typepad.com/ourfavorites/2010/10/niall-ferguson-explains-why-keynesian-policies-are-dooming-the-world-economy-to-round-after-round-of-asset-bubbles.html

The most Important Quote of this article is:

'Remember what Keynes wrote in the 1930s about stimulus and the way in which government could get an economic going again really applied to a post-globalization world in which trade and capital flows had largely broken down, and most economies were quite isolated units.'

Keynesian thinking might be good in the past, but now the world is facing a great monetary deficit that might not be able to be paid off, the world economy are now interlinked with each other, no longer are bankruptcies the bane of companies, but also a threat to nations. What if the USA becomes bankrupt?

How Government Actions have plunged the world to crisis. (Keynesian Style)

Remember the 2008 Housing Mortgage Crisis

The crisis was caused mainly by mortgages and loans that went bad. That trickled down into the mortgage-backed securities being sold by banks to investors to : Reduce credit risk and replenish funds to loan out more money to housing buyers amongst other things.

Why would banks lend money to people who can't qualify for loans or meet the income brackets? Simple, the US government created Freddie Mac & Fannie Mae (Govt linked entities) to assure and guarantee all these loans and debts taken. With the government assuring your loans, greed took over most people and many began taking loans far beyond their means.

Banks gained the guts to lend more loans to risky people since the governments guaranteed it. Once those loans turned bad, the domino effect of disaster happened.

Stimulus Packages

Or Quantitative easing as the officials call it. In simple terms, its flooding the economy with money that is meant to stimulate the economy only if the money is put into good use. However most of these money never reaches its intended venues. Most of it is used to rebuild government infrastructure or to create jobs that DO NOT create any value or production in the USA.

That money should be given to the private sector, entrepreneurs to revive dying sectors that can improve the real production of America and not used as bailout money.

The next Bubble i call it the Credit Bubble, thanks to Keynesian thinking and government intervention (with good intentions but poor execution), the money supply of the world is going out of hand.

'Because the liquidity just leaks out, and that's why another round of stimulus would not stimulate in the promised way. It would stimulate the wrong things. And those things, commodity markets and emerging markets, are already overstimulated to the point of being nearly bubbles.'

Why is gold still strong and set to soar? Simple, because the world is Keynesian.

Gold (Stage 2 & Why)

This should be renamed the smart, the scared and the dumb. It would be naive to just keep going pro-gold all the way. I always do an anti-gold research at the same time. Many people are as anti-gold as those pro-gold. However their reasons are unfounded, more or less based on fear.
Fear profits no one, but fear itself. Lets recap an investment boom stage 1 & 2.

In stage one : Prices have gradually begun to rise, but not sufficiently enough for most people (including professionals) to take an interest. Only a few are making profits, the media doesn't care much.

In stage two: The mentality of most people is 'the market has gone too far too quickly'. The media has some references to the investment boom, some are proponents, others are opponents and demonizes that investment class.

This is why i say it is in stage 2. I will prove it to the best of my ability using not only the media, but world events as well as charts.

My analysis and response is in red color.

How the Opponent Media of Gold sees it:


Omg, i cannot believe CNN money actually said that. Bubbles are the Perfect time to make money, in times of crisis, the wealth transfer from the poor to the rich, the unsuspecting to the prepared is tremendous. The only great event other then a crisis/bubble is striking the lottery.

http://money.cnn.com/2011/01/10/pf/investing/investing_in_gold.moneymag/index.htm Excepts from CNN money: 'Unlike a bond, gold doesn't promise to pay you back with interest; unlike a stock, it doesn't have any hope of generating earnings over time. If gold were a house, it would be one you couldn't live in or collect rent from.'

True bond gives dividends, but many of these AAA bonds turn out to be junk. Remember the housing crisis of 2008. People don't really learn. Gold doesn't pay back interest, so? The recent capital gains from gold over time trumps any interest in the market as of yet. The time for bonds is over, there will be a time for bonds, it is not now!

'Right now, though, there's no sign that inflation is about to rear up anytime soon. For all the Fed's efforts to inject money into the system, the folks who have it -- banks, mostly -- have been reluctant to do much besides sit on it, leaving too few dollars chasing too many goods.'

CNN money has its head buried in a hole. Prices of items, goods and everyday products are slowly going over the roof. No sign of inflation rearing up? They must be living in the twilight zone.

Event a major media like CNN money is naive, how much can you trust mainstream media to give you a proper financial outlook?

Lets look at a recent statement by the Federal Reserve

'WASHINGTON, Feb 28 (Reuters) - A top U.S. Federal Reserve official said on Monday the U.S. economy should do well in 2011 and that oil prices rising on tensions in the Middle East are not currently a drag on the recovery. "We're in very good shape for 2011, the only wild card now is the Middle East." St. Louis Federal Reserve President James Bullard said on CNBC.' http://www.cnbc.com/id/41825136

What i like about the Fed's statements is that to see the truth you just need to turn their words 180 degrees around. Oil prices are not a drag on the recovery? Are you sure? Thats fed speak for saying a jobless recovery is still a recovery! The economy should do well in 2011? Which Economy? Mars?



I have analysed quite a few bubbles in the past, from the south-sea bubble to the dot-com bubble. We are long past stage 1, we can't go back. Prices are going up quite quite significantly now.

Best Case Scenario: Gold hasn't seen a bubble yet: It is just naturally revaluing itself to all the credit and currency floating around the world.

Worse Case Scenario: Gold is a bubble: We are at mid stage 2.

Conclusion: Whether it is a bubble or revaluing itself, its time to make money.


Gold is at 1420 USD/Oz. Up 10 dollars from 1 day ago. Have you bought gold yet? :)

Asset-Trends (Identifying the Next Big Thing)

Today although gold is still an underperforming asset, more and more people are consuming the yellow lustrous metal like never before. It is still not greatly shown in the media, but prices are gradually climbing. You can call the climb of gold taking 3 steps forward and 2 steps back.

I believe Gold is in the Mid-phase 2 of an investment boom. There is still ample time to invest into this metal. However what is the next investment opportunity? What is the current asset class that is still in phase 1. What is under everyone's radar?







Lets recollect: Phases of an investment boom

Phase 1: Stealth phase; only those with time, analytical skills and great knowledge can identify it.

Phase 2: More identifiable, but only those with foresight and emotional stability will enter it.

Phase 3: The whole world knows; this phase is motivated by greed and those entering here thinks they know everything.



I seek to find what it is.


p/s: To those who have not participated in riding the gold wave, please do yourself a favor and start now. It will not last forever, the wave will build up higher and higher and participating in a wrong time (phase 3) is not only dangerous but it might even be disastrous. Do not chase yesterday's news.

ssshhh gold is past 1410 USD/oz :)

Dictators & Bank Runs

The economy is strongly tied to the fate of the geopolitical world. Its an understatement to say when there is a crisis in any significant part of the world, the economy suffers.

Turmoil has hit the Middle-East, perhaps the beginning of something more. As the dust of the Egypt protests and violence begins to settle, an even more violent uprising and protest in Libya has begun.

Introducing Muammar al-Gaddafi

Ex-Colonel, now the leader of Libya from a successful coup. He faces a bloody open revolt by his people for ignoring the basics of public care, unemployment and the traditional reason of corruption. More or less, Libya is in a state of civil war with the opposition unwilling to back down and Gaddafi issuing a statement of ' fighting to the bitter end'.

'Gaddafi has vowed to "fight to the death" in defense of his leadership of the country, and has responded to the unrest with large scale and extremely violent military and police crackdowns in the cities of Benghazi and Tripoli, which include the use of artillery and airplanes against protesters. As of late February, the country appeared to be rapidly descending into chaos as hundreds of people were reported to have died in the violence, Gaddafi is reported to have imported foreign mercenaries to defend his regime, and large swaths of the country, particularly in Eastern Libya, are reported to have fallen into the hands of anti-Gaddafi elements'

-Wall Street Journal / AP

Bank Run in Korea

Did you know there was a bank run in Korea? Most probably you didn't. This incident is kept extremely quiet by the major presses and hardly even heard around the circles of even business.
South Korean banks now suffering from the classic bank run.

Bank Run: Its when depositors lose confidence in either paper currency of the banks credibility to assure their deposits and hence literally run to the bank to withdraw every dollar they have.

Isn't Asian economies suppose to be safe and immune from the Western problems? Not really, remember we are all interconnected and from the looks of this, time to be cautious of even the local banks. Check this out:

'More than a thousand customers lined up in front of the Busan II Savings Bank located in Busan yesterday as soon as the nation’s financial regulator announced a six-month business suspension of Busan Savings Bank and its affiliate Daejeon Mutual Savings Bank.'

The government is doing its best to calm people, but it's not working:

“I’ve saved 40 million won ($35,810) over my whole life. That money was going to be used for my grandson’s marriage but I cannot trust these people [bank employees] saying that I am guaranteed to get my money back,” said Cho So-young, 79.

Is it any wonder now gold has creeped back up the USD 1400/oz mark and silver has reached a 30 yr high? I think not.

http://www.businessinsider.com/there-are-fears-of-a-massive-run-on-the-banks-in-a-country-youd-never-suspect-2011-2?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+clusterstock+(ClusterStock)

The Strength of the Sing Dollar & The Blame Game

Its great to be in Singapore (for-now)!! =D

With the US dollar literally dying, the wealth of the Asian Economies will be affected but will ultimately thrive.

Come, let me explain why the Sing Dollar is Strong, Why the US dollar is weak & Why buying gold (or any commodity actually) using Asian Currencies is much better then the US dollar.

Here is an old pic of mine after my travels to New York. In Early 2007, the price of gold in US dollars is: 600 USD per oz. Exchange rate to Singapore then was probably around 1.42 or so. (Meaning 1 US dollar can buy 1.42 Sing Dollars). Meaning in 2007, you need 850 dollars to buy an oz of gold.

Today the price of gold is around 1370 USD an oz. However the exchange rate is now only 1.28, meaning you only need 1750 Sing Dollars to buy an oz of gold.

To conclude with the US dollar falling, get out of the dollars and get back into Asian currencies such as the Sing Dollar and the Yuan. Even if gold rises, you will be paying (in a way) lesser for gold using the Sing Dollar then if you held on to the greenback!

The Blame Game!!

How do most locals in Singapore think about inflation? There you have it. Most realise something is wrong but are waiting for either handouts or solutions from the government. They blame the whole world except themselves. Remember people, when something goes wrong, more often then not to find the culprit, one has but to look into the mirror.

Its quite obvious which post is mine down below. But omg, i received 2 dislikes within 10 minutes while Mr Whiner garnered 3 likes for complaining. Amazing. Disgraceful.

The 3 things that Erode your Wealth

The 3 Things that Erode your Wealth

Ok this time the post is not about gold/silver. But some basic financial education that shockingly, the majority of people have no idea. Once you view this you will be convinced the surest way to poverty is to just work a 9-5 job and save your money.

Sounds counter-intuitive right? Sounds like i'm crazy? Why this is dude criticizing the structure of society that 70%-90% of people are following.

I present you with the 3 Things that Erode your wealth

1. Tax

Since the ancient times of Kings, taxes were imposed on the common-folk to pay for the wars, lifestyles and plans of those in authority. Of course, taxes are also needed to pay for some public amenities and civil servants.

In Singapore the tax rate for individuals range from 3.5% to 20%.

http://www.iras.gov.sg/Tax%20Calculators/IIT/IIT.html

Simply meaning If you rely 100% on your income for your survival, payments and to sustain your lifestyle, the vampire called TAX will suck up to 20% from you.

Lets say you earn $4000 a month, a maximum of 800 dollars is lost to taxes and that does not include the CPF money taken from you. Take home pay will probably be less then $3000.

Things the Government CAN and WILL touch (as of 2011): Dividends, interests, Property Rent, gains of profits from an income, royalties and estate income.

Remedy: Do you know that capital gains are not taxable. Such as stock investments and commodities investments. An example is Gold, although physical gold is 7% GST taxable, if gold rises in value, the government doesn't tax you on that (for now)

Play it right: Do not rely 100% on your taxable income, do have some other forms of investments, property, precious metals and stocks.

2. Debts

Yes, i understand it is impossible to eliminate needing debts. You do need debt to survive, your first house, your university study loan. However the moment you take a bad debt without thinking, you have signed a form to financial suicide.

Lets say you buy a $1,000,000 dollar home, making a downpayment of $200,000 and you take a loan of $800,000 @ 8% interest for a 30 year term. Guess what, in 5 years, you would have paid $352,200 to the bank ($312,760 for interest and only $39,440 for debt reduction)

And that is assuming you can earn $70,000 a year (that excludes food, clothes, car payments and entertainment). If you can't pay on time, the interest will either pile up or you lose your house.

Play it right: If your going to take on debt, make sure you get paid for it, an easy example is rent out the million dollar house, let say it fetches at 6000 dollars a month, your mortgage is fully paid for and in essence, your getting a house for 'free'.

3. Inflation

Why saving all your dollars in a bank is pure ludicrous is simple. The interest rates you get is seriously near zero, even those that aren't, requires fixed deposits (your money is frozen for a time period if you want the interest).

We all can feel inflation, can your pay rise at least 5% a year to scale with inflation? Even if it can, it means your just surviving, your not getting richer. Your fighting over a money supply that is being printed for free.

Save your money, yea its a good idea, your 20 dollars today that can eat a nice meal in a middle-tier restaurant won't even buy you a mac donalds meal 3-5 years down the road.

Play it right: Invest at least 25% of your portfolio into stuff that will either appreciate or retain their value over time. An example of an item that has held its value for 3000+ years is Gold. An item that can appreciate is Silver, sugar, wheat, oil and other commodities.

Gold: The Art of When to Sell

Gold is an investment, there is a time to buy, there is a time to hold, and yes there is a time to Sell. There is a time to sell!



Gold/silver is not a marriage contract that states for better or for worse, sickness or in health. When the time comes, you need to sell it off to realise your profits.

Before i start talking about the signs of when to sell, lets discuss a bit about asset classes, and how they follow each other. In history, these signs have always played out, some more significantly then others. Others are directly track each other, some have lag times.

My Theory of Asset Class Movement



Ok granted, it may not be lines that have sharp turns, but perhaps gradual curves, but the general direction i believe should be highly correct.

Understand this concept Wealth Cycles. The economies of the world plays out in this fashion for thousands of years, one asset class will become overvalued and eventually fall, while another asset class from being undervalued rises. The old overvalued asset then become undervalued. Vice-versa.

The Art of Selling Gold/Silver is to correctly predict where roughly the peak of its wealth-cycle will be, sell everything and pump it into an asset that is undervalued.

Remember the stockmarket and dot.com boom, where everyone left their day jobs. Stocks was at an all time high, commodities was very low in price, gold was less then 200 dollars an ounce. (Today it is around 1370 US dollars an ounce).

We used to see the first graph applies to the direct relation between stocks and commodities, when stocks began declining, gold went directly up. However not today. With the manipulation of money (printing, silver/gold shorting, rumor & fear mongering and quiet acquisitions), the pattern of gold and stocks/bonds now follow closely the pattern of how commodities relate to property prices.

Happy Identifying the next undervalued asset class! You must know what to put your money in once gold/silver becomes overvalued. (But i believe, we are far from that day, still relatively far)


Factors that Signal the Time to Sell gold

Watch the Dow-Jones Index:
Historically in times of crisis, the price of gold rose and the dow jones fell to 1:2 and even 1:1 ratio. Meaning eg. Dow Jones fell to 8000 points, gold rose to 8000 dollars/ounce. Meaning you can buy a share of the Dow Jones with just an ounce of gold.

Currently: Gold: 1370/oz, Dow Jones: 12,092/share (we are still far off, relax)

Watch the Consumper price Index & Food prices:
This is simple, when the CPI jumps in double digits and above 20%, we are getting near an exponential increase in gold's price. When your plate of rice or noodles start costing 10 dollars for a simple meal, the end is near. You can feel it, your wallet will be screaming.

Watch your News papers, including business times:
The media especially in Singapore is slow to catch on, they are part of the herd, when gold rises and inflation hit the streets, people will all be thinking gold is the best investment and dump all their money in it. This will make the price of gold skyrocket, but incidentally, this is the time when you want to hold the trigger button that connects to the word 'Sell!' and squeeze it at a moments notice.

There are many more indicators, but these 3 points should be enough for you guys to keep in mind without forgetting.



So what are you doing with your money? :)

Obama's State of the Union Review

Welcome to my review of The President's speech or better titled,
5 good reasons why the future of gold still shines brightly.


Before the presidents speech, gold was struggling, profit-taking and investors who are more willing to take risks in the stock market & bonds market moved away from gold as a safe-haven. Obama's speech was vital to the short-term fate of gold. Will gold continue to fall? Will gold rise back?

Obama painted a nice picture of the America of old, of how the world of old was one way or another was outsmarted & out-witted by the USA. He put on a perfect show, but try to look beyond the smoke-screen of his speech, and you will realise the US economy is no where near any improvement.

#1: USA will reduce its deficit by 400 Billion dollars! By a five-year freeze in domestic spending projected to save $400 billion over the next decade.

'Are you kidding me? The US deficit/debt is continually growing at a rate of 300-400 Billion dollars a year. So it is actually just slowing down the path of the US economy to its doom, nothing more. Even if the debt is reduced by 400 billion, a freeze in domestic spending will not benefit this American consumerist machines.


#2: USA will invest more money in Education

'That sounds nice, giving the kids today a nice solid education for a good paycheck tomorrow. Firstly do you know the staggering amount of student loans and debts that exist in USA? The amount is even more then the credit card debts owed in America. This move is going to drive more and more students deeper into debt and despair. What good is the future of America if its young is full of debt, facing a 20% jobless rate and a poor credit score?


#3. Wall-Street & Lobbyist still Controls the Cabinet

No reshuffle or even a hint of any change in the cabinet, cronies like Timothy Franz Geithner (ex President of the Federal reserve) is still the Secretary of Treasury.

#4. The Federal Reserve Interest rates have not moved.

'They are still at near Zero percent. If you put in 1000 dollars in a bank, after 10 years, your interest will be near zero, and your bank balance after 10 years will either be 1000 dollars or zero dollars (if the bank collaspes).'

#5. Continuing American War Escapades in the Middle-east, Continuing Pressures on Iran and North-Korea.

'For freedom! Oh really? Apart from the political reasons, continuing of these military adventures pushes whats left of the American economy to the brink of Bankruptcy. Sure, soldiering jobs are created, but the real show of a country's economic power is the ability to produce and manufacture goods and services, not by its massive army and war machines created. When USA's war industry prospers, the rest flounders.'

Gold measures not only how bad the state of the world economy is, it is also a measure of how screwed up the world is, political unrest and threats of war is prone to make gold soar. President Obama has put up another annual smoke-screen for the American people. Every time gold rises by a cent, is another second the world is creeping into chaos.

When gold is stable, chaos is controlled.


Marc Faber on Obama's Zombie Economy

Silver Prices (Volatile & Opportunistic)

Yes this time i am talking about silver for once. Not half as glittery as gold but has a real probability to outperform gold. Lets picture gold as something stable, its fundamentals are traced back at least 3000 years, backed up by history, Kings, governments, banks. It has been and still is the international money that transcends time and governments.



Silver on the other hand is a most interesting metal, yes it is precious, traced back thousands of years too, a monetary metal of course, but this time, it has industrial uses. A LOT of industrial uses. I'll explain in another article in detail. For now, lets just focus on the prices of Silver and what affects it.

View these Charts. Ill explain it simply, doesn't take a genius to interpret it.



Conclusion:
Silver over the last year has risen more then Double of its initial value. Gaining at least 100%

Versus Gold that grew only 33% (Which is still phenomenal considering this zombie economy)


Why? WHY? How is it even possible? How can anything beat the GOLD?!

Here are the factors that make silver rise & fall


Why Silver will Rise:

1.Extremely important industrial metal:
Your mirrors, your ipods, your CDs, your handphones, your telephones, your satellite dishes, your cutlery, your cars, your watches, your wires, your medical equipment etc. All these require silver. In many instances, silver cannot be replaced by a cheaper metal because
Silver is: - The highest electrical & thermal conductivity metal
- The only metal in the world that has anti-bacterial properties etc.

2. Silver Production cost is getting Above its selling cost:
What do i mean? Simply put, digging the silver from the ground and pouring chemicals on it to refine is is more expensive then selling it on the open market. The production cost is almost the same as its selling cost. Silver is undervalued.

3. Silver recycling is economically impossible:
This is not your plastic bottles or newspaper save the earth foundation people. Most items that contain silver does so in minute amounts, from a few microns of silver (CDs) to a few grams (handphones). Asking people to recycle silver is like telling them, spend 10 dollars tearing the item apart and refining 1 dollar worth of silver.

4. There is less Silver on earth then Gold:
I am not joking. Silver is now rapidly being consumed, eaten up by industries. The total amount of gold in the world can make up a cube of 18 ft x 18 ft x 18ft. Silver is probably less then 75% of that total amount. I don't know about you, but lesser of something more functional then gold spells and smells like its undervalued.

5. China just launched its public Silver Bullion Smiths:
Why is this a factor, China is the world's next superpower. the chinese government is aggressively asking its population to accumulate gold & SILVER. Why? Its to protect the citizens wealth, and more insidiously, is to let the country profit when the world reverts to a monetary system backed up by gold & silver.


Why Silver will fall

1. Comex Silver/Paper Silver:
Once again it calls into play manipulation and covering of shorts in the market. What do i mean? Lets say i have only 100 grams of silver, but i am selling silver certificates online that is equivilant to 10000 grams of silver and i call it 'unallocated silver' or Silver futures. Selling silver that hasn't even been mined yet? FUBAR

2. Dollar is strengthened:
Bailouts, government rumors, investors all dumping their commodities to take extra risks out there in the stock markets will make gold & silver fall.

3. Supply & Demand:
Once again very simple, if demand for silver falls, the prices will fall. Production currently is rather steady, so if industries one day discover a mystery metal cheaper and better then silver, then silver is in trouble.

4. Manipulation of Silver prices:
-Refer to my JP morgan manipulation article ,coming soon.-


To end this, this is like comparing a reliable horse (Gold) to a new age high-potential motorcycle (Silver). Both still wins the economy (Turtle). So if you have lots of money, tens of thousands, throw into gold if you have doubts. If you are daring or your budget is in the hundreds - thousands. Explore silver. You won't regret it.

Why Does Gold Prices Fluctuate?

Well this question is the most common question i have ever heard. Understand that everything in life fluctuates, be it gold prices, fuel prices, interest rates, even the prices of your hot dog next door changes from time to time. The most important attributes needed for an investor is just 3 simple ones.

- Knowledge (understand both sides, eg. those pro-gold, and those anti-commodities)

- Emotional stability (you can be intellectually brilliant, but still lack this important quality)

- Will to act (So what if you know everything to succeed, until you try, you won't succeed)

I'll address the Knowledge part in this article.

I would like to share a quote about stock/commodity prices i find interesting: 'Prices are nothing but numbers that relate to the collective hope, greed, fear, rumors, speculative natures and knowledge of investors.' How well a company's management also does play into factor however, i feel is nothing compared to the collective force of the former factor.' - Mark Shipman


Firstly this would mean just looking at the price of gold or any other stock will give absolutely no indication if it would fall or rise. So what if gold is at $300 or $3000 per ounce. Using this same principle, it is useless to predict where gold will be 1-2 years from now from just its price. A price is a number.

Hence the take home message:'Investing is NOT bargain hunting whereby getting a cheap stock/commodity would mean getting a good deal where it has no direction to go but to rise and let you earn money! This mentality is naive and courting disaster.'

Ok, Why does gold Prices Fluctuate?



When i mean fluctuate, i am talking about charts of gold up to the 60 day limit. It is very obvious to the general direction of gold in the 1-10 years chart. It is heading up.

But why is there quite major fluctuations in the near-term time period? It looks as if the end of the chart is where the beginning is, just one roller coaster ride to no profits, right?

Making things Simple, i attribute these to 5 main reasons.

Comex Gold/Paper Gold:
The prices you see here are reflective on not only all the physical gold that is being traded, it is a reflection of gold's prices together with the futures market, gold derivatives, gold ETFs, and paper gold. Not all gold is bought physically, an extreme amount is being traded electronically, and some of these gold are done in an un-allocated state (you do not physically own it and you have no idea where it is being stored, in short you know close to nothing). Paper gold backed by nothing is dangerous and causes a lot of shorts in the market.

Conclusion:
If more paper gold is relied on trading/less people taking physical gold delivery : Gold prices fall.
If physical gold delivery is desired, and the demand causes the shorts to be exposed:
Gold prices rise.

Short Term Speculators:
Firstly understand, the normal investor such as you and me only comprises of less then 15% of the total market. Big boys such as corporations and billionaires more or less control the market (another reason why you shouldn't fight the market or think you are smarter). An obscene amount of corporations love to play the 'short-term gain game'. To put things simply, they will buy an enormous amount of gold (paper/physical, doesn't matter), gold prices rise, at the peak of their own choosing, they sell close to ALL their gold holdings, the market is flooded by a sudden influx of gold, prices drop. They then buy again 'cheap gold' and rinse and repeat the cycle.

Conclusion: Big corporations (Eg. Central banks, Governments, Billionaires) buying up gold will cause: Gold to Rise.
Big Corporations selling their massive gold holdings : Gold Will drop.

People's Emotions:
This is perhaps the best thing we can see in your daily life, especially herd mentality. If gold prices rise, the greed in people will make them buy gold so as to 'ride the wave', but if gold falls, unless they are equipped with the proper knowledge and emotional stability, they will most probably sell their holdings, causing a domino effect. John sells, Amy sees John selling, she sells, her family sees her selling, they sell, the community sees the family selling, they all sell..etc.

Conclusion: This is linked to the previous factor and almost exactly the same.

Supply & Demand:
This is the simplest to understand, gold is not conjured from thin air, it has to be dug up from the mines and processed extensively using chemicals. It is SUPPLIED from mines and mining companies. Supply for gold is currently decreasing and demand is increasing, hence rising gold prices. Simply put, the mines is not producing enough gold, people want and are buying more gold then is available in the market. Do note that gold is a finite resource like oil, it will run out!

Conclusion:
Supply Up + Demand down: Lower Gold prices.
Supply down + Demand Up: Higher Gold prices.

World Events:
Reading your Wall Street journal is not enough. World events such as the impending threat of the Korean War & the European Debt crisis greatly affects the pricing of gold. Lets take the 2008 bailout of America. Fiat currency backed by nothing flooded the market, corporations that should have died were saved, the panic of a crashing economy was delayed, Gold prices took a dip as the dollars confidence was still relatively strong. A few months later to a year, the fiat currency injection just made matters worse, jobless rates continued, debt increased, people ran to gold for safety. Gold Rose.

Conclusion: Wars/Debt Crisis/Scandals: Gold will most probably rise.
Bailouts/manipulation/dollar confidence boosting: Gold will most probably fall.

The factors for Silver prices is somewhat the same, however it brings into issues such as the JP morgan manipulation. This will be covered soon =)

How our Economy is (Video Version!)

Do yourself a favor, view one every wednesday before you head to clubbing or something. In 1-2 years time, your whiskey coke is going to be 10 bucks a glass, 50 bucks a jug!

I won't waste your time with long videos, so I'm just going to post 2 really short and easy to understand videos, and then finally one slightly longer more official video.

Video #1: World Economic Collapse explained in 3 Minutes (Disaster made easy!)





Video #2: How the financial System Works in 2 Minutes

Video #3: Robert Kiyosaki (Rich Dad Poor Dad ) & Mike Maloney explaining how Gold & Silver Links to this economy.

Gold & Silver Investment Opportunity

Whoops here i am again with pictures, i apologies for not manually typing it out, but still its quality information from my own document.

Important note: It is important to note that investing in these precious metals do have certain calculated risks. Many avenues for acquring these metals are open to the investors, however only a few are totally safe; Comex gold/paper gold vs physical gold. Gold stocks and futures and ETFs (exchange traded funds) do exist. However please do your own research before plunging into anything. You wouldn't buy a car without test-driving it right?

Want to know more? Do contact me at fsqsean@yahoo.com or drop me a fb message, also at this same email.

My Story (GSS, the Gold & Silver Story!)

GOLD

Ok this part is the easiest part. What i have been doing lately. From 2 years ago i was blindly buying gold. Why? Simply because of the fact my brother was doing so, i did not know what i was buying. I was just acquiring gold bullion or gold coins. He is known for his economic sense so i felt its time to jump onto the bandwagon.

Gold then was around 780-800 USdollars an ounce. 1 Troy oz is 31.1 grams.
Gold then was 25-26 dollars a gram.


Some of the Gold holdings i possess. I invest/collect in only pure .999 gold. I won't touch jewelery.

Today Gold is worth around 1371 US dollars an ounce. Or 43-45 US dollars a gram. My investment has grown by around 73-76%. Now tell me a bank that would give that amount of interest, hell if you can find a bank that gives 5-10% of your deposit without it being a fixed deposit or requiring you to dump in hundreds of thousands to the millions, then your a hero!

Oh yes gold has risks, but it is a smart calculated risk that i feel will win in the long term, if you are more daring with the proper education, you can try the stock market, you might be able to make more short-term gains there, well that is if you know what you are doing.

lets talk about Silver

Ah the poor man's gold. Still a great store of intrinsic value. Great fundamentals. I started pouring in some money into silver, not alot because i was a skeptic, i am still a little skeptical of silver in regards to the potential of gold, but i am bullish about silver compared to the economy. But despite my reservations, investing into silver i did!


A portion of my Silver Holdings. I dived into silver about a year back when it around 11-15 dollars an ounce. Today it is around 28-30 dollars an ounce. I made at least a 87 % profit from my initial investment, calculating more accurately, i believe it could reach up to 100%. And that is within one year. Better performance then gold. But i still prefer Gold (The stuff of dreams, greed and legends)

How does this relate to you?

Well simply put, i feel its better that you manage your spare cash carefully, if you are a guru in the stock market, so be it, if you believe in mutual funds that give u a miserly amount of profit (plus the fact you do not know the details about how your money is being managed) then good for you. If you love the smell of cash or just the sight of a fat wallet then omg, i have nothing to say. But if you want to take things into your own hands, and secure your money and possibly even make a handsome sum from an impending crisis that i feel is coming. Time to enter into Commodities. (Commodities is just a term for gold, silver, wheat, oil, soya beans. etc)

If you are thinking, Gold will fall eventually right? Then ill tell you this, the rich are buying gold by the tons, with their money, do you think they will allow gold to fall? Besides the economy today is violating the fundamentals. Its almost an economic war where we are the victims.

http://www.straitstimes.com/BreakingNews/Money/Story/STIStory_586785.html

If you are interested in acquiring more information for free. Please contact me at fsqsean@yahoo.com
or drop me a fb message.
My credentials? Simple, i've made a shitload of money. Nuff said.

The Typical Phases of an Investment Boom

I wish i could retype everything here but it is very painfully tiring. I will do so and make it more dynamic when i have the time.

Gold & Silver: The State of the Economy

Gold & Silver: The ultimate Hedge, Wealth protection Instrument & wealth creation

Throughout our lives we are taught a few basic principles, study hard, get a job, save your money, get married and happily ever after. I'm sorry to burst your bubble but this does not apply to today's society anymore. Your 'money', the dollars you hold are currently under attack. I will not link the word money to your dollars because the dollars you and i possess are just currency. This article i feel is not only important to those ambitious to gain wealth, but also for the average Joe to simply survive an impending economic crisis.

In order to discuss about Gold and Silver investment opportunities, it is important to start from the basics. Lets discuss about the state of the economy. I will explain in simple terms.

The State of the Economy

Whether you believe it or not, the economy is not improving, it is crumbling. I do not care about the various 'official information' fed to all of us to make us believe the economy is improving. The fundamentals of an economy are being violated. This violation is a direct consequence of the measures the world is handling money. My money, your money.

Inflation

This occurs when the money supply circulating is out of control and floods the economy. Currency/dollars is being printed without being backed up by anything. This is fiat currency, the 'money' we use today. The only thing keeping this concept afloat is the government's authority that makes these pieces of paper legal tender.

Effects of inflation: A burger 10 years ago might cost 50 cts to a dollar, today it is around 3 dollars. Property prices a few decades ago were less then a few hundred thousands, today the same property might be worth a million dollars.

Understand this fact: Things are NOT becoming more expensive, your Dollars are becoming weaker in purchasing power.

Lets take a look at the purchasing power of the dollar. The world's Reserve currency, the currency that is supposed to be strong and ideal and where all other nations' currencies are compared and pegged to. the US dollar.

For those who cannot interpret this graph it simply means for the last 75 years, the dollar has been dropping in its purchasing power by around 95%. And it is still dropping! The dollar 75 years ago is now worth less then 5 cents today. I know this is hard to digest, but too bad, this is happening to you and me.

Your paycheck today might not sustain you tomorrow.

Why is this happening?

This is happening not because of some big conspiracy or cover up, this is occurring in front of our very eyes.

Heard of the Gold standard?

Of course you haven't, well you might but understand this, we have gone away from the gold standard from the year 1971. The worlds currencies was pegged to the US dollar which was in turned pegged to Gold. In other words, your dollars were redeemable for gold. However, not any more, President Nixon of USA ended it in 1971. The reason in my understanding and opinion, is to allow a then Bankrupt USA (due to fighting the Korean, Vietnam and World War 2 battles) to artificially grow their economy. See the graph again, before the end of the gold standard, the dollar was at least marginally stable.

The World Banking System

Firstly i am not criticizing any system, i am just laying down the facts. You can decide for yourself. To me banks are the 8th wonder of the modern world. Why? Very Simple: Fractional-reserve Banking.

Ok i will explain it in very simple terms, want to see the full article regarding it, go wikipedia it. Basically if 10 million dollars was deposited into Bank A, the Bank (having a fractional-reserve ratio of 10:1) has the ability to conjure up 9 million on top of the 10 million it already has deposited by a customer. This happens as only 1 million is needed to guarantee the 9 million that was 'created'. If a new customer takes this 9 million dollars loan and deposits the money in his own bank B. This process repeats itself with 8.1 million of new money being 'created'.

Disclaimer: I might be wrong, this system might be truly a wondrous gift to mankind by the banks or it might be just downright wrong. Its up to you to judge. Just ask yourself, can you create money from thin air? If you can, then earning money is nothing more then a magic trick, means your money is worthless.

I do not know if Singapore Banks practice fractional banking at all, if to any degree, but i am convinced that major commercial banks that influence the world practice it to a large degree, especially American Banks.

The American Situation

This part of the article is perhaps one of the most important points i would like to mention. This is not only USA's domestic problem, the world is interconnected, especially so to Singapore. America's problem is our big problem.

In 1913, The Federal Reserve act was first established. This is to allow literally the printing of money to be controlled by an entity separate from the US government. The Federal Reserve is no more federal then Federal Express, it is owned by overseas Banking cartel which comprises of European nations and Saudi money.

The US government has to go through the Federal Reserve for any creation of money by selling its government bonds (essentially a debt), the Federal Reserve will then print money according to the value of this debt and exchanges this money for the government bonds. Hence new money is created from debt, in other words, money is fabricated.

Bailouts? Does it even work?

We have heard this word multiple times, i am frankly sick of this word. Its akin to a little child smashing a neighbor's window and asking his mom for money to repair it.

The bailout of 2008 (700 billion dollars) or any US bailout comes from the Federal Reserve, which is essentially phantom money. Hence the debt cannot be solved permanently with the bailouts or any stimulus package that is backed by nothing. Not only does it add to the US debts (14 trillion, to you non-mathematical folks, that is 14,000,000,000 dollars and counting).

To make things worse, the US interest rates are alarmingly low, production levels in US compared to other superpowers such as China, India and Middle-east is non-existent. The US economy is consuming everything but producing close to nothing. Asia and the rest of the world that still has sound money is getting sick of bailing out the Americans.

The European Problem

Oh yes, this is not just a red-white-blue problem anymore. It has spilled over to Europe. The bottom pictures are taken directly from my own writeup document. (Click on it for a better resolution)

Oh btw the Singapore debt is at around 20 Billion dollars and our public debt to GDP ratio is around 110%. How can it be?

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html

Verified by the CIA themselves.

(Disclaimer: This are just personal opinions and personal research conducted by myself, i am no financial adviser, hell i'm not even an economics major, but i am concerned about money, about how to manage my own finances, and i feel you should too)

[This article is very raw, it is not done using complex terms and jargon because firstly i know very little of that, it obscures the truth sometimes and i want this article to be reader friendly to all professions and all walks of life. Links to my sources will be uploaded when i have time.)