Revisiting Christmas
This essay is an appeal to your sense that all is not well with the economy and offers a simple alternative on how to approach this holiday shopping season. Even though every financial media outlet is telling you, "It is safe to go back into the water, it's time to put your money back into the stock market," you are sensing the danger of a strong undertow and intuition is warning you of the perils that lie ahead.
Last year (about this time) I wrote a little essay entitled "What Christmas Will Bring," ( www.gold-eagle.com/editorials_01/dsmith082701.html ) which among other things, predicted a drop in consumer spending over the holiday shopping season. This didn't occur because the US government and big business pulled out all the stops to keep consumer sentiment from turning negative. I received yet another lesson on how influence on the masses is implemented by the influential. Whether they can get the consumers through another Christmas buying season is yet to be seen.
"Oh there you go again," you say (after reading last year's article). Perhaps, but let's look closely. Japan's economy is definitely worse. Her most closely watched stock index, the Nikkei, is now down to 20 year lows. The USA stock market, in fact, did make another leg down. Even though the drop in consumer spending didn't take place, the S&P 500 index went from about 1150 to 900, a 22% drop. The FTSE index in Europe went from about 5175 to 4190, a 19% drop. Imagine how much worse these markets would have responded if consumer spending had in fact, dropped. Now we find ourselves once again at those familiar crossroads.
If the lengths that have been undertaken to distort the truth is an indication, US government and big business are in a weaker position this time around. To date, business has been willing to siphon off profits in the way of price reductions and free credit while the US government has been able to lie and manipulate their way through every pivotal point. In the case of business, the financial media have been accomplices by greatly distorting corporate earnings and putting the wildest spin on financial news. As to the government, they have had to increase the level of lies and manipulation to a point I thought could not possibly go undetected by anyone with an ounce of intellect.
Over the past two years, the Federal Reserve (FED) has lowered interest rates to 1.25% in hopes of stimulating the economy. Because of this lower cost of credit, people have been tricked into refinancing their homes, pulling out equity so they can feed their consumption habits. Businesses have used this opportunity to take on greater debt, not to invest in new plant equipment, but to refinance old debt and obtain more operating cash. Now that businesses and consumers are having to service more debt than ever, where will their next monetary infusion come from? The next phase in the current economic cycle will be accompanied by a drastic slowdown in consumer spending. There, I said it again.
The rate at which people are losing their jobs is taking away from consumers' ability to spend. While virtually no jobs are being created in the USA, companies are daily announcing layoffs. In some cases, companies are announcing the third, forth, and fifth rounds of job cuts. All the while, the Bureau of Labor Statistics (BLS) reports a relatively stable unemployment rate. This is a blatant lie as any serious research into the matter shows. How much longer can the BLS distort the truth about unemployment before their shenanigans become apparent to all?
An interesting point is that every move business and government make, while providing a temporary veil of prosperity, seals the fate of the global economy. Before the world's economy can recover from her illness, a significant amount of debt must be purged from the system. Because of the extreme greediness of the banking community and the short sightedness of citizens under the influence of this credit drug, a worldwide "Economic collapse" must take place. Most likely, it will be severe and extended. The imbalances are simply too vast.
It may be of interest to you that this collapse has already begun. To date however, those in control of statistics have been able to paper over the truth. The perception of a recovery is going to unravel in about the time it takes to switch on a light bulb. And when the light comes on and the people wake up, they will be furious. The US government sees this coming and is implementing Big Brother techniques under the guise of terror (right out of the book, "1984"). Passage of the Homeland Security Law allows the government to create a database containing EVERY piece of data about you that you can imagine. If you are using the Microsoft Windows operating system, you may be surprised to know that the US National Security Agency (NSA) is much closer to you than you think (www.heise.de/tp/english/inhalt/te/5263/1.html).
So what is the average person to do?
I suggest you close your ear to the spin coming from virtually all directions and focus on the facts. Talk to your neighbors. Analyze what is going on in your community. Look at the geopolitical events that are transpiring. Make a plan for financial survival.
The probability of surviving events that will shortly come to pass is directly proportional to the amount of physical gold and silver in your possession. We are in a uniquely advantageous position right now. Government has had to keep the price of gold and silver as low as possible since much of how it manipulates and misinforms hinge on these prices.
How about purchasing gold and silver for Christmas gifts this year?
Buying gold and silver bullion this holiday season is the logical thing to do. Gold is inexpensive and can be purchased in small quantities. Silver is downright cheap, but can also be purchased in small quantities. Every ounce purchased for a loved-one this Christmas is an ounce of economic freedom that could be greatly needed in the months ahead.
How about making yourself a gift of gold and silver this year?
Let's look at what would have happened if you had done this last year. On November 21, 2001, exactly one year ago, you could have purchased gold for $272.80 per ounce. Today the price of gold is $317.20 per ounce. You could have purchased silver for $4.02 per ounce. Today the price of silver is $4.46 per ounce. This is a 16% rise in gold and an 11% rise in silver. Can you see how precious metals preserve your wealth in a failing economy?
This rise in precious metals is insignificant to what is going to happen in the near future. There is still time to acquire a little security. In other parts of the world, where the US financial spin machine has little effect, acquisition of precious metals is skyrocketing. Even communist China has opened a precious metals market! Muslims are advancing rapidly on the use of gold as money in their economies. Have you seen the television commercials in t he USA advertising gold coins? How about the ads on the Internet? Business is eyeing this market because they know what is going to happen to the demand of precious metals and they want to be positioned when the gold rush begins!
Providence has given the western world (especially the USA) one more chance to acquire a small amount of financial security. Are you going to take advantage of this opportunity?
Purchases of gold and silver bullion can be made at your local coin shop. Look around for the best prices.
Merry Christmas and happy shopping!
Don Smith
a.k.a. GoldHappy
November 23, 2002
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