Ron Paul: No More Bailouts! Banks Should Be Allowed to Fail…

by Ron Paul

Supply and Demand - Free Enterprise

French businessman and economist Jean-Baptiste Say is credited with identifying the fundamental economic principle that aggregate demand for goods in an economy will equal the aggregate supply of goods when markets are permitted to operate. Or in Say’s words, “products are paid for with products.”

English classical economist David Ricardo, among others, more fully developed this principle into what has become known as “Say’s Law.” Say’s Law, according to Ricardo, leads us to understand that market equilibrium for goods is constant. This simply means that markets, when left alone by government planners or other fraudulent actors, inexorably tend toward an “equilibrium price” which eventually balances supply and demand for any particular good. Thus markets will clear themselves of any surpluses or shortages in the form of excess supply and demand.

This important corollary of Say’s Law– that markets clear– is critical to understanding the moribund US housing market. In housing, perhaps more than any other good, we see the terrible consequences of government and central bank interference with market forces.

Increase The Money Supply

First, the Federal Reserve Bank relentlessly increased the money supply over the last few decades. Much of this newly created money and credit flowed from Fed member banks into the residential and commercial real estate markets, causing prices to rise dramatically prior to the housing bust of 2007.

At the same time, the Fed systematically suppressed interest rates for decades. This led to tremendous malinvestment both by homebuilders and individuals, and encouraged a seedy subprime mortgage industry to make nonviable loans that would not make economic sense under market interest rates.

Give Credit to Whom Credit is Due!

Congressional meddling in the mortgage market also added tremendously to the problem. Inane legislation like The Community Reinvestment Act literally forced banks to make thousands of loans to bad credit risks. Similarly, Fannie Mae and Freddie Mac put taxpayers on the hook for millions of mortgages that never would meet market underwriting criteria. And of course the real estate and homebuilder lobbies made sure mortgage interest debt (unlike most personal debt) remains tax-deductible.

The ultimate result of these interventions by our caring friends in Congress and the Fed has been the biggest housing bubble and crash in US history, leaving millions of Americans underwater on their mortgages if they have not already lost their houses altogether. Congress and the Fed are directly responsible for millions of shattered lives, and almost unknowable economic damage in the form of trillions of dollars in mortgage backed securities.

Banks will Close Their Doors

The only solution to this mess is to allow the US housing market to clear. All of the bad mortgage debt must be liquidated, whether via foreclosure or bankruptcy. Banks holding substantial mortgages or mortgage backed assets must face the music and adjust their balance sheets to reflect today’s reality. Undoubtedly this will force many banks into immediate insolvency, but such banks must be allowed to fail without receiving another nickel of taxpayer money. Banks took the risks and made money during the bubble years; those who exercised bad judgment must now accept the consequences of their actions.

Never in American history have we needed to adopt a policy of laissez faire more desperately; never has government seemed more determined to artificially prop up an industry. But only by allowing the housing market to clear can we hope to rebuild our shattered economy from a stable foundation. Clearly there will be pain in the short term, but we owe it to younger Americans and future generations to allow the reemergence of a rational housing market.

Original source of articel from: http://www.ronpaul.com/2012-10-29/ron-paul-no-more-bailouts-banks-should-be-allowed-to-fail/

Find out what the ultra rich are doing to hedge themselves against economic collapse.

Finally a Presidential Candidate Points the Finger at Money-Printing

It took nearly 2 years of constant campaigning, but finally one of the men set to be President in 2013 said the words we’ve been waiting to hear.


EVG Research Team here, and we’ve been watching Mitt Romney and Barack Obama closely to see if either has a clue about the coming crisis. Or if they do, the courage to speak about it.


But so far, not one has mentioned the $1.5 trillion dollars waiting on hold at the Federal Banks, just waiting for the right moment to flood the economy with inflation.


Not one has suggested lowering the debt; not even with an empty campaign promise. They only promise to lower the deficit, in other words, the speed at which we grow more debt.


Not one has mentioned how we’ll manage to pay the interest on $16.2 trillion in debt when interest rates rise.

Inflation, runaway debt and sky-high interest rates will threaten hopes of retirement for a generation. 

The Elevation Group has a plan: Click here to discover our solution.


It seems the only option America will soon have is to honestly default on our debts and restructure them... or continue to manipulate our currency by printing more money to pay our debt.


We’d like to know which option the candidates would prefer, but for so long they were silent on money-printing and currency manipulation.



And Then it Finally Happened...


Someone mentioned currency manipulation. It was Mitt Romney, and he said...


China has been a currency manipulator for years and years and years. And the president has a regular opportunity to label them as a currency manipulator, but refuses to do so.


On day one, I will label China a currency manipulator, which will allow me as president to be able to put in place, if necessary, tariffs where I believe that they are taking unfair advantage of our manufacturers.


Wait. Someone finally mentions currency manipulation and we point the finger at China?


Wow. Let’s take a look...


Mitt Romney is suggesting China is a currency manipulator. Their crime is printing money to intentionally devalue the Yuan. In theory, this will make their exports cheaper and attractive to nations like the United States.

And that’s true. They did this for decades. BUT, this mostly stopped in 2005 when China depegged their currency from the dollar. Since then, the Yuan has been steadily growing in value.

In fact, in the last 7 years the Yuan has gone up in value 23% in dollars.


And on the EXACT DAY that Mitt Romney said these words, the Yuan set an opening record high versus the dollar.


So we have Mitt trying to protect us from China weakening the Yuan (when it’s actually getting stronger). And yet...


Who’s Going To Defend Us
Against the Weakening Dollar?


And why isn’t either candidate standing up against the currency manipulation of the Federal Reserve?


Since China has depegged their currency from the dollar, our Federal Reserve has had the printing-machines cranking at full gear... TRIPLING the base money-supply in just a few years.


And it was AFTER this happened that Mitt Romney said, “I think (Ben Bernanke) is doing as good a job as he thinks he can do.” And, “But look, I’m not going to spend my time going after Ben Bernanke. I’m not going to take my time and focus on the Federal Reserve.”


Yes, we can tell, Governor Romney.

How About The Other Guy?

And neither is President Obama, who reappointed Ben Bernanke even after all the money-printing skyrocketed.


To us at The Elevation Group, this is a clear sign that we should...



Find a Lifeboat, and Get In


That $1.5 trillion dollars is anxiously waiting to flood the markets, and the dam could break at any time. When it does, through “Fractional Reserve Banking” that $1.5 trillion could turn into $10-$15 trillion in no time.


That’ll send inflation through the roof and interest rates to the moon.


The only way to survive rising rates and prices is to find a lifeboat and jump in.


At The Elevation Group, we like to see ourselves as that lifeboat.


Our founder, Mike Dillard, watched his friends and family lose dearly in the 2008 financial crisis. And since then, he’s been circling the globe in search of contrarian financial experts to teach him and his family how to invest in these strange times.


And it’s worked. In the last 4 years of implementing these “black box” investment strategies of the ultra-rich... Mike has earned an average 77% annual return.


If you’d like to find out more about these “black box” strategies... AND how to climb into The Elevation Group’s lifeboat before the crisis really hits, then go here now: 

Click Here To Watch The Free EVG Presentation

The Legal Lie Banks Tell You

Is Your Money Really Safe?

Did you know each time you deposit money into a bank, they’re legally allowed to...

* look you in the eye and lie, with a wink and a smile
* sell you a line of bull about how your money is kept safe in the vault
* and give you a kick in the rear on the way out?

EVG Research Team here, and we might be kidding about the last one.

At The Elevation Group, we fancy ourselves as adventure-seeking truth-tellers. That means we’ll go places others won’t dare to uncover lies, distortions and old-ways of investing that just don’t work anymore.

And this lie could be the biggest one of all.

It’s not a new lie. It’s been legal since 1913 in the United States. And it’s legal in most other countries, too.

Yet people don’t know about it because politicians only talk about it using big words in wonkish, boring speeches.

But when it’s brought down to the human-level - and you realize it’s your money they’re lying about - you just can’t look away from...

The Legal Lie Banks Tell You

The money you deposit in a bank, isn’t in their vault. It’s not in a vault across town. It’s not in a vault at your bank’s headquarters either.

It’s not in a vault at all. In fact, outside of a computer, your money doesn’t even exist.

It sounds weird, but that’s how most banking systems in the world are set up today.

It’s called Fractional Reserve Banking and it works like this...

When a person deposits say, $1,000, into a bank, that person believes their money is still there. After all, their account balance still says $1,000.

But the truth is, the banks are lying to you.

They are legally allowed to loan out 90% or more of your deposits to other customers and STILL tell you that your $1,000 is in the bank.

And the Federal Reserve, who regulates the banks, not only says it’s “OK” for the banks to tell you this lie... they’re the ones who made it possible.

They set a number called the “Reserve Ratio.” And if it’s set at 10%, then banks can reloan 90% of your money without telling you.

And This is the Real Scary Part...

Of that $1,000 you deposited, we know the bank can lend 90% of that to other customers. That’s $900.

So say a person borrows that $900 from your bank to buy a motorcycle. The borrower leaves the bank with $900 cash and gives it to the bike owner.

The former bike owner, happy to be rid of his bike, then goes and redeposits that $900 cash in the very same bank.

Now two people have deposits - one for $1,000 and one for $900 totaling $1,900 - that came from the same exact $1,000 cash deposit. The extra $900 was “BORROWED into EXISTENCE.”

This process...

 

Created the Housing Bubble and Global Financial Crisis

When money is created so easily out of thin-air, it leads to bubbles in asset classes.

Since the United States completely left the gold standard in 1971, we’ve had one bubble after another. There was the early ‘80’s gold bubble, the stock bubble of the 90’s, and just recently the housing bubble.

The current global financial crisis is in large part due to all the money that was “borrowed into existence” to buy homes at inflated prices.

But when the housing bubble popped, it set off a massive deflationary event.

People who were no longer able to make their house payments walked away from their mortgages.

And because we have a monetary system where money is “borrowed” into existence, when a borrower refuses or can’t repay the debt, the money simply VANISHES from the system.

It’s called a currency contraction, and that is deflation.

At this point, there are only...

2 Possible End Games-— and Both End Badly...

In response to the deflation from the housing crisis, the Federal Reserve quickly started “printing” more money to try and replace all the money that was vanishing.


They literally doubled the money supply in just a few weeks following the 2008 panic. And since then, the money has tripled pre-meltdown levels.


But unfortunately for the Fed and all its victims, the problem seems to be too big this time.


The money-printing isn’t working. And If they keep up the pace, we’ll see massive inflation... or even hyperinflation.


Or the Fed may recognize the problem is too great and try something more honest than money-printing. They may decide to default on our debts the honest way, by telling our creditors we can’t pay and restructuring the debt.


This would cause massive deflation as all the money borrowed into existence vanishes.


So those are the two endgames, massive inflation or massive deflation. Both of which will make the current global recession look like a walk in the park.

And it All Could Have Been Avoided

...had we just stuck with the gold standard. Instead we drifted away starting in 1913 with the creation of the Federal Reserve Bank. And we completely severed the dollar’s ties to gold in 1971.


A dollar backed by gold means money can’t be borrowed into existence to cause a global financial crisis. And it’s actually written into the US constitution that states are not allowed to use anything but gold and silver as legal tender.


We’re happy to see a major US political party announce that their party platform will call for a gold commission to study the gold standard.


To find out more about fractional reserve banking and what it’s done to our economy, jump back into the first strategy session with Michael Maloney:


How to Profit From the Greatest Wealth Transfer in History

Paul Haarman's View on the Shift Economy

There is so much to gain from this group. I highly recommend that you click on the link below and soak as much information in as you can. We have a small window of time to maximize our profits as the currency continues it's decline. Some of us will be wiped out economically. But some of us will come out on top. It's a matter of educating yourself and making certain choices today.



Click HERE for more information.

Facebook Founder’s “Vanishing Act” Has Many Riled Up

Facebook’s recent initial public offering (IPO) generated a lot of media buzz. But the actions of one of its founders created a public outcry.


Facebook’s recent IPO made instant billionaires out of all four of the original Facebook founders.


You’ve likely heard of Mark Zuckerberg. He’s the main founder and current CEO of Facebook.


At the tender age of 28, his net worth soared to $19 billion after Facebook’s IPO in May.


Eduardo Saverin is one of the lesser-known founders or Facebook with less than a 5% stake ... but he’s still worth an estimated $3 billion dollars after Facebook’s IPO.


In case you missed the news ... last September Eduardo did what many feel is the unforgivable sin.


He renounced his United States citizenship.


The IRS revealed Eduardo’s decision in April 2012. The public outcry was immediate.


Angry citizens flooded blogs and message boards calling Eduardo a traitor. They accused him of being unpatriotic.


Maybe you’re angry at him too.


After all, a young kid makes billions of dollars, benefits from the American way of life, and then renounces his citizenship?


Sounds pretty selfish. Greedy. Un-American.


“Running away to avoid paying taxes?” they complain. “Shame on him!”


But once you hear Eduardo’s backstory and understand his family history, you may change your mind about his actions.


And even if you don’t change your mind about Eduardo, you’ll definitely learn an important lesson about your own “sovereignty”...


...and how it could mean the difference between the Poorhouse and Easy Street for you and your own family in the coming financial crisis.

The First Flight Was to Protect the Family’s Life

To understand Eduardo Saverin’s decision, you have to go back two generations.


His grandfather, Eugênio Saverin, was a hard working and industrious entrepreneur. But being a Jew living in Germany during the 1940’s didn’t mix well.


Rather than face concentration camps, Eugênio snuck his family out of Hitler’s reach and resettled in São Paulo, Brazil.


Eugênio brought nothing with him except his entrepreneurial spirit.


But that was enough.


By 1952, he founded the kidswear brand “Tip Top,” which went on to become the most popular brand of children’s clothing in Brazil.

The Second Flight Was to Protect the Family’s Fortune

Eugênio had a son, Roberto, who grew into the family business.


Using the entrepreneurial spirit he inherited from his father, Roberto grew Tip Top into a successful franchise of retail chain stores in Brazil.


He increased the family’s wealth by investing in real estate and in some of Brazil’s vast natural resources.


But in 1993, Roberto packed up his bags, took his wife and child (Eduardo) and fled the country.


He did it because of the economic chaos brewing in Brazil at that time. Then President Fernando Collor had just frozen all savings accounts.


Roberto knew more capital controls were coming.


Rather than hand his family’s fortune over to people who hadn’t worked for it, Roberto migrated to the United States. He and his family started a new life in Miami, Florida.


Eduardo Saverin was 11 years old at the time. A few years later he and his family went through the legal process of becoming U.S. citizens.


Up until September, 2011, Eduardo maintained a dual U.S. citizenship along with his native Brazilian citizenship.


(Here’s an interesting side note. Many internet sites claim that Eduardo’s family fled to the U.S. because young Eduardo’s name was found on a list of possible kidnapping targets due to his family’s wealth.


The story spread like wildfire after the book "Billionaires by Chance" presented it as fact.


While it’s a compelling story, we did a little more digging to find out if it was true. What we found was a recent interview (June 2012), given in Portuguese for the Brazilian news magazine, Veja.


In that interview, Eduardo explains that the names of his father and grandfather had been found on a kidnapping list, but the family only found out about it years after moving to the U.S.


(Just thought you’d like to know the real story.)

How America Made Eduardo Rich

Eduardo spent his teenage years growing up in the Miami area. He was a top student and a chess prodigy (The International Chess Magazine featured him after he beat a chess grandmaster at the age of 13).


He enrolled at Harvard University in 2003 to study economics. That’s where he met Zuckerberg and became the first investor in Facebook.


The rest is history. Facebook has gone on to become the most popular website on the planet. During its rise in popularity, Eduardo watched his own net worth skyrocket into the multi-billion dollar stratosphere.


He’s now one of the top 100 richest people in the world.


So it’s easy to see why people are mad. It seems obvious that Eduardo gave up his U.S. citizenship to avoid paying taxes on his newly acquired Facebook fortune.


That’s not entirely true, though.


He’s been living in Singapore since 2009 and loves it there. It’s the place he’d like to make into his new home.

The Third Flight Was to Protect the Family’s Legacy

And that’s why many tax experts think Eduardo’s strategy has nothing to do with avoiding taxes ... at least not right now.


You see, he’s NOT getting off scot-free. The U.S. requires everyone who renounces his or her citizenship to pay a 15% exit tax.


That means Eduardo will be paying hundreds of millions of dollars in taxes to the U.S. – even if he doesn’t cash in his Facebook stock.


Here’s how Eduardo describes it in his Brazilian interview (translated from the Portuguese):

“The decision [to denounce his U.S. citizenship] was strictly based on my interest in living and working in Singapore. I am obligated and I will pay hundreds of millions of dollars in taxes to the American government. I already paid and I will keep paying whatever taxes I owe based on my time as a U.S. citizen.”

Paying the exit tax now will likely trigger a bigger financial hit on Saverin than if he had kept his U.S. citizenship.


You see, according to United States law, you don’t pay taxes on capital gains until you cash out. Many wealthy people simply borrow against their unrealized capital gains and live tax-free until after their death.


But, once you die, your estate can get hit with a 35% inheritance tax.


Tax experts are guessing that Eduardo would like to pay his exit tax now rather than give away a third of his fortune after his death.


They feel Saverin is using his family history of global mobility to put himself in the best situation to carry on the family legacy.


It’s hard to say, but that seems to be Eduardo’s sentiment. In the Veja interview he said: “I was born in Brazil, I was an American citizen for about 10 years. Now I live in Singapore. I’ve always thought of myself as a global citizen.”


Like him or hate him, you have to admit he’s got a fascinating family history.


And as a mobile, sovereign, global citizen, Eduardo Saverin is simply carrying on a family tradition: he’s taking care of himself, his fortune and his family legacy. All at once.

How This Relates to You

Listen, you don’t have to renounce your citizenship to protect your wealth. And you don’t need to be a billionaire either. Almost anyone can diversify his or her assets overseas.


This is NOT about evading taxes.


Lesson 5 - How and Why I'm Diversifying My Assets Overseas in The Elevation Group member site lists four reasons for investing overseas:


1. Diversification
2. Privacy
3. Asset protection
4. Tax efficiency


You can start small now by protecting just a portion of your assets overseas.


And if you want to protect more, Rob Wolmer can help. He’s the lawyer from Lesson 5 who specializes in protecting your wealth by diversifying you internationally.


He can tailor-fit a plan based on your specific needs. You’ll find his contact info in Lesson 5 ... or in the EVG Rolodex under the Resources tab. Mr. Wolmer's contact info at the bottom of the page under “International Investing.”


Setting up foreign accounts and tax entities can make a huge difference to your bottom line ... if you structure it right. But if you do it wrong, it can cost you a fortune.


Whether you’ve already built your fortune or are just getting started ... this is information you don’t want to miss.


Some of you may have dismissed this strategy thinking you don’t have enough money to make it useful.


Don’t make that mistake.


Even if you can’t use the information now, it’s part of your education that will help you start thinking like the wealthy. It may also become very useful for you down the road.


Click Here to review this strategy as outlined in your member’s area.


This article is reprinted courtesy of The Elevation Group. To find out more, please visit their website at:http://theelevationgroup.com

What Happens to the “Bank of You” if the Dollar Fails?

The “Bank of You” is one of the most popular...and successful strategies that Elevation Group members have been using to secure their financial future.

But there are also some concerns about how the “Bank of You” will hold up if we have another 2008-like economic crisis...or worse.

Here’s a great question from an EVG member about what will happen if the US Dollar tanks:

Regarding the Bank of You, Paul Haarman said it takes around 5-7 years to break even, and after that is when things start to take off. But the Lesson #2 video was made back in 2010. So at this point in time, with our fiat currency heading ever more towards to the brink, is it advisable for anyone to start investing in the Bank of You? Will the US Dollar even be around in another 5-7 years? Thanks in advance for your help on this question.

Mary D.Paul is the EVG expert on the “Bank of You,” and he says he gets this question a lot.

But his answer is a little more complex than a simple “yes” or “no.”

Here’s why:

Everyone’s Concept of Financial Collapse is Different

When some people think of financial collapse, they envision total mayhem...

A kind of post-nuclear holocaust where everyone wanders around aimlessly...

Abandoned ghost-town cities. Smoking piles of debris littering the landscape...

People clad in dirty rags ... picking their way through heaps of junk for a morsel of food.

Is that how you see it?

If so, then realize that no investment will thrive in that reality.

Not even gold.

In that scenario, mere survival will be the only thing that matters.

But that is NOT how Paul envisions the coming financial collapse.

Why?

Well, none of the biggest financial collapses in our world’s recent (or past) history have ever looked like that.

Yes, there is always a temporary chaos as wealth transfers hands.

And yes, there are tough times for the masses ... sometimes for extended periods of time.

But in the end, a new order is always established ... and in the event of a currency collapse, a NEW currency is always formed.

Like it or not, we will most likely have to live with some form of fiat currency during our lifetime.

So even if the present form of your country’s currency collapses, there will be a new currency that takes its place.

At that point you’ll get something in exchange for your old money.

But that’s assuming a total financial collapse.

Paul feels it’s more likely that we’ll get high inflation rather than total collapse. In that case...

Interest Rates Will Move Up With Inflation

The second thing to remember is that interest rates and inflation generally go up in lock-step.

So if we start seeing 10% annual inflation, the interest rate you earn in your Bank of You will also go up.

Some readers may remember the high inflation of the late 1970’s into the early 1980’s.

Back then you could earn 17% on a one–year Certificate of Deposit (CD).

Right now, inflation is at 2.5% and you can earn around 10% in a Bank of You.

That’s a 7% spread.

Once inflation hits 10%, you should easily be able to earn up to 17% in your “Bank of You.”

Which brings us to the final point...

The “Bank of You” Protects You During Inflation or Deflation

A properly set up “Bank of You” will protect you from future high inflation...

...but it can also save you if we get deflation.

We’ve already seen how deflation could be part of our future in a recent newsletter.

Most investments work well only in one scenario or the other. Either in deflation or inflation.

In fact, many investments will completely crash if used in the wrong situation.

Not the “Bank of You.”

Properly set up, a “Bank of You” steadily increases your wealth during either scenario.

It works that way because it has the income-producing abilities of an inflation hedge, and the cash-like qualities of a deflation hedge.

Final Thoughts

No one can say with 100% certainty what the future holds.

Will there be high inflation? All signs point to that.

Will there be deflation? At least one realistic scenario exists where that could be our fate.

With most investments, you have to make an educated guess which scenario is coming.

At EVG, we’re betting more heavily on the inflation side.

But with a “Bank of You,” you’ll be protected either way.

It won’t matter if the US Dollar tanks ... or even disappears.

Frankly, you’ll never get the timing of any investment absolutely perfect.

What’s more important is understanding the Wealth Cycle we are in and how that will affect your long-term investment goals.

Once you are convinced in your own mind that a particular investment makes sense, the final step is actually committing to it...pulling the trigger and making the investment.

Now is a good time to review Lesson 1 on wealth cycles and Lesson 2 on the Bank of You.

If you have specific questions about setting up your own “Bank of You,” give Paul a call.

As a member, you have access to his contact information on the Resource Page in the members area.

This article is reprinted courtesy of The Elevation Group. To find out more, please visit their website at:http://theelevationgroup.com

The “Secret Pact” That Could Make You Rich ... or Poor!

The American Dollar has powered the global economy for the last half century or so. And it’s made the United States the most
powerful nation in the world.

But that may all be soon coming to an abrupt end.

For the last 68 years, the U.S. Dollar has enjoyed a unique status as the world’s reserve currency.

But... for the last 39 years, the US Dollar has been artificially propped up by a “secret pact” made between former US president Richard Nixon and Saudi Arabia.

That pact has made America the richest country in the world. Americans have enjoyed unprecedented wealth as a result.

One problem. The secret pact was non-binding. Either party could walk away without getting in trouble.

As nations start to abandon the agreements made in that “secret pact,” only one outcome will be possible:

The Death of the US Dollar

When the US Dollar dies, it’ll cause the most massive wealth transfer the world has ever seen.

It will affect every person in the world ... no matter what country you’re from.

If you’re prepared, you could end up extremely wealthy.

If you’re not prepared, you’ll likely end up dirt poor. All your hard-earned money will get transferred to someone else.

We’ll give you all the details of the “secret pact” in a moment.

But first, to properly understand why it will be so devastating ... and how YOU can get on the correct side of the wealth transfer ... we have to take a little trip back in time.

So hold on tight. We’re going on crash-course through modern economic history today.

Don’t worry, it’s short and sweet. But it could be the most important ... and profitable history lesson you’ll ever learn.

Let’s start by answering a question many of you may have (but were afraid to ask...)

What’s a Reserve Currency?

A reserve currency is the money central banks hold in their vaults throughout the world. It’s the money other nations use to set the price of their own currency.

And most importantly, it’s the currency that nations use to trade goods among each other...

Like natural resources (oil, copper, timber and grain)... and manufactured goods like cars, electronics, clothing and processed food.

These things get traded throughout the world between many nations.

For the last 70 years or so, most countries have traded their goods with other nations using US Dollars.

Doesn’t matter if it’s Spain trading with Argentina. Or Saudi Arabia with China.

These countries trade with each other using American dollars, because that’s the reserve currency.

So how did the US dollar get this important distinction?

The Rest of the World Eagerly Gave the US Dollar This Status

In 1944, while bombs were still dropping on European soil, leaders from the Allied nations gathered to plan for the end of World War II.

Their goal was to establish an economic system that would help quickly rebuild the war-torn areas of Europe.

At that time, they chose the United States as the most financially stable country.

So in July of 1944, the 44 Allied nations signed an agreement giving the reserve currency status to the United States.

In turn, the US promised to exchange each US dollar for a fixed amount of gold. For each $35 you cashed in, the US Treasury promised to give you one ounce of gold.

This was an advantage to the countries ravaged by war. Europe (and then Japan after the war) needed to rebuild.

They did it by devaluing their own currency against the US dollar. This boosted their exports to America. It created jobs for their citizens and growth in their economies.

It was a great boon for these countries in the post-war recovery. And the US loved its new role as the world’s economic powerhouse.

It all worked reasonably well until the 1960s.

The problem was, the U.S. government was only backing about 25% of its money supply with actual gold. Yet it was promising to redeem every dollar in circulation with real, physical gold.

In the 1960s, some people started noticing the growing discrepancy. One of those guys was the president of France, Charles de Gaulle.

He began emptying French banks of every last US dollar he could find.

Then he plunked the cash down at US Treasury headquarters and demanded gold, citing the 1944 agreement.

The US Treasury had no choice. They backed their trucks up to Fort Knox and began emptying the vaults. They ended up shipping hundreds of tons of gold bars to France.

Other nations took notice... and it started a run on gold in the late 1960’s.

During that time, foreign countries plundered more than 50% of the United States’ gold reserves. A total collapse of the system seemed imminent.

The Nixon Shock

So in 1971, US president Richard Nixon decided to end the 1944 agreement to convert US Dollars into gold.

Dubbed as the “Nixon Shock,” this decree turned the US Dollar into a pure fiat currency.

That means the only thing giving value to the U.S. dollar since then is the promise of the US government. No gold. No nothing. Just a promise. It’s really kind of scary.

And yet, strangely, that move did not hurt the strength of the US Dollar.

In fact, the demand for the dollar only increased.

Here’s why.

The Saudi Arabian Connection

In 1973, U.S. President Nixon and King Faisal of Saudi Arabia signed a pact that created the petrodollar system.

Nixon asked Faisal to accept only US dollars as payment for oil. He also asked him to invest his excess profits in US Treasury bonds.

In exchange, Nixon pledged to protect Saudi oil fields from the Soviet Union and other potential aggressors (like Iraq and Iran).

This “secret pact” created immense international demand for US dollars.

Nations who bought oil needed Amercan dollars to buy it. Nations who sold oil bought US Treasuries to protect their interests.

This petrodollar agreement played a huge part in boosting the dollar's valuation.

But more importantly, it created an almost endless pool of demand for US Treasuries.

This was how countries around the world maintained stores of petrodollars. And international investors looking for a safe haven investment always turned to US Treasuries.

The Tide Is Turning Against the Dollar

Fast forward to today. Countries still do most of their international trade in US dollars.

Why? Mostly because that’s how they’ve always done it. The system is in place thanks to Nixon’s secret pact.

But some countries are questioning the system. If an African country is trading with China, why are they using American dollars as the trading currency?

So over the past few years China, Russia and other emerging powers have been quietly making agreements to move away from the US dollar in international trade.

And nations that dislike America see ditching the dollar as a good way to reduce American influence in the world.

They’re right.

How It Will All Unravel

Many Americans don’t realize that the petrodollar system has given America an unfair advantage for the last half a century.

It’s enabled the U.S. to print as much money as it wants. Why? Because there’s always been a huge international demand for it’s debt (treasury bonds).

But the shift away from the Dollar as the world’s reserve currency is changing that demand.

It won’t happen overnight. Buying US Treasuries is a long-standing habit for many foreign countries and investors.

But once a large country decides to cash in its US Treasuries, it will be like the run on gold that France started back in the 1960’s.

Other countries will start cashing in ... and everyone else will panic and want to do the same.

When that happens, the value of the dollar will plummet. Most likely the International Monetary Fund (IMF) will step in and create a new world reserve currency to stave off a world-wide crisis.

But it will be too late for the dollar.

The US dollar may still survive as a local currency. But it will no longer have the worldwide power and influence it has enjoyed for the last 70 years.

What Will Be the Fallout?

In the United States, there will be massive inflation and high interest rates.

The huge spike in the cost of food, clothing, and gasoline will make the 2008 recession look like nothing more than a bump in the road.

The US government will be unable to finance its debts.

The house of cards, built on the assumption that the world would rely on US dollars forever, will come tumbling down.

It is a scary proposition in many ways. But it’s also a huge opportunity.

How YOU Can Prosper

Recent stories in major financial magazines have warned about the potential death of the US Dollar as the world’s reserve currency.

But they don’t tell YOU what to do about it.

Everything we teach in the Elevation Group prepares you for the inevitable outcome of this story.

The investment strategies we promote in EVG will not only help you survive ... they’ll position you to prosper and come out on top.

See, the death of the dollar will be part of the massive wealth transfer we constantly talk about. It’s setting up to be the most massive wealth transfer in the history of mankind, and we plan to be on the proper side.

Now is a great time to jump back in to the Members Area and review some of the lessons.

Remember, this is one of the ways you get to “hang out with the rich.” The more you read through the lessons and diaries, watch the videos and listen the interviews, the more you’ll start to adopt the mindset of the wealthy.

If you haven’t gone through Lesson 1 on the coming wealth transfer recently, that would be a great place to review the HUGE opportunity waiting out there for those who are prepared.



This article is reprinted courtesy of The Elevation Group. To find out more, please visit their website at:http://theelevationgroup.com

12 More Signs Gold Is Ready For Take Off!

Gold has risen in price every year for 10 years straight. Yet in 2012, gold seemed to take a needed breather.

EVG Research Team here, and the breather looks to be over. Gold looks primed and ready to continue it’s historic climb upwards.

 

 

3 Kinds of Telltale Signs

When gold is getting ready to shoot higher, there are 3 telltale signs to look out for: increased demand, money-printing, and a global loss of faith in the US dollar.


And browsing the news this summer, these 3 signs seem to show up everywhere you look.


Here are just 11 we've spotted in the last 35 days.

• Former US Treasury Secretary Buying Billions Worth - John Paulson left the US Treasury to manage the world’s biggest bond-fund manager: Pacific Investment Management. And he just increased the companies gold holdings to $2.4 BILLION. (Reported Aug. 22)

• Central Banks on a Gold Buying Spree - In 2011, central banks around the world bought more gold than in any year since Richard Nixon was President. And this year, they’ll beat last year’s gold-buying record by nearly 10%. (Reported Aug. 17)

• US Dollar Running on Fumes - The dollar is falling in value fast. It’s at a 4-month low vs. the EURO - despite Europe’s current financial crisis. If it keeps up we’ll see $2,000+ gold in no time. (Reported Sept. 12)

• Hong Kong’s Shipments of Gold to China have DOUBLED! China hasn’t told the world how much gold it has since 2009, but sometimes Hong Kong can give you a clue. Their July reports showed gold exports to China DOUBLED from July of last year. (Reported Sept. 9)

• China’s Sneaky Gold Moves - Rather than buying existing gold off the market, China’s making bids for gold mining companies around the globe: in Brazil, Africa, Australia and more. So instead of buying gold, they can just mine and keep it. (Reported Aug. 17)

• European demand rising! The German Constitutional Court just ruled that the European Central Bank can keep printing money, pushing Europeans to buy more gold to protect against inflation. (Reported Sept. 12)

• India Begging Citizens to Stop Buying Gold - Gold is a big part of the Indian culture, and their demand for the metal keeps prices high. So now their central bank is practically begging citizens to stop buying gold. They warn it’s an awful investment because it’ll likely just be given away at a wedding anyway! (Reported Sept. 7)

• George Soros Doubling His Stake in Gold - He’s the infamous investor who first saw the English pound was weak... and then almost single-handedly brought the currency to its knees with a $10 billion short, making himself a cool billion in profit. Now he sees the future of gold, and he just doubled his fund’s stake in SPDR Gold Shares. (Reported Aug. 22)

• US Republicans Want to Return to a Gold Standard - The US Republican party platform was updated in August - and a commission to study a return to the gold standard was added. If enacted, a gold standard will make the price of gold SOAR. (Reported Aug. 24)

• World’s Largest Mutual Fund Agrees. The Total Return Fund, managed by Bill Gross, is buying gold now, and has been all of 2012. It’s the world’s largest mutual fund, and they expect gold to rise quickly. (Reported Sept. 4)

• World Gold Council Predicts A Move to Gold... and away from the US Dollar. Since the 2008 crisis, the US dollar has been the safe harbor to store wealth. But the World Gold Council now predicts the game is over - and gold will be the world’s currency hedge. (Reported Aug. 16)

And the NUMBER ONE Reason Is...

The Fed just announced a new round of “money-printing,” known as “QE3.”


It is, of course, the third time the Fed has tried “quantitative easing” - or money-printing - to fix the economy. And each time gold has jumped significantly higher.


But this time it’s even MORE BULLISH for gold.


When QE1 and QE2 were announced, the Fed let it be known upfront how much money they were willing to “print” beforehand.


This time, QE3 has no such limit. The Fed announced it’ll continue to add $85 billion per month - or $1 TRILLION per year - to the economy.


That’s when the M2 Money Supply shows there’s currently only $10 trillion in the economy. So the fed just promised us a 10% increase in the M2 Money Supply per year...


...otherwise read, a PROMISED 10% INFLATION per year.

That means if you keep your money in a bank account, you’re essentially LOSING 10% per year.

The best alternative is to buy gold & silver - two historical investments people flock to in times of a currency crisis.


In fact, in the hour following Ben Bernanke’s announcement of QE3, gold jumped by over $30! Overall, gold is up 10% since rumors of the Fed’s actions started swirling.


To find out more about buying gold and silver, jump back into this exclusive strategy session with Mike Maloney:

Everything You Need to Know About Buying Gold & Silver

And just as a friendly word of advice, this time it’s different. Not only did Ben Bernanke promise unlimited new money-printing to fix the economy, he also promised to keep going even after “things get better”:

“...a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens” ~ Ben Bernanke September 13, 2012

The time is NOW to protect yourself from Bernanke’s inflation and ride the gold boom upward.




This article is reprinted courtesy of The Elevation Group. To find out more, please visit their website at:http://theelevationgroup.com/

Is it Too Late to Collect Your Share of the Wealth?

EVG Research Team here, and there’s a question we've seen come in from EVG members that need to be answered.

But first some background...

...Every week hundreds of take-charge individuals join us at the Elevation Group (EVG) to both protect and grow their wealth.

They realize a storm is brewing; and that...

• Debt crises in the US and Europe threaten the global economy...
• The 2008 crash will be DWARFED by the next crash, set to hit in 6-36 months.
• Keeping your wealth in dollars or any other currency at a time like this is risky...
• IRAs and 401ks used to work for retiring “middle class” - but don’t anymore.

AND most importantly...

• That you must take proactive steps to make sure you’re not wiped out by the next great wealth transfer.

So at EVG, we don’t just plan to survive the next financial crisis... we plan to thrive and prosper.

Because of the financial experts we’ve assembled, we know that...

•  The safe play is buying gold and silver and holding for the time being...
•  A traditional bank account is no place to put your wealth.
• The “Bank of You” can produce 6%-10% returns with zero risk.
• Twenty-percent returns or more are possible when you know how to stack investments.
• And taking on long-term fixed rate mortgage debt is a fantastic idea as we head into hyperinflation, when paying back loans will be super easy.

But the most common question we get is...

“Is it too late to start all this now?”

Absolutely not. And that’s one reason why we were so happy to see this message come in from Joe D.

“At first I was overwhelmed simply because I'm young, don't have any money saved up, and was at that moment living paycheck to paycheck. With the little changes that I've made, I've gained more and more confidence.

~ Joe D.Joe D. is young. Had no savings. And has none of the advantages an older investor might have...

...but HE got started! And in my book, he’s well on his way to not just surviving - but THRIVING - during the next great wealth transfer.

Joe had nothing financially when he joined The Elevation Group. And now look at his progress!

I've invested in precious metals, purchased a few firearms and have taken courses on how to operate them as they carry a tremendous responsibility.
The great thing about Mike and The Elevation Group is that they decisively select the most important topics today and present them at the right times. We're not being given all the information at once and for me it's great that he gives us just enough time to learn each lesson before moving on to the next.
It's still a little difficult being that I started practically with nothing but with what little money I was able to save up from my paychecks I invested back into myself and my future business...
...There's no doubt in my mind today that I will have a business in real estate and hopefully not as an agent but as a true investor. EVG has given me the proper information and tools to take action and be a successful entrepreneur. It is with faith that I can share with the EVG community that the day will come when I can quit my job and be an entrepreneur like Mike and his partners/colleagues. 

Thanks Mike and The EVG!!! Regards, Joe D.

Joe is using Elevation Group lessons to save, invest in precious metals, start a business and even protect himself if the US turns into Greece.If you’re starting from scratch with no savings, you can follow Joe’s lead by becoming a member and growing a solid financial foundation.

And if you have wealth that you need to grow and protect in this economy, jump back into one of our 20 lessons revealing the investment strategies of the ultra rich.

There's plenty here to take you to the next level:

Click Here to Go to the Members Area Now

This article is reprinted courtesy of The Elevation Group. To find out more, please visit their website at: http://theelevationgroup.com/

What Does an Economic Collapse and Uncle Sam Have In Common?

There really is no precise definition of an economic collapse. The term can be used to describe a broad range of bad economic conditions from a severe, prolonged depression with high bankruptcy rates, high unemployment and massive national debt, to a breakdown in normal commerce caused by hyperinflation (such as in Weimar Germany). The Great Depression comes to mind, though there are many more examples in history.

I don't know about you but if and when a global economic collapse happens, I want to be on the winning side. There is so much doom and gloom talk out there that the whole concept can be completely depressing. On one hand – maybe that is enough to inspire some people to get off their butts and do something to protect the security of their family both long term and short term. Unfortunately most of us are educated by the same system which does not teach anything about preparing for or prospering in any economic crisis never mind a global collapse.

I came across this video on YouTube and wanted to share it with you… It is an amazingly in-complex, five minute summary of the fundamental reasons why our nation is heading for a major train wreck…Historically speaking, we are repeating the same mistakes our for fathers have made even as far back as the Roman Empire.



If you want to know why there ‘s a 100% chance we’re going to experience a global economic collapse, or "economic Armageddon" within the next 6-48 months, just click play and then share it with those you care about.


So how do you protect yourself, your family and others you care about? – How about even profiting from the implosion in stead of sinking with the ship? First you must educate yourself and TAKE ACTION NOW.

How to Invest Like the Rich

Government deficits, weakening currencies and economic chaos are waking people up to the sad  truth that it’s getting harder to leave your children with a higher quality of life than you had. If not down right impossible; or so it seems, but we are going to look at why there is hope for the the economic future of the next generation.

Recently, a Fox News scientific poll revealed that about 57% of Americans believe their children will be worse off than they were and are. If this is true, it will be the first time in generations. Does this concern you? It should!




And it’s the same everywhere around the world. Studies show Britain living standards stopped rising nearly a decade ago and that this current generation already has it worse off than their parents. This really shouldn’t come as a surprise since the American dollar is basically the standard world wide. When every nation does the same thing, using similar economics, why would we expect a different outcome? The definition of insanity is doing the same thing over and over again while expecting to get a different result. Apparently propping up the economy with fiat money is not the answer we are looking for.


If you wish to leave your family with more than you were given, then you need to shake things up. You need to invest differently than the Average Joe. You need to invest like the rich. Lets take a brief look at two of the richest families in history. We will see how one saw its fortune pass on and grow from generation to generation, and the other… well, read and find out.


Mayer Amschel Rothschild grew rich in the mid 1700’s by starting a bank and keeping it in the family. He sent his five sons to set up a “bank branch” in five different economic hubs in Europe. And each was very successful. Instead of letting later generations simply inherit wealth for them to squander, the Rothschilds continued to start banks run by members of the family. Just 100 years later Rothschild banks filled all corners of Europe: Paris, London, Frankfurt, Vienna, Naples and more. At least 6 branches of the family were elevated to royalty. And even today the world is littered with Rothschild businesses, banks and charities. The Rothschild family legacy has gone on for 300 years and it still seems to be going strong.


While I don’t agree with many of the philosophies the Rothchilds hold to, their multigenerational thinking has led to a great economic future for their posterity.


Now contrast this with Cornelius Vanderbilt, whose shipping and railroad empires made him one of the richest men in the world in the mid 1800’s. Cornelius Vanderbilt lived modestly. But his offspring built lavish mansions and blew through wealth as fast as it came in.

The Vanderbilt fortune was squandered in just a handful of generations. It is said a direct descendant of Cornelius died broke just 48 years after he did. And there are no millionaire Vanderbilt’s alive today who didn’t make their money on their own.



So what made the difference?


The Rothschilds passed along much more than just their money from generation to generation. They transfered a value to thinking long term, to consider the next generation and the economic future. AND YOU CAN TOO!



Click Here - This is valuable information that will change your life and the way you think about money, education, assets, family, government, etc.








This article is reprinted courtesy of The Elevation Group. To find out more, please visit their website at: www.theelevationgroup.net