An excerpt from the latest in his "Fingers of Instability" series. Check out the embedded 'Gold is Money and Nothing Else' link and don't let go of your shares!

http://www.financialsense.com/fsu/ed...

"...Gold is Money and Nothing Else - by Paul Mylchreest

Here is a link to the finest gold report on the planet titled “Gold is Money and Nothing Else” by Paul Mylchreest of Redburn partners, an institutional brokerage in London. Paul even references some of my work on the “Crack up Boom” that is unfolding before our very eyes. This is must read material. Yes, I do believe in the K winter he speaks of, but it is still a long way off, as this will be a global Kondratieff cycle not a national one, and first I believe we will have the “Crack up Boom”. This is must reading for informed investors and you can access it from this link: Gold is Money and Nothing Else

In conclusion: There is only one solution to the problems I have outlined and it is: They will print the money! It is the only course they can take and we know they will do so as that is what they have been doing for over 5 decades and the party’s not over yet. Some people call me an inflationist, others call me a doom and gloomer. I am neither, I am a realist. There will be deflation in some sectors of the world economy and inflation in others, it is not one or the other, it is BOTH! In order to thrive you must embrace reality and position yourself to capitalize on it. If you don’t you will be consumed by it. The opportunities are enormous, equal too or bigger than anytime in history!!

Paper is deflating and to re-inflate it will take exponentially more of it now, just as it did in the last deflationary G7 episode of 2001-2002. Elections loom in the US and public servants will agree to and do anything to secure their reelections. In fact, they will insist upon it. You can see central banks throughout the G7 printing money: Over a trillion Dollars, Euros, Pounds, Yen, and Canadian Dollars since the initial deflationary salvo in July and August. Why do you think commodities and precious metals impulsed higher against all currencies since august and the dollar broke to multi-generational lows. It is set to continue ad infinitum. So the financial industry, over inflated PAPER assets and investments are DEFLATING! Anything but government bonds are in freefall and the markets they are in are frozen. These are the “most important and powerful” constituents of the G7 economies so we know they will be rescued at any cost!

Conversely, inflation is rampant in things that can’t be printed as all the money creation is creating the definition of inflation: Too much money chasing too few goods. Everybody has money, its everywhere; it is why investment returns are being pancaked. It’s why thirty-year bonds return 4.5% in a world where REAL inflation is approximately 7% or more, there is too much money chasing them. It is why there is over 3 trillion dollars sitting in money market funds of one sort or another - in 2002 that number was 2 trillion, it’s up over 50% in 5 years. You can rest assured that all measures of paper investments are up approximately an equal amount since that time. It is why we have CDO’s, CMO’s, and leveraged products, the demand for them is enormous in a world awash in cash, it is the fire hoses of money seeking ALPHA, aka profits and returns.

Do not think you can run from one piece of paper into another no matter how high the quality. For example; from Dollars into Euros or Pounds. That safety is an illusion as the financial industries in those countries are also in dire straights and their balance sheets are toast as well. The financial authorities, industry and public servants in those places will do what they are doing in the US to secure their futures as well. THEY WILL PRINT THE MONEY! You can expect REAL interest rates to go further negative, and nominal interest rates to go to 1% in order to facilitate the transfer the wealth of depositors to the balance sheets of the banks as they take the spread (borrow at 1% from their depositors and lend it at 6 to 30% “credit cards”) away from the public they fleece and transfer it to the masters they serve (financial and banking industry and politicians). It is exactly what Greenspan did to fix the balance sheets of the banks in 2001-2006, only this time it will be exponentially more. They will do everything necessary to reflate the paper and save their financial systems and asset backed economies!

In order to thrive you must take these things into account when investing, as the G7 Public servants, Central banks and financial authorities work to underpin their paper castles and futures. The money you hold no longer performs the “functions of money” as a store of value, medium of exchange and as a means to transfer wealth into the future. And its ability to do so in the future will increasingly be impaired. Don’t despair; These are enormous opportunities! Recognize this fact and turn your future from bleak to bright! You must avoid their follies and step into HARD assets and units of production in order to “short circuit” their confiscation of your wealth through “fiat currency and credit” creation. I will bring you the tools and thoughts to protect your wealth and grow it in the emerging “CRACK UP BOOM”, as it is in its infancy."

© 2007 Ty Andros
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