PrepareToday!

Concerned about the declining dollar?

You should be!

The sad fact is, when it comes to what I call “FEPS” - Financial, Emotional, Physical and Spiritual Readiness - most Americans are doing absolutely nothing. Even FEMA estimates 93% of us are unprepared for any disaster whatsoever  and will find ourselves looking for handouts during a disaster.

Let's take a look at the true consequences of the falling dollar. They’re much worse than you think. 

Historically, one of the best ways folks have protected themselves against a floundering currency is to purchase gold and silver. Simply put, a falling dollar means everything priced in dollars is falling in value. If the dollar falls, say, 10%, and you are paid $50,000/year, your earnings will fall by $5,000. If your home is worth $200,000, its value will fall by $20,000. If your stock portfolio is worth $100,000, it will decline by $10,000.

Got it?

If you’re like most Americans, this erosion in the value of your dollar-based possessions is hardly noticeable. That’s because you’re probably still paid in dollars, paying your mortgage and making purchases in dollars and, in many cases, investing in dollar-denominated stocks.

NEWSFLASH: Just because the dollar decline is almost invisible doesn’t mean it’s not real. Like the frog in the gradually boiling kettle, it's happening right before our very eyes. Slowly, we've become accustomed to the gradually reduced purchasing power of our money.

What's the cause of this decline? Most experts say the dollar is falling because of our “twin" deficits: the federal budget deficit and trade deficit. 

Simply put, more money is being spent than earned. How's that workin' for ya, Uncle Sam? Folks, if you and I overspent the balance in our checkbook, checks would be returned for “insufficient funds.” But the U.S. doesn’t have that problem. Not yet... because the dollar is the world’s “reserve currency,” viewed historically as being “good as gold” by MOST countries. Among other consequences, this is why oil is sold in dollars, not yen or euros, and why people in third world countries hide dollars, not rubles or pesos, under their mattresses.

Now, both these deficits are serious, but the one most concerning to economists is the trade deficit. I've read that, when a trade deficit exceeds more than 5% of a nation’s Gross Domestic Product (GDP), that country’s currency must fall sharply—20% to 40% in most cases. Devaluing the currency makes that country’s exports more competitive, and imports more expensive. That in turn spurs exports and discourages imports, bringing things back into balance.

I know, it's boring. But we're talking about YOUR FINANCES. So, pay attention.

The dollar is falling, and is likely to fall more. In the near future, you can expect to be paying more for anything made overseas - and the declining dollar will then not be nearly as invisible as it is today. It's already happening. Have you noticed?

The real question is: Can anything protect you from this decline in the purchasing power of your dollars?

Yes! All you have to do is physically possess gold and silver. Why will that help? The most fundamental reason is this: gold and silver, are, in fact, REAL money. Gold has been a trusted store of value for more than 5,000 years, and silver for almost as long. The monetary nature of gold and silver is even specified in Article I, Sec. 10 of the U.S. Constitution, which prohibits the states from making “any thing but gold and silver coin a tender [i.e., an offer] in payment of debts.” However, there is no such prohibition for the federal government, and so today, the dollar has no connection whatsoever to gold or silver. It is “fiat” or paper money, with no intrinsic value, and backed by nothing but the “American dream.”

In essence, we're trusting in monopoly money. The entire planet has grown tired of this game and many nations are set to bail. Some, like the BRICS nations, have already begun to abandon the U.S. dollar.

Gold and silver are actually competitors against the dollar and all other forms of play – I mean, paper money. And because of this, when the values of paper currencies decline, gold and silver prices increase. That’s what’s been happening for the last 90 years, during which time the value of the dollar has fallen 95% against gold! To put things in a slightly different perspective, during this 90-year period, gold has moved from $20.67/ounce to about $1770/ounce! This is the fundamental reason why you should have gold and silver.

HOW CAN I AFFORD GOLD AND SILVER?

Frankly, none of us can afford NOT to have gold and silver! Just remember, you aren't BUYING or even INVESTING in precious metals... you're EXCHANGING your dwindling dollars for gold and silver which starts GROWING the moment you take possession. For example, ten dimes dated pre-1965, contain 90% silver. Their value is worth more than a $20 bill! Conclusion: Get pre-1965 dimes!

How Much Should You Invest In Precious Metals? Here's what I learned:

First, a growing number of investment advisors suggest placing 5% of your investment assets into gold, which is never sold. This is referred to as your “golden anchor.”

Next, another 15% of your investment assets should be placed into gold and silver to be bought and eventually sold as you would a security. A purchase of one-half gold and one-half silver of the 15% allocation is often suggested.

There are a number of forms your investment in gold and silver can take, with the most conservative listed first: 

• Gold and silver bullion, in the form of coins or bullion bars 
• Gold and silver certificates, representing the ownership of a certain amount gold and silver stored in a secure location 
• Shares of gold and silver mining companies, traded on securities exchanges and  
• Futures contracts or options speculating on the future price of gold and silver. 

Personally, I believe there's too much risk in speculating in mining stocks and futures and options contracts. There’s no question that such investments provide tremendous leverage relative to any move in precious metals prices but, since these types of investments are denominated in fiat currencies, they don’t provide the same protection from the falling value of a paper currency as physical gold and silver.

For that reason, we have decided to – rather than invest in anything – start EXCHANGING our declining dollars for physical gold bullion in small, user-friendly amounts produced by Karatbars in Germany, and in junk silver, U.S. coins minted before 1965 which are recognizable to shop merchants and contain 90% silver.

Incidentally, gold, silver and platinum coins, bars and certificates may be included in your self-directed retirement plan. An IRA is like a "jacket" you can wrap around whatever wealth you have. The IRA, or other form of self-directed plan, must have an administrator/trustee located in the United States, but storage can be anywhere in the world. I recommend talking to Tom Barrett of GoldenArtTreasures.com about this. He is an expert when it comes to rare coins you would use as a store of wealth in an IRA.

COINS, BARS, CERTIFICATES???? 

When planning to acquire gold and silver, I had to consider WHY I WAS DOING THIS in the first place. If my gold and silver were going to serve as a means of exchange during an economic collapse, I needed gold and silver in small amounts that could be used without over-paying for goods and services, and they had to be recognizable. Also, I had to be able to barter with them. 

Remember, when you have coins or bars, you’ll need a secure location in which to store them. A safety deposit box, private vault or professionally installed floor safe at home are all acceptable. Many banks, especially in Switzerland, also offer precious metals custodial services, for an annual fee of approximately 0.25%–0.5% of the value of the metals. Karatbars comes in 1 gram, user-friendly amounts and they will store your gold purchased through them at no charge.

Offshore storage of precious metals is attractive to those U.S. investors who are concerned about the repeated confiscation of gold in U.S. history, most recently in 1933. It was only in 1975 that Americans were again legally permitted to own gold but many are in fear of confiscation while others say, “They gotta find it first!” and are coming up with some VERY creative places to hide their wealth!

Personally, I believe the government has ALREADY confiscated far too much of your hard-earned wealth; it's called “taxes.”

Since storing large quantities of physical precious metals may prove problematic, for some, certificates might be considered an attractive option. Personally, I've grown tired of paper wealth, if you know what I mean.

THE STRONG CASE FOR PRECIOUS METALS 

Precious metals are an important part of any portfolio in these uncertain times. And some of the world’s most influential investors agree. In 1997, Warren Buffet bought a staggering $650 million of silver bullion. More recently, George Soros, the man who made $1 billion in a day by betting against the British pound, made a huge silver purchase as well. 

The current “bull market” in precious metals is only just beginning. The gains so far have mainly been a reflection of the weakness of the dollar, not any inherent strength in gold or silver. But experts project that’s about to change.

Best of all, you don’t have to be a billionaire like Buffet or Soros to invest in precious metals. Even today, you can purchase a one-ounce silver coin for less than $10, and a one-ounce gold coin for under $500. That’s pretty inexpensive monetary insurance, ESPECIALLY if your assets are primarily in depreciating dollars anyway because those are going nowhere fast.

Folks, if WE can do his, so can you. If you'd be interested in establishing a FREE Karatbars Gold Savings account, simply email miketummillo@me.com and type "KB" in your Subject Bar. I'll be in touch!

Blessings,

Michael Tummillo