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Monday, April 25, 2011

More reasons to buy gold - even now

Gold is valuable in direct proportion to the instability of the sovereign currency.

How stable is the dollar right now?

It depends on your perspective. If you're a bank president, or a U S Senator, or a Hollywood star, or a popular radio personality, it probably seems pretty damned stable. Or, at least, you have so many of them in your wallet it's not really an issue: this is the greatest country on God's Green Earth, we have the most innovative people and the deepest markets, and the Dollar is still King, by golly!

For everybody else, not so much. We all know about the 14 trillion dollar Government deficit, the 75 trillion in unfunded US Government liabilities, the 3 trillion in debt held by China and japan, the trillions in off-balance sheet funding for our three ongoing wars, and the fact that the Fed - which is currently insolvent by any standard used to measure a bank - is currently buying over 70 percent of all newly issued US debt.

But what about you and me? What about the average guy and gal? After all, what we spend makes up about 70 percent of US GDP.

There are now about 7.25 million less jobs in America than when the recession began back in 2007.

Only 45.4% of Americans had a job during 2010. The last time the employment level was that low was back in 1983.

Only 66.8% of American men had a job last year. That was the lowest level that has ever been recorded in all of U.S. history.

According to a new report from the AFL-CIO, the average CEO made 343 times more money than the average American did last year.

U.S. households are now receiving more income from the U.S. government than they are paying to the government in taxes.

Approximately one out of every four dollars that the U.S. government borrows goes to pay the interest on the national debt.

Total home mortgage debt in the United States is now about 5 times larger than it was just 20 years ago.

Total credit card debt in the United States is now more than 8 times larger than it was just 30 years ago.

Average household debt in the United States has now reached a level of 136% of average household income. In China, average household debt is only 17% of average household income.

The average American now spends approximately 23 percent of his or her income on food and gas.

If that all sounds sustainable, sell your gold and buy dollars. If not, maybe you should sell some dollars and buy gold - and slver. Even at these prices.

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