from Money News:
Economist and author Detlev Schlichter says governments now have two stark choices: stop printing money and spark economic tumult, or keep printing money and risk total currency collapse.
Both choices are grim, and holding physical gold is the safest course of action, he wrote on his website. Schlichter is the author of the book “Paper Money Collapse – The Folly of Elastic Money and the Coming Monetary Breakdown” and is a former asset manager.
“My three favorite assets are, in no particular order, gold, gold and gold,” he wrote, noting that the current global economic problems represent a paper money crisis provoked by central banks.
“Whenever paper money dies, eternal money — gold and silver — stages a comeback,” Schlichter said. He said that throughout history, every experiment with paper money has sooner or later ended in failure, with over-issuance the predominant cause.
Investors Don’t Understand The Risk In The System
Today 40-year veteran Don Coxe spoke with King World News about what is happening in the markets. Here is what Coxe, who is Global Strategy Advisor to BMO ($538 billion in assets), had to say: “Well, what’s happening right now is the that stock prices are falling (since October 19th) because it turned out that one of the things the pollsters never asked people was, are you a serious investor? Who were you supporting, Romney or Obama? What we now know is that there were more serious investors supporting Romney, and they are pretty upset. So they are selling stocks.”
“You say, ‘Well why aren’t they buying gold?’ What they are doing, first of all, is getting their portfolios in line, and they are going to cash first. They realize that the so-called fiscal cliff is simply the first face of reality for the administration. But they are not going to come up with anything for it that gets the deficit down below 3/4 of a trillion dollars per year.
Nobody is suggesting that. They are saying they can’t afford to do that….
INDIAN BANKS BANNED FROM LENDING FOR GOLD PURCHASES
India’s central bank has banned banks from lending money for the purposes of buying gold.
“It is advised that no advances should be granted by banks for purchase of gold in any form, including primary gold, gold bullion, gold jewellery, gold coins, units of gold Exchange Traded Funds (ETF) and units of gold mutual funds” said a statement issued by the Reserve Bank of India Monday.
India is traditionally the world’s biggest gold buying nation.
US DOLLAR DEATH BY A THOUSAND CUTS CONTINUES
A “renminbi bloc” has been formed in East Asia, as nations in the region abandon the US dollar and peg their currency to the Chinese yuan — a major signal of China’s successful bid to internationalize its currency, a research report has said.
The Peterson Institute for International Economics, or PIIE, said in its latest research that China has moved closer to its long-term goal for the renminbi to become a global reserve currency.
Since the global financial crisis, the report said, more and more nations, especially emerging economies, see the yuan as the main reference currency when setting their exchange rate.
And now seven out of 10 economies in the region — including South Korea, Indonesia, Malaysia, Singapore and Thailand — track the renminbi more closely than they do the US dollar. Only three economies in the group — Hong Kong, Vietnam, and Mongolia — still have currencies following the dollar more closely than the renminbi, said the report, posted on the institute’s website.
The South Korean won, for example, has appreciated in sync with the renminbi against the dollar since mid-2010.
China has long vowed to raise its currency’s global sway, along with the rise of its economy, which became the world’s second-biggest last year.
Greenspan and Geithner: Raise Debt Limit To Infinity