Gold is simply a win-win situation with the impending bailout proposal going before the senate this evening.

If the bill passes, gold will most likely immediately drop to the 840 level or so on the illusion of a stronger dollar. However, that illusion will disappear with time as people realize that a stronger currency in relation to a plan that allows for unhindered printing of it is akin to a family celebrating the lower cost of living after the death of their first-born son. The plan in this regard is short term bearish, long-term bullish for gold and precious metals. The plan will only delay the inevitable outcome described below.

If the bill fails (which is the more democratic / capitalistic approach if liberty still has a pulse) it will likely herald in the quick dispatch of numerous banks and financial institutions living off the balance sheet of the federal reserve. It will not happen immediately, but within weeks of a failure to approve the plan. Gold will rise on safe-haven demand as banks begin failing and people seek shelter in alternative assets.

Remember - this bailout is very insignificant if not illusory in what it seeks to accomplish: price control. People will continue to refuse to buy real estate at such ridiculously high levels with taxes that are being raised and wages that are being lowered and higher levels of inflation in basic necessities (not to mention astronomical levels of existing debt for most). The media has people spun up into a frenzy about how this plan will affect Main Street and Wall Street creating this psychology of “dam ned if we dont” with no talk of “dam ned if we do” - but that is the reality of this situation.

This bailout is more focused on currency stability than credit market dynamics. If successful, the results will be temporary, if a failure the inevitable consequences that have been staring American’s in the face for years will finally catch up with us. We owe far more than we could ever afford to pay back - and nobody wants to send us any more capital.

Ask yourselves - does it feel like we’re about to clear everything up with this wave of the magic wand?

Own gold and watch your investment prove to be the only one worthwhile for the mid to long term.

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