Tuesday, January 11, 2011

Gold As Insurance Says John Williams

John Williams Eyes Gold as Insurance Against Armageddon
Source: Karen Roche of The Gold Report 01/10/2011

John Williams says he likes physical Gold, Silver and Canada. Our U-Vault Account allows foreign clients to store their Gold & Silver in Canada with an independent security company. Please call for details or visit the U-Vault page for more information.  BK

JW:  My views haven't changed since we last talked. The ultimate result here is the government printing money to meet its obligations. The Fed effectively is funding the government's borrowing. But as the economy continues to weaken, as the deficit worsens, as the Treasury funding needs increase, quantitative easing and monetization of U.S. Treasuries will have to increase. We're going to see more and more foreign holders of dollars sell their dollars. I think there's high risk in the next year of a panicked sell-off, a panicked dumping of USD-denominated paper assets. All of that will cause the Fed to continue to flood the system with liquidity, to buy up unwanted Treasury debt and stimulate inflation. As people increasingly don't want to hold the currency because of the inflation, we'll start to see higher inflation that quickly can evolve into hyperinflation.

 JW:  As an economist looking at the broad trends—I'm not an investment advisor—people in a USD-denominated environment will need to try to preserve their wealth and assets and protect the purchasing power of the dollars they have. That means holding some physical gold, physical silver, getting some assets outside the U.S. dollar. I still like the Australian dollar, Canadian dollar and Swiss franc, and I think they will come out of this relatively unscathed versus the USD. Over the long haul, gold really is the preeminent asset, with a history of holding its purchasing power over time.   LINK...