Gold Goes Mainstream

Gross: Stock and bond managers today must be alchemists: turn lead into gold. NOT likely. Too much lead (bubbled assets).
–Tweet from Bill Gross, Founder of PIMCO, which manages $1.8 trillion

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“Do you own gold?” “Oh yeah. I do…There’s no sensible reason not to have some.”
–Ray Dalio to the Council on Foreign Relations

This is being written to put the precious metals market in a larger context for those people who still see the world proceeding much as it has proceeded in the past, a world without the large financial and supply chain disruptions that we foresee.

Strong multi-year upmoves in the price of any asset, aka a secular bull market in that asset, go through three stages:

  1. The speculative, early-proponent phase during which the mainstream investment community ignores or derides the potential of that asset.
  2. The mainstream phase, where the mainstream decides that exposure to that asset is a good idea for just about everyone.
  3. The mania phase, where just about everyone feels that they must own that asset and will tell you so when you meet them by chance in the supermarket.

Phase 1 for gold has been marked by derision from the mainstream investment community. Quoting Keynes, they call gold the “barbarous relic.” Otherwise-intelligent economic commentators such as Nouriel Roubini have been calling for a price top in gold for several years. Some who are old enough to have experienced the gold bull market of the 1970s have been saying, “We heard all this before in the 1970s, anyone who buys gold now will regret it later.” All of these people have been wrong all along as gold and silver have powered higher in price.

During most of Phase 1, the major central banks of the world have been sellers of gold, preferring to buy government bonds of various countries (such as Greece and Spain!) to “get a return” on their money. Gold has been a far better investment for the last 12 years. Over the last three years, central banks have become net buyers of gold, to the tune of hundreds of tons per year. Most but not all of this buying has come from Asia as the western central banks have been preoccupied with printing money in a mad scramble to keep their markets afloat.

Gold has been in Phase 1 since 2001. Most in the financial community regard it as an annoyance when their clients ask about it. The price increased from $256 in 2001 to $1,911 in August, 2011.

A couple of weeks ago, Ray Dalio gave a presentation to the CFR. He was asked if he owned gold, and he said, “Oh yeah. I do.” This marked the start of Phase 2, the mainstream phase.

Who is Ray Dalio? Most people in the investment community respect him as the best active hedge fund manager on the planet. We mentioned his firm, Bridgewater Associates, in a previous post. They manage about $140 billion. Ray is highly respected in both financial and political circles.

And the CFR is the Council on Foreign Relations. If you had to pick one organization that has the most influence on the mainstream political thought in the US, it would have to be the CFR. It was founded by the Rockefellers. You have to apply for membership. There are currently 4,700 members, including Bill Clinton, Robert Zoellick, Janet Yellen, Paul Wolfowitz, Lloyd Blankfein, Jamie Dimon…in other words, the CFR is the public face of The Powers That Be/Were.

Now that all of these mainstream movers and shakers have heard from what some consider the smartest money man on the planet that owning gold is a good idea, well, if we haven’t yet convinced you to get rid of a mainstream financial advisor such as a broker, said broker is likely to be calling you in the not-too-distant future with their “innovative” idea that you should get some gold. Of course, being mainstream, they will likely advise you to own it in paper rather than physical form, which will be a big mistake, but that will be their advice. And they will advise that you put a maximum of 5% of your assets into gold or gold mining stocks. In normal times, this would characterize the mainstream phase for gold, during which its price would rise steadily for years.

More evidence that we’ve entered the mainstream phase comes from Bill Gross, known to many as the “Bond King.” Gross founded PIMCO, which manages over $1.8 trillion. Yes, that’s trillion with a T. Almost all of the money is in conservative bond funds. But here’s a tweet this week from Gross:

Gross: Stock and bond managers today must be alchemists: turn lead into gold. NOT likely. Too much lead (bubbled assets).

Note that Gross, the Bond King, is saying that stocks and bonds are bubble markets. That money managers should turn that lead into gold. Though he also says that’s not likely.
Those who hate gold claim gold is in a bubble. Great examples of bubble markets are internet stocks in 1998 through early 2000; or real estate running up to 2006; or government bonds now. Gold, on the other hand, has had a nice steady rise for years, nothing meteoric or bubble-like at all. And here is someone, Bill Gross, who may know more about bonds than anyone on the planet, saying that bonds and stocks are the bubble, not gold.

Gold can’t possibly enter a bubble until it enters Phase 3, the mania phase. During this phase, you will be regaled on a regular basis from media sources and individuals with stories of people who got rich from gold and silver. Like the stock day traders of the year 2000, or the real estate flippers of 2006, there will be lots people trading gold on a daily basis, probably at gold trading shops like the day trading shops that were operating in 1999. People will be quitting their jobs to trade precious metals to “make their fortune.” 90% of people who talk about gold will assure you that it is the surest thing on earth to guaranteed riches. CEOs of gold mining companies will be like rock stars, getting interviewed by Charlie Rose. That’s what a bubble looks like. How many people do you know who own gold and silver?

Now, with the acceleration that is all around us, it is unlikely that we will proceed through these three phases of a secular bull market as we would in normal times. It is far more likely that gold will have a meteoric rise quite soon. But if you think that the world will proceed in a conventional manner in the years to come, we have outlined the path of the precious metals for you.

Why Gold?

U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.
–Ben Bernanke, Chairman, US Federal Reserve Board, from a speech in 2002

If the governments devalue the currency in order to betray all creditors, you politely call this procedure “inflation”.
–George Bernard Shaw

At the end fiat money returns to its inner value – zero.
–Voltaire

Gold can make its way through the midst of guards, and break through the strongest barriers more easily than the lightning’s bolt.
–Horace

Three short segments on gold:

1. Why Did Gold Become Money?

Everyone knows that gold and silver were used as money for millenia. But those who despise gold as money, who call it the barbarous relic, who think government-created paper and electronic bits are the best money, claim that it was arbitrary that gold became money. Here is a scientific treatment of the topic, a link to a 6-minute video about why humans chose gold and silver as money versus all other substances available to them from the Periodic Table of Elements: Why Did Gold Become Money?

2. Gold As A Store Of Value

If you already know well the fabulous effect it has on a person to buy physical gold and silver, then you don’t need the next video. But for those who are still worried about gold as a store of value, who think paper currencies are better for their long term wealth, who worry about where they are going to store it, etc., here is 10-minute video on Gold As A Store Of Value.

3. The Vibrational Value of Gold

Those first two links are for all readers. The text below is unlikely to be of interest to anyone who thinks the physical plane is all there is, that is, below is a multi-plane view of the gold question from the book Unveiled Mysteries by Godfre Ray King. It gives a big clue about why many people like to keep some gold on their person at all times, and why you might wish to do that yourself, especially in increasingly turbulent times:

Gold was a common commodity…in all Golden Ages, because its natural emanation is a purifying, balancing, and vitalizing energy or force…

The outer or intellectual knowledge of humanity, holds within it little–very little–understanding of the real purpose for which gold exists on this planet. It grows within the earth like a plant, and through it there is constantly pouring a purifying, vitalizing, and balancing current of energy into the very ground we walk upon, as well as into the growth of nature and the atmosphere we breathe.

Gold is placed upon this planet for a variety of uses, two of its most trivial and unimportant ones being that of using gold as a means of exchange and for ornamentation. The far greater activity and purpose of it, within and upon the earth, is the release of its own inherent quality and energy to purify, vitalize and balance the atomic structure of the world.

The scientific world today has no inkling as yet of this activity. However, it serves the same purpose to our earth that radiators do to our homes. Gold is one of the most important ways by which the energy from our sun is supplied to the interior of the earth, and the balance of activities maintained. As a conveyor of this energy, it acts as a transformer to pass the sun’s force into the physical substance of our world, as well as to the life evolving upon it. The energy within gold is really the radiant, electronic force from the sun, acting in a lower octave. Gold is sometimes called a precipitated sun-ray.

As the energy within gold is of extremely high vibratory rate, it can only act upon the finer and more subtle expressions of life, through absorption. In all “Golden Ages,” this metal comes into plentiful and common use by the mass of the people, and whenever such a condition occurs, the spiritual development of that people reaches of very high state. In these ages, the gold is never hoarded but instead is widely distributed into the use of the masses who, absorbing its purifying energy, are themselves raised into greater perfection. Such is the right use of gold, and when this Law is consciously understood and obeyed, the individual may draw any quantity he desires to himself by the use of that Law.

Because of the gold deposits in all mountain ranges, one finds health and vigor in life upon the mountains that he cannot find in any other places on the earth’s surface. No one ever heard of detrimental effects coming to those who constantly handle pure gold. While in its pure state, it is soft and wears away easily, still the very quality is the fulfilling of this purpose of which I have just spoken.

What then can we do? Part 2

This is the true joy in life, the being used for a purpose recognized by yourself as a mighty one; the being thoroughly worn out before you are thrown on the scrap heap; the being a force of Nature instead of…complaining that the world will not devote itself to making you happy.
—George Bernard Shaw

In Part 1, we briefly covered how “Inner Work” and buying precious metal bullion coins could be helpful in having us glide through this transition rather than struggling through it. And remember, our point here is not to frighten, but to offer ways for readers to calmly and persistently prepare for the inevitable problems that will arise from the collapse of the financial system.

In this Part 2, we will deal with “Outer Work” topics related to serious impairments of the global supply chain. Our firm expectation is that this supply chain will experience increasing turbulence and unreliability. As currently configured—though mis-configured is a better description—the supply chain is entirely dependent on the efficient functioning of the transportation fuel markets. And both it and those fuel markets depend on the proper functioning of the banking and credit systems, which will disappear when the financial system collapses.

The collapse of the financial system will not remove one bushel of corn, one apple, or one barrel of oil from the planet. The real things people need will still exist in great abundance. But the process of getting them from where they are produced to where they are needed will be disrupted, sometimes severely. Not forever. People are very clever. Supply chains will be re-established. But it will take time. And their re-establishment will not be instantaneous and smooth. And not all types of goods will be available. Some may disappear for long periods, even forever. Good riddance to some of them.

In this post, the overall recommendation is that you become far more independent of the global supply chain than most people are now. Beyond being practical and likely very beneficial from the point of view of health, this topic has philosophical dimensions. Just how dependent do you want to be on huge corporations and huge governments for your food, water, electricity, health care, etc? In our current world, most purchases are made from very large companies and at large chain stores which buy their supplies from those places on the planet where people will work for the lowest wages, where the workers have little in the way of rights, where there are few or no environmental safeguards, etc. The chain store sells these products and uses its profits to go to the centers of government power to purchase ever-increasing influence, typically with the idea of driving out competition and driving down costs to increase profits. So manufacturing is now done by the poorest, and distribution and retailing are done by the largest, limiting work and profit opportunities for everyone else, who then become more dependent for their income on government, which works on behalf of those who pay the bills of the politicians, namely the big financial institutions and the large corporations and so on—until the whole world is controlled by lumbering behemoths who operate without restraint for their own mega-profits. And nearly every transaction you have with this system is tracked and taxed, eliminating privacy and draining your financial resources to feed its insatiable appetite. And the more they know about you, the more they try to use that data to manipulate you. With every move you make away from dependence on this ever-increasing force of domination and toward local sufficiency—growing and cooking your own food, supporting farmers’ markets, buying truly local products and services, producing your own electricity and heat, living in ways that promote and deliver health rather than disease, etc.—the better off you, and those in your local community, are likely to be.

So this is not simply some survivalist approach, this is equally about transitioning life on this planet toward greater freedom for everyone. And toward sustainability versus the current trend of exponentially increasing resource consumption. So let’s get to it.

BARTER: Barter networks and barter currencies are popping up all over. These will play a vital role since it is unlikely that anyone can anticipate, let alone purchase and store, all of what they might need when the global supply chain fails.

Participating in barter networks and currencies, to understand them and to strengthen them before they are critically needed, is a service to yourself and your community. Purchasing and storing a surplus of goods that would clearly be valuable to others is one useful way to prepare for barter network participation. With some practical goods and with some precious metals coins, you will be well-prepared to participate.

And experimental participation in barter currencies is valuable preparation as well. Just as we don’t recommend keeping a substantial portion of your savings in fiat national currencies, we do not recommend placing a substantial portion of your assets in any barter currency, including the international variety such as Bitcoins. None of these currencies are backed by gold or silver, they are backed by people trusting that the currencies have value. And as we are learning from our experience with government fiat currencies, that trust can be abused by the unscrupulous and by well-intentioned but misguided players. But participating in barter currencies to a limited degree is highly recommended. They will give local communities something to fall back on when trust in national currencies dies. If that local system is well developed and well understood by many in the community, that will be a great advantage for the community. Clearly, from our recent dismal performance, humanity has a lot to understand about money, and these barter networks and currencies will play a role in helping people understand just what money is.

If there are no barter networks or barter currencies in your area, consider starting them up yourself. The barter-oriented (but also survivalist-oriented) website Alt-Market  has a map of some barter networks in the US. If you search the web for “barter networks,” there is a whole lot of info out there. If any readers are experts in this field, we would love to hear from you on this topic. And we will write about the international barter currency Bitcoins soon.

FOOD: Things have gone far enough on the planet that even one fairly large institution is recommending that its members have backup food supplies: It is a requirement of the Mormon church that each LDS household have enough food on hand for a year for each member of the household plus one other person. So if the supply chain fails, everyone head for Salt Lake City. OK, just kidding. But the Mormons are onto something here. Major cities in industrialized countries are known to have a three day supply of food in the region of the city. If re-supply is shut off, the shelves will be empty in a heartbeat. So learning to buy, store, and cycle your own food supply will be very useful. And it does take a little learning. Store what you actually eat and that has some shelf life. Cycle it in to your daily use, eating what was purchased earliest first and adding newly-purchased supplies to the tail end of your own “supply chain.” People tend to make two mistakes when they undertake this task:

  • storing food they never eat: If you don’t eat canned cheese now, you probably won’t want to eat it later.
  • failing to cycle stored food into daily use: thus the stored food goes bad and gets thrown out.

For fresh foods, learn to grow your own. For lazy gardeners who don’t want to spend their life fighting weeds, learn to do raised bed gardening. The book Cinder Block Gardens is the best we know on the topic. This book will tell you how to grow your own vegetables with relative ease even if you have a full time job. And, even if you don’t have room for a formal garden, it will tell you how to do that in your driveway or a parking lot. These raised beds will work outdoors, in a greenhouse, or under a coldframe. And if, for example, you want to grow delicious cucumbers that weight two pounds each, then you’ll need to enlist the delightful help of the nature kingdom like the people at Findhorn did. Here is the website of a current public practitioner of that art and science.

Don’t have room for raised beds? Then at least learn sprouting. Some say that many survived World War II in Europe because they knew how to do sprouting. All you need for sprouting is a window not exposed to direct sunlight, a jar, water, and some sproutable seeds. Because they store and sprout so easily, whole organic lentils are a great place to start. Sprouts are packed with nutrition and energy because they are in the phase of the life cycle of a plant where nature is doing its best to give this seed a leg up in terms of getting established as a new successful plant. So they are a great source of essential nutrients and are easy to use in salads, soups, etc.

And like telling the truth, growing food can be a revolutionary act at this time. Most who grow their own food quickly migrate toward organic ways, where one takes care of the billions of critters in the soil, and the soil and sun take care of the plants. In this method, there ensues a brilliant, intricate, delicate dance of the soil critters and the plant roots, where each communicates their needs to the others and each provide materials for the others. That is the way nature grows things. Working this way, a person is quickly overjoyed and humbled by the abundance and deliciousness that nature provides. And with debris from chemtrails and radiation from Fukushima floating around our atmosphere, growing food in greenhouses may actually become necessary, so the sooner one sets up that infrastructure, the better. Further along the path to growing the way nature does is the world of permaculture, where plants work together in what some call plant guilds. All of this is movement away from industrialized agriculture where the soil is literally de-natured, that is, if an industrial farmer wants to grow corn, they try to kill everything else in the field: weeds, insects, soil critters, etc. Then they truck in bees for pollination and are surprised when the bee colonies collapse when the corn has been sprayed with neocotinoid poisons. And genetically-modified (“GMO”) corn has a terminator gene inserted so that the seed will not propagate and the farmer must buy new seed from Monsanto if they want to grow corn again next season.

And the industrial meat food chain is even worse: the animals are fattened in feed lots where they eat these industrially raised and poisoned GMO “foods,” and stand in so much manure that they have to be pumped full of antibiotics to survive. And of course those antibiotics are ingested by those who eat the meat from these animals, helping to breed antibiotic-resistant super-bugs. Ummmm, yummy!

Seriously, if you haven’t been growing any of your own food, you are missing a lot of fun and some big, delicious treats. Favorite foods grown from heirloom seeds in great soil? Wow, such food is so much better than what you can buy in stores it’ll make your mouth spin.

And speaking of heirloom non-GMO organic seeds, obtaining more of these than you need for the current season, and storing them in a cool dry place, is a great idea if you plan to grow some food, or to perhaps offer seeds to other growers. For most of us, buying seeds is the way to go. Harvesting seeds from the plants you grow is a skill that needs to be cultivated. Seed saving is an art and science, easy for some plants, quite tricky for others. For those interested, the book Seed to Seed is the bible. Heirloom seeds for purchase are best obtained from a local organic seed producer because they are suited to local conditions, but these are not available in all areas. Seeds of Change and Seed Savers Exchange are great sources for ordering seeds on the web.

And to sum up our food discussion, we see backup supplies of food with a good shelf life as something to tide people over until they are either growing their own food or have established availability of a reliable local supply. No matter how much food one has on the shelf, if one wants or needs to feed a group of people, that food will go quickly. We need to arrive at sustainable local sources.

ELECTRICITY: Our dependence on electricity is remarkable. If the electricity grid were down for an extended period of time, the repercussions would be staggering, curtailing lighting, heating, refrigeration, connecting with people by internet and phone, pumping gasoline into our cars and trucks, having our water supplies pumped to us, using debit and credit cards, getting money from ATMs, receiving a wide range of medical and dental procedures, using a wide array of electronic devices, etc. It is reasonable to say that almost all services in the modern world depend on the ready availability of electrical power. This winter, due to an ice storm that felled trees and power lines, affluent residents of parts of the US state of Connecticut had no electricity for eight days. Many were unable to heat their homes because the operation of their furnaces depends on electricity.

Would a collapse of the financial system seriously impair the electricity grid? Given that most electrical utility companies rely on the debt markets for their operation and that a great deal of electricity generation depends on the just-in-time mining and transport of fossil fuels, particularly coal—well let’s just say that the financial system collapse could give the grid some very bad days, or weeks, or more.

So being able to create at least a little electricity when the grid is unavailable will likely turn out to be very useful. And it is doable. But it’s a classic case of easier said than done.

Homeowners with some extra cash can address this problem by purchasing a solar array and related equipment that supplies some or all of their electricity. But if you buy such a system, it is worth checking carefully whether it will supply you with electricity when the grid is down. Many grid-tied photovoltaic systems won’t. By design! (Another great help from The Powers That Be.) “To protect workers” servicing the grid, many inverters are designed to cease operation when the grid is down. If you buy a system with substantial battery backup capability, it is likely to be able to operate during an extensive grid outage. But adding battery backup adds a good deal to the cost of the system, so most forego that capability. We are very much in favor of photovoltaic systems, but buyers should make sure to fully understand what their system will and won’t do.

Winds turbines can be an outstanding addition to a photovoltaic system, though they are prohibited in many urban areas—where they don’t work all that well anyway—and subdivisions.

Microhydro is the ultimate renewable energy system, producing power whether or not the sun is shining or the wind is blowing, but very few of us live on rushing water. And in places like the US, to install a microhydro system legally (some are installed “by moonlight”) requires filing applications with the federal government that can costs tens of thousands of dollars and over five years to process. (Yes, yet another great help from TPTB. Are you getting the idea that they would like us to be entirely dependent on their gargantuan energy systems? On their financial system? On their food system? On their health care system? And on…)

Homeowners and renters can purchase backup generators. We are all in favor of these as well. But again, clearly understanding what you are buying is essential. The small gasoline generators that cost $400 to $500 at the big box stores are designed to run for no more than 200 hours, at which point most of them will fail and, not being designed to be repaired, need to be junked. Some have enough power to run your refrigerator, some do not. The ones that are meant to run well for years cost over $1,000. And there is the problem of gasoline storage. If you store 20 gallons of gasoline, how many hours will that run your generator? Not a whole lot. Storing a lot of gasoline can be cumbersome and dangerous. Again, homeowners with extra cash can install generators that power their entire house, powered by propane from a large tank. Propane lasts virtually forever, so such a setup can run for thousands of hours. But this is not a great option for renters. Renters might wish to consider a tri-fuel generator from Yamaha that is large enough to power their refrigerator (and quiet enough that you and the neighbors will consider the running generator a net plus, not a minus). Tri-fuel means it can run on gasoline, propane, or natural gas. For anyone with access to a large propane tank, here is a small quiet portable generator that should run for thousands of hours if there is a good supply of propane or natural gas. This Yamaha will power a refrigerator with ease, but it will not power appliances such as dryers. But even if you don’t have access to a large tank, propane can be stored in multiple small portable containers used to power propane barbeques.

Small-scale renewable power setups that will not run appliances with motors but which will run DC LED lights, laptops, and other small electronic gizmos are available from a company named Goal Zero. Designed for campers and campsites, Goal Zero sells portable batteries, inverters, solar panels, DC LED lights that consume very little power, etc. Such setups won’t allow you to run your full-size refrigerator, but at least you can have light and computer power at night and be able to re-charge cell phones and the like.

Everyone’s circumstances truly are different when it comes to generating electricity. But in our view, it is a puzzle worth spending time and some money to solve. Ideally, it would be wonderful if we were all generating all of our own electricity from renewable sources (free energy devices would be, of course, the very best) and driving an all-electric vehicle. It would change the world in many ways. Many rightly complain about the unfortunate methods of Big Oil, Big Coal, Big Gas, and the nuclear power industry. But for now, we are their customers, so we are in on the game and it is not so easy to stop playing. But to state it again: this is a puzzle worth spending time and some money to solve.

HEALTH CARE: If you depend on medicines or supplements, obtaining a good supply is likely a very good idea. The financial crisis in Greece is leading to drug and treatment shortages there (Greek health system crumbles under weight of crisis) and Greece is surrounded by countries whose drug suppliers and health care systems are fully functioning. When the entire world financial system goes, many drugs and services are likely to be entirely unavailable in any country for some period of time. Clearly, if you do not have supplies or if you need treatment, having bullion coins or paper cash available should be a big advantage versus relying on government or insurance company promises to pay. Remember, trust in such promises will be the first part of the financial system to go.

The conventional medical system relies on the smooth functioning of the global supply chain, on government and insurance company payment systems, etc. When the economy becomes far more local as global systems fail, those who understand the health benefits available from alternative practitioners and methods—including but not limited to energetic and telepathic healing, acupuncture, Ayurveda, MMS, traditional Chinese herbal medicine, etc.—might find themselves very happy that they investigated these systems in advance to determine what works for them.

HEAT: If you live in a climate that experiences cold weather, planning for a heating method that does not rely on the functioning of the electrical grid is a great idea. It could be a life-saving idea. We highly recommend being able to safely heat with wood or propane and having an adequate supply of one of those on hand.

WATER: Since we can’t live without it for long, a reliable water supply is critical. When the Soviet Union collapsed in 1989, water company employees realized that a lot of people would die if they stopped working so most continued working without pay for several months. That was lucky. And it worked, to some extent, because Russia has plentiful supplies of the energy resources needed to keep the pumps and purifiers of a modern water system functioning. Would all of us be that lucky if the electricity grid were down for a period of time? Perhaps. But having backup supplies, or an alternative source of water that you can purify yourself without electricity, seems like a good plan. Filters such as those from Berkey and Aquarain are examples of quality filters that don’t require electricity and can purify water from almost any source. At least as long as that water hasn’t been Fukushima’ed.

HOUSEHOLD GOODS: Which household goods are considered critical is a highly personal judgment. But having some backups for the supplies you use on a daily basis seems wise. If you end up with an excess, supplies considered by many people to be necessary will make for very good barter items.

LOCATION: Where is the best to live for the future being outlined here? That is a large topic, so to not distract from the essentials described above and in Part 1, we will punt on this topic for now and cover it later in a stand-alone post.

To summarize, we recommend methodically moving away from dependence on big government and corporations and toward local sufficiency. Such moves are useful, and most find them to be a good deal of fun as well.

What then can we do? Part 1

Let’s talk about what we can do about the consequences implied in The financial system is based on 12 promises that are lies, dealing with these questions:

  1. How can we prepare for the collapse of the financial system?
  2. How can we prepare for supply chain outages and disruptions?

Preliminary Remarks

In our view, one principle involved here is quite simple: If you take some of the key steps outlined below, you will be in a position to help yourself and others. If you don’t, you will need help from others. At this point, there is still some time to choose your position, but that time is growing short.

Since this is a transition, we want be mindful of where we are coming from and where we are going to:

  • We are moving from old systems and structures that are detrimental to humanity; they are collapsing from their own growing uselessness and corruption, and we are hastening their collapse by eliminating or methodically reducing our participation, our complicity, in those systems;
  • We seek to protect ourselves and our communities during the period of collapse; and,
  • We want our actions to be positive steps toward the world we aim to create, thus we aim to “be the change” and to take actions that are wins for ourselves, humanity, and the planet.

Obviously, but perhaps worth stating: We don’t know how you should live. The suggestions in this post are based on our own thought experiments, research, and by watching how people have responded to change in recent years. Some people have found the changes difficult, others have found them liberating. The actions recommended here are some that a person might take if they wish to glide through the coming changes rather than struggle through them. Please consider each recommendation for action to be a summary. We will have future posts with greater detail on each recommendation.

And I would like to be clear about one thing: I am planning to be in a community where people are lending each other a hand so all can live well. I am not planning to live in a bunker with guns pointed in all directions. Local sufficiency is what I am aiming for. I am of the opinion that this can be achieved outside of the major metropolitan areas.

In terms of priorities on the Outer Work list below, do the precious metals thing first, today. After that, if there are things on the list that you’ve “always wanted to do,” perhaps it will be best to do those next, perhaps there is a very good reason that you’ve always wanted to do them.

Inner Work

As with all aims of consequence on the physical plane, some of the work is inner:

TURN FROM WANTS TOWARD NEEDS: In these times, does more need to be said about this?

EMBRACE CHANGE: It’s clear that those who have accepted the changes of the last several years have had a much easier time of it, inside and outside, than those who have resisted change at every turn. In our view, the pace of change is accelerating and will continue to do so, thus embracing change will become an increasingly important contributor to a positive inner state. Common forms of resistance are denial that anything is changing at all, wanting and expecting things to go “back to normal,” pretending that “nothing can be done about it so I’m not going to change anything,” etc. Beyond accepting change is its active pursuit: movement toward that life which truly and deeply makes sense to you. When enough of us are on that track, the world will be a beautifully different place.

MAINTAIN EQUANIMITY: Obviously, people can be thrown off kilter by both the acceleration and by the disappearance of societal structures on which they believe they are reliant. And “off kilter” seems to reach new heights—if the latest news stories are any indication, perhaps that should be depths—every week. So whatever activities people do to maintain their connection with what is real in them, whatever they do to raise their vibration—meditation, chanting, breathing exercises, sensing exercises, energetic healings, breathing the marrow of the sun through their crown chakra and distributing that energy inside to where it is needed, whatever … these need to be very high priority activities. Ignoring these is an increasingly high-risk strategy as we proceed through this transition.

WATCH THE TRENDS: Life is clearly telegraphing the coming changes by presenting examples of each and then ramping up their frequency and intensity. The trends are not mysterious, they are very clear. We are all being shown where all this is proceeding in finance, politics, the recognition of the need for inner work, weather changes, earth changes, nuclear energy, magnetic pole migration, etc. If you observe these trends without bias, you are unlikely to be shocked as they accelerate. Expecting trend acceleration is key. As some say in Tibet, “Recognition is liberation.”

Outer Work

MONEY: When the current financial system fails, the typical sources of money will be gone or the money they deliver will be nearly worthless due to over-printing. The solution is minted bullion coins obtained from reputable, low-cost dealers for storage controlled by you.

If you have savings denominated in fiat money, convert as much of it as you can into minted gold and silver bullion coins. Minted bullion coins means gold and silver US Eagles, Canadian Maple Leafs, Australian Kangaroos, British Kings (“Sovereigns”), Kruggerands, or so-called “junk silver,” that is, pre-1964 US dimes, quarters, and half dollars that contain 90% actual silver content. These bullion coins are typically priced at some small percent above the world spot price of the physical metal itself, though junk silver can sometimes be purchased below the spot price from a good dealer.

We are not talking about gold bars, which are far easier to counterfeit than coins. We are not talking about special proof coins, which are overpriced for their metal content. And we are DEFINITELY NOT talking about buying numismatic coins, namely those coins touted as valuable because they are old and rare. That is a world for collectors and experts. If you buy them, you are 100% certain to be overpaying for their gold or silver content, and typically overpaying by a lot. If a dealer tries to steer you toward those, steer away from that dealer.

What is wanted now are coins valued for their metal content, coins that are easily recognized for that content, coins that will have known value on the street when national currencies are dying. Avoid all “gold experts” who tell you to put 5% to 10% of your money into physical metals or who call gold an “asset class.” They do not understand the scale and scope of what’s happening. Either that or they think we are all so rich that losing 90% to 95% of our savings is somehow acceptable. If you have no savings in fiat currency and no metals, do your best to obtain what metals you can. Make it a priority to save a few dollars on a schedule and then buy a silver coin or two when you can. Your effort, perhaps your sacrifice, will be very well rewarded.

And we are talking about minted bullion coins where you control possession, not situations where you have a piece of paper that says you own some gold somewhere. Most such papers will turn out to be unreliable.

When would it be best to convert fiat savings to bullions coins? Now. Today. Here’s one method: buy as much as you can stomach buying. When you’re done, do that again. And then again. Yes, leaving a little money in regular checking accounts to cover near-term expenses is a good idea. And if you can, it is a good idea to have a few months worth of paper currency around as well since there will be a time, after the death of electronic national currencies, when many vendors won’t know the value of precious metal coins so some will still want paper currency. Our research says that it would be wise to complete this conversion process by August 2012.

If these statements on precious metals are clear, great. If they are not and you want to act soon, please e-mail and we can elaborate on tactics prior to doing a major detailed post on that topic, for which there may not be time right away.

In Part 2, we will deal with topics related to outages of the global supply chain.