This is from a friend of mine who has been in the financial industry for 30+ years.  He gives wise advice.  I would suggest that you all read this article.  About the new monetary system that would revamp the entire global financial system...dethroning the dollar in the process.  Did I mention gold?  You might want to get some in this new system.

To buy gold from my friend, a personal, trusted connection, email him at safehavengold@earthlink.net

He has been right on for years...about where things are going in our economy, and he sees the writing on the wall.

The Strong Watchman

A very important message to my friends,

If the general public was asked what the biggest news was during the past week, the response would likely be: the elections landslide.  And the general public would be wrong.

Although the election results do give a spark of hope moving forward, the real story -- the biggest event that has happened in our country's financial history since 1971...one that quietly bypassed most Americans -- happened yesterday, November 8, 2010.

Yesterday the President of the World Bank publicly discussed the need for a new world monetary system, one that would be based upon a gold standard.  Harry Shultz (one of the most brilliant and respected international minds on this planet, and editor of the Harry Shultz Letter) had this to say:

"Yesterday, Nov 8, 2010, was a day I've awaited for 40 years, since President Nixon shut down the last vestiges of the gold standard. Yesterday, at last, a respected member of the ruling classes called for a discussion to readopt a modified global gold standard as a lynchpin for the monetary system. Robert Zoellick, World Bank President and a former US Treasury official, says a new system is needed (as called for in HSL for 20 years), using 5 main currencies, with gold as the international reference point for future currency values. He wondrously said "Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today." I couldn't have put it better and in fact I have put it in those exact words, as has Jim Sinclair and a number of free market analysts.

RZ said "The development of a monetary system to succeed Bretton Wood II launched in 1971, will take time. But we need to begin." Amen, Mr. Z and thank you! Also, thanks to the Financial Times for making this the leading page one headline story, despite their traditional aversion to gold. Ethics won! This story broke in the early AM Nov 8th and halted a correction that began in the gold price, after which gold rose to a new high. The story freaked out ruling politicians around the world who despise gold because it acts as a governor on government spending. After Nixon closed the gold window, government spending and deficits rocketed, as the data charts prove, from that exact moment. Germany, the US Fed, and Trichet of ECB all patted Mr. Z on the head, but said it's not practical.

What would you expect them to say dear reader? They will fight a gold-linked system, but in the end they will give in, because the system is dying, fast, as the gold price reflects. How good a new system will be, whether it will have only a symbolic link or a strong one, can't be guessed today, nor how soon. The gold price will tell us. My prediction on Bloomberg TV in Paris a few years ago was that "Gold will force a system change when gold hits $1,650, but that it might need $2,000 to bring a change." That may still come true, because, as you see in the press today, most political leaders tried to discount Mr. Z's brave, but wise recommendation.

I shall frame this FT front page and hang it on a wall. It was a watershed day."

Harry Schultz

Here's a quick lesson in monetary history that might make the above a bit more understandable.

"Bretton Woods" was a post-WWII meeting of the western countries ("victors") of that war, who decided to establish a new, post war monetary system ("Bretton Woods" was chosen as a moniker for the new system because that's where the meeting was held).  This system established the US dollar as the world reserve currency, backed by gold.  What this meant was that all other currencies of the world were fixed at a pegged rate to the US dollar and had to be redeemed in dollars to purchase gold.  Countries could hold US dollars and exchange them for gold (at a fixed rate of $35 per ounce) anytime they chose.  Thus, the dollar was "as good as gold".

"Bretton Woods II" is the name used to describe the US dollar based monetary system since 1971.  Because the US had printed (created out of thin air) too many dollars during the 1960s to finance both the Vietnam War and "The Great Society" welfare system, countries around the world - sensing the devaluation of the dollar - started a run on the gold in the US treasury, by redeeming their dollars for gold.  To avoid a bankruptcy of the US Treasury,  gold backing was removed from the US dollar by President Richard Nixon.  The US dollar then became a "fiat" currency (backed by nothing, except the good faith and credit of the issuer), and countries were no longer able to convert dollars back to gold at a fixed rate.  This is the monetary system under which the world has been functioning for the past 39 years.

So, what Mr. Zoellick is publicly advocating is earthshaking...it is an official revamp of the world's monetary system (for the first time since WWII), dethroning the US dollar as "King", and re-establishing a monetary system based on gold.  THIS IS A WATERSHED EVENT, AND FOR THOSE THAT UNDERSTAND IT, THE BIGGEST NEWS IN THE FINANCIAL WORLD (WHICH AFFECTS US ALL)  IN OVER 60 YEARS!

Those of you who have known me (or followed my guidance) for any length of time will not be surprised by this, as I have been discussing the inevitability of the dollar's fall and a creation of a new monetary system for a long time.  What is important is who is now publicly admitting that the days of the dollar as the world's reserve currency are coming to an end.

The news of Mr. Zoellick's statement broke less than one week after Fed Chairman Ben Bernanke announced the resumption of quantitative easing ("QE2", or printing more money out of thin air) to the tune of $900 billion.  As I discussed in yesterday's email, this will accomplish almost nothing, except to further debase the US dollar, and make the prices of gold, silver and other commodities rise through the roof.  Of course, Mr. Bernanke claims that QE2 is only to rejuvenate the economy, and will have only a minor effect on prices.  The man is either delusional or just plain lying (or both).  [See a video clip of Mr. Bernanke's statement, and Congressman Ron Paul's response: http://www.cnbc.com/id/40068994/ .]

In fact, gold has gone up about $100.00 per ounce this past week in response to the announcement of QE2.  The long term implicaton of QE2 will be continued increases in the price of gold, due to the continued debasement of the US dollar.  And, although I usually don't like to make short term predictions on the gold market, I'll go out on a limb here: if I am right (and my advisors and resources are right), expect gold to rise another $100.00 per ounce in the next month, and to be over $1,600.00 per ounce by early 2011.

The momentum for gold is building, driven primarily by (1) the massive US debt, and (2) the fall of the US dollar's purchasing power worldwide.  It is impossible for the US to pay off its massive debt, and the rest of the world knows it [China’s Dagong Global Credit Rating Co. reduced its credit rating for the U.S. to A+ from AA, citing a deteriorating intent and ability to repay debt obligations after the Federal Reserve announced more monetary easing.  http://www.businessweek.com/news/2010-11-09/china-s-dagong-lowers-u-s-credit-rating-on-fed-easing.html ].

Either the US will default on its debts, or - more realistically - the US will continue quantitative easing to infinity (which will destroy the dollar, but allow the US to pay off the debt in worthless dollars).  The massive US debt and the fall of the dollar's purchasing power is causing the most massive global transfer of wealth and power since the industrial revolution - from the western nations to the eastern nations.  [To further understand this, I suggest you read Alisdair Macleod's "Gold is Part of the New Economic Order" http://www.financeandeconomics.org/Articles%20archive/2010.11.03%20Gold%20and%20SCO.htm .]

So, as I said in my opening paragraph, the election results - by comparison - are nowhere near as earthshaking as the back to back announcements of QE2 and Mr. Zoellick's call for the restructure of the world's monetary system!

Certainly, we can only hope that our new leaders in Washington can help turn things around, but - realistically - don't expect too much.  First, the debt (and damage already done) is too great to undo...and there is really no political will to try.  [For an excellent understanding of this, please read the attached "Perspective", Casey's Daily Dispatch, November 3, 2010.]

Second, even if our newly elected congress could stop - or drastically reduce - both spending and debt, it wouldn't matter.  Why?  Because the out of control, unregulated Federal Reserve is by-passing both Congress and the will of the American people, by creating trillions of dollars out of thin air to spend elsewhere (mostly to finance the debt that nobody else on the planet wants to finance anymore).  This is massive currency debasement, and it is what the rest of the world financial community is finally recognizing and/or admitting.  It is why gold, silver and commodities have been soaring, and will continue to soar in the months and years ahead, as the value of the dollar spirals downward.

Historically, hyper-inflation of currencies (and the resulting price hyper-inflation) have been limited to the one country that is hyperinflating its currency.  This time around, the world is being affected by the hyper-inflation of the world's reserve currency.  The impact will be global, and all fiat currencies are going to be affected.  The one true currency - gold - will be the one standing when the dust settles.  That's why Mr. Zoellick is now publicly advocating a return to a gold standard.  The end of Bretton Woods II is rapidly approaching...and the world's rulers know that the moment of reckoning is almost upon us, and that they can neither ignore nor suppress this truth much longer.

When President Nixon removed the US dollar from gold in 1971, the price of one ounce of gold was $42.00.  Now, 39 years later, the price of gold is over $1,400.00 per ounce.  Gold is the "financial canary in the coal mine" that screams when the underlying currency is in trouble and/or being hyper-inflated.  That's why gold - at 33 times the price that it was at the beginning of Bretton Woods II - is soaring today.  It is announcing to the world that the US dollar is dying...and the faster the dollar dies, the faster gold will continue its rise.  Gold is rising not because gold is gaining value, but because the dollar is losing value. [The US dollar has lost over 80% of its purchasing power relative to gold in the past 9 years.  See attached chart.]

For your sake, I sincerely hope that you do not take this lightly, and that you have taken a defensive position in gold (and silver) to protect your accumulated wealth from being further decimated by the storm that's now here.  Any assets you have that are denominated in US dollars will continue to lose value as the dollar fails (And, the dollar and debt problems will have a strong impact on the stock markets, the banking system, and the real estate markets too -- and not in a good way [see yesterday's email and/or read this short article, attached below).  If you are still sitting on the fence about gold, I implore you to act now - while there is still time to do so.

Please pass this information on to others that you care about.  And if I can help and/or guide you (or them) in any way, either with information or purchasing precious metals, I may be reached by email at safehavengold@earthlink.net

In friendship,