None of the governments of the world will allow any independant body to inspect the gold reserves of respective countries to verify the claimed holdings. Gold has a value as long as it is hoarded by countries and individuals and, in my view, the most worthless investment. If all countries put on sale their gold deposits the price of gold would crash probably to the price of iron!

The USA can have a deficit of 450 billion dollars because of the huge amount of US dollar bonds in circulation. Last year US Govt. Bonds in circulation were US$ 4,348/- billion (US$ 4.3 trillion). Of this US$ 2,917/- billion by non US institutions and governments. This constitutes 65% of the total US bonds in circulation. In simple terms the USA in enjoying other peoples and countries money at very low interest with very little security. Many of the countries of the world that claim to be anti American are the very countries that invest in US bonds. If the rest of the world really wants to bring the USA to it’s knees all they have to do is to get rid of all the US bonds that they hold.

Similarly, the stocks of companies the world over are traded on highly inflated values that are purely notional and artifically kept high by using mutual funds and investment banks to hoard a major portion of the shareholding to create a low floating stock. The mutual funds and investment banks have a cosy relationship by selling to each other to generate profits. This can carry on smoothly only as long as the money keeps flowing from the banks. But the shares also have a saturation point beyond which no profits can be made. So the banks started diverting their lending to the property market, which, too not only reached it’s saturation point but went below the value of the balance amount due from the borrower!

What I am trying to prove is, that the economic model brought about by capitalism is ultimately doomed to failure because it is based on premise that values will keep on rising, which can never be the case as a saturation point will eventually be reached sooner or later. Trouble is, as long as stock and property values keep on rising, no government tries to cap them down to reasonable limits because everybody profits from it.

What’s the immidiate solution?- Go back to barter trade because the money the world has is being produced from thin air and is being pumped into bad assets and will make even the good money disappear.Be prepared for a long, long depression.

So how do you and I the common people on the street tackle this depression? Tighten up your purse strings, spend only if necessary. Collect as much spare cash as you can. When the stock market has really reached the bottom then pick up the companies with good financials and be willing to wait for a couple of years. By then the capitalists of the world will be able to ramp up the economy and the share market. When the value of your investments rise more than five times the original then promptly dump the shares because the next crash/depression will be waiting in the wings because public memory is short and the same mistakes will be made by the so called “brilliant” economists and ceos of the capitalist world to bring the economies of the world to their knees.

Remember being rich does not necessarily mean being satisfied!

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