Gold and Energy Advisor: Gold, Oil & Energy Markets Investment Research
James DiGeorgia, Mr. Macro
- Chief Editor -
Mr. Macro
Geoff Garbacz, Mr. Micro
- Chief Strategist -
Mr. Micro
Dan Hassey, Mr. Retirement
- Senior Stock Analyst -
Mr. Retirement

Gold and Energy Advisor's Real Wealth

Real Wealth #230  05/27/2009



Russia Warns North Korean Conflict Could Go Nuclear...China Warns Again on the U.S. Dollar

 

Dear Subscribers,

There are two items in the news today that you should be aware of relating to gold, oil and stocks...

Vice President Biden’s warning that President Obama would be tested early in his presidency is coming true. North Korea’s test of a nuclear weapon 10 times the size of its last tested device and its tests of short range missiles in the last few days all violate UN Resolutions as well as standing agreements negotiated in the past 10 years is quickly becoming a serious test of Obama’s Administration.

The situation is so serious the Reuters in Moscow is reporting that Russia is taking security measures as a precaution against the possibility tension over North Korea could escalate into nuclear war.

Interfax quotes an unnamed security source saying ...

 "The need has emerged for an appropriate package of precautionary measures.

“"We are not talking about stepping up military efforts but rather about measures in case a military conflict, perhaps with the use of nuclear weapons, flares up on the Korean Peninsula".

The international condemnation has been almost universal including terse statements from both China and Russia. North Korea response to the threat of new U.N. sanctions has been a declaration that it is no longer bound by the armistice signed with South Korea at the end of the 1950-53 Korean War.

Itar-Tass news agency quoted a Russian Foreign Ministry official as saying the "war of nerves" over North Korea should not be allowed to grow into a military conflict, a reference to Pyongyang's decision to drop out of the armistice deal.

"We assume that a dangerous brinkmanship, a war of nerves, is under way, but it will not grow into a hot war," the official told Tass. "Restraint is needed."

In the past, Moscow has been reluctant to support Western calls for sanctions. But Russian officials in the United Nations have said that this time the authority of the international body is at stake.

Russia’s President Medvedev told South Korean President Lee Myung-bak, who called him on Wednesday, that Russia was prepared to work with Seoul on a new U.N. Security Council resolution and to revive international talks on the North Korean nuclear issue.

"The heads of state noted that the nuclear test conducted by North Korea on Monday is a direct violation of a U.N. Security Council resolution and impedes international law," a Kremlin press release said.

 

The second item in the news item further confirms my fears over the risk that will not put up with the United States printing money. Britain’s Telegraph ran a story entitled...

China warns Federal Reserve over 'printing money'” which is exactly what were doing.

 

Richard Fisher, president of the Dallas Federal Reserve Bank, is quoted as saying that officials of the Chinese government grilled him about whether or not we are going to monetize the actions of our legislature."

"I must have been asked about that a hundred times in China. I was asked at every single meeting about our purchases of Treasuries. That seemed to be the principal preoccupation of those that were invested with their surpluses mostly in the United States," he told the Wall Street Journal.”

The Britain’s Telegraph asserts...

His recent trip to the Far East appears to have been a stark reminder that Asia's "Confucian" culture of right action does not look kindly on the insouciant policy of printing money by Anglo-Saxons.”

Mr Fisher, the Fed's leading hawk, was a fierce opponent of the original decision to buy Treasury debt, fearing that it would lead to a blurring of the line between fiscal and monetary policy – and could all too easily degenerate into Argentine-style financing of uncontrolled spending.

However, he agreed that the Fed was forced to take emergency action after the financial system "literally fell apart".

The Oxford-educated Mr Fisher, an outspoken free-marketer and believer in the Schumpeterian process of "creative destruction", has been running a fervent campaign to alert Americans to the "very big hole" in unfunded pension and health-care liabilities built up by a careless political class over the years.

"We at the Dallas Fed believe the total is over $99 trillion," he said in February.”

These two items in the news should not be ignored.

 

The reality of the massive and rapidly growing U.S. debt and outright printing of money is going to trigger major conflict with the Chinese, and could bring about a monetary collapse that will literally change the world as we know it.

 

I’m not sure there’s a cure especially when the U.S. government is pumping another $50 billion into GM and effectively nationalizing both the banks and now private industry. I have no doubt that even the ardent supporters of President Obama will not love him very long with marginal tax rates of 60%, 70% even 90% in the years ahead. I also know that if the U.S. Dollar collapses if you’re not holding gold, platinum or silver in your investment portfolio you’re going to be left stranded and at the mercy of a socialist welfare state!

 

I’ve been recommending semi numismatic and numismatic gold, silver and platinum gold coins simply because I believe the U.S. Government facing a monetary collapse will once again as it did in 1933 seize private bullion holdings from the public. Collectable coins were exempt in 1933 and I foresee the same scenario unfolding.

 

My staff at Finest Known can be reached at 1-866-697-GOLD (4653) or 1-561-750-1716 and we are capable of providing you the assistance to put semi-numismatic gold and platinum coins in your IRA. Gold and Platinum are both up again today. The longer you wait the more danger gathers and the higher the price you may pay.

 

Sincerely,

 

James DiGeorgia

Publisher and Editor

Please see risk disclosure link below.