to be a real disaster…
administration’s economic strategy will create an unmitigated
disaster – not only our country’s worst financial calamity,
but the greatest economic disaster in recorded history.
I first warned
my readers about what was happening last December, in a letter titled
The End of America:
great inflation will destroy America’s economic leadership.
It will lead – eventually – to the return of settling
international obligations in gold instead of paper dollars. And
this will happen much faster than anyone expects.
time Obama leaves office, you will not be able to exchange dollars
for any sound currency in the world without permission from the
U.S. government. The price of gold will be well over $2,500 per
ounce. Most importantly, commodities will no longer be priced in
dollars either, but instead in the currencies of the leading producer.
Americans haven’t experienced anything like this since the
Since I wrote
that first warning, I have become much more concerned and much more
afraid. What the president has done is actually worse – much
worse – than even the dire scenario I had envisioned. Not only
is the administration planning on enormous deficit spending this
year, but the current plan calls for increasing deficit spending
for the next decade – spending that will more than double our
entire national debt during his presidency.
Budget Office produced the following graphic, which compares the
deficits of the 1980s and 1990s to the current and future budgets.
Assuming Obama remains in power over the next eight years and assuming
these deficits aren’t actually much larger (which almost always
happens), the Congressional Budget office estimates the president’s
budget will add more than $10 trillion to the total federal debt
by 2019 – approximately as much total debt as was outstanding
at the beginning of 2007.
to borrow more money over the next eight years than all of the other
presidents – combined.
hard to put this in perspective. The numbers have become so large
they’re almost meaningless. “Twenty trillion” has
13 zeros: $20,000,000,000,000. Nobody can think about a number that
large. But consider this… In 1980, the entire federal debt
totaled $930 million. Assuming we’re paying 5% on our debt
in 2019, we will spend more money on interest than our entire national
debt of 1980.
of debt is going to be a huge problem because no one will want to
pay the money back – ever. And it can’t be financed forever.
The poor will blame the rich. The rich will leave and take their
wealth offshore. And absolute chaos will follow. The dollar will
be completely destroyed.
know… you’re thinking, “I’ve heard all of this
before. But the end of the world somehow doesn’t happen. We
find a way out.”
Not this time.
In fact, when I wrote last year that the dollar would cease to be
the world’s reserve currency much faster than anyone expects,
I’m sure no one took me seriously. But since then, we’ve
heard two of the world’s leading powers – China and Russia
– both openly suggesting a new world reserve currency must
be created. Putin is even talking about using gold to settle international
trade. It will happen because no one will want to be a creditor
to the United States.
As more and
more people try to get out of the dollar, the government will be
forced to forbid the free exchange of dollars into other currencies
– and perhaps even to forbid the purchase of gold bullion.
This will happen. I guarantee it. And it will happen during the
why it’s critical for you to take precautions now, while you
The first thing
you should do, if you haven’t yet, is buy gold bullion. It’s
easy: You just call a few coin dealers, find out who offers the
lowest premium on bullion, and wire them the money. Once you have
the coins, they’re easy to hide, easy to store, and easy to
transport. There’s no law (yet) saying you can’t take
bullion out of the country. If things start moving that way, you
should have enough time to get the bullion out before the law passes.
If not… well… you can clip your coins easily and use the
gold to pay for whatever you might need.
I also believe
you should immediately buy gold stocks. In fact, I’m convinced
you’ll never have a chance to buy gold stocks this cheaply
again… Gold stocks have never been cheaper compared to the
price of gold itself. This is an amazing, once-in-a-lifetime opportunity.
I truly hope you’ll capitalize on it.
thing you should do is move as large a percentage of your financial
assets as possible out of the country. Unfortunately, I don’t
know enough about this yet to offer any good advice. I’m working
And the third
thing you ought to do is to build a stimulus package for yourself.
I realize it’s paradoxical. But the coming crisis will make
lots of people rich. It’s not hard to generate a paper fortune
in a huge inflation. All you have to do is own the most important
economic assets: energy, communication, and transportation. Thing
to do right now is buy the assets you know the government has to
have for the economy to function. These assets will remain in private
hands, and their values will increase the most.
I can tell
you what happens to countries that go bankrupt. I’ve been to
Argentina. I’m familiar with the history of Mexico and Great
Britain. We’ll see the same things here, shortly: inflation,
huge tax increases, capital flight and, eventually, capital controls.
It will probably
take decades for Americans to realize socialism doesn’t work.
But that clarity might not happen during my lifetime. And I don’t
want my assets to be stuck inside a banana republic in the midst
of a huge socialist experiment. I’m graveyard serious: If you
do not take precautions and prepare yourself and your family for
the inevitable collapse of our currency, you will suffer incredibly
over the next decade.
founded Stansberry & Associates Investment Research LLC, a private
publishing company based in Baltimore, Maryland, in 1999. His monthly
newsletter, Porter Stansberry's Investment Advisory, deals
with safe value investments poised to give subscribers years of
exceptional returns. And his weekly trading service, Porter
Stansberry's Put Strategy Report, shows readers the smartest
way to book big gains during the ongoing financial crisis.