Someone on CNBC TV just said that the Republicans in the House might use the threat of not agreeing to raise the Federal debt ceiling as a bargaining chip to force the Democrats to agree to large budget cuts. They said that the Republicans might agree to keep increasing it by a small amount, every couple of months. Investors should be aware that would be an extremely dangerous thing to do. An unintended default could bring down the entire world financial system because of the HUNDREDS OF TRILLIONS of dollars of derivatives out there. NO ONE is smart enough to know how such a thing would play out. Imagine what gold and silver would do if the USA defaults on its’ debt! If you have any, I would sure hang on to it. These clowns are playing with fire. I doubt default would ever occur, but who knows. If it did, it could be the biggest event in world history. As I told my banker (the day before they were forced to merge with another bank in order to keep from going under) modern civilization can’t exist without a functioning global banking system. It would be like shutting down the electric grid. We are dependent on it for our survival.
Bernanke is telling Congress that it will take 4 or 5 more years to get US unemployment back to normal levels. He is giving a lecture on the need to get the budget deficit under control. I wonder if he will suggest raising the 15% income tax rate for the hedge fund guys? Quit laughing!
The answer to that question should tell you about the future worth of the US dollar.

Then what would you expect from the Bond King! Yea, if people bought gold big time, he would get less from stocks and bonds in his fund and he himself would experience a drop in wealth.

The counterparty risk in stocks is huge at the present time. Counterparty risk is a volatility itself. Besides where’s the volatility in a commodity that has risen for the last ten years.

If the dividends from your shares or interest from your bonds plus price rise of share or bond is significantly less than the gain in price of gold or silver, as it has been in 2010, why talk gold down on the grounds that you don’t get an income?

My 55% gain on gold and silver in 2010 greatly exceeds the combined return of income and capital growth in shares and bonds. And when I want income, what do I do? I sell some gold and then I have money incoming.

I increasingly think that these experts in bonds and shares know very little about the bullion market. This serves them well, of course, because they can then advise people to go on and on buying the stocks they themselves live off.

“The counterparty risk in stocks is huge at the present time. Counterparty risk is a volatility itself.”

Sad to say but most of John Mark’s note is nonsense, except for this part, which is gibberish.

Perhaps it would make better sense for the beginning rookie investor to not just have or invest in bonds, whether they be savings bonds, corporate bonds, and the like…but also to invest in stronger currencies as well such as the Euro. Do not get me wrong, The USD is gaining ground, but it still makes me feel a bit edgy about investing in stocks at this time. Perhaps when things begin to even out I might consider stocks. On the plus side, it does make sense to have the other currencies on hand when you travel into other countries. Correct me if I am wrong, but are we not on a global system, and as part of the global system, shouldn’t other nation’s currency be honored by the global community, no matter what nation that you are in that are part of that Global Community?