Hi to everyone who reads this! - Gary Tooze here. Thank you for taking the time to surf here....

REVELATION FREEGOLD!!! (February 2013)

Below still has much merit and relevance but after 2+ Years of research FREEGOLD is our destiny - HERE are MY Thoughts on Freegold!

"The world economy architecture is like a gigantic jigsaw puzzle, and hence, the pieces can only fit in one manner - that is why Freegold is inevitable. No matter, how long or, in what order the pieces are connected - the final picture is pre-ordained... and it is easier to identify nearer its completion." - Gary Tooze

After debating a pile of ways to tell this to my friends - I couldn't think of - even one - subtle way. I haven't the time to reach everyone what with the logistics of family life and 2 young boys, work, where everyone geographically lives etc. While I have informed many friends face-to-face, I apologize that it wasn't always possible for everyone and that this is far less-personal. I'll try to preface this by saying that, for most of you it will sound totally outrageous - unbelievable - frankly, 'crazy'.  Hopefully you might find this minutely interesting - if nothing else. So, here it goes: It is my contention that the U.S. dollar will eventually collapse and that country will fall into a lengthy inflationary depression quite possibly triggering hyperinflation (see March 2012 post-post-post-post-script below.) This will be their ticket to Third World status.

"I'd rather be a year early than a day late"

Are You Crazy?      Why do you say this?      When do you think this will happen?

Will it happen all of a sudden?

How come I haven't heard this on the news?       Where did you do your research?

Will this affect us badly?      Can we do anything?

What if you are wrong?      Give me some details   

QE2 - All You Need To Know      Final word

Essential Reading/articles/video        Quotations

Stock suggestion           Sources           Pictures

Are You Crazy?
Quite possibly - but my level of sanity will have little effect on the inevitable outcome of this prediction. It is less important to me that 'you think I am crazy' than it is for me to tell you.

Why do you say this?
It is not as unlikely a premise as you might expect. I've done somewhere around 150 hours research but after only about 20 hours my mind was made up and I decided to collapse my RSP (pay the penalty) and started accumulating Gold and Silver... which, by the way, has escalated dramatically as the proverbial 'cat is being let out of the bag' on this topic. In simple terms - the U.S. Federal Reserve has been printing money (electronically) - most notably for T.A.R.P. (2 trillion for bailing out the banks, insurance companies, auto giants etc. after the 2008 financial crisis) and more recently for QE2 (600 Billion for 'Quantitative Easing') which is being used to buy U.S. Treasury Bonds. Many had anticipated this decline since Nixon took the U.S. off the Gold standard in August 1971. Devaluing your own currency is not a new idea (it gains competitive edge on the worldwide market) - but on a large scale it can be a vicious circle ending disastrously. The U.S. debt is unmanageable and their current economic system is unsustainable. They have gone well beyond any 'tipping point'. For most of us - our children will not live as well as we have. Their lives will be burdened under this irresponsibly established debt.

When do you think this will happen?
How can we know with any certainty? Events are occurring now but the bulk will happen 2014-2017, I suspect.

Will it happen all of a sudden?

I hope not - a continued gradual decline would be easiest to accept also allowing us to prepare more. The U.S. economy is so fragile that anything could be the trigger - a geo-political event or it may end up being a 'run' on Treasuries - on one very average-starting day in the Stock Market.

How come I haven't heard this on the news?

Same reason you didn't hear about the DOT-com bubble or the housing crisis till AFTER they occurred. Mainstream media - almost by definition - is behind the curve. They report history. It is, generally, not in their best interests to make predictions. Plus their advertisers wouldn't be too keen. This is a 'contrarian' theory I am telling you but you are likely to hear discussion of it more often in the near future. Stay tuned...

Where did you research?

Mostly YouTube interviews and websites. I hope you can appreciate that I am NOT relying on every Tom, Dick or Harry with a webcam sitting in his underwear in the basement blathering about conspiracies. You do your due-diligence research making determinations on the expertise and validity of the people you listen to - giving weight to more credible sources. You can use the Internet for heaps of valid information if you are discerning enough. For any that would like to follow in my investigative footstep I will gladly send you a few hundred links to start if you simply ask me. There is probably more information on this topic that you could read in an entire year - some good, some bad, much... irrefutable.

Will this affect us badly?

Well, this site is for friends around the world but I know most are in Canada and I can't say how much we will be affected here. BUT we will get inflation - hopefully not on the same massive level that will occur in the U.S. The problem is that the U.S. dollar is the world's reserve currency with many other currencies 'pegged' to it. The effects will be global but no one can know exactly how much inflation will hit each country. You can be sure that if the United States gets supply-chain shortages - so will Canada.

Inflation always hurts your standard of living. Rising prices means you have to pay more for the same goods and services. If your income increases at a slower rate as inflation, your standard of living declines even if you are making more. Inflation's main consequence is a creeping reduction in your standard of living. Essentials like food and gas will be the most notable in their price increase in the very near future.

Can we do anything?

Of course. You can prepare!

1) Sell any U.S. based liquid assets (this includes bonds, RSP - IRA, 401K - leanings - everything directly relating to the U.S. dollar)

2) Do NOT, I repeat, do NOT keep large sums of money in the bank. Your dollars are a depreciating asset (negative real interest rates) - buy appreciating hard assets with them (see #6).

3) Minimize spending habits. Learn to live quite lean. NO big purchases (SUVs, HDTVs, lavish trips etc.) Get out of debt if possible.

4) Stock up on non-perishables (dry pasta, canned foods with decent expiry dates, rice, if you have a freezer fill it with ground beef, roasts, chicken etc. buy larger quantities of soaps, shampoos, toothpastes etc. when they are on sale.) Buy smart - have a 'stash'.

5) Start a vegetable garden - buy seeds now (the price will inflate).

6) Get a safety deposit box and buy physical Gold and Silver coins/bars - as much as you can responsibly afford (buy a safe, bury in your garden etc.).

7) Envision what you will do if gas is 10x the price it is now (it is denominated in US dollars).

8) If you are an investor buy TSX Gold Mining stocks. A nice basket mix of 'juniors', 'midcaps' and high caps'. See a recommendation below HERE

What if you are wrong?

How dare you! <just joking>. I'm about 95+% certain that this will occur but if I am wrong there is no real downside, in my opinion. So you prepare to live more lean, grow a garden, purchase some extra stuff that you will eventually buy and use anyway - the investment advice is sound - commodities will be in a bull market for a few years to come. If I am wrong then I look like an idiot (situation normal). But, as the saying goes 'hope for the best - but prepare for the worst'.

Give me some details, Gary

The US Sovereign Debt Crisis may come in various forms. 43 States are bankrupt or preparing to file for bankruptcy - so 'the event' may manifest itself via a Municipal Bonds collapse. As the money-printing already used as 'stimulus' filters into the system - inflation will inevitably rise quite dramatically (this is a 100% guarantee.) If the Fed doesn't continue the 'stimulus' after June 2011 (QE3? - or some other mindless acronym in some other form - even stealth) - who will buy their Treasury Bonds? (answer: no one of any significance! - China is ceasing and Japan is selling them to deal with their own catastrophic events.) The banks and government are so highly leveraged that even a one point increase in interest rates will bankrupt both. 26 cents of every tax dollar goes just to interest on the debt.

So:

1) Continued money printing is inevitable (monetize debt, pay bills, buoy the stock market) and it will promote further inflation.

2) If they don't print more money the bond market will collapse which would prompt a total loss of confidence in the U.S. dollar.

The more liquidity injected into the system - the more inflation.

1) They must eventually raise interest rates (when?) to combat the spiking levels of inflation

2)  Raising Interest rates would require massive money printing (or result in Federal bankruptcy, housing market collapse, again -> rampant inflation etc.)

Who can guess which route the Fed will go? - but as their options are so limited - they will follow the pattern of every other historical hyperinflation occurrence and print money. They have economically painted themselves into a corner.  As the paper money value shrinks around the world - Gold and Silver rise because they can't simply print more of those precious metals - as they can, and are, doing with paper currency. Let's say the Fed both a) prints incredible amounts of money and b) raises interest rates - then hyperinflation, via loss of faith in the currency, is a guarantee. Odds are greatly in the favor of this happening anyway. This will prove catastrophic - like nothing you have ever seen. Prices will increase weekly...

QE2 - ALL YOU NEED TO KNOW...

It's been said many times that the four most expensive words ever spoken in the Stock Market were "It's -  different -  this -  time". Niccolò Machiavelli (1469–1527) agrees with me in that history repeats because the passions of man never change. Even if we throw out all the overwhelming economic data about the falling US dollar, the steady rise of Gold, the tripling of the monetary base etc. etc. - we only need focus on one aspect of the US economy. That being 'Quantitative Easing 2' where the Federal Reserve, the Central Bank of the United States, purchased $600 billion of longer-term U.S. Treasury securities between November 1st, 2010 and June 30th, 2011. This isn't the first time that monetary policy has been enacted by a central bank to 'stimulate' its nation's economy. Notably this was done in Japan and more recently in the United Kingdom as well as the Eurozone. It has never produced a positive outcome and there is no evidence (zero) that it ever will. The 'Think-Tank' of a hundred or more economists working inside the Federal Reserve are obviously aware of this. We can call Chairman Bernanke and company 'a complete bunch of idiots' - but they had a reason behind this obviously flawed policy decision. And it's similar to the reason for retroactively-named QE1 and why it was done in other countries as well; TOTAL DESPERATION. It is just delaying the inevitable. See, the Treasury raises government funds by selling bills, notes, and bonds - in this instance purchased with QE2 money which was created... out of thin-air. You heard right. I explained this to my eight-year old son, Kyle, and he said "Why don't they (The Fed) just give the money directly to the government?" Yes, indeed. Why the charade? I'm sure there are reasons. Frankly, I don't care - it's irrelevant at this stage. We don't need to delve into the sordid details. The bottom line is that QE2 means (more) money printing and its cycle cannot end - the United States must now financially continue to feed upon itself to survive. This is the ugly truth of debt monetization as proven by every hyperinflated country that has enacted it before. It means the US economy can only end in the dreaded 'h' word. When? No one can say. But don't be distracted by the extraneous obfuscating political gamesmanship, the forthcoming lies, the eventual wars - IT - IS - OVER!

Final word   "Never underestimate the power of denial'

My advice is NOT to expect the powers-that-be to 'cure' the current and future problems. They will, undoubtedly, try - but they won't be able to - this is a tidal wave that can't be stopped. The US government is lying and has acted fiscally irresponsible - it is shameful the emphasis that they put on their military machine. The faith we had in Obama is as worthless as the paper money in circulation. Greedy bankers and tunnel vision on world Oil have destroyed a once-proud economy. They will go to war (don't believe it is anything else but 'war') with a few other countries in the Middle East - culminating with invading Iran Saudi Arabia. This will be both the excuse for domestic strife and distraction for the growing poverty on the home front.

Most people won't believe this 'collapse' till it actually happens - this is referred to as 'normalcy bias'. Those are the people that will suffer the most. Don't be those people. Do the research yourself - the Internet is the greatest tool we have for information. 

Remember what is important - family and friends are our most valuable asset. Let's look after ourselves and each other. We'll get through this.

Peace,

February 2011

P.S. (added June 10th, 2011) You now have my 100% guarantee that the United States will have HYPERINFLATION.

P.P.S. (June 18th) I've written an article - "All Roads Lead to Rome: The Collapse of the United States" HERE.

What is value? Value is being able to put a hot meal in front of your family every night. Value is knowing that a tooth infection isn't going to kill you. Value is being able to flush a turd down the toilet and being reasonably sure it won't come back to haunt you. Value is being secure in the thought that you can go downtown, and in the silence enforced by the meekest of your neighbors, read the words of the most controversial thinkers who ever lived. Value is walking down the street at night without being mugged. Value is being able to practice the faith of your fathers, or more importantly not having to practice the faith of your fathers. Value is that a rich man is as subject to the law as a poor man. Value is when a butcher trims the fat for you the same as he does for the mayor. Value is when your home is as secure as an impenetrable fortress. Value is when the government trembles before the will of the people.
Value has nothing to do with money. - Unknown

"Faced with the choice of changing one's mind and proving there is no need to do so, almost everyone gets busy on the proof" - John Kenneth Galbraith

“Pure gold does not fear the furnace.”

“The Desire of gold is not for gold itself. It is for the means of freedom and knowledge."

"Accordingly, when the supply of gold runs short, the security behind the notes is diminished, the loaning of notes is restricted or suspended, and the panic follows." - John Buchanan Robinson (1846-1933)

"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered." Thomas Jefferson

"Paper is poverty. It is the ghost of money, and not money itself." Thomas Jefferson

"The one aim of these financiers is world control by the creation of inextinguishable debts." - Henry Ford (1863 – 1947)

"I warn you that politicians of both parties will oppose the restoration of gold, although they may outwardly seemingly favor it, unless you are willing to surrender your children and your country to galloping inflation, war and slavery then this cause demands your support. for if human liberty is to survive in America, we must win the battle to restore honest money. There is no more important challenge facing us than this issue -- the restoration of your freedom to secure gold in exchange for the fruits of your labors." Howard Buffett - Warren's Dad (Financial Chronicle 5/6/48)

“When you see that in order to produce, you need to obtain permission from men who produce nothing; when you see that money is flowing to those who deal not in goods, but in favors; when you see that men get rich more easily by graft than by work, and your laws no longer protect you against them, but protect them against you...you may know that your society is doomed.” - Ayn Rand - Atlas Shrugged

"An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense... that gold and economic freedom are inseparable." Alan Greenspan

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value." Alan Greenspan

"The dollar is a child holding a photocopier. Gold is a man holding a machine gun." - Unknown

"Fiat money has no place to go but gold" - Alan Greenspan

"The leverage of physical gold against dollars; it dwarfs the grasp of a Western Mind:

“You can ignore reality, but you can't ignore the consequences of ignoring reality.” - Ayn Rand

“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years.” ― Alexis de Tocqueville (29 July 1805 – 16 April 1859)

“Whenever destroyers appear among men, they start by destroying money, for money is men's protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it becomes, marked: 'Account overdrawn.' - Ayn Rand, Atlas Shrugged (written 1957)

“In hyperinflation, a kilo of potatoes was worth, to some, more than the family silver; a side of pork more than the grand piano. A prostitute in the family was better than an infant corpse; theft was preferable to starvation; warmth was finer than honour, clothing more essential than democracy, food more needed than freedom.”

***

The current fractional reserve bullion banking practice is unsustainable (it is a carryover from the official gold standard) for viable economic longevity. Because, the end result of this is that the definition of 'store of value' as a monetary function is how long participants are willing to hold any excess of this perceived 'money' for the very purpose of storing value. The separation of this role from transactional currency means that excess currency will be spent rather than stored for its long term value. Nothing can alter this from transpiring - it is the inherent, hard-wired, human interaction with value.

As an unencumbered physical asset, GOLD is the single objective reference point from which the relative value of all else can be ascertained.

The difference with today being that gold is currently encumbered, and cannot function as that organic reference point... until this changes ie. gold will be 'freed' (end of parity between paper gold price discovery and physical gold price discovery). This is a wholly natural conclusion that is essentially... inevitable.

We are a locomotive train headed down that route with the speed, apparently, increasing but we can't know when the track abruptly ends. Jim and Rob help us see further ahead - they have a less-encumbered view outside the lead passenger car windows, but they (nor anyone) can see the final destination as we round corners, go through fogs and lengthy tunnels. We only know there is an ending to this scenic trip - probably a very abrupt one.

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Stock Suggestion (Disclaimer: I am no broker and am only parroting suggestions made by others. Please don't invest/gamble with money you cannot afford to lose!)

1) Pretium Resources Inc. (symbol PVG in Toronto) - President & CEO is Robert Quartermain who took Silver Standard on a 100 fold move. After seeing the core samples from Pretium's advanced-staged exploration projects at Brucejack and Snowfield, located in northern British Columbia - Quartermain decided to come out of retirement.

From July 29th, 2011 PR Log HERE "...Pretium has the potential to produce over $10 in earnings (after taxes) x 20 PE ratio = $218 per share. It is currently at $11.50..."

Robert Chapman International Forecaster July Newsletter: 'In 52 years in this industry we have never seen such unbelievable results. It simply does not get much better than this...;'.

Seeking Alpha (August 3rd, 2011): "Pretium Resources Inc., which we believe merits a far greater valuation than its current price indicates."

Agoracom.com (August 2nd, 2011): "The thing that I was looking at was this new zone. valley of the Kings. The bulk of the tonnage is low grade, however some of the cores in this valley of the Kings are right off the charts. There was also a recent agreement with the Northern Indigenous Peoples which if this deposit is in this area of agreement there may not be the same problem encountered by Taseko."

CASEY’S INTERNATIONAL SPECULATOR AUGUST 2011 20 : PVG: Pretium’s numbers are still suggesting a lot of upside, and with good reason: In May, the company released metallurgical results for its Brucejack project that outlined 92% to 95% recoveries for gold and 73% to 76% for silver. Moreover, the higher-grade West zone achieved a terrific 99% recovery. These numbers are preliminary, but look great nevertheless.

Then PVG announced the results of a Preliminary Economic Assessment for Brucejack. At a 5% discount rate and US$1,000 per ounce gold and US$21 per ounce silver, Brucejack scored US$662 million NPV and 27.1% IRR. At US$1,536 per ounce gold and US$37.86 per ounce silver (current spot prices at the date when the PEA was released), the project’s NPV soared to US$1.4 billion and the IRR to 48.3%. But Pretium also has Snowfield, an adjacent project of comparable size. Given how much gold the two host together, PVG has room to grow – based only on the value of ounces in situ, if nothing else.

August 22nd article on Pretium from Resource Clips.

Positions in stock mentioned: I bought some Pretium shares (at $9.93 and sold them at $17.65. I have not bought any more as of June 2012).

January 2013 Update: My advice is to stay out of the Stock Market entirely - it is totally manipulated. Just buy Gold and Silver assayed coins and live your life...

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Sources (Here are the top 30 most influential Financial Sources as per TBP - hyperlinked)

My brief opinion:

For Asset Managers - I really like Jim Rogers, Hendry, Gross, am always impressed with Felix Zulauf and I pay a subscription to Fleckenstein. Half of what Soros says is a lie - he is the enemy. I don't know the other 4.

For Researchers/Strategists - LOVE Jim Grant, have only seen Gary Shilling twice (and liked both), Faber is well-respected and a Gold bug, Canuck Rosenberg is one of my new favorites, Chris Whalen is always good on KWN, ditto for Louise Yamada, and Roubini is co-opted and refuses to understand Gold. He is another part of the bigger problem. Don't know the other 3.

For Media/Blogs - I surf to ZeroHedge multiple times a day and subscribe to their Twitter - the most timely financial info on the web. Jesse’s Café Américain is pay-only (I think) and an off-shoot of GATA (good). I'm still on the fence about Mish and Prechter. Krugman, I honestly think, is out of his mind (have you seen this guy speak?) I've been saying for months that he is the most undeserved Nobel in the prize's history.

My more conspiracy-minded subscriptions are, predictably, not here - Jim Willie and Bob Chapman. I wouldn't have been surprised to see Doug Casey and I guess King Word News is too Gold-leaning although they have at least 5 of the above names as regular interviewees.

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