Curried Wealth Building
Finding an Edge

If you want help with your finances, give me a call at 703-791-3243.
October 8, 2008
Issue 12  -  Buckle Up
 

The system is literally spiraling out of control. Politicians and central bankers have no idea what to do. The 50 basis point cut today did absolutely nothing as I could have told anyone. The problem is not interest rates, it's a lack of confidence and a tower of debt and derivatives. This is an example of the confidence being put into the "reserve currency" of the world:

"Brazil, Argentina abandon US dollar
Tue, 07 Oct 2008 08:03:52 GMT

Brazil and Argentina have launched a new payment system in their bilateral trade, doing away with the US dollar as a medium of exchange.

The two Latin American nations started the Payment System on Local Currency (SML) on Monday following a last month agreement inked by their presidents to use local currencies in a bid to end transaction in dollars.

On Thursday, Argentine Central Bank President Martin Redrado and his Brazilian counterpart Henrique de Campos Meirelles signed the enforcement of the agreement for the SML, under which exports and imports between the two countries will take place with the Brazilian real (BRL) and the Argentine peso (ARS)…."

The reserve currency is turning into a laughing stock. Our reserve status is the KEY reason we have been allowed to act like fools for so long. The chickens are coming home to roost and time is short to protect yourself. Gold is the way to go:

"looks like gold has moved to new highs in all currencies on Kitco's page except for US$ Renminbi and Yen! That is to come very very soon!"

The major gold stocks popped today for about 18%. This is good news and will set the stage for the juniors to finally have their day. As far as gold goes, the supply is dwindling:

"Kitco is working diligently to fulfill all existing client orders. We apologize for any delays in order fulfillment which are a result of production and delivery delays imposed by certain mints and by our suppliers.

The following products have been temporarily removed from our Precious Metal Store until further notice due to production and delivery delays that retailers are currently facing; Gold Eagle 1 oz, Gold Maple 1 oz, Special Gold Maple 5 X 9 pure 1 oz, Gold Buffalo 1 oz, Gold Krugerrand 1 oz, Gold Bar 10 oz, Gold Bar 1 oz, Kitco Gold Bar 1 oz, Kitco ChipGold 10 g, Kitco ChipGold 20 g Gold Philharmonic 1 oz, Silver Philharmonic 1 oz, Silver Eagle 1 oz, Silver Maple 1 oz, Silver Bar 100 oz, Platinum Eagle 1 oz, Palladium Maple 1 oz, Silver Maple Olympic Coin 1 oz"

And yet the price of gold and silver sit relatively motionless. This anomaly will not last forever. It is a GIFT and one that you should take as soon as possible. Central banks are now even beginning to hoard their gold:

"Financial Times, London

Tuesday, October 7, 2008

Central banks have all but stopped lending gold to commercial and investment banks and other participants in the precious metals market, in a move that on Tuesday sent the cost of borrowing bullion for one-month to more than twenty times its usual level.

The one-month gold lease rate rocketed to 2.649 per cent, its highest level since May 2001 and significantly above its five-year average of 0.12 per cent, according to data from the London Bullion Market Association.

Gold lease rates for two, three, and six months and for a year also jumped to levels not seen in the last seven years.

Traders said the jump reflects the fact that central banks -- mostly European -- have almost completely stopped lending gold in the last few days and are not rolling forward old leases after maturity. This is because of fears that some borrowers might not repay their bullion loans if they are engulfed by the financial crisis.

"A number of central banks have been cutting back on their gold lending," said Tom Kendall, a precious metals strategist at Mitsubishi in London.

John Reade, a commodities strategist at UBS, added that there had been a lot of talk about some central banks being unwilling to lend their gold because of a redoubled focus on the risk of borrowers not returning it."

The gold spigot is going to be shut off soon and unless you have some it will be very difficult to get some. Order it now. www.tulving.comis reputable and I have no connection to them. The only down side to them is a 20 ounce minimum order (about $18,000) but they do have some gold in stock. For smaller quantities try www.apmex.combut they don't have much. Noticing a trend here? Get yours today.

Tomorrow I will blog on how to have your gold and silver shares registered in case there is a banking shut down. This will ensure that you get the shares you own in a timely manner.