The uncertainty about gold coin investments appears to have given way to the harsh reality of the true state of the economy.

May 02, 2011 – The uncertainty about gold coin investments appears to have given way to the harsh reality of the true state of the economy. The psychological barrier of $1500 proved to be no barrier at all as the price of gold marched right past it and is now closing in on $1600, a mark it could easily hit this week.

The dollar meanwhile enjoyed a brief moment of upswing ignited by emotions over the death of Bin Laden, but quickly plunged to new lows. Nothing the Fed can say or do can convince the world that we still deserve the AAA/Aaa ratings bestowed on us by Moody’s and S&P.

Now the same ratings service that “identified severe weaknesses among large life and health insurers in the early 1990s that were given stellar ratings by the leading rating agencies” has introduced the Weiss Sovereign Debt Rating service, says founder Martin Weiss.

The Weiss rating presents an alternate view of 47 nation’s economic condition without the bias or agendas of the big three agencies. The service’s USA ranking of ‘C’ is only fair, and were it not for our ability to borrow it would be ‘vulnerable.’ That only supports what the world is rapidly coming to understand: the USA is bankrupt.

“Global investors, already dumping the U.S. dollar, will dump U.S. bonds in panic,” Weiss says. “They will demand draconian cutbacks in U.S. government spending. And these cuts, in turn will bring a vicious cycle of economic declines, larger deficits and further investor demands for even greater cutbacks. It will be very ugly.”

Meanwhile, a dedicated group at MIT has undertaken the Billion Prices Project, an exhaustive on-line monitoring of actual prices world wide designed to pin a real number on inflation. According to their figures inflation here is currently running at an annualized rate of 7.4%. Even accepting the most optimistic growth predictions (the Fed’s fairy tales), when you deduct 1% from GDP growth to compensate for the growing population, the real economy is shrinking at an alarming rate.

And our puny job growth barely compensates for the natural increase in the labor pool. The percentage of men employed today is at its lowest level in history. The one bright spot in the outlook – manufacturing – is supported by exports, which are riding the coattails of excess liquidity. That too cannot last.

The days of uncertainty have long passed. It would be foolhardy to forgo investing in gold coins one moment longer.

Kevin Johnson

Senior Staff Writer –

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