Posts Tagged ‘economic recovery’



Signs are a forewarning that something important is soon to happen. Arm numbness could be a sign of a heart attack. Night sweats could be an early sign of diabetes. Lately I’ve been searching for signs of a real economic recovery. How else can we explain the latest gold/silver decline, all while the DOW posts another new high, other than a true recovery, right? After all, the great metal sell-off of 2013 can only be attributed to a new found level of economic faith.

Is the city of Detroit a sign of economic recovery? Detroit dropped from a circa 1950ish population of just under two million to less than 700k today. No one counting can be surprised by the bankruptcy of a city when it loses over half of its middle class and industry all while simultaneously growing the state’s pension obligations. Detroit is certainly not a sign of recovery as we watch poverty overtake what was once declared the city of great opportunity.

Nearly half of the wealth of American is stored in real estate. The lion’s share of this wealth rests in single-family homes known as a principal residence. But just as we’re led to believe the great housing recovery is unstoppable (housing bubble 2.0) news of a recent major decline in new mortgage applications say otherwise. Is it possible our great housing recovery could be upended by a 1% increase in mortgage rates?

The signs of a housing recovery are few and far between when the three denominators holding RE values together are cheap money, faith, and leverage.

What is a house worth, in municipalities like Detroit, after stigmatized by bankruptcy? The value of your home is directly affected by the health, and obligation, of your state and local economy.

The anti-recovery list grows longer. The new-found affordability of the Affordable Care Act has to be a sign of recovery, yes? Cities collapsing under the strain of long-term debt and unfunded liabilities have to be a sign of recovery, too. The fact we’ve reached the point of unbridled QE must be the truest sign of real economic recovery.

Why Silver & Gold will rise!!

The positive signs of economic recovery presented by today’s media are nothing more than a monetary distraction. Most individuals have reached a point of no longer willing to think for themselves, not to mention the ability to question those who put motive over principle. If the media or internet says so then it must be true.

I know my stack of PMs will take care of my family’s future for one reason only; what most folks view as financially stable is supported by the ability to create (borrow, print, or tax) currency. Everything from social programs, pensions, real estate values, stocks, banks, etc have reached the point of fiat dependency. This recovery is as real as any structure built upon a foundation of debt leaving no other choice but print of die.

Only the minority now buck this trend of nonstop quantitative easing. The rest, the majority, only argue over how to spend it. Think about this for a moment, please. Can you imagine the Detroit inferno if the evening news reported a significant reduction in social services, section 8 housing, food stamps, disability, etc.? What if a politician announced a monetary commitment to stop deficit spending altogether? The clip below answers it best.

Not only would city streets in every major city burn but the outcry from those invested in paper assets would be so great that the very life of the one proposing such a foolish plan would be in jeopardy.

This “jeopardy” is why your stack of physical silver and gold must rise just to keep a natural order of monetary balance and buying power. The United States, most countries too, have reached the point of no other option than print to appease, both politically and economically speaking.

I know TPS has mentioned this before but we are long past the point of arguing if metal will rise. It must rise, and will rise, as our nation accepts we are to the point of print or burn.  TPS recently posted how debt has become a threat to our national security. I’ll go as far to say the domestic threat outweighs the foreign threat when we calculate the growing number of our entitled.

COMMENT:  I personally believe the gold bugs are about to be squashed – maybe less than $1000 an ounce!!

TPS Reply:  Thanks for the comment. If every prudent person sitting on physical gold had to sell now then “yes”, the gold bugs are soon to be squashed, at least the most recent buyers. But your theory has one giant hole in it when we consider that few bugs are sellers. In fact, many are out buying discounted precious metal.

Let me guess, the DOW is your suggested new opportunity of safe haven? If so, what happens to the value of today’s DJIA if not for perpetual QE? What happens when the DOW has to stand on its own monetary merit? Will the 2008 DOW meltdown pale in comparison when those with wealth realize it’s nothing more than a paper promise?

Bernanke’s pile of printed money supports Wall Street because the lion’s share of this fiat rests on Wall Street. Of course investors in return support WS because they have little choice other than follow the next bubble; can’t you see this? I, for one, will side with the gold bugs by taking my chances with sound money (according to our US Constitution & 5000 years of history).

QUESTION:  In your last post, Fake Money Threatens our National Security, you mention the word “printing” but this is inaccurate. The money is nothing more than a digit, not only is it fiat but it doesn’t exist at all…. literally. Your point is noted but you should clarify. Thanks for what you do!!

TPS Reply:  Great point, thanks. You’re correct, less than 1/2% of cash deposited actually exists. This number can vary but never anywhere close to a percentage that would make most depositors comfortable. This is why the banking world is deathly afraid of a bank run similar to what happened in Cyprus.

This is also why I recommend keeping most liquidity in cash, silver, or gold form. In my opinion, at least 1/3 of this wealth should be within arm’s reach safely stored in-house or with someone trusted. I wish more folks understood the fragile nature of today’s banking world, fractional reserve lending (banking), fiat currency, and, of course, real money.

Good for you and thanks for the reminder!!  By the way to all readers, if this sounds like an overreaction just research the words “bail-in” as it relates to today’s banking institutions. Why not take a proactive stance while this option still exists?


DC Carlton is founder of The Prospector Site and author of the Amazon Kindle #1 Bestsellers Why Silver and Gold Will Go Higher and Storing Silver & Gold. If you’re looking for trustworthy PM assistance feel free to contact DC regarding his personalized consulting service. TPS doesn’t sell silver or gold; we represent you, the buyer, looking for affordable precious metal from honest trustworthy sources. Feel free to register here for his free online newsletter that provides precious metal insight rarely mentioned from mainstream media sources.

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I recently received an interesting question or three from a very worried reader leading me to ask all readers if owning gold in 2012 is really worth the trouble. Most of us understand the natural progression to protect begins monetarily but at least one reader questions gold’s worthiness during what history will write as the economic correction of the century. I believe gold is relevant but, more importantly, what do you think? Here is the question with all its raw honesty.

Question:  Okay, I bought gold bullion many years ago preparing myself financially and emotionally for a day I see as imminent. By doing so I made great sacrifices at my family’s expense that includes living on a narrow budget, taking few vacations and lots of worry. At times my family viewed my decision (to own gold) as overreacting but has slowly come around to the same conclusions that led me to precious metals. The problem is lately I’ve doubted my decision to own gold and here is why.

I see the entire world facing long odds of economic recovery in my lifetime. I see severe social unrest and I see more totalitarian governmental control that only compounds problems by stealing more wealth from those making deep personal sacrifices. To be honest….what good is a boatload of precious metal if a government steals it through taxation someday? I question the benefit of owning silver, gold, or any other storage of wealth in such an age.

TPS Answer: First let me say I do appreciate your honesty and candor. This site receives many gold related questions but few as honest as the ones you’re asking. Most folks are miles away from your prudence and just now looking for ways to preserve what wealth is left in 2012. You on the other hand have accomplished what few will ever realize but still question such prudence, I understand. To be honest, I too have asked myself similar questions and this is why I would rather live in a world with $500 an ounce gold than $10k (quality of life is more important than individual gain).

You are realizing growing gold values come with a price far beyond growing wealth. The downside to expensive gold (gold appreciation is on its second decade) is the pain and suffering as those unprepared realize dollar dominated wealth is an illusion all while gold grows out of reach. “Yes” overreaching governments will take wealth unprotected and exposed. “Yes” social and civil unrest worldwide is happening and will probably expand as the economy corrects.

But all these things you mention will happen if you own gold or not. Those holding wealth have choices other don’t and this means more options for someone like you and your family. The option to relocate, the option to serve others, the option of better health care and the option of growing wealth. But another option is rarely mentioned and one I want to make most clear. A great option of wealth is the ability to protect it, let me explain.

I’ve owned small private businesses my entire adult life and can honestly say nothing can protect wealth more than a compatible team of professionals committed to protecting what you have worked hard for. This is why big corporations pay little in taxes while the middleclass continues to see inflation tax away any real chance of a prosperous future. Your storage of gold – hopefully silver too – provides the ability to pay those with the professional capacity to protect wealth, even from an overreaching government. Now is a good time to take your wealth to the next level, the protection level of metal ownership.

In the meantime, try to enjoy what you’ve been blessed with and appreciate what most can only dream of owning. Thanks for the questions and honesty.

Question:  Do you feel comfortable putting a number to year end gold prices? I’m sitting on the sidelines waiting to buy more gold while hoping gold dips at year end exactly as last year.

TPS Answer:  Great question and thanks for asking. I’m assuming you’re asking in terms of dollars? If so, any year end gold prediction would only be a guess. Gold could drop over short term but no one with a simple understanding of economic sins believes gold will do anything but substantially rise over the longer term (rising deficits equal dollar devaluation which in return equals rising gold prices). I don’t have a problem with waiting since you sound as if you already own gold and looking to add more. If I’m misreading, and you don’t own gold, then don’t wait since marginal gold inventories could leave new buyers outside looking in.

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Everyday we hear about “economic recovery” almost as if we hear it enough it will happen.  I have no doubt 4Q 2011 offered a 3% (depending who we listen to) growth but the big question to ask is how much did this growth cost?  We have entered an age where it is very important to question everything and no longer assume opinion as fact.  The longer I live the more I realize some powers have economic motive (spur consumer spending) and some have political bias.  If we are to make wise decisions in turbulent times we need the truth. Many of you are trying to decide if gold is right maybe even considering PM for the first time.  Let’s see if we can help by asking  a few questions.

QUESTION:  Do you feel the economic recovery is real?

This has to be a yes and no answer.  Certainly some of the five trillion in new debt is having an impact on our economy.  The question is will this “all in” theory light our economy into a sustaining fire of recovery, if it doesn’t what then, maybe 100 trillion dollars of stimulus?  An obvious recovery, if you will, in gold/silver is noticeable as of January 2012 but I’m not sure this is the recovery Big Gov’t is looking for?

QUESTION:  Is a bigger government stifling a free market?

I honestly can’t remember a total free market system to be honest.  It’s not a stand alone free market in health care, not in our auto industry, not in banking, not in our mortgage industry either.  Would college be as expensive if not for government loans pushing up tuition, how about health care?  Have we grown to the point of such government involvement that a capitalist society doesn’t exist, I’m thinking yes?  But has this type of blended government/free market ever worked during a fiat based economy? Maybe this is why gold continues to increase in value (and dollar cost).

QUESTION:  Why would mainstream media drum recovery if not real?

Who doesn’t want recovery especially when your paycheck depends on it.  Most media sources are corporate owned and corporations only profit if you’re out spending.  Currency is out of circulation once it lands on PM (precious metal like gold/silver) so needless to say a consumer based economy doesn’t want your money idle.  Does a mainstream medium have political bias?  It certainly is probable but with today’s internet age it is not hard to find independent news and information.

QUESTION:  Are most American families “All In” with recovery hope?

Probably yes, most families are busy doing what families do and that is day to day life.  Recession/recovery cycles are nothing new and the fact our deficit has doubled in three years means nothing to many folks.  A trillion dollars is nearly impossible to comprehend so it rarely has more affect than a billion.  Folks want to believe in recovery because the alternative is too much to imagine.  Little do most realize the alternative will eventually lead to a localized free market economy but this means little in a global age.

QUESTION:  Does government really need to “invest” in America?

President Bush felt so, so does President Obama.  The cost to invest (national deficit) has increased since as long as I can remember but how have we benefited?  Sure gold is up eleven years straight but no other investment has come close to keeping pace.  Maybe all this government investing is good for PM holders but what about Middle America?  Job growth appears to be improving but how many of these jobs are government jobs, how much does each job cost in new borrowing?  How much can we “invest” before inflation shows, once again, how debasement leads to rising costs?

QUESTION:  Does a rising national debt always spur gold’s growth?

Yes, the internet is full of graphs and charts showing each raise in the debt ceiling reflecting an increase in gold’s dollar value.  This is what we mean when we refer to gold as a wealth preservation asset.  Gold is rising in all currencies around the world and will continue as long as borrowing, sorry investing is the norm.



QUESTION: I have a quick question for you about a group called SilverSaver. This looks good to me so I don’t need to pay big shipping and handling charges. Plus I won’t be chasing eBay prices. Once I build up a good amount of silver or gold I can take delivery of it. For some reason I am getting the feeling this is too good to be true. What are your thoughts on this group?

PROSPECTOR REPLY: I first heard of SilverSaver a year ago and have to admit I love the idea and concept.  I personally have no experience with this company but have heard nothing negative either.  This is a passive form of buying silver since a third party buys as you established when setting up an account.  They buy, store, and monitor your physical silver until you decide to sell or take possession.  I think a concept like this just shows how mainstream PM is heading and suggest anyone interested to use due diligence just like with all PM sources.  Thanks for bringing SilverSaver up and thanks for your question too.

COMMENT:  My investment group is using The Prospector Site as part of our investment research and we just want to let you know.  Thanks for providing gold and silver insight without a sales presentation slant! Cheers.

PROSPECTOR REPLY: Thanks for reading, and commenting.  Good luck with the investment group too!

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