Gold, as predicted, is reaching for the sky and has now passed $1,180 per ounce – the $1,200 mark is almost upon us.

When the wankers (sorry Bankers) return to Wall Street on Monday expect some upheaval!

Lending institutions are now being hit with a new kind of defaulter – those with spotless credit are now walking away from mortgages and taking the ‘hit’ – it makes economic sense for the long term because of the vast imbalance between current house prices and mortgages..

This news article grabbed my attention…

CHICAGO (Reuters) – The seven-bedroom, three-bath house in this city’s West Garfield Park neighborhood had once been someone’s American Dream.

But at a recent auction of about 100 foreclosed houses and condos, it was just Property No. 20 — and drawing no bids from a roomful of buyers despite its bargain-basement price.

“Any interest in this home at $7,000?” fast-talking auctioneer Renee Jones asked the crowd. “If not, we’ll move on.”

“The foreclosures are going to explode again.”

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NEW YORK — The dollar sold off broadly overnight Tuesday, reversing gains from the two previous global sessions to hit new 12-month lows against the euro and Swiss franc.

Investors turned to higher-yielding currencies as most Asian shares and European stocks moved higher, triggering a new wave of risk-taking. In early New York trading, high-yielding currencies have backed off their overnight highs and trading is somewhat volatile.

The dollar bloc currencies were the top performers in the overnight session, led by the New Zealand dollar, which set a new high for the year after posting its lowest annual current account deficit in more than four years, said Brown Brothers Harriman analysts.

The euro hit $1.4822 — a fresh 12-month high — and the dollar hit 1.0216 Swiss francs — a new 12-month low — as traders abandoned the positions they had staked out Monday in anticipation of this week’s meetings of the G20 and the Federal Open Market

In the States the consumers’ net worth is down – from $62Trillion to $50 Trillion. In both the UK and the US the currency is being debased by the minute – gold has already passed the $1000 an ounce and silver is poised to clear the £10 mark!

Remember the days when a silver dollar was worth – well, a dollar!

So for those who where surprised when the banking crisis hit and were under the impression it was lack of money that caused it – think again. The Fed and the bank of England are busy keeping the printing presses going,  to fill up the reservoir – but the hole in the levy is called debt….

INVESTORS BEWARE

Investors in gold have two traditional routes – one is to physically store gold coins and/or bars in the house or a bank vault – or to accept a certificate from the seller.  The seller must have at least 90% of physical gold to back the certificates they issue.

We have all seen the results of fractional lending by the major banks getting out of control  -as the dollar gets closer to total collapse expect to see that 90% rule breached – as it stands at the moment I would bet if 50% of certificate holders wanted their gold it would cause a very serious problem.

Investing in gold and silver is a wise move – but a piece of paper may end up being just that!

Currently both the USA and the UK are funding deficits in the budget by the same method – just printing more and more paper. The US is approaching the same criteria as hyperinflation Germany and the UK has already past the post. The question is, therefore, why isn’t the US and the UK seeing the same inflation trend? The answer, it turns out, is quite simple – foreign investors selling the mark short (betting on inflation).  This was possible, as is now, because the private banks lent large amounts, returning interest to the banks.

So what was the turning point for Germany? How did it achieve such a turnaround in such a short time-frame? Hitler! He issued ‘Labour Treasury Certificates’ – millions of Germans we employed to reconstruct Germany and paid with the Treasury Certificates. As these certificates did not trade on foreign markets there was no outside speculation – they were stable.

The problem, it would appear, is therefore the banks! Lincoln realised this, but his attempt to disband the private bank cartel known as the Federal Reserve ended with his death. The same with JFK and his executive order 11110.

The currently insolvent California could learn a lot from history – but it doesn’t even have to go that far back – only three out of fifty states are currently solvent, one of them being North Dakota. Since 2000 the GNP there has grown 56%, personal income is up 43% and it actually has a budget surplus of $1.2 billion – how has North Dakota managed to beat the trend? It has it’s own State Bank – The Bank of North Dakota, established in 1919.

By 1909 the Ford Model T had a steering wheel, and in 1914 Ford announced the $5 a day pay for workers to man the assembly lines – growth was exponential, the workers ‘managed’ by Ford’s ‘Service Department’ headed by Harry Bennett from 1930 until Henry Ford died in 1947

In 1941 the US government gave Ford $200 million to build a bomber factory at Willow Run – known locally as ‘Will it run” the factory only produced 8,000 bombers during the entire war, not the one an hour quoted by Ford – was there a conflict of interest? Ford factories existed in both Germany and France – and Standard Oil supplied the fuel….

Recommended reading – ‘Ford: An unconventional biography of the Men and their times’ – Herdon)

Many have come along with brilliant ideas – ways to change the world for the better – and that could not be better epitomised than the life of Nikola Tesla

A hearing is due on 30 Jun to determine the restructuring plans and possible emergence from bankruptcy – the goverment (taxpayer???) holding 60.8%, 17.5% United Auto Workers Trust and 11.7% by the Canadian taxpayer…