Saturday, January 9, 2010

Get Your Money's Worth

Venezuela has devalued its currency in the face of shrinking government revenues, rising prices, shortages, and declining popularity of the nation's leader, Hugo Chavez.

You can read more here:

Wall Street Journal: Chavez Devalues Venezuela's Currency

New York Times: Chavez Devalues Currency Amid Oil Fall

Business Week: Chavez Devalues Bolivar 50%

You should really take the time to read these articles, and note the obvious parallels between the United States under Obama and Venezuela under Chavez.

I'm not an economist. I'm just a guy who trades a third to half his daily life for pieces of green paper that can be exchanged for goods and services needed to support his family. It is just my humble opinion, but I think that makes me more knowledgeable about how this will screw the middle class than some guy in a argyle sweater sitting in a wingback back chair sheltered by an Ivy League School.

This move will help the poor, as the government will magically have twice the money it had yesterday to throw at them. That means the hungry, angry mobs that put him into power will be mollified for a short period. Think of zombies with a fresh corpse to munch on.

This move will help the rich, as doubtlessly, they had insider information and were able to position themselves to take financial advantage of the devaluation. Hey! I've magically twice the money I had yesterday! Thanks Comrade Chavez!

This screws the middle class because their money, while still looking like it did yesterday, is now worth half of what it was yesterday.

If it happened here in this country, this is what would have happened. If you have say $100,000 in savings, and the currency is devalued by 50%, you still have $100,000 in savings, but it will only buy $50,000 worth of goods.

Have you ever been so close to a problem you could not see it? Looking for that lost pen or pencil that you just had a minute ago? Only to find it is still in your hand?

I think that is what is going on in this country.

Many have warned about how the dollar is going to crash, and become nearly worthless. Already in the past ninety some years, the US dollar has lost ninety percent of its value. We're on track to see its remaining roughly 8 cent on the dollar value decline to roughly a penny on the dollar should Obama choose to devalue the US dollar. At that point your dollar will buy you what would have cost you a single penny 90 years ago. in 1910, 1 lb of cane sugar would have cost you an average of 6 cents, today it averages around ninety six cents. That tracks with the estimated decline of the value of the dollar.

Most people are bamboozled into thinking of this as "inflation". When most people are asked about what "inflation" means, they will say that prices are getting bigger, or going up. They cite greedy people and businesses, or just higher costs of doing business such as taxation as being responsible. What they frequently do not realize is that it is exactly the opposite. Their money is going down in value. It's not really "inflation". It is the devaluing of a currency.

People in our government are making your money worth less. Soon to be worthless.

Here is a timely interview with Bob Chapman of The International Forecaster. It is an hour long, and took place in hour four of the Dec 15, 2009 Coast To Coast AM Show. He speaks of a plan to devalue the US Dollar in the early fall. Be aware that Hugo Chavez has just devalued the Venezuelan currency in an election year. 2010 is also an election year for us.

Listen Here If it doesn't play, right click on the link and select "save link as". Save to your computer and play from there.

There is also an interview with Mr. Chapman on Alex Jones TV (click to watch) from Jan 4, 2010 that should be watched.

Be aware that Bob Chapman lives abroad and not in the United States. The story is that not only has his life been threatened, attempt(s) have been made on Mr. Chapman's life as a result of his continued exposure of the manipulation of our economic system.

So what does all of this mean to you?

We've said it time and time again. Stock your larder. Gold is probably out of many people's reach at this point, so go buy at least an ounce of silver at every pay period to hedge against a devaluation.

Already Venezuelan's are mobbing markets trying to buy what they can before prices skyrocket after the currency devaluation.

Your time is running out.


Anonymous said...

Good post Catman. I agree completely and 2010 is certainly going to be a helluva year.

Cygnus MacLlyr said...

My larder this year is going all towards foodstuffs. in fact, i'm full bore growing from seed I already have, replacing what I can, stocking up on heirloom varieties otherwise, and generally planting far, far above and beyond any square footage ever attempted.

Nice poionts on "inflation", monetary devaluation, any general populace screw-ancy, Catman.


Ryan said...

I dunno. Fail to see the benefit for the US to do a formal devaluation (lop zero's off currency, etc). I see them just spending money we don't have which will decrease the value of our money via inflation.

Food/ fuel/ guns/ ammo make sense. If you have something left over putting a bit of it into precious metals is not a bad idea.

Truth_Sets_You_Free said...

there's never a benefit to devaluation. Sadly that is most likly going to happen. My father found an article where the U.S. is giving Our land as collateral to China if we can't pay them back. Which we all know is a complete violation of our God given rights, but the goverment doesn't believe in that God.

Going by that news, cat mans evidence, and past events in the last twelve months, I believe our goverment will try to do what Germany did. They will destroy our current currency because it isn't backed by anything (Germany went bankrupt and had no gold after world war 2). Then make a new currency (In Germany it was the riche mark or something like that) that is backed by land instead of precious metals.