Dear Member,

The answer to this question is actually quite easy. The current global monetary system is unsustainable. The problem is, if you look at the arguments from Doug Casey back in the 1970’s, Ron Paul in the 1980’s, Peter Schiff in the 1990’s, or myself in early 2008, you will see that an unsustainable system can go on a lot longer than you think. It reminds me of an old investment saying, “the market can stay irrational longer than you can stay solvent.”

So much fraud has been exposed over the past few years, you would have thought it was earth shattering, but nothing happened to the current system. The current system continues to chug along despite tens of trillions in bank bailouts in 2008/09, the Libor scandal, U.S. Credit Rating downgrade, debt ceiling breaches, and now gold manipulation going mainstream. From the end of the London fix, to Bloomberg covering the daily smash downs of the gold price, where a mysterious large seller hits the bid all in the matter of 1 minute, sometimes selling as much gold as is mined in an entire year; despite all of this, the Dow and S&P are making new highs and gold is lingering $600 below where it was in 2011.

What I tell everyone in my speeches at investment conferences is this, “for everyone in power, the system works…” Think about that because it may make sense for China to dump the dollar or for some other major player to abandon the current system, however, we should always be mindful that if they are in power, the odds are things are probably pretty good for them.

For example, China has a large population that expects growth, stability, and new jobs, anything short of that and the leaders in China could be looking at a revolution.

Rick Rule says that an early lesson he had to learn was that inevitability doesn’t mean imminent. It’s an important lesson for us all because when we do get into a long term trading idea like silver, platinum, palladium, or uranium, we need to have the knowledge and stomach to stay the trade.

When it comes to economic collapse, I think the system is fragile with a lot of vulnerabilities, specifically with U.S. debt & deficits. However, Europe & Japan are in a recession and China is slowing down, so in the short term, the U.S. dollar may be the best car at the junkyard.

Here is what I suggest if you are concerned about an economic collapse.
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  • First, accept that this does happen, empires fall, currencies die, and systems are reset. If you are overly pessimistic, I urge you to look at Japan and Germany; both of these nations were decimated in the 1940’s, yet went on to eventually thrive with booming economies in the 1970’s and 80’s. We will get through this, a restructuring is coming, but it is not the end of the world.
  • Prepare for a currency crisis or natural event and then move on with your life, don’t allow the doom to take over your life.
  • Expand your pantry, food storage, acquire some good defense weapons, and then focus on living a great life.
  • Honestly, the best thing you can do to prepare for an economic collapse is to build your cash flow, both active and passive income. And of course my favorite, live a debt free lifestyle.

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Have a prosperous week!
Daniel Ameduri