Month: December 2011
O-metrix Score
Which country has the most foreign exchange reserves + gold?
When it comes to how much Foreign Exchange Reserves + gold a country has we can have 3 different statistics:
Zero Hour
Chart 1:
http://seekingalpha.com/article/289000-is-zero-hour-debt-saturation-upon-us
Another sign of the end nearing is the outlays (government spending (pensions, medicare, social security)) compared to foreign debt. Historically, once 40 % of outlay spending comes from foreign debt, then the country is relying too much on foreign debt for its spending needs and this results in hyperinflation (James Turk: http://www.fgmr.com/more-deficits-more-debt.html).
Quote (James Turk): As further proof that the Havenstein moment is behind us, consider that 58% of the money spent by the federal government in October and November came from borrowed money ($320 billion of debt against $551 billion of expenditures). Monetary history shows that governments are on a hyperinflationary path when crossing the 40% threshold, a level long passed by the federal government.
Following chart shows the level of deficits relative to expenditures before hyperinflationary periods. As you can see, above 40% means hyperinflation:
Chart 2:
http://www.financialsense.com/contributors/john-mauldin/inflation-and-hyperinflation
Following chart says that Japan and recently USA are on the verge to go to hyperinflation:
Chart 3:
http://www.financialsense.com/contributors/john-mauldin/inflation-and-hyperinflation
For 2010:
Outlays in 2010 (see chart 6): 3,3 trillion USD
External Debt increase in 2010 (see chart 4 and 5): 1.3 trillion USD
1.3 trillion USD / 3.3 trillion USD = 39 % (almost hyperinflationary)
Chart 4:
http://gold.approximity.com/Fortune_gets_it_wrong_on_gold.htm
Chart 5:
http://www.usgovernmentspending.com/federal_deficit_chart.html
Going back to the Belgian Frank
Gold Money Index (James Turk)
There is this Gold Money Index that gives the fair price of gold. (James Turk)
Central bank foreign exchange reserves (USD)
Gold Money Index = ———————————————————————-
Central Bank Gold Reserves (ounces)
I quickly took some numbers from Wikipedia for foreign exchange reserves:
China 3197 billion USD
Japan 1137 billion USD
Eurozone 886 billion USD
Russia 510 billion USD
Saudi Arabia 456 billion USD
…
Total ~ 12000 billion USD
Then I quickly took some numbers from Wikipedia for gold reserves in central banks:
USA 8133 tonnes
Germany 3401 tonnes
Italy 2452 tonnes
France 2435 tonnes
China 1054 tonnes
Switzerland 1040 tonnes
India 946 tonnes
Russia 836 tonnes
…
Total ~ 1000 million ounces of gold
Gold Money Index = 12000 billion USD / 1000 million ounces = 12000 USD/ounce
So basically we have a gold price of 1500 USD/ounce today and are supposed to have a fair price of 12000 USD/ounce of gold. That’s an eightfold increase in the gold price. If what James Turk says is a good valuation of gold, then we’re in for a big ride upwards.
To learn more about the Gold Money Index, please go to:
Gold Money Index
Who ows who?
A very nice interactive diagram to see which country owes debt to another country.
Chris Martenson's view on the economy after 20 years
If you haven’t watched it, you should.
Chris Martenson has his view on what the world will be like in 20 years from now:
I predict that oil, food, ground, basic commodities (especially silver will be depleted in 10 years) will become scarce. Prices will be much higher than today. World population will continue to grow at least for 10-20 years. When oil is not affordable anymore we will need to go to electrical energy/natural gas. And when that isn’t affordable anymore the whole economy will slow down unless we find another energy source.
It will not happen in another lifetime, it will happen just in 10 years time, don’t be fooled.
Be prepared and buy up all resources while you still can!
Chris Martenson\'s view on the economy after 20 years
If you haven\’t watched it, you should.
Chris Martenson has his view on what the world will be like in 20 years from now:
I predict that oil, food, ground, basic commodities (especially silver will be depleted in 10 years) will become scarce. Prices will be much higher than today. World population will continue to grow at least for 10-20 years. When oil is not affordable anymore we will need to go to electrical energy/natural gas. And when that isn\’t affordable anymore the whole economy will slow down unless we find another energy source.
It will not happen in another lifetime, it will happen just in 10 years time, don\’t be fooled.
Be prepared and buy up all resources while you still can!
Chris Martenson’s view on the economy after 20 years
If you haven’t watched it, you should.
Chris Martenson has his view on what the world will be like in 20 years from now:
I predict that oil, food, ground, basic commodities (especially silver will be depleted in 10 years) will become scarce. Prices will be much higher than today. World population will continue to grow at least for 10-20 years. When oil is not affordable anymore we will need to go to electrical energy/natural gas. And when that isn’t affordable anymore the whole economy will slow down unless we find another energy source.
It will not happen in another lifetime, it will happen just in 10 years time, don’t be fooled.
Be prepared and buy up all resources while you still can!