Right after I posted my "worst case scenario" calling for exchange controls by fall of 2009, Jim Rogers (in this Bloomberg article) is basically saying the same thing!

"
May 12 (Bloomberg) -- A rally in the U.S. dollar has run its course and a currency crisis may take place in the fall, investor Jim Rogers said.

“We’re going to have a currency crisis, probably this fall or the fall of 2010,” Rogers, 66, said in an interview with Bloomberg Television in Singapore. “It’s been building up for a long time. We’ve had a huge rally in the dollar, an artificial rally in the dollar, so it’s time for a currency crisis.”

Rogers may consider buying the yen and prefers the euro to the dollar or the pound, he added.
"

Jim Rogers correctly predicted the dollar rally last fall.

I've taken the time to compile a timeline of global economic stats for 2009. It will be an interesting year. I'm not ready to drink the kool-aid that the worst is over. The worst is yet to come. After a quiet summer, the next leg of the collapse will start at some point in August. I really hope what I say does not come true, because if it does, it will be a living nightmare.

• Unemployment figures (officially) in the US will hit 10% by July. However - the government may massage the figures, keeping them under 10% until late September.
• I'm expecting very little volatility in the markets over the summer, until early August when unemployment figures in the double-digits will be first released. I'm expecting the Dow to continue somewhere between 9000 and 10,000, and gold between $900 and $1000, until at least early August.
  
• Watch out on August 8, 2009. This is exactly a year after the Georgia incident. Russia may again try to attack Europe, in retaliation to growing NATO influence over former Warsaw-pact territory. The men behind the curtain may give Russia the green light, in light of the horrendous economic stats coming out. In other words, to make a quick buck and prevent social unrest, the corrupt banksters may choose to start a third world war.
  
• By fall it will become clear that the world is in total economic collapse. In September, 2009, the Dow will begin to crash violently, along with the US dollar. News will be coming out that US unemployment has just hit 12% and the US economy is expected to contract 15% in 2009.
• From a high of 9000, the Dow will end up at 4000 by November. US treasuries will go into hyperinflation in October, 2009. The entire world will enter a World War II-like state economically starting in October.
  
• In October, 2009 a dangerous new influenza virus begins to spread. It begins by claiming 200-300 lives every day. It is clear that it is a bioweapon, because it is spread by way of covert agents, appearing simultaneously on different continents. By December, this mystery flu is killing 1000-2000 people every single day. It has a kill rate of 40%. This means 40% of people who become infected die. The government encourages vaccination, not knowing that the vaccine also has a kill rate of 40%. It will turn out to be the worst pandemic the world has ever seen.
  
• Somewhere in early October, gold will definitively cross the $1000 barrier while the Dow crosses 4000 on its way down. Shortly after that, the COMEX will be shut down and all markets in the US will be closed. All commodities will be declared illegal. The US will be under full martial law. No person will be allowed to own property, and all land will be seized by the US Federal Government. Movement will be strictly controlled with military checkpoints. UN peacekeeping forces will be deployed worldwide to contain civil unrest.
  
• Although no longer reported, unemployment will continue to climb, reaching 16% by the end of 2009 (by official measures) or 30% according to shadowstats.
• It will not be visible, but the US dollar will reach hyperinflationary collapse by November, 2009. The US dollar will only be exchangeable on the black market. Exchange controls will be in place worldwide. Gold will sell for over $4000 USD on the black market.
• At some point in October, 2009, there will be a concerted effort to take down the Internet. ISPs will be forcefully shut down for allowing "subversive" material to be downloaded. If the attempt is successful, there will be mass riots. 70% of every city's population will be violently protesting. All economic activity will go underground. The Internet may be forced to go underground.
• Be prepared for widespread long-lasting power outages starting in August, 2009. Remember what happened in 2003. It will be similar to that, but it will last longer. Blackouts may end up lasting for weeks. It's quite possible that by the end of 2009, reliable electricity service will be a thing of the past.
• One also needs to prepare for food shortages and shortages of other essential goods. The government and corporations will hoard all food for themselves and possibly give some out in small rations (e.g. you are allowed 3 eggs per month). The blackouts will make it hard for supermarkets to continue operating. The fixed exchange rate and worthless fiat currency will mean that imports & exports will be impossible.
  
• By November, 2009 nearly every country on the planet will have instated a total military draft. Every single citizen will be openly apprehended and forced into either military service or civilian service (forced labour).
• The speed with which all this happens will make "shock & awe" seem like slow motion.

I suggest to everyone (including myself) to prepare for all of these possibilities. What do you do if your city's power goes out for 2 weeks? Or if the Internet is shut down? What if all the local grocery stores close down for 3 weeks? What if all your paper currency becomes worthless, or you're no longer allowed to withdraw money from your bank account? And lastly, what are you gonna do... when they come for you?

Peace. Love. Understanding.
Hope for the best. Prepare for the worst.

It's tax refund time, and my suggestion to you all (especially US citizens) would be to spend 50% of your tax refund on precious metals. Here's a little known fact: The average rate of inflation in the US over the past 40 years has been 7% per year. This means in 10 years you lose half your money.

The case for precious metals as an inflation hedge really doesn't need to be re-stated. But before you get into precious metals, here are some important things to know:

1. The COMEX price means nothing. Be prepared to set your own price.
The COMEX is just one of many markets for precious metals. Other markets are eBay and Craigslist. The COMEX is in fact a very small market. Use the COMEX price (like all other prices) to your advantage. When the COMEX price is the lowest, buy from the COMEX (or from dealers who base their price on the COMEX price). The primary objective here is to always buy low and sell high.

2. For buying, coin shops and bullion dealers are the most reliable & usually the cheapest.
eBay is very expensive these days, mainly because of cash-back. If you're in the US, take advantage of the cash-back offer. Otherwise, forget about eBay. Craigslist rarely has bullion up for sale and if it is, it's usually local pickup and quite expensive (because the seller knows how valuable bullion really is).

3. Always tally up all your costs (shipping, exchange rates, and other fees) before determining price.
It's often easy to forget about shipping costs, customs fees, eBay fees (for selling), or exchange rate arbitrage. Typically, exchange rate arbitrage is 3% of the price (if you're paying in a currency other than your bank's).

4. Always prefer domestic dealers over foreign. But not necessarily local.
There's certainly more risk involved in sending precious metals across international borders. You could be hit with customs fees or run into some kind of draconian restriction on imports. Now, in Canada, if you choose a dealer within your own province, you'll have to pay provincial sales taxes. So it's usually better to buy from dealers outside of your province (or other regional jurisdiction) to avoid taxes.

5. Do not sell anything unless you must.
Given the uncertainty of a fiat monetary system, you never know if something is a bubble or if it's hyperinflation. There's really no way to judge if precious metals have become overvalued. The best exit strategy is to never sell. However, there are those cases where you desperately need some money. In such a case, you are forced to sell. There are also situations where you may find a better investment (e.g. a stock or a piece of property) but don't have enough money to invest in it. In that case, again, you are effectively forced to sell to raise cash.

6. There is such a thing as having too much.
Keep enough cash lying around so that you won't be forced to sell in the event of some minor setback (e.g. losing your job). The problem with selling precious metals is that in many cases you are hit with taxes & fees, on top of the premiums you paid originally to purchase the metals. Therefore, too much buying & selling will cause you to lose all your money.

7. Keep yourself busy.
Sometimes it's tempting to obsess about the daily spot prices or constantly second-guess your investment decisions. To avoid such foolishness, you should keep your mind occupied. Basically, forget about the fact that you have precious metals and go on with your life.

There is another question precious metals investors struggle with, and that is, "Which metals should I buy?" My belief in this regard is that the oldest metals, those that have been money for thousands of years, need to be given priority. You should have a much larger proportion of gold & silver relative to platinum & palladium.

Deciding between platinum & palladium is quite easy. Palladium can be substituted for just about every use of platinum and it's much cheaper. Plus, Russia controls much of the palladium supply, meaning it could create artificial scarcity quite easily, raising prices dramatically. Palladium can be used to produce the cold fusion effect observed in 1989 by Fleischmann & Pons. There's also a growing palladium jewellery market in Asia. I would recommend palladium over platinum any day of the week.

Now, deciding between gold & silver is more tricky. On the one hand, gold is owned by central banks and is therefore more capitalized. It's more liquid & less volatile. The problem with silver is it's a wild ride. If you don't like wild rides, you should keep more gold than silver. However, silver has the potential to go much much much much higher than gold. Silver can be substituted for all other precious metals, and there's less silver bullion out there than gold bullion! So if you want maximum upside, you should go with silver. And because silver is correlated with gold, you won't miss out on gold's upside by owning silver. However, I would recommend holding some gold because of its low volatility. In cases where you need to sell something, you would sell the gold & keep the silver.

Historically, the best performing portfolio is 50% gold, 20% silver, 5% platinum, and 25% palladium. However, it's also very volatile & illiquid because of palladium and not very well exposed to silver. So instead, I would recommend a portfolio of 40% gold, 40% silver, 5% platinum, and 15% palladium.

In the end it's up to you. Remember: DYODD (Do Your Own Due Diligence).

My word is not gospel. Amen.

I love how ignorant people often accuse bearers of bad news of spreading "FUD" (Fear, Uncertainty & Doubt). Let me just address this by saying, FUD is the only way to find truth. It's the only way to learn new things. Were it not for FUD, we'd still believe the Earth is flat. All of science is based on FUD. Ignorance is caused by the absence (or opposite) of FUD.

What's the opposite of FUD anyway? It's gotta be TCB (Trust, Certainty, and Belief). Trust, certainty, and belief are the three fundamental pillars of religion. You must TRUST that the preacher is honest, you must be CERTAIN that there's a God. You must always BELIEVE that there is a God. No questioning. There's no room for FUD in religion.

So let me just finish this by saying, I will ALWAYS promote & encourage FUD. We have too much TCB in this world. Obama and his Wall Street crooks keep spreading TCB about everything. Hope. Faith. Trust. Confidence. I have a better word for it: CONTROL!

Haven't had much time to update the blog lately, but here's my take on the latest events...

• Swine flu: Dry run for martial law. Mexico was on the verge of financial & social collapse. Obama just finished 100 days in office. US treasuries were in trouble. In a prior secret meeting in 2008, the US congress discussed the imminent collapse of US finances by May of 2009. How convenient then to have a "pandemic" at this point. It's a total diversion from more important issues at best, and at worst a pretext for governments to launch full-blown martial law. No more talk about torture or prosecuting Bush admin officials. WHO is at level 5 now. Level 6 means the US government has the authority to apprehend any individual and detain him/her indefinitely and seize his/her property without warrant. This authority was given by a piece of legislation passed in the summer of 2008 which specificially mentions "threat of influenza pandemic" as a potential event that would trigger martial law. All of this is documented on infowars.com.
  
  
• Do not panic, yet: Although governments around the world have full authority now to do whatever they want, it doesn't necessarily mean that they will. Just because I can jump off a bridge doesn't mean I will. At this point, it's a matter of wait & see. In the meantime, we must all do our best to inform our fellow citizens in any way possible that the government is not on our side. The government is owned by individuals who want to see the world's population reduced to 500 million. Does this mean they will? Maybe, maybe not. But their stated intent is clear. It's like living next door to a person who has threatened to kill you. It's only a matter of time.
  
  
• Anthropogenic global warming is a convenient lie: I have to throw this in here because of all the nonsense I keep hearing about anthropogenic global warming. It's false. It's a politically-motivated lie. The world is warming, but your car is not causing it. If anything, we should be putting more CO2 into the atmosphere. Plants need CO2 to grow. Studies have shown that trees grow bigger if their supply of CO2 is greater. The greatest limiting factor on plant growth is lack of CO2. Plants produce oxygen and clean out toxins from the air. If you want to support a greener planet, put more CO2 into the air. Lastly, CO2 is not a pollutant. It's what humans breathe out. Do you want a tax on breathing? Oh right, I forgot, you're a sheep! BAAAAH!

Well I'm done. Not much time to blog these days but I'll be back in about a week with another summary of this kind. I find it fun to rant as long as it's a meaningful rant.