Up until the late 1970s, the United States was the world’s largest creditor nation. But since then, its ever growing expenditures have propelled the US into the status of the largest DEBTOR nation in the history of the world! Our current national debt “on the books” is now approaching thirteen trillion dollars. Our nation is running a staggering deficit in excess of two trillion dollars a year. But that’s not the worst part! If you take into account the cost of ongoing social programs such as social security, Medicare, Medicaid, military and government pensions, etc., for which there exist no accumulated savings whatsoever, the actual indebtedness of our fine country is somewhere between eighty and one hundred trillion dollars – an absolutely UNFATHOMABLE amount. How unfathomable? Most people have a really difficult time trying to contemplate how much a trillion dollars actually is. To help our readers gain a little better understanding of how large a sum a trillion dollars is, we would like to share with you this very interesting mathematical fact. If a person spent one million dollars a day – every day – of every year – since the birth of Jesus Christ, it would take over another HALF A MILLENIUM before we reached a TRILLION DOLLARS!! Yet the United States owes almost ONE HUNDRED TIMES that amount! How will this ever be paid?

The short answer is: It won’t. Or rather, it will be paid, but with ever increasingly worthless dollars in much the same fashion as Zimbabwe (see above).

In the last thirteen and a half months, the United States Treasury has borrowed and printed into circulation, over thirteen trillion dollars. These “dollars” are, of course, mostly electronic digital credits primarily bestowed upon our major banks. Nevertheless, we feel that this new currency inflation will soon explode into the private sector causing mass price inflation and an even greater rapidity in the decline of the dollar’s value. Furthermore, the world is literally “swimming” in dollars. Most of these “dollars” are held in the form of foreign debts and serve as a claim against future American production and prosperity.

To make matters even worse, our banking system is in far more desperate shape than Iceland’s. Our banks are carrying on the books literally trillions of dollars in highly leveraged derivative “investments” (actually bets) that are essentially worthless, not paying any returns, but still counted on the balance sheets of these institutions as performing assets. JP Morgan Chase Bank trading desk is reputed to have at risk over seventy trillion dollars in derivative risk – a literally incomprehensible amount. This risk is so highly leveraged that even a one percent negative correction in their trading positions could wipe out, many times over, their entire bank capital.

In this year alone, 2009, over one hundred twenty US banks have been declared insolvent and been taken over by the Federal Deposit Insurance Corporation (FDIC). Things are getting so bad that the FDIC itself is, for all practical purposes, BANKRUPT. In addition, there may well be as many as six thousand more banking institutions in serious financial difficulty. We at Kristos Trading believe that an imminent banking crisis of Herculean proportions awaits our country’s citizens in the months and years ahead.

The only reason that the US dollar has not already gone the way of Zimbabwe and Iceland is because of its designation as the world reserve currency which has been preserved, at least in part covertly, by Uncle Sam’s strong imperial military presence throughout the globe. Many lesser world governments have, in our opinion, been “intimidated” into continuous acceptance of US dollars of ever decreasing value in exchange for their raw resources (i.e. Middle Eastern oil) and the huge volume of manufactured goods from China and other countries. But that is quickly changing. Many key nations in the world (Russian, China, Brazil, Argentina, the Arab Emirates, among a few) are now openly discussing replacing the ever more worthless US dollar with some new type of currency exchange such as one founded upon gold and other tradable commodities. These nations are also now refusing to subsidize our burgeoning debt. They are no longer willing to accept our IOUs (our treasury notes and bonds) in payment for their resources and manufactured goods. Surely, a crisis of nearly unimagined size and scope awaits those who are uninformed and unprepared.

Since the days of Babylon, gold along with silver has been recognized as meeting the requirements for REAL MONEY. For two and a half thousand years, nearly all advanced civilizations from Europe, through the Middle East to Asia, have revered and acknowledged gold (and its sister, silver) as the most sound and sought after form of money.

While gold has maintained its luster and reputation throughout the ages, literally hundreds upon hundreds of paper currencies have not. The historical truth is that almost no paper currency has survived longer than one hundred years. Between Marco Polo in the thirteenth century and the advent of the communists in mainland China, that country has known no less than six failed paper based currencies. Likewise, so has France (Louis XIV, XVI, Napoleonic regimes), Germany (Weimar Republic, post World War I), our own nation (the Continental dollar following the American Revolution) and too many more to list in this short report.

The situation seems to be always the same for most currencies. When governments come under financial pressure, they can never resist the temptation to print money to pay for their debts, be they a result of war or social program obligations. The more currency these governments continue to insert into their money supplies, the more the value of their money decreases proportionally. Eventually, a paper currency reaches the point where even the citizens of the issuing country refuse to accept it for the most basic financial transactions. This is an inevitable reality.

Gold acts as both a critical hedge against hyper runaway inflation and a deflationary financial collapse. The world’s financial system is struggling for its very survival and has only been temporarily rescued by governments printing unlimited amounts of fiat money. There are only two possible outcomes, as we see it, to the resolution of the world’s financial crises:

1. Governments continue to succeed in temporarily rescuing their financial systems by printing horrendous quantities of money. This will lead, undoubtedly, to hyper-inflation, rendering paper money virtually worthless;

2. Or, if these measures fail, there will be a world wide deflationary credit and banking collapse which will engender a systemic failure of the world wide financial system.

EITHER WAY, both of these outcomes will be extremely bullish for gold and silver.

We at Kristos Trading firmly believe that the above trends for the precious metals will continue on average. We feel confident that gold and silver will continue to be outstanding investments, producing excellent capital gains and returns along with preserving your precious life savings. It should be understood that the valuation of gold and silver should not be measured on a day to day or week to week basis but rather should be considered as a long term core holding representing the foundation of any wealth building plan.

PLEASE CALL OUR ORDER DESK AT 1.888.385.1116, 7 days a week, regarding any questions you may have. We will be more than happy to take any time you need to explore your precious metals investing questions.