Well, it’s official! The worldwide debt bomb’s fuse has been lit. Today Standard & Poor’s downgraded the sovereign debt ratings of Greece to junk status along with lowering the investment grade status of Portugal. The Dow Jones Industrial Average immediately plunged 213 points and the Euro fell one and a half percent for the day. Ladies and gentlemen, this is only a tiny tremor compared to the massive tectonic plate collisions lying ahead on the world economic landscape.

Here at Kristos Trading, we are sure that by tomorrow morning the world media will be flooded by so-called expert commentators attempting to analyze exactly why this has occurred and what it means for the world’s finances. Analysts of all sorts will be coming out of the woodwork to try to decipher this shocking turn of events. Since we value our readers’ precious time, we have attempted to distill this complex event into one, very simple idea. That is: YOU CANNOT INDEFINITELY BORROW YOUR WAY TO PROSPERITY. It does not work for individuals, for families, for companies, or for any level of government – especially nation states.

Fear is once again running wild through the markets. Investors worldwide are scurrying around to try to find some safe haven to park their wealth. Last year, it was the Euro; so far this year, it has been the US Dollar. Worried investors have to be asking themselves, “How will this game of currency musical chairs play out?” Joel Bowman, the editor of “The Daily Reckoning”, prophetically addressed this dilemma in this morning’s edition of that newsletter, when he says,

“Of course, it’s not only dubious currencies keeping investors awake at night. Those dubious governments standing behind said currencies are enough to strike fear (and loathing) into the hearts of many a brave man and woman. With a gaggle of nitwit inflationistas manning the world’s central banks, it’s hardly surprising that many of our fellow reckoners are turning to gold as an anti-printing press store of wealth.”

Puru Saxena, founder of Puru Saxena Wealth Management, agrees. Comments Saxena in a Kitco news interview from his office in Hong Kong, “…Gold should continue to benefit purely as an anti-currency because people have lost faith in the Euro and the dollar. At some point, people are going to say, well, ‘We don’t want to lose purchasing power in currencies that are dubious, we want gold as an insurance.’”

The scary truth is that the treasuries of most of the world’s developed nations are broke. And none is more broke than that of the US federal government. Yet the US government continues to dig a deeper and deeper fiscal grave in which to bury its citizens. According to the brilliant and well respected economist John Williams, whose superb website, www.shadowstats.com details the actual financial statistics (as opposed to the continual lies regurgitated by official US statisticians), the true 2009 US deficit was approximately nine trillion dollars, or $24.7 billion dollars per day. Writes Stewart Dougherty in a January 2010 article entitled, “America’s Impending Master Class Dictatorship”:

“Putting Fiscal Year 2009’s $9 trillion deficit another way, 17% of America’s private wealth, accumulated over a period of 235 years, was wiped out by just one year’s worth of government deficit spending insanity.

America’s public finances are now so completely dysfunctional and chaotic that something far worse than debt enslavement and monetary implosion, terrible curses unto themselves, looms on the horizon: namely, a Master Class  sponsored American Dictatorship.

Throughout history, the type of situation in which America now finds itself, has been a fertility factory for tyranny. The odds of an outright overthrow of the people by the Washington and Wall Street axes, or more broadly, the Master Class are increasing dramatically. The fact that so few people believe an American dictatorship is possible is exactly why it is becoming likely.”

Indeed, these are fearful times in which we live. But fear can be your friend if you listen to its warnings. The woeful world financial condition is an engineered disaster created by the unfathomable greed of the world banking elite and its various minions. But fortunately, it is giving you warnings. All of us are being given a chance to protect our life savings and our families’ futures by investing our wealth in the only true and tested storehouse of value since antiquity. Gold and silver are the only true money. Paper currencies are nothing but debt instruments whose temporary value is only determined by the legitimacy of the issuing countries. To survive the coming debt bomb, you must buy precious metals and buy them now while they are still available and affordable. Do not let the debt bomb destroy your life work and savings.