Paul Tustain, the Director of BullionVault, recently pointed out that the real cost of Northern Rock to the British taxpayer is $10,000 per household. We view this as utterly ridiculous, that taxpayers money is being used to prop-up a private business, but we have voiced our opinions on the Northern Rock saga in a previous article.

So although Northern Rock may cost over £100 billion, the bigger cost will be the collapse of the fiat currency system. Nobody is sure at the moment exactly how much this coming collapse is going to cost the global economy and many may even hold the view that it is not coming at all. However although we are not sure how much it will cost, we are fairly certain that the cost will be staggering.

As in a game of poker, the smartest players make the most money, and the less smart players will lose big time. Therefore it will be our governments and central banks that lose the most money in the coming collapse and as the people elect the government and pay tax, this unfortunately means that the people will lose out big time as well. Last week $110 billion was “created” by central bankers around the world and this week alone the European Central Bank conducted money market operations that made another $500 billion available!

Paul Tustain believes this is too make sure there is enough cash to redeem the large amount of bonds that are due for redemption on the 31st December, but regardless of the reasons for doing so, one cannot simply “create” money! Well obviously the Central Banks are creating money, but they cannot create wealth, the “money” has no real value. This massive fault in the financial system will play a big part in the coming collapse of fiat currencies as investors move their wealth to gold and precious metals which are of course the only real monetary assets of any real value. Therefore the investment community, and eventually the public at large will flock to gold and silver driven partially by fear of fiat currencies and by the hunger for profits that will be booming in the precious metals market.

Of course, savy investors will already be in position to ride this boom in gold and gold stocks, and all those that buy now or have already bought will be handsomely rewarded. So if you haven’t bought gold stocks already, then load up ASAP, gold has just had a breakout and we think gold will hit $1000 in the next year. To stay updated regarding which gold stocks we are buying and when, subscribe to The Gold Prices Newsletter completely free of charge, simply click here and enter your email address.

Happy New Year!