At times this whole financial crisis can seem surreal. How is it that everything is going wrong at the same time?

Bank runs lurk in the EU; Gold is taking off towards $2k an ounce; China is suspending exports of vital raw materials; Russia is suspending exports of agricultural goods; Many people are warning of hyperinflation in the United States; 2010 saw over 3 million foreclosures in the U.S. and 2011 looks to be worse; Unemployment everywhere is getting worse; Food prices are rising everywhere; Riots are breaking out; Country by country are falling into bankruptcy like dominoes.

It makes you wonder sometimes if we’re all just a collective Chicken Little running around making gloom and doom predictions. Has the recent recession made us unreasonably paranoid? Are we reading the data with the preconception that they will reveal a glass that’s half empty?

It is in this context that I’d like to point you to one of my favorite videos on the internet.

 

Understanding the reality and the depth of the crisis at hand requires an understanding as to what money is, what credit is, and how the two have been completely distorted over the last hundred years or so.

There is something on the order of $300 trillion worth of U.S. dollar debt in the world (debt denominated in USD) while there is only on the order of less than $20 trillion U.S. dollars in existence.

Those numbers should send off alarm bells that something is completely out of whack.

These problems are real. They are not exaggerated.

A perfect storm is coming. Protect yourself with gold.