Executive Summary

• The current gold slam has *nothing* to do with the fundamentals for precious metals, which are very favorable right now
• How bad would deflation be?
• Evidence that deflation is arriving
• Why our current monetary system has become so compromised by the banks
• How to best protect your wealth from both deflation and the banks

If you have not yet read Part I: This Gold Slam is a Massive Wealth Transfer from Our Pockets to the Banks, available free to all readers, please click here to read it first.

About Those Wealth Transfers

By now you are probably wondering why I did not make a call that gold was likely to experience a big downdraft.  After all, if I know their process of raiding for fun and profit so well, why didn't I see this one coming? 

The truth is, I didn't see it coming.

I allowed myself to think that perhaps this time it might be different, which is dangerous territory.  Here's why I thought that a big gold slam was such a poor idea that it would not be tried.

The biggest news of the recent past is the flow of gold from West to East. 

(Source)

With China importing 835 tonnes of gold in 2012 – that we know about (and they may well be doing more under the table for official purposes) – and also standing as the number one producer of gold, with ~360 tonnes of domestic production, none of which is exported, China is consuming at least 44% of total yearly world gold production.

Connect that with India importing between 200 and 300 tons per quarter (2011 imports were 967 tonnes, and 2012 was 864 tonnes), and this represents another 33% of total world mine output.  Add in Russia buying more official gold, and you suddenly find that a commanding proportion of the newly mined gold in the world is headed East, where it used to stay largely in the West.

To be clear, I view gold as money and therefore wealth itself.