James Turk has posted a new update over at GoldMoney. If you don’t keep up with his updates regularly, you should. You can sign up by email to be notified of new alerts. He usually releases one every two weeks, unless something major happens in the meantime.

This time, he’s posted a shocking chart that reveals the extent of the radically new terrain in which the US banking system is currently treading. Not trying to be dramatic here, but the graph speaks for itself.

I read alot about how to stay protected in many economic environments - inflationary, deflationary, stagflationary, recession, currency collapse, etc. I often think I’ll be okay because of how diversified I am. We can’t always predict what type of market we’re really headed into. Experts and analysts don’t agree. So I take their arguments, blend them together, and wonder, if these were ALL true, what do I need to do to protect and grow my wealth? That’s the kind of solution I’m aiming for.

But once in a while, I read or hear or realize some new aspect of the picture that might yet topple all my expectations and predictions. Maybe I won’t be protected from a 1930’s-style Depression after all. In the electronic age, wealth can disappear that much more quickly.

This chart is one of those things that makes me think the situation might be something altogether more unexpected and unpredictable than forecasted. What can we do? Pay attention. Stay informed. Stay diversified. Keep an eye out on all of these updates as much as possible. Make back-up plans. Have different kinds of savings - some on paper, some in other forms.

What about you? What’s your solution to protecting your wealth? Who knows what’s really coming. Garth Turner, a Canadian MP and financial reporter, noted recently that now they’re expecting another 90 banks in the U.S. to collapse. Most of these might not ever be reported.

Following the IndyMac failure, America’s second biggest bank failure, many people online have been talking about whether they should take their money out of the bank and put it somewhere else. Others have been asking about what’s happening: are banks really failing, and what does this mean?

For younger people, and for those who haven’t spent a lot of time reading about the economy (like I have for the past 7 years, although I am by no means an economist or economic expert), I think the present situation can seem very confusing. I would be worried too if I was American and/or earning all my income in US dollars. But I think it’s a good thing for people to be awakened to the fact that something isn’t right. And people should be asking these kinds of questions, and more of them, too.

James L. Turk over at GoldMoney.com insists that this summer we’re going to see the collapse of the US dollar.

Now, “collapse” can mean one thing to one person and another to another. So don’t get too excited yet. I am not sure if he’s thinking “Argentina 2001,” or just something much more mundane but nevertheless with many repercussions.

Similarly, Ron Paul has been advocating for an alternate currency since at least November 2007 and probably quite some time before, too (I was introduced to Paul in late 2007, so I can’t say).

This isn’t something that’s been happening overnight. The sub-prime bubble collapsed in August 2007, but even that was visible miles ahead by those who had been studying the economy. In fact, I’ve read about what’s happening today as early back as 2002. Henry Paulson likes to tell Americans that the US has strong fundamentals moving into the future, and I’m thinking “OK, yeah maybe if by future you mean 50-80 years or something.” What exactly does he understand by “fundamentals”? I don’t think he knows how to read a basic balance sheet. The US economy is in the red, BIG TIME. And the only way it can get out is to raise interest rates, but the Fed refuses to do that. So, we’re also seeing the slow debasement of the greenback. Inflation isn’t 4%. It’s more like 10%, and perhaps a bit higher.

Here are my Recommendations For Protecing Your Money:

• turn in some of your greenbacks NOW for another world currency (the Canadian dollar, Australian dollar, Euro - these will all be safer even if the US one collapses).
• exchange some of your greenbacks for some GOLD and SILVER (I recommend GoldMoney.com)
• don’t keep your life savings all at one financial institution
• don’t keep all your investments only in US companies: diversify into foreign holdings too (GoldMoney will also allow you to buy foreign currency)

In short, I think it’s time for more Americans to learn more about how their economy works and how investing works. I think we’re really close to the straw breaking the camel’s back. It doesn’t help that oil is pushing all kinds of other prices up, but again, that’s all part and parcel of the devalued dollar problem. Don’t be fooled by media reports of “troubles in Nigeria” causing the price of oil to boom - there may be trouble there, but the real problem is just that the dollar is sinking.

Anyways, this is my understanding based on the research that I’ve done.

A few people I have talked to have been wondering about how they can invest in gold. Well, as Jim Rogers once said - once your local newspaper starts talking about how the dog next door just got started in commodites, then it’s probably time to get out. I’ve read more than a few stories from people just waiting for the commodity bubble to “burst.” I’m not really in that camp. Based on my understanding, there isn’t much of a commodity bubble, and there can’t be, almost by definition. Commodities are real, tangible assets. You can’t actually fake the amount of rice or gold in production around the world. Your creative accounting team might be able to sketch up the numbers here and there, but when supply meets (or doesn’t meet) demand, it’s pretty straightforward. This is why I think it’s always a good time to be in commodities. I’m not a market-timer, I just invest for the long run and for current cashflow. I don’t really mind if gold goes up and down over the month, and I don’t pay much attention to it.

A Bank of Virtual Gold

My recommendation for would-be gold and silver investors is pretty simple. Use Goldmoney. Since 2001, they’ve been the leader in the new “digital gold” industry. The best way to describe their service is to think of them as an online bank that deals only in metals. They keep the real, physical metals in their secured vaults (unlike regular banks, which rarely are required to even keep 10% of their supposed holdings on hand), and you log into your online account where you see the electronic totals of the gold and silver you own. And you actually do own specific physical pieces of that gold and silver. It’s not an abstract “pooled” account where everybody’s gold could be anybody else’s. If there were a run on GoldMoney, they’d be able to give everyone their exact bars of gold right away. Your bank can’t even do that.

Located in Jersey, in the Channel Islands (UK), Goldmoney allows you to purchase gold, silver, platinum and palladium in several major currencies. It’s free to open an account. You can purchase in Canadian dollars, then later sell back into US dollars. Or Euros. Or pounds. Or Swiss francs. On top of this, you can even pay for certain goods and services with your gold. They have a list of their affiliates on the site.

Goldmoney is not only extremely secure (quarterly audits and insurance), but they also own several patents for their innovations. Bubble or not, Goldmoney continues to grow at an impressive rate and is going to be here for quite a while. What I most like about the site itself is to read the bi-weekly updates of James Turk, the founder. It’s basically a little blog on the price of gold around the world. Turk is a famous gold-bug. But don’t let such names get in the way of perceiving the great value that a service like this has to offer. I’ll probably say more about Turk and Goldmoney in a future post, but for now, you should really check out the rest of the details yourself. And of course, you’re always welcome to contact me about it too if you’d like more of a personal testimonial.

What do you think? Have you used GoldMoney or a similar service? I’d love to hear about it.