One year on from the height of the financial crisis it is obvious the integrity of the global banking system is still compromised. Despite flooding the system with liquidity, bail outs, zero interest rates and accounting rule magic tricks the problems have not gone away. In fact they are now much worse. The balance sheet risks of the banks are now largely a problem for governments and its not just the PIIGS (Portugal, Ireland, Italy, Greece and Spain) that are at risk of sovereign default. Many US states are bankrupt. California (the 8th largest economy in the world) is bankrupt. In fact the UK and United States are also technically bankrupt.  Paper money is the ultimate promise of a government to its citizens and trading partners. This backed by nothing paper money FIAT system is built on trust and confidence. Sometime soon it will be clear the emperor has no clothes.

Private citizens should consider becoming their own central banks. The days of irredeemable paper fiat currencies may be approaching its end, and there is a reason why the central banks hold gold - it is their default insurance.

Do not be fooled, the gold reserves of central banks are their actual Money. Debt-based paper dollars, yen, pounds are all just ridiculous currencies, sad shadowy mirrors of their former selves, which is gold and silver coin. Gold's manipulated volatility cannot mask its >20% annualized returns versus the USD over the past 9 years. Remember - in actuality, it is the depreciation of the world's fiat currencies we are seeing, not the appreciation of gold itself which is itself both money and a currency.

Physical gold in your possession has no liabilities. You are not relying on a 3rd party to make good on a promise. Cash is simply a government promise to pay. even if we dont have a monetary system collapse you must realise that each new paper note printed dilutes the value of those already in circulation.  Printing presses running 24 x 7 globally. Unfortunately money printing is the only remaining solution to manage debt levels, but it comes a catastrophic long term price.........hyperinflation or put more simply worthlessness of paper money.

Be prepared for big changes to the monetary world order in 2010-11