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Late February Economic Rant -Roger Mason

The U.S. economic situation worsens by the day. We are the biggest debtor nation in the world; we are the biggest debtor nation in history The Fed has lowered interest rates to 3%, while they are counterfeiting money at a 15% inflation rate. They may go to 2%, which will be even worse. This defies reality. Lowering interest rates is making the entire situation worse. The stock markets are collapsing, and the Dow cannot hold 12,000. The housing collapse is just getting warmed up folks. There is a one year supply of unsold homes, and the builders are still trying to build more. You will see houses sell for a quarter on the dollar based on 2005 peak prices. Freddy Mac and Fannie Mae are bank- rupt, and have already lost over 4 TRILLION dollars. They are the biggest mortgage writers in the country by far. The government should not be in the mortgage business in the first place. We are already in a recession, and a CNN poll showed 61% of the Ameri-can public now realizes that. We are headed for the Much Greater Depression after al- most 80 years. Depressions, like everything else, are cyclical. Americans are all broke, and owe an average of $10,000 on their credit cards. The banks are all broke from making bad mortgages, not just “subprime”. The Big Three auto makers are all broke. The government itself is completely broke, and has been even since the Federal Reserve began in 1913. No one will buy T-Bills and T-Bonds anymore. Walmart is the flagship stock of America, and needs to grow 15% a year just to match inflation. They grew 1% in 2007, which means they lost 14%. At that rate Walmart would cease to exist in six more years. Starbucks is a very accurate indictor of our economic health. Starbucks stock fell a full 50% in 2007 (adusted for inflation). People just can’t afford $4 vanity coffees. Harley Davidson is going broke. Dell Computers is going broke. General Electric is going broke. The list is endless and growing. The unemployment stats are completely fabricated, and the true figure is more like 14%, not 5%. Many people have taken any job they can get just to pay the rent.

There are only two investments on the face of this earth, and that is silver and gold. They are the only legal money as defined by our Constitution. They are both at 28 year highs, but the media won’t tell you that. All paper currencies are worthless. The gold in Ft. Knox is long gone, and no required audit has been done for 50 years now. Silver has far more potential than gold, and will return to the historical 15 to 1 ratio, rather than the current 53 to 1 ratio. That would mean, for example. $200 silver and $3,000 gold.

Do you have a 401k or IRA? Can you convert it to the U.S. silver stocks of your choice? Most probably not. SELL IT, take the 40% hit, and put the 60% into silver bullion and silver stocks. At 12,000 the Dow would have to go up 15% a year just to break even. After paying taxes on your illusory “profits”, you would lose badly. That means a 13,800 Dow by Christmas, and 15,900 by the next Christmas. You would still lose money after taxes. Look for a 10,000 Dow this year. Sell you401k/IRA, and put your money into silver or you’ll starve when you retire. Do you have a private pension? Forget that. Do you have a government pension? They’ll pay you in inflated worthless Monopoly dollars that won’t buy anything. Social Insecurity? You must be kidding; that was broke decades ago. You have to take responsibility for your own retirement. 

The government has no silver, no Strategic Reserve, none at the U.S. Mint. There are only about 50 real silver mines in the entire world, and most of them aren’t worth invest-ing in. The biggest cache of silver is the COMEX, and half of that is privately owned and not for sale.  

Mine supply of silver is about 650 million ounces a year, but we use up over 1 billion ounces. The 350 million ounce deficit cannot be made up with recyling. You cannot have a technological society without silver, and you cannot replace it. You cannot have phones, cars, computers, air conditioners, TV, radios, refrigerators, microwave ovens, house wiring, or much of anything else electronic without silver.

The big name silver mines like Pan American, Silver Standard, Hecla, Coeur d’Alene, Hochschild, Apex, BHP Billiton, and Industrias Penoles are not worth investing in for various reasons. You cannot invest in Russia, China, or South America. You should not invest in the small mines like Southern, Oro, Oremex, Mexican, Klondike, Abcourt, Apogee, Aura. They have more potential, but more risk. This leaves a very short list of mines you want to invest in such as Quaterra, Silverstone, ECU, Endeavor, Silver Wheaton, First Majestic, U.S. Silver, Fury (higher risk/reward), and Impact. Silver stocks are down very much in February, which makes them an even better buy. Look at the long term and never the short term, as this is going to be very volatile. Buy and hold is the secret. COMEX futures are only for the experienced investor. Your poor, old author bought 4 futures contracts in 2000 for $20,000. This is now worth over $400,000 with 16 contracts. When silver hits $50 this will be worth almost 3 million dollars.

Neo-con McCain will be your next president. Romney just dropped out. They are asking Huckabee to drop out so McCain has no competition!!! That’s already been decided. He will be Bush on steroids with his “100 year war in Iraq”. He has promised to put as many troops into as many countries as he possibly can. He wants us to be the World Policeman and World Bully, in direct violation of the U.S. Constitution and everything the founding fathers believed in. “Friendships with all, entanglements with none”. We already have U.S. troops in over 100 countries, and don’t need troops in any country. Bush personally promised Netanyahu he will attack Iran before he leaves office. McCain will go after Pakistan and Syria. He’ll keep letting illegal immigrants freely come into the country and stay. You don’t choose the president; the media tells the great unwashed masses who to vote for. Whatever you call them- the  CFR, Bilderbergers, Illuminati, One Worlders, Neocons, Globalists, or whatever- they have already chosen your president and told the media who to promote.

Take a hard look at all the possible investments you can make and you’ll see YOU  HAVE NO CHOICE. Silver and gold are the only choices. You can’t buy bonds, any stocks in any country, real estate, oil, uranium, platinum, CDs, commercial paper, T-Bills, T-Bonds, any currencies, or anything else. Only silver and gold.

The “Patriot Act” made us into a functioning police state. The “Real ID” Act is really just a national ID card like they have in communist countries. By 2011 every American will be required to have this national ID card or go to jail. After more than 230 years we have self destructed as all democratic societies have. We now live in a socialistic, welfare police state that gets worse by the day. Go to www.ronpaul2008.com and donate. Do the right thing. You’ll always know you didn’t vote for the lesser of two evils.

Go to www.kitco.com every week and read the contributed commentaries. Keep up with the real world. There are $750 trillion worth of derivatives that are coming unraveled as you read this. This will take down the world economy. Buy silver and be happy!
 
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