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Late March Economic Rant -Roger Mason

We have given AIG over $130 billion dollars so far. It only takes them six months to lose that much and ask for more. AIG just gave $100 million dollars of YOUR tax money to the very executives who ran it into the ground. They want more and they’ll get it. They are giving this money to major bankrupt banks. Where is the outrage? What the hell is going on? Why not let them go broke like they’re supposed to do? Why is YOUR tax money used to prop up a bankrupt insurance company that doesn’t know how to sell insurance? Remember that “stimulus” means print worthless, unbacked Monopoly money. When you give the government a dollar you get back maybe 10 cents worth of services. Will Rogers said, “Be thankful we don’t get all the government we pay for.” Government can’t solve problems because GOVERNMENT IS THE PROBLEM. The bailout will soon reach 10 trillion dollars. Can you say, “ten trillion dollars”? Do you know what that means? It means an American family of four will pay $133,000. The problem with socialism is that you quickly run out of other peoples money. The entire basis of socialism and Marxist is wanting something for nothing. 

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Look at the Dow to gold ratio chart above. This went to 42 to 1 in 1998 and is now only 7 to 1 in a matter of 11 years. This will go to 1 to 1 (e.g. $5,000 gold and 5,000 Dow)  just like it did in1982 ($850 gold and 850 Dow). The same is basically true for silver, but it will do even better. The Dow to silver ratio in 1998 was 300 to 1, and has fallen to a mere 500 to 1.  It will keep falling to about 20 to 1 ($250 silver and 5,000 Dow).  In 1982 the Dow to silver ratio was only 16 to 1.Anyone who owns regular stocks has a death wish. The stock market is hopeless and will take 20 to 30 years to recover as it did from 1929.

The traditional gold to silver ratio is about 15 to 1 since there is usually about 15 times more physical silver available than gold. That ratio will return in the next three years. Today there is about 5 billion ounces of available gold since gold is basically only used as money. Nearly every ounce of gold that has ever been mined still exists today. In 1940 there were about 10 billion ounces of silver. Half of this was owned by the U.S. govern-ment. That’s how powerful we were then. Now they have none, zero, zip, nada. There are only about one billion ounces of known available silver, and nearly every ounce of it is owned by “strong hands”. They are not going to sell it until it goes up to at least $200 an ounce. Nearly every ounce of silver that has ever been mined no longer exists as it was used up in one way or another. The gold to silver ratio is about 70 to 1, so silver is a much, much better investment than gold. Buy silver over gold.

The stock bubble and the housing bubble were both based on greed. The coming precious metals bubble will be based on PANIC. Greed is bad, but can’t even begin to compare to widespread PANIC. People will really panic when they’re cold, hungry, jobless, disil-lusioned, and very angry. Then you’ll really see what panic means. One in five mort- gage holders are now under water. ONE IN FIVE. It just gets worse from here. The average home price will fall from $170,000 to $120,000. We have another two to three years of a residential and commercial real estate collapse. The more mortgage bailouts given the worse it will get. This is going to be a worldwide depression that no country will escape. Look for the S&P to collapse to 500. Folks, 18 months ago Economic Rant was telling you the stock market would fall to 5,000- on a good day. It already fell to 6,600 and will keep falling.  53% of the American public (Rasmussen poll) now expect a real depression very soon. The party is over, the drunks are waking up, and the punch bowl is empty. City, state, county, and federal tax receipts are all falling badly. Individual federal income taxes have already fallen an astounding 64%! You can’t have socialism without lots and lots of taxes. We will soon have “free”, nationalized health care. This has, of course, failed miserably in every country it has been tried in. You think medical care is expensive now? Wait until it’s “free” and you’ll find out how really expensive it can get. For every dollar you pay you’ll get ten cents worth of third rate medical care. What a bargain!

The U.S. dollar should be about 60 or 70 on the U.S. Dollar Index, but it is somehow propped up to 89. This five month bull trap is due to government intervention, and has nothing to do with the “value” of the dollar. It is no longer the world reserve currency. It has stalled out at 89 and will collapse. The printing presses run 24 hours a day, 7 days a week. The ONLY cause of inflation is printing unbacked, worthless paper money. There is no mystery to this, and that is the only cause- printing Monopoly money. Inflation quietly and silently sneaks into your life and steals from you unseen and unknown. The only way you can protect yourself is to own silver and gold- real money.  We are headed for massive, unprecedented Zimbabwe-style hyperinflation, so be prepared. You are going to see the worst inflation this country has ever seen. You will still the prices of everything rise astronomically.  The American standard of living will fall a full one third and never recover. It’s over folks; America is falling off a cliff never to come back again. History teaches us all nations self destruct after about 200 years and we are 232 years old. History repeatedly shows all  countries collapse after about 200 years.

Senile in Omaha Warren Buffett may actually go bankrupt. His infamous Berkshire Hathaway (BRKA and BRKB) is invested in the worst possible stocks you could choose (such as General Electric). He is also up to his ears in derivatives which are imploding as you read this. His profits fell 96% last quarter from 2.95 billion to a mere 117 million. His profits fell 96% folks! That’s not a misprint. He could have bought up entire silver and gold mines and his stock would be headed for the Moon. Do you know what he said about gold? “It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again, and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.” That’s a direct quote. He feels the same about silver, only worse. What a senile, brain dead moron. Gold and silver have the ultimate utility- they have been the only real money for thousands of years. That’s what “utility” means. He did admit, “The U.S. economy has fallen off a cliff and is in shambles. 2009 is hopeless.” 80,000 retail stores shut down in 2008, and 120,000 retail stores will shut down this year. This is the government shill who has been telling you to invest your life savings in a collapsing stock market. An evil man. Look at how well gold has cone compared to Berkshire Hathaway in only 9 years.

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Don’t deny we now live in a police state. Did you know we have more people locked up per capita than any other country in the world? More than Russia, China, North Korea, and Cuba? Over 7 million Americans are either locked up, on parole, or probation. That is 1 in 31 adults!!!! For blacks it is much worse. This isn’t due to rising crime at all. The crime rate has actually fallen 25% in the last two decades, yet we have locked up more people than any other country in the history of the world. It costs you about $30,000 a year to keep a prisoner locked up under the worst possible conditions. Most of these people simply do not need all this ridiculous security as they are not serving long terms or don’t have much longer to finish their terms. Prisons in America have become human warehouses. California is so bad the courts have ordered one third of all prisoners re-leased due to inhumane conditions. One third of them are in for drugs. Legalize drugs and one third of the prisons would close and all the drug dealers would be out of business overnight. This means all the Latin and Asian drug cartels would be out of business overnight as well. That’s right, if all drugs were legalized for adults all drug dealers and all drug cartels would close down today. All drugs were legal until the Harrison Narcotic Act in 1913, and there was no minimum age to buy them. Only about 3% of Americans abused the legal drugs. We have far more alcoholics than that. Drug abusers and addicts are sick people, not criminals. Let the police and courts spend their time arresting real criminals and putting them in jail.

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See the bank chart above. This has fallen for 120 to under 20 in two years despite mass-ive bailouts at your expense. This is much worse than the Great Depression and will continue to get worse. The government will nationalize the banks and then we’ll have a REAL Soviet-style economy. Take a good look at this chart. Our banks are literally bankrupt, hopelessly broke with no chance of recovery. The more bailouts given the worse the situation will get. You don’t bail out poorly run businesses. The banks loaned money to stupid, greedy people to buy homes they couldn’t afford with money they didn’t have. In normal times the banks would love to foreclose on the homes and resell them. In 1929 this is exactly what they did. Now they aren’t worth taking back. The Mortgage Bankers association admitted that 1 in 5 mortgage holders are under water and owe more than their homes are worth. This figure will just get worse and worse. The housing crash has another 2-3 years to go along with the commercial real estate crash. If your home is worth less than what you owe GIVE IT BACK TO THE BANK and walk away for God’s sake. Just give them the keys and turn your back. The U.S. median home price will fall to about $120,000. maybe less. You’ll know the bottom is in when you see the average home sell for $120,000. Do not keep money in the bank and don’t use “safe” deposit boxes. Keep a minimum checking account. Keep Monopoly money at home for when the banks close, the credit cards are dead, and you can’t use checks. It just happen-ed in Iceland, so stop saying, “it can’t happen here.” It can and it will. Keep in mind that true inflation is really about 16%. You have to make 16% on your investments just to break even!!! True unemployment is really about 18% . Actually it is worse, since many people have taken any job they can get just to pay the rent and buy groceries. Keeping a job is the most important thing you can do, because unemployment is going to 30%. In 1929 it was “only” 25%, but it will be worse this time.

Every one of our 50 states is broke! All of them. The lemmings are demanding more and more “services”, but tax revenues are dismal. The Peoples Republic of California is the brokest. The eighth largest economy in the entire world is hopelessly bankrupt. This is what people get when they choose socialism and big government over freedom and prosperity. Nearly every pension and retirement plan is broke, busted, bankrupt. This includes federal, state, county, and city. The Social Insecurity Ponzi scheme was bankrupt decades ago, and has been robbing Peter to pay Paul. Peter doesn’t have any more money, so now they print worthless Monopoly money. Zibigniew Brzenzenski (Carter’s advisory) said we are going to have civil unrest and outright riots here in the next few years. First it will be the ghettos and barrios. Then it will be the blue collar class. This will start out as non-violent protests against taxation. People will not be able to eat and pay utilities much less pay their taxes. It will quickly escalate to outright violence. Gun and ammunition sales are thru the roof. Armed citizens now far outnumber the total military and national guard. If you do not own firearms to protect yourself go out and buy some with lots of ammunition. Obama and the Democrats are busy taking away your Second Amendment rights as you read this. You cannot own guns in a Marxist state. You cannot protect or defend yourself under socialism. The police will not be able to protect you in cases of serious unrest. Do NOT join the NRA (National Rifle Associat-ion) as they sold out years ago. Do not join Concerned Citizens either as they just want your money. Join the GOA (Gun Owners of America). Buy firearms for self protection. Get a concealed carry permit if your state has them. Take a short firearms course if you don’t know how to use one. If you live in a city or highly populated area, move to a more suburban or rural one. We have 761 military bases in 151 countries. Nearly all out soldiers are outside of the country. Armed citizens far, far outnumber the domestic military, national guard and all police forces combined. We should have no military bases outside of America. We should have no soldiers outside of America since no war has been declared anywhere. Look at the money we could save. No one with a brain is willingly going into the military now. The draft is coming and your son and daughter will be taken by force to go off to some country you’ve never heard of to kill and be killed. Saviour Obama already said, “when some serve, all serve.” He promised to, “bring the troops home”, yet immediately sent more troops into Afghanistan. He is planning to attack Pakistan for God’s sake, and is still trying to figure out how to attack Iran to make Israel happy. Any attack on Iran (or Syria) will be the start of World War III. Russia has already clelarly warned us about this. Don’t irritate a sleeping bear for no reason.

Silver Wheaton is buying Silverstone. Silver Wheaton owns a mine in Peru. Peru is a very unstable country that will go communist any time. We are selling and do now want to own Silver Wheaton. Management should know better to own any mines in Central of South America. Mexico is bad enough. This only leaves six mines. ECU Silver (ECU), First Majestic (FR), Endeavor (EXK), U.S. Silver (USA), Impact (IPT),  and Genco (GGC) are the only six left. There are only about fifty real silver stocks in the entire world. The other forty four just aren’t worth owning for a lot of reasons. They either have bad management, a history of hedging (not trusting is the very silver they produce), own mines in communist countries, own mines in unstable countries, aren’t actually produc-ers, and other such reasons.

“My reading of history convinces me that most bad government results from too much government. It is incumbent on every generation to pay its own debts as it goes. A principle which, if acted on, would save one half of the wars of the world. To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical.”  –Thomas Jefferson

“What experience and history teach us is this: that people and governments never have learned anything from history or acted on principles deduced from it.” -Hegel

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Now look at the chart above. The Dow has really not risen in 80 years adjusted for inflat-ion and is falling. That’s right, if you owned the Dow Jones for the last 80 years you would merely have broken even. You would not have made any money. The black line is the numerical Dow, and the blue line has been adjusted for inflation. You see the 1929 high basically equals what it is today. So, investing in stocks for the last 80 years would have gained you nothing but keeping up with inflation. What a deal! Don’t let anyone tell you, “investing for the long term” is a winner, because the above chart proves it isn’t Most people don’t even live 80 years, much less have any money to invest for that long.

Welcome to the U.S.S.A., the United Socialist States of  America. The brain dead voters chose Marxism over freedom and prosperity. Only 2% voted libertarian. There is now  not once single free country on the face of this earth. There is nowhere to go. This planet isn’t worth living on anymore. You can get fantastically rich by investing in silver, but you can’t buy civil rights and freedom from government at any price. Freedom really is priceless. 

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