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April Economic Rant -Roger Mason

“The American people will never knowingly adopt socialism. But, under the name of “liberal-ism” they will adopt every fragment of the socialist program, until one day America will be a socialist nation, without knowing how it happened. I no longer need to run as a Presidential Candidate for the Socialist Party. The Democratic Party has adopted our platform.” –Norman Thomas, President of the American Socialist Party 

Welcome comrade to the United Socialist States of America, the U.S.S.A. on the “Road to Recovery” The sheeple chose Marxism and they are getting what they deserve-  good and hard. With Marxism the government runs your life from cradle to grave until everyone is equal… equally broke. The lure of socialism is to get someone else to pay your bills. How do you like all that “change we need”, and “hope” he promised? His approval rating has already fallen to 60% in less than 90 days. It will get a lot worse. Obama was praised by the media as a talented and articulate speaker, but he can’t open his mouth without a teleprompter. He has aides write every word he parrots, and he is completely incapable of saying anything without a teleprompter to tell him what to say. No other president has ever been this helpless. We told you in the last issue the U.S. dollar would stall out at 89 and collapse. It did with a vengeance. The dollar is headed for 50 cents and maybe worse. Zimbabwe-style hyperinflation is just around the corner. The real inflat-ion figure is about 16% ( and getting worse by the day. You have to make 16% on your investments just to break even! If you have a 3% money market, for example, you are losing 13% a year. The Federal Reserve (which isn’t federal has no reserves, and no one even knows who owns it!) is printing funny money 24 hours a day, 7 days a week nonstop. The monetary base (i.e. Monopoly money) has doubled in the last year unbacked by anything. Inflation will soon go to 30% and then to an outright 100% a year massive hyper-inflation. Be prepared for massive, unprecedented hyperinflation.

You must come to the realization that only silver and gold will protect your life savings and that silver is a far, far better investment than gold. You must realize you have no choice. There is no decision at all here. Silver and gold have been the only real money for thousands of years, and have never failed to protect you. Gold was the world reserve currency (not the U.S. dollar) until 1971 when it could not be converted to gold (or silver). The U.S. Constitution defines money only as silver and gold. No currency on earth has any value including the Swiss Franc. No stock market on earth, no real estate on earth has any value. The stock markets are hopeless while CNN yammers about the Road to Recovery. There will never be a recovery. The Dow will be 4,000 on a good day. We optimistically told you the Dow would fall to 5,000 eighteen months ago. Look for a false “Obama Bounce” possibly back to 10,000. If this happens it will be a mere bear trap or sucker rally. America is done, through, over, finished. Our standard of living will fall by one third and never recover. The housing crash will continue for two to three years. Any mortgage bail-outs will just make it that much worse. The commercial real estate crash will also continue for two to three years. You’ll see empty strip malls and then entire shopping malls close down. Then you’ll see the empty storefronts rented out as apartments for poor families like in Third World countries. 80,000 stores closed in 2008 and we optimistically predicted only 120,000 would close this year. 75,000 stores have already closed in 2009 and another 275,000 are expected to close. This will mean 350,000 stores shut down this year. That defines Much Greater Depression by itself. You will see houses sell for a quarter on the dollar based on 2005 peak prices. The current median U.S. home price is $170,000. When this hits $120,000 you’ll know the bottom is basically in. There is a one year supply of unsold homes backed up that no one wants. In 2000 the median home was $169,000 and gold was $279, for an average of 605 ounces of gold to buy the average house. In 2009 the house price is the same, but the price of gold has almost tripled. You can now buy the average house for only 180 ounces of gold. In 2012 when the median house price will probably be a mere $120,000, the gold price will probably be about $4,000 (or a lot higher). You will be able to buy the average house for a mere 30 ounces of gold instead of 600 ounces. Silver and gold always keep their value. It will be much, much better for silver, since silver will go from the current 69 to 1 back down to the historical ratio of 15 to 1. When this time comes we’ll all cash in our silver and buy houses, the stock market, or whatever else is cheap at the time.

Private and government pensions are broke. The pyramid scheme Social Insecurity was broke decades ago. You’re going to see soup lines that will dwarf the ones in 1929. 1929 was a de-flationary depression; money had great value, but  no one had any. This will be a hyperinflat-ionary one; money will have no value and no one will have any! You’re going to see civil unrest, protests, and demonstrations turn to violence. First it will be the barrios and ghettos, and then the blue collar class will riot. When people are cold, hungry and homeless they feel they have noth-ing to lose. In desperation they will literally do anything. True unemployment is actually about 18%, not the 7% the government tells you.  This figure is actually worse since many people have taken low paying jobs just to get a paycheck.

Most of the 8,000 banks in the U.S. are hopelessly bankrupt despite YOUR tax dollar propping up the crooks. Take your money out of banks and “safe deposit” boxes, and keep only a mini-mum checking account to pay your bills. Keep cash at home for when the banks shut down, your credit cards are cancelled, and you can’t write checks. Don’t say, “it can’t happen here”, because this exact thing just happened in Iceland. We had bank holidays 80 years ago, and we’re going to have much longer and much worse bank holidays any time. The FDIC was broke a long time ago and cannot insure anything. The idea your savings is insured by the FDIC is patently ridiculous.

Major automobile manufacturers make little crappy, plastic, pretend cars with small motorcycle engines to sell in third world countries, but not in the U.S. These are just glorified golf carts. Middle class Americans will soon be driving these imitation cars like the Daihatsu “Charade” instead of their monster SUV. Blue collar and lower middle class will take the bus.

Today we’re going to add a silver stock, Great Panther (GPR). Silverstone was bought out by Silver Wheaton, and they have a mine in Peru. We are selling Silverstone or Silver Wheaton. when it converts after the sale. This means we now have Great Panther (GPR), ECU Silver (ECU), Impact (IPT), Endeavor (EXK), First Majestic (FR), Genco (GGC), and U.S. Silver (USA). You need to own bullion. There is even an argument for bullion only. Ironically you can still buy 1,000 oz bars at spot with no premium. If you have $14,000 buy a 1,000 oz bar (70 pounds) at spot from a large coin dealer. These will disappear any day. If you can only afford one  ounce rounds and 100 ounce bars at a $2 per ounce premium buy all you can. Remember the price you pay is the real world price, and not the fake paper COMEX price. One place to get these is Never, never buy paper silver like ETFs or let anyone store your silver for you. You must hold it yourself. J.P. Morgan Chase owns 90% of the massive COMEX silver short contracts (almost 40,000 net short contracts). This is almost twice the annual world silver production, so this can only be price manipulation. This is the reason the silver price is so low. In 2009 physical buying will overwhelm them and silver will take off. Manipulations always end, and always end in disaster- the opposite of what the manipulators intended. There is a severe consumer deficit for silver, and soon there will be a severe wholesale deficit for actual commerc-ial users. This is proven by the current “backwardization”, where the current contract price is higher than the nearby future months. This has never happened to silver ever. This is a sign!

This insane government bailout is going to reach at least 10 trillion dollars. As we have told you that means $133,000 for every family of four in America. $133,000 per family down the toilet. Fortunately for Americans, anyone else holding U.S. dollars is going to get screwed badly. This will dilute the damage. That means the Chinese more than anyone. Anyone holding dollars in any form such as T-Bills or T-Notes is also getting cheated badly. No one wants our useless Treasury paper anymore; they finally caught on after all these years. The more the government does the worse the situation gets. Yet the lemmings keep screaming for the government to “do something”. The more the government does the worse it will get. The Czech Prime Minister Topolanek said the U.S. stimulus plan is, “the road to Hell”. Obama and the Congress are going to do everything possible to destroy the energy supply. He is going to heavily tax oil and natural gas. Ethanol is a scam and a net loss of energy. You lose energy with every gallon you make, while people go hungry and you’re using corn for fuel. Wind power is a total illusion as proven in Europe and other countries. No one ever discusses the BATTERIES you need with wind power. Or the fact it just doesn’t work. Solar power is an even more illusory illusion, as sunlight just has no wattage. You would need a football field of very, very expensive solar cells to run the average home with air conditioner, dryer, stove and oven. Again, no one ever discussed the BATTERIES you need with solar power. Obama promised to destroy the coal industry and he’s doing a great job. Burning coal produces carbon dioxide, a normal part of our atmosphere. He is going to promote “clean coal technology” which is too asinine, complicated, expensive and unworkable. Coal produces half our energy needs, and we have at least 1,000 years of known coal reserves right here on our own soil. We could be making clear SASOL gasoline from coal for $2 a gallon and not import one drop of foreign oil. Obama and Congress will shut down the coal industry, the very basis of our energy. We have at least 200 years of known oil and another 200 years of known natural gas deposits right on our own soil. Electric cars like the Chevy Volt are too ridic-ulous to waste time discussing. The 800 pound battery alone will cost about $5,000 to replace every five years. How are tens of millions of people going to charge their cars every day when we don’t have enough electricity for everything else? There is no energy crisis or energy shortage of any kind. There is no Global Warming. Global Warming is a scam for stupid people who can’t think. Anything Al Gore promotes is insane. The EPA is going to make sure you have no energy at all. No coal, oil, gas, nuclear or anything else that works. Just useless windmills, solar, and ethanol. Federal regulation of carbon dioxide is completely insane. Obama and his socialist Democrat friends are going to make sure we don’t use any of these things. Why? Do you think they’re stupid? They’re not stupid at all. They’re evil, but not stupid. It’s all by design to make Americans poor. You can rule poor people, but you can’t rule affluent people. The poorer people are, the easier it is to push them around like sheep. Affluent, independent people don’t need or want government help. Look at Cuba for example. Castro has kept them poor for fifty years now with total control over their lives. Nationalized health care has been a total, dismal, hopeless failure in every country it has every been tried. The quality of government provided health care is non-existent. If you think health care is expensive now just wait until it’s “free”. The lemmings want government health care because THEY WANT SOMETHING FOR NOTH-ING. That’s the bottom line here. People want something for nothing  and someone else to pay their bills under socialism and Marxism. Government health care by itself will completely bank-rupt this country. Add the housing collapse, the commercial real estate collapse, and the $10 trillion bailout and you have the Much Greater Depression. The news media told you housing sales were up. Baloney. Half the sales were foreclosures, not real sales. This is right from the Organization for Economic Cooperation and Development. Banks auctioning off houses no one wants at fire sale prices. Home prices fell 19% in the last year.This is in addition to the fall from 2005 to 2008. At that rate your home will be literally be worth nothing in three more years. The media told you McDonalds profits were up 10%. Look at a stock chart of McDonalds (MCD) and you’ll see the stock is down badly. This was one of the best and strongest stocks, and a true bellwether of the economy. Now the media is telling you candy companies are thriving during bad times. Look at a chart of Nestle, the world’s largest chocolate company and you’ll see the stock fell $129 to 33!!! That’s a collapse of 75%. The media claims their profits were up 11%. Liars. (Mars and Hersheys are privately owned, and both are doing badly.) They claim Cadbury was up 30% in yearly profits, but their stock price fell 40%. The point here is the media is just the mouthpiece for the government, and  turns the facts around 180 degrees. If the news people are lying to you about hamburgers and candy, imagine what kind of whoppers they are telling you about the economy! The banks are broke except for the Federal Reserve shadow bank Goldman Sachs, which is propped up by YOUR tax money. The Banking Index we’ve printed before shows this beyond any doubt.

You can see the future if you just take a good, hard look at today. Great events cast their shadows before them. You don’t need to be psychic or even intuitive to see tomorrow. Just PAY AT-TENTION and you can clearly see what is basically going to happen tomorrow. Google “Gerald Celente” and “Trends Research” to see some very good 10 minute videos on the economy and the future of our  country. Gerald has been right on the money with everything he’s said. Go to kitco. com at least once a week and read Willie, Weigand, Daughty, Radomsky, and other fine authors.

In 1867 Karl Marx predicted, “Owners of capital will stimulate the working class to buy more and more of expensive goods, housing, and technology, pushing them to take more and more expensive credits, until their debt  becomes unbearable. This unpaid debt will lead to bankruptcy of banks, which will have to be nationalized, and the State will have to take the road which will eventually lead to communism.”

Almost no one believed the Soviet Union would break up into independent republics. America may well break up the very same way. The entire southwest could go to Latinos. The entire northwest could go to whites. Don’t think it can’t or won’t happen.  

Obama and Congress are busy taking away your Second Amendment rights to own guns for self defense. Join the gun Owners of America (GOA) and not the National Rifle Association (NRA).

Patrick Henry made this very clear: “I ask sir, who is the militia? It is the whole people. To disarm the people is the best and most effectual way to enslave them.” You need to be able to defend yourself and your family in your own home. More and more the police will not be able to help you. Criminals love gun laws because it keeps citizens unarmed.

If you are a person of means this is the time to give as much as you can. Look for ways to help people to help themselves as much as possible. Times are tough. You can overtip the waitress, the maid,  the cab driver and whoever else is out there trying to get by. Buy the elderly couple next door living on Social Insecurity some groceries. Give to any charities you believe in. Charity donations are drying up badly, and this will only get worse. Be as generous as you can and give to any cause you believe in. This is the time for charity and philanthropy. We are soon going to see soup kitchens only much longer lines than 80 years ago. Please help anyone you can to help themselves.

Some people are still hurt by the fact they lost so much on their silver stocks in 2008. Everyone in the world lost badly on their investments in 2008. Buy more silver stocks at these bargain prices. Buy more silver bullion at $13 an ounce. No investment in this world is going to go up in price but silver and gold. You can only get them out of mines. There are only about 50 real silver mines in the world, and most all of them aren’t worth investing in for various reasons. Silver was $50 an ounce in 1982. Adjusted for inflation this would be about $180 an ounce today, but spot Is only $13. The gold to silver ratio was 17 to 1 in 1982. Silver will go back to the historical 15:1 ratio (e.g. $6,000 gold and $300 silver). There was a glut of silver 27 years ago, but now you have to pay a $2 premium and hunt for silver. 80% of silver is a minor  byproduct from base metal mines. Most of these are broke and closed down like Rio Tinto and BHP Billiton because base metals have collapsed in value. This means even less silver being produced than ever. You Cannot operate a cell phone, computer, car, TV, refrigerator or much of anything else with electronics without silver. You cannot replace it with anything else except really expensive metals like platinum, rhodium, and palladium. Silver is the “poor man’s gold”.  Silver will outperform gold by a factor of at least five to one.

Deal with change or change will deal with you. People in London are rioting in the streets as this is being typed. These riots are now worldwide and will come to the U.S. We have had dozens of riots in this country in the last 50 years and they’re going to get much worse. 2009 is going to be the worst year since 1929. Prepare yourself, prosper, be happy and healthy.

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