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Late April Economic Rant -Roger Mason

“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up all around the banks will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.” –Thomas Jefferson 

The Federal  Reserve is not federal and has no reserves. It is a collection of private banks that refuses to be identified. That’s right, no one has ever documented exactly which banks they are, but they do include Goldman Sachs, J.P. Morgan Chase, and others. The creation of the Federal Reserve is the worst crime ever perpetuated on the American people. Ron Paul has introduced an act HR 2755 to end the Federal Reserve entirely and has real support for it. Don’t be surprised if Ron suddenly disappears from the face of the earth. He also has bill HR 1207 to audit the fed and S604. The Fed has never ever been audited and no one knows who owns them.

It takes a lot of patience and faith to sit through these times. The stock markets are mak-ing false rallies to trap the gullible, while gold and silver are smashed along with their stocks. There are only 63 million ounces of available silver on the COMEX and falling.  Six million ounces were taken off in just three days, yet silver falls to $12. Obviously, this can’t keep up very long.

Many of you watch Glenn Beck. Glenn does have some good things to say, but he is muzzled by the government. He was on Fox News March 3 and emphatically stated he and his staff had investigated the FEMA prison camps. He said, “These are actual prisons that were built during the Bush administration.” That very night, and thereafter, on his show he denied everything he said, and claimed there are no FEMA prison camps! He denied everything he just said on Fox News. Glenn has also clearly and repeatedly stated 9/11 was done by terrorists and was not an inside job, was not staged. Some of you go to to listen to Alex Jones. He also has some good things to say, but is a disinformation agent. That’s right, he is a counterfeit conservative. At least Alex will tell you 9/11 is a hoax, and there is overwhelming proof of the FEMA camps. Just google “Civilian Inmate Labor Camps” to see for yourself. You can also google “FEMA camps” and other such terms and get a wealth of overwhelming factual information about them. These are real folks. Malcolm Berko is a syndicated columnist who gives bad financial advice in many U.S. newspapers every week. He is a shill for the government and stock markets, and is always telling people to, “buy more stocks”. He is the newspaper version of TVs Jim Cramer. He says gold and silver are useless and to keep buying stocks. Obviously his advice has ended in financial ruin for anyone naïve enough to listen to him. Strangely enough, in his April 5 column, he actually warned about the coming depresssion! He defines a depression as a 10% reduction of the standard of living, and says it has only happened in 1917 and 1929- and now. A Great Depression is a 25% reduction. He is clear, like George Soros, that there is no prayer of a recovery.  He says three experts (he can’t name) expect a depression. Then he goes on to tell you to, “buy more stocks”! Jim Cramer is also telling you to “buy, buy, buy”. So is Larry Kudlow on CNBC.

We have a work force of 140 million here in America. Did you know that? Right now 18% of them are out of work, and many more are underemployed making far less than they are worth. That means 25 million people without a job. Soon 30% will be out of work, which means 42 million people not earning a living. Who will feed them and put a roof over their heads? What are they going to do? Right now you can still get minimum wage jobs, but soon they will dry up, and people will line up for them. That’s right, pretty soon people will line up for minimum wage jobs and pray to get one.

The Case-Shiller Index had the median home price at $226,000 in 2005. Now it is down to $162,000 and falling. By 2011 or 2012 the median home price will fall to $120,000.

This is much worse than it sounds, as these will be inflated dollars. Housing prices will fall 75% in real terms adjusted for inflation. You will be able to buy the house of your choice for a quarter on the dollar in real money. It is the housing crash that will take down this country.  The same is true for commercial real estate. Look at the empty stores everywhere you go. They will not be filled. It will only get worse.

Somehow the U.S. dollar is propped up at 85 cents. This will fall to 50 cents, as the Fed is printing money 24 hours a day seven days a week. They refuse to publish M3 money statistics, but these have been configured ( at 16% real inflation. Why the secrecy? Why not publish how much Monopoly money is being printed? You are going to see hyperinflation that wills stun you! You are going to see Zimbabwe-style hyperinflation that will destroy this country. It takes a good nine months for inflat-ion to actually hit the store shelves after the Monopoly money has been printed. The really sad thing is that inflation rewards those in debt. Inflation punishes those who save. Isn’t that sick? The middle class family that has lived frugally and saved their money will get hurt the most. Those in debt will be rewarded, as they will pay off their debts will inflated currency. If you owe on your home, for example, take your time paying it off with Monopoly money. The dollar will no longer be the reserve currency of the world. Gold was the reserve currency of the world until 1971 when we went off the gold (and silver) standard. No currency on earth has any value including the Swiss franc. There is only one way to defend yourself against hyperinflation, and that is silver and gold. If people in Zimbabwe simply had silver coins, like dimes and quarters, they would be fine economically, but they don’t.

Right now silver is only $13. People cannot get silver. If you find some the premium is at least $2 an ounce. Silver is in backwardization until December. This has never happened. This means the spot price is higher than the futures price because supplies are tight. 80% of silver is by-product mining from lead, copper, zinc and other base metals. Due to low prices all these mines have closed down or cut back severely. This means less silver than ever being produced. This means the industrial people will soon be out of silver. This is when the feces hits the fan folks. Gold is also in backwardization until June.

The silver-to-gold ratio is an irrational 70 to 1, and will return to the classic, historical 15 to 1 ratio. We might have $400 silver and $6,000 gold for example. That may sound impossible to you, but remember silver was $50 in 1982 when the world was awash in silver. That would be about $180 today adjusted for inflation, and we’re almost out of silver. The COMEX is the largest supply, and could well default this summer when they run out of physical silver. Only 63 million ounces are available (the rest are owned and stored), and 6 million left in just one week. The COMEX did fall to 40 million available ounces in 2004. When it falls to 40 million again this will go very well for us.

Now we have falling tax revenues, but rising socialistic “services”. This can only end in disaster obviously. The American voters chose Marxism, and they are going to get it good and hard! Only 2% voted for freedom. America was the last bastion of freedom. Now the entire planet is just one socialist, Marxist, communist prison The One World Order plans are real, and come true every day. More and more we are headed for One World Government, a totalitarian planet. If you never read Orwell’s 1984. or Huxley’s Brave New World, do yourself a favor and read them. Both authors very much under-stated the matter. If you still think there is any hope for this country, please consider the latest Rasmussen poll of the American public. Only 53% believe that capitalism (free markets) is better than socialism (government run markets). That figure should be 99%. Socialism was preferred  by the young and by  Democrats. That means barely half of our population believes in the Consitution and Bill of Rights, and prefers Karl Marx’s Das Kapital. Now do you see any hope for this country? We have a hardline Marxist president because Americans now prefer slavery and poverty to freedom and prosperity.

We keep beating up on Senile in Omaha Buffet and his worthless, collapsing Berkshire Hathaway stock. He has the worst stock picks on earth, and is up to his ears in toxic derivatives. Well, Moody’s just downgraded his stock as they agree it stinks. People use to think the sun rose and set on Berkshire. He is still trotted out on TV almost daily to tell you to buy stocks on the Road to Recovery. If you want to make some money wait until this stock bounce is over and short BRK.A. When the richest man in the world is going broke, it’s time to admit we have a real problem on our hands.

New York has been the most prosperous and recession resistant city in the entire country. Until now. Walking miles up and down Broadway (the heart of the city) this weekend there were countless closed and unrented stores. Many of these are landmarks and have been there for decades. City officials admit NYC is hopelessly broke and have raised taxes in an attempt to stay afloat. NYC is already the highest taxed city in the entire country, and raising them even more will drive people out and reduce business  and just make the economy worse. More people fled New York than any other state last year. California was second, as they are the second highest taxed state.

You must come to the realization that there are only two investments that can save you during the upcoming collapse- silver and gold. Silver will do at least five times better than gold as the ratio falls from 70:1 back to the historical 15:1. There are only 63 milion ounces of available silver on the COMEX. What does that mean? It means 630 families could buy 100,000 ounces for 1.3 million dollars each and there would be no more silver available on earth basically. There are over a million American households that could do that. We are only 5% of the world population.  We know several families who own far more than that. They bought 200,000 oz at $5 for only 1 million dollars several years ago. That’s how tiny the silver market is. It is very tiny. The silver price is manipulated on the COMEX by J.P. Morgan Chase who owns 28,000 short contracts at 5,000 oz each. This is far more silver than is mined every year. There has never in history been such a short position on silver or any other commodity. This is pure and simple manipulation. They are going broke as the price of silver goes up and they lose money. Soon it will end, and the price of silver will explode. The COMEX price is the fake, paper, manipulated price, not the real price. All manipulations end exactly opposite of what was intended.  We do not need gold. We cannot exist in society without silver, and it cannot be replaced or substituted. Silver is the poor man’s gold. Even a poor Mexican family can buy several silver coins at $13 each  (plus a $2 premium of course).  In 1950 a dollar would buy you four gallons of gasoline. A silver dollar would buy the same four gallons. Today a dollar will buy a half gallon of gas- only one eighth of what it would buy before. A silver dollar will buy you six and a half gallons, or THIRTEEN TIMES AS MUCH AS A PAPER DOLLAR. Thirteen times folks. In 1950 governments held 10 billion (not million, but billion) ounces of silver. Individuals and companies held large amounts of silver. Silver was commonly used as currency. Dimes, quarters, and silver dollars were held by everyone. Today no government has any silver. The only real cache is held by the COMEX with a mere 63 million ounces and falling. The Coinage Act of 1792 defined the U.S. dollar in terms of silver, not gold. Almost no one owns silver. Do you know anyone who owns silver? The ETFs are frauds, and will end in disaster. They do NOT have the silver to equal the paper sales they have made. It’s all a big scam. Silver cannot be confiscated like gold.

We sold our Silverstone since it will be bought out by Silver Wheaton (SLW). They are so stupid they own a large mine in Peru. Peru is about to go communist any time. We now own ECU (ECU Silver), IPT (Impact), EXK (Endeavor), GPR (Great Panther), FR (First Majestic), GGC (Genco), and USA (U.S. Silver). All of these are Canadian stocks folks except Endeavor, and will be found on the Canadian exchanges. Please stop looking for them on the American exchanges. You must own silver bullion. There is even an argument that it would be best to own only bullion and no stocks. However, the stocks are very leveraged and should profit far more than bullion. You must own your bullion. You cannot store it or do anything else with it. If you can’t see it you don’t own it.

"To whom much is given, of him much shall be required." - Luke 12:48. If you are in a position of strength, now is the time for charity and philanthropy. Help anyone to help themselves you can. We already have extensive tent cities all over the country, and they are growing. The Salvation Army and other charities are already overwhelmed. Soon there will be soup lines that will dwarf those of 1929. If you can’t give money try giving of yourself, of your time, of your efforts. Do whatever you can. This is going to be the worst depression the world has ever seen, and it may well hit by Christmas. There is no Road to Recovery, there is no Turnaround, the economy is not “bottoming” in any way.  Notice on the chart below that silver forward rates have fallen from 5% to minus 0.5%.

One tenth of what they were. Backwardization. Again, this has never happened in history. Silver futures have never been cheaper than spot silver. This shows silver supplies are tight. 80% of silver comes from base metal mining. The huge base metal mines, like Rio Tinto and BHP Billiton, are doing badly and producing very few metals. We are almost out of silver, and there is nowhere to get any. Ted Butler says silver is not going to grad-ually rise in price, but skyrocket when the industrial users finally admit they can’t get any. You can only get silver from silver mines. There are only about 50 real silver mines in the world. The seven we talk about are the best for a variety of reasons. Silver stock prices will go up far more than bullion. For example, if a mine produces silver for $12 an ounce,and sells it for $13, they make a mere dollar. If they produce it for $12, and sell it for, say, $20, they now make $8 or 800% more profit, while bullion only went up 54%. This is your chance of a lifetime to see the future and be 100% invested in silver bullion and silver stocks.

Wednesday the 15th is both Tax Day and Tea Party Day. Hopefully all our readers were out in the streets letting the government know we won’t pay any more taxes. Here in Wilmington, NC there were almost 1,000 demonstrators. This is just the beginning.

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