Welcome to Roger's Economic Rant
May Economic Rant -Roger Mason
The housing collapse has just begun, just gotten started. This is the nail in the coffin for The American Dream. Eli Broad co-founded KB Homes (the 5th largest home builder). He said on Bloomberg TV that we’re, “not anywhere near a bottom.” Robert Shiller, the co-founder of the Case-Shiller Home Index said the same thing. A CEO of Freddie Mac said we have 2/3 to go! One half of people who bought homes in 2006 are all under water. They will walk away and give the keys to the bank. The Wall Street Journal just did an editorial “The Housing Crisis is Over”. Yes, they did. The new media mantra is, “no recession, and the worst is behind us.” They keep repeating, “the worst is behind us”. The worst is ahead of us! We’ve been in a recession for months, and it just gets worse every month. Depression in 2010-2012. The home builders are decimated. This will destroy the house-of-cards stock market. This temporary bear rally for the DJI will soon end in disaster. Dow Theory has gone into neutral, so a temporary rally could occur, but it won’t last. Adjusted for inflation, the DJI should be about 22,000 just to break even. 13,000 is a total loser. Look at the fundamentals, and look at the big picture. 72% of of Gross Domestic Product comes from consumer spending. There are now more Government Jobs (22,385,000) than Goods Producing Jobs (21,618,000) in the official stats. This is insane. Consumers are broke. Their credit cards are maxed out. Americans used to produce, manufacture, make things, not just mindlessly buy things they don’t need with money they don’t have. The continuing housing collapse will take down the stock markets. This quarter point rate cut by the Feds to 2% is the last one you’re going to see. From here rates are going to go up, and keep going up to match the true 18% inflation we have. Let’s take a look at Starbucks (SBUX). Six years ago it was $36. With 10% basic inflation that means it should be $64 today just to break even ($40, $44, $48, $53, $58). It is $16, so it has lost 3/4ths of its value. General Electric (GE) is the largest conglomerate in the entire world. Five years ago their stock was $28. Adjusted for inflation it would have to be $45 today just to break even. It’s $33 and looking dismal. WalMart was $52 five years ago, should be $83 now, but is a mere $57. WalMart is in huge trouble due to rising costs and you’ll hear about this soon. They cancelled all plans for new stores. Dodge, K-Mart, Disney Store, E-Trade, Old Navy, XM Radio, Countrwise, Circuit City, Gateway, Vonage, Yahoo, and Motorola are all going under. Did CNBC or CNN tell you that? The Dow Jones has a price/earnings ratio of 57, when it should be about 12. At 13,000 it would have to go to over 15,300 by May of next year just to break even. After taxes on your illusory “profits” you would still lose money. Even if it was still at 13,000 in May of 2009 you would lose 18% due to real inflation. The government doesn’t even publish M3 (counterfeit money printing figures) anymore because they are trying to hide real inflation. To monitor M3 go to www.shadowstats.com. Guess what two businesses are thriving? Check cashing services ($40 billion a year) and car repossession. Ain’t that great?
Oil can and will do anything. The coming attack on Iran could happen any day- or months from now. On May 15 there is a huge buildup of U.S. warships off the Iranian Coast. The Washington Post on April 26 said, “The Pentagon is planning for potential military courses (plural) of action against Iran”. That’s an exact quote folks. Iran is the 2nd largest oil producer in the world. Hillary said she will vaporize Iran if they attack Israel under her command. With Admiral Fallon out of the way, Admiral Mullen, Commander of the Joint Chiefs of Staff, can’t wait to invade Iran along with Condi Rice, Robert Gates, Dick Cheney and the rest of the NeoCon crowd. Middle East conflicts are none of our business. The Founding Fathers said that, “friendships with all, alliances with none.” We should bring the troops home from all 120 countries they’re in.
The oil price is not determined by supply and demand, but by politics. Stop blaming Big Oil and the Arabs for the gas prices…BLAME YOUR GOVERNMENT! The American government caused these prices with this insane Iraq war and their Marxist energy policies. The gold/oil ratio is now only 7 to 1. It should be about 20 to 1. Gold will take off. We have a mere 149 oil refineries, haven’t built one in 30 years, and aren’t building any new ones. We won’t use the oil in Alaska. We won’t convert coal to fuel, even though you could do that for $55 a barrel. That’s $2 gasoline at the pump for the next 200 years. Plus 200 years of natural gas. The governor of Texas says we have 60 years of oil right here in the U.S., plus another 60 years of natural gas. The governor of Montana wants to open SASOL plants, but your government won’t let him. America runs on coal, but we won’t even build coal power plants because of the liberals. A very strange thing has happened… suddenly the media and CNBCs Minister of Disinformation Jim Cramer have come out against ethanol! Charlie Munger (Buffet’s partner) said ethanol is the stupidest idea he’s ever heard. Very strange indeed, since YOUR tax money pays for this insanity. It takes more energy to make ethanol than you get back. Thirty countries are starving to death, and we’re wasting corn to make overpriced car fuel.
Silver is under $17, but you can’t buy any. The media told you about the rice shortage, but not the silver shortage. There is no silver unless you have $90,000 to buy 5,000 ounces from the COMEX. That, too, will end soon. While there are 134 million ounces on the COMEX now, only 43 million MAY be available. That’s less than $750 million.
That is ONE EIGHTH OF AN OUNCE for every American! A pittance. The other 91 million are registered (owned). There has never been a silver shortage in the history of the world. This is the first. Take every dollar you have and buy the silver stocks we’ve been ranting about for months. QTA, SST, ECU, FR, FUR, EXK, IPT, GGC and USA. You can only get silver from silver mines, and there are only about a dozen worth talking about out of the mere 50 that exist. When prices fall like this it is called a buying opportunity. Later this year you are going to look at these stock prices and regret that you didn’t sell your house and car to buy more. Silver is going to $25 this year and gold is going to $1,200. There are eight banks that are temporarily manipulating the silver price by shorting more silver than exists on the face of the earth. They are short 360 million ounces of silver. This kind of blatant manipulation has never happened in history This will end soon and the COMEX may close due to lack of silver. It is now unknown how much of the COMEX silver is privately owned and not available. Look for $25 silver in 2008.
“Senile in Omaha” Buffet sold his silver. He’s on record as saying he hates gold. Instead of buying silver mines, he bought a chewing gum company for $23 billion dollars! You heard that on the news. His famous Berkshire Hathaway stock can’t even keep up with inflation, much less make you a profit. His (BRK.A and BRK.B) stocks fell 10%, and he lost 1.6 billion in just 90 days. He just had a meeting of 30,000 shareholders, and had to admit their profits just fell TWO THIRDS the first quarter of this year. He warns against the derivative neutron bomb, but he’s loaded with them! He can’t even follow his own advice. Go figure. He’s always been a limousine liberal. His wife, Susie, left her billions to left wing charities. He’s on the board of the Washington Post. He’s just a pitiful, senile old man who put $23 billion dollars into a chewing gum factory rather than silver mines.
He lives off junk food and prescription drugs at 77. If Buffet can’t make money in the stock markets who can? His moron investors revere him. You mean no one told them the SEC is investigating him for fraud? Fact.
Don’t forget there are $700 trillion in worldwide derivatives and the banks own $165 trillion of them. The entire GDP of the U.S. is only 15 trillion. These are coming unraveled as you read this.
Do you have a pension of any kind? Well, you can forget that. The private pensions are generally completely underwater and unfunded. Government pension? That will be destroyed by inflation. Social Insecurity? You’re kidding, right? That was broke decades ago. Nothing but another socialist pyramid scheme. Do you still have an IRA/401k? Then convert it to American silver stocks or cash out. That’s right, take the 40% tax bite and invest the 60% in silver stocks. All currencies are useless including the Swiss franc. The U.S. dollar index is now 73 cents and falling. The dollar is no longer the World Currency. There is no gold in Ft. Knox. We are supposed to have 5000 tons (130 billion dollars at $900 gold), but probably have about 1000 tons. It was taken out in 1967 by President Johnson to support the dollar. There has been no required audit of Ft. Knox in 60 years. Federal law demands this be done every ten years, but it is never done because there is no gold to audit. Some fake audits were done to placate the public. Gold was forcibly confiscated in 1933 and was ILLEGAL in America until 1974. It will be confiscated again. Silver has never been confiscated as it is an industrial metal. Google “Ft. Knox is empty” if you want more proof. More evidence the dollar is worthless Monopoly Money.
America, where too much is never enough. When you go in WalMart you always see a variety of obese brood sows pushing carts overloaded with junk food and garbage. Buying things she doesn’t need with money she doesn’t have. She takes all this out to her 6,000 pound gas guzzling SUV with the pink Breast Cancer and yellow Support our Troops ribbons. Like she’s doing anything for either. Well, she is disappearing and will soon be extinct. America, where one third of everyone is clinically obese. Where we eat twice the food we need. Where one third of our children- our future- will grow up with diabetes. 5% of the world population uses 25% of the energy. We only manufacture 12% of what we use. Only in America folks, the biggest debtor nation in the world, bar none.
Tax breaks for the rich LIE. Did the media ever tell you that the top 1% of Americans (like your poor old author) pay 39.4% of all taxes? Did you know that? The bottom half of taxpayers pay a mere 4.6% of all taxes. The top half pay 95.4% of all the taxes. That’s Marxist socialism plain and simple. Just remember that one- the top 1% pay almost 40% of all your taxes. The top half pay over 95%.You’re welcome.
Next year you’ll see half the airlines, half the airplanes, and half the flights, but double the fares. The airline, trucking, cruise, railroad, shipping, and other industries cannot operate on $100 oil, much less $150 or $200 oil. Carnival Cruises is hemorrhaging.
Las Vegas has always been a very accurate barometer of the economy. It has also been recession proof. Somehow people will gamble, eat and drink even when they’re broke. Las Vegas is suffering severely. The famous Tropicana is bankrupt. Conventions are not coming to town. People just cannot afford to go there. Even with four star hotels at $69 on The Strip and $49(!) downtown they just don’t have the money. This will be the end of Las Vegas as we knew it. Soon you’ll see fantastic bargains in a desperate attempt to survive. It won’t work. Another American tradition down the toilet.
The federal budget is $2.8 trillion. Our unpayable deficit is $5 trillion. We also have $55 trillion in unfunded liabilities like Social Insecurity, Medicare, etc. Debts are always resolved one way or another. We’ll have an outright depression in two to four years.
Folks, you do not have a choice as to your investments. Silver (and gold) are the only choices on the planet. No currency has any value. No stock market has any worth, especially “emerging markets” like China, India, and Brazil. All real estate is falling. The price of oil is politically determined. Platinum is already pricey. Silver is a much better choice than gold, so there is only one good investment on earth- SILVER!
A very strange thing happened on May 7. Jim Cramer, CNBC’s Minister of Disinformation, started touting real gold stocks like Agnico Eagle and Yamana.
First he tells us ethanol is a scam, and now he is finally giving sensible advice. He called his show Cramers Gold Rush. Go figure.
Social Insecurity has always been a doomed Ponzi scheme. Every year the checks buy less And less. The Social Insecurity fund was broke decades ago and they have been Robbing Peter to pay Paul. Peter is broke. 87% of Americans over 65 will depend on this for the great majority (71%) of their daily needs. That means almost 9 out of 10 Americans will be going broker and broker every month until they can’t eat anymore or heat their homes. It’s their own fault for depending on Big Government for their retirement. You’ll still get a check, but every month it will buy less and less until it won’t buy much of anything. 9 out of 10 people over 65 are going to be cold and hungry.
McCain and his evil, harpy wife will be president in seven months. Obama Hussein (his real name) will not choose Hillary as vice president. Too many people died mysteriously while Bill was president. Don’t vote; the election is a fraud. Your vote doesn’t count. Don’t kid yourself. Mc Cain has been chosen by the Powers That Be and that’s the end of the discussion. He is now being privately prepared to take over. He will finish turning this country into a police state and part of the One World Order. Buy silver.
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