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Late August Economic Rant -Roger Mason

The fundamentals for silver (and gold) are better than ever. Some of you are concerned that your silver stocks have not done well in the last eight months. Take a good look at this chart. The “HUI” (basket of unhedged gold and silver stocks) always correlates with the price of gold and silver in the long term. A silver vs HUI chart would look almost exactly the same, only more dramatic and volatile. In the short term there are slight anomalies. Late 2003 the stocks lead the metals. Early 2008 the metals lead the stocks. It all works out folks.  Just remember you can only get silver from silver mines. Never forget that obvious fact. Silver is down to the $13.00 area for the final washout before it takes off to $25.00 by Christmas. The stocks are going to outperform the bullion because there is more leverage. There is no better investment on earth than silver and silver stocks. Only silver and gold are real money as defined by our Constitution. 
 

 
 

Iran is still the most important concern of all, not the horrible economy. We have such a massive buildup of various warships in the Iranian area from carriers to submarines. There are over 40 major naval vessels jammed up over there. This is total insanity! We would not have these over there unless we were preparing for war. Both China and Russia have warned they will not tolerate us attacking Iran. Invading Iraq was the worst mistake the U.S. ever made in in 232 years. When we invade Iran, that will be the worst mistake we have ever made. They will pay us back, and make us very sorry for doing this. They will- and should- vaporize an entire American city. They have a horrifying arsenal of bioweapons, including smallpox and contagious plagues. They don’t need missiles to deliver these either. “Our” Congress has already passed two resolutions to illegally blockade the Strait of Hormuz. The Iranians will not tolerate this, nor should they. We have no right to even think about something this stupid. This strait is where are the mideast oil comes from. Congressman Ron Paul has warned his millions of radio listeners that Congress has already given the green light to an Iran attack with ALL options. That includes nuclear first strike! He said this will end in total disaster for the U.S. Ron talks to these senators and representatives daily, and knows what is going on. The only question is will the attack be before or after the election? Put at least four 5 gallon approved cans of gasoline away and rotate them every six months. (Gasoline goes bad within a year.) You would be better off with eight cans. Using five gallons a week this would last you two months. Always fill up when you get down halfway.

Remember the famous German hyperinflation of 1920? The photos of people burning paper money to keep warm and all that? Is all any German citizen had to do back then was simply open their eyes and see the creeping inflation. It doesn’t happen overnight. Then they just had to walk over the border and change all their currency and savings into Swiss Francs, Dutch Guilders, French Francs or British pounds. They didn’t even need to buy silver or gold. Today there are no good currencies. You can’t invest in any other form of paper money. All paper money now is counterfeit “fiat” (by government decree) junk. Only silver and gold are real. Keep reminding yourself of this simple fact.  
 

 
 
Look at the price of silver from 2001. We have been in a strong seven year bull market. This is the best investment you could have made in the last seven years. There is still time. Silver is going to $200 an ounce, and gold to at least $3,000 (15:1 ratio). Yes, silver just corrected over one third from $20.70 to about $13.00 now This is nothing new. Back in May of 2006 it corrected one third from down to $9.50. Then it took off. It will take off again very soon.  Silver has been in a rocky, volatile, and powerful bull market for seven years now, and has a long, long way to go.

The housing crash is only half over folks, and has another half to go. We have a full year of unsold homes, and that is growing all the time. Richard Syron is the CEO of Freddie Mac and said, “there is no end in sight for the housing collapse”. Even CNBC admitted this week there is no way for the housing crash to end before first quarter 2010. The government housing bailout will cost you the taxpayer. This is another socialist scam that will just make things worse in the end. You will see houses sell for a quarter on the dollar from Summer 2005 peak prices. In a few years you can sell your silver and buy a million dollar mansion for $250,000 if you want. 60% of people who bought houses in the last five years are already under water. Their houses are worth less than the mortgage and falling all the time. And the water is getting deeper every day. Eventually all these people are just going to give the house back to the bank and walk away. Who in their right mind is going to pay, say, $500,000 for a $250,000 house when they don’t have to?

For all of you who signed the Drill Here, Drill Now petition, we got two million signatures already. Both McCain and Obama listened. Mc Cain on national TV said, “We’re going to drill here, and we’re going to drill now”. Obama backtracked and said, “we need to use domestic oil”. Please go to www.americansolutions.com and sign the petition. if you haven’t already. It takes one minute and is idiot-proof. Even that stupid Marxist cow Nancy Pelosi has given up on stopping us using our own oil.

The U.S. Geological Survey says the Artic area may contain a full one fifth of all the known oil on the planet. The Russian Northern Slopes, and the islands of Indonesia, are believed by scientists to contain more oil than the Middle East. We have 200 years of oil and natural gas right here in the U.S., and this is not merely in ANWR. There is no oil shortage, no energy crisis, or Peak Oil. We have plenty of energy. Windmills, solar, and biofuels and are silly liberal fantasies. Fuel cells are decades away.

You need to realize that Freddie Mac and Fannie Mae were the largest financial institutions in the world. The biggest of all. They are totally broke, and YOU are paying the bill. Wake up and smell the money. Every American man, woman, and child will cough up about $30,000 apiece to bail them out. We don’t have a mere $10 trillion national debt. We have a $100 trillion debt, and it can’t be paid off. No one is going to get their Marxist Social Insecurity, Medicaid, Medicare, Unemployment or anything else. This is why we’re going to have the Much Greater Depression in 2010 or 2011. This is the fifth major depression since 1830 the U.S. has had. It is normal, cyclical, and just the natural course of history. Don’t kid yourself that it isn’t going to happen. It’s been 80 years since the last one. It’s happening NOW! Finally other countries like Russia, China and Japan have realized that buying U.S. treasuries (T-Bills and T-Bonds) is losing proposition. Sales have fallen badly and continue to fall. Soon we won’t be able to give away our useless treasuries and the economy will get much, much worse as that happens. The Fed may continue to lower interest rates while printing worthless money as fast as they can. This is a recipe for disaster of course.

Please do not waste your vote on the lesser on two evils. When you vote for evil you commit an evil act, and really waste your precious vote. Yes, vote for Bob Barr in the 30 states that allow you to vote for the Libertarian Party.  Or vote for the Constitution Party. In the other 20 states just don’t vote. Why should you? Not voting is better than supporting the Lesser Evil. At least you didn’t contribute to it. Never support evil.

The U.S. standard of living will drop about one third, and is dropping as you read this.

We’ll have a crappy standard of living like Europe. People will wear the same clothes year after year, won’t eat out in restaurants, or drink in bars, we’ll take public transportation, we’ll rarely fly anywhere, we’ll eat cheap filling food, we’ll drive little plastic pretend automobiles like Tata’s and Smart Cars. We’ll live in small apartments, and generations of families will share houses because they have to. Life will suck here like it does in all of Europe today. Did you really think the Germans, Swiss, English, and French live well? Think again. Go to Europe and see for yourself. That’s your future!

Europe choose socialism over freedom a long time ago. Remember 100 years ago England was the most powerful and richest country with the largest army. “England ruled the waves!” Now it’s a third world backwater full of immigrants and dimwits.

You’re seeing a daisy chain of bank failures kick off. Did you think the FDIC “insures” your deposit? Get real! They only “insure” 1% of all deposits, and that money is almost used up by the banks like IndyMac that already went under. Get your money out of banks, out of the stock market, out of real estate, out of bonds, CD’s, T-Bills, etc. All your money should be in silver bullion (if you can find any) and silver stocks. The second choice would be gold and gold stocks, but they won’t do nearly as well as silver. You’ll see 150 to 300 banks fail in the next year, including the biggest and “best”. Most banks now are not only bankrupt and broke but very, very deeply in debt. This will make the bank failures 80 years ago look like fun. The good news is that real inflation is down to “only” 16% based on M3 printing. That means you have to make 16% on your invest-ment every year just to break even.

The dollar and the stock markets are both propped up by the government- at your expense of course. This will soon end. All manipulations are temporary and end badly.

The government is also manipulating the price of gold and silver. Tax revenues are falling badly, which means the Great American Socialist Dream cannot function. You Need extortionate taxes to support the endless socialist programs and government assistance. Tax revenues will continue to fall, which means less and less government in our life. California is completely broke and there are 49 states to follow.

On the surface the Georgian war seems to be of the utmost importance. The price of oil has yawned on this event, and so should we. Russia is still the only the second biggest world bully after the U.S. Pakistan’s Musharraf is being forced to resign. The NeoCons want to invade Pakistan after they invade Iran! Why on God’s earth are we going to invade Pakistan? Syria is still on the list. Mc Cain- your next president- will institute the military draft for your son and daughter after he takes office. McCain has promised an endless invasion of sovereign countries. He has chosen Tom “Homeland Security” Ridge as his vice president! Bush on steroids. Your son and daughter both will be drafted in 2009.

“Senile in Omaha” Buffet is still losing money as fast as he can with his famous Berk-shire Hathaway stock. Go look up BRKA and BRKB yourself to see that he is losing 20% a year (adjusted for 16% inflation). Actually his stock is down 15% just in the last 60 days. That’s right folks, the world’s richest man is hemorrhaging. People still think he walks on water, and he is quoted as if he is some kind of human oracle. Are they blind? Buffet is loaded with derivatives, and is hopelessly under water as they unwind every day. Strangely enough, he warns the world never to invest in any derivatives. CNBC regularly  trots him out to pontificate, as does the rest of the media. Go figure. If Buffet wasn’t senile he would have put all his money into actually owning major silver and gold mines. He has far too much money to try and own bullion or stock shares. That’s right, you can make far, far more money than Warren by investing in silver.  The stock markets are hopeless and are being propped up by the government. McDonalds is one of the strongest stocks in America, but is failing in the last month. Target is one of the leading discount retailers, and is also failing. Adjusted for inflation WalMart is doing very badly. All the auto makers are bankrupt, and it is just a matter of time before they’re out of business. The entire banking industry is history. People just can’t continue to buy things they don’t need with money they don’t have. Again, you have to make 16% a year, or raise your gross sales 16% a year, just to break even today. True 16% inflation.

For all you readers who bought silver stocks and have temporary losses, please go to sites like www.kitco.com and start reading. Silver is very volatile, and will get even more volatile in the future. You see the chart on the second page. Educate yourself. Read the websites of Ted Butler (www.butlerresearch.com), Jason Hommel, SilverSeek and others. You are not margined, so these temporary losses are just that- temporary. We are out of physical silver, and that situation is only going to get worse (and better for us). You can only get silver from silver mines, and good silver mines are the best investment on earth. Buy and hold and add on dips. This is the last final washout before silver (and gold) take off. There is no better investment on earth than silver. $13.00 silver is insane, especially since we’re out of physical silver. Please go to www.silverstockreport.com and hit “all articles”. Read Hommel’s August 15 article, “What the Silver Shortage Means”. Buy value and hold for the long term and add on dips.

Baron Rothschild used to say, “buy when there is blood in the streets”. The situation in silver today is exactly what he was talking about. Buy when the price is down and people are discouraged. Buy when the crowd is not buying. Back the truck up and buy as much silver and silver stocks as you can. Only silver and gold are real money.

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