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September Economic Rant -Roger Mason

Welcome to the first monthly issue of the Young Again Economic Rant. We want our customers to be financially secure and affluent as well as healthy and happy. It is September 3,and the stock market is about 13,000. Gold is about $670 and silver about $12.

The entire U.S. economy is coming apart at the seams. The controlled media, of course, is telling you, “everything is fine”. Nothing is fine! The stock market is a house of cards ready to fall. Just look at the volatility and instability. The housing crash will be the worst disaster America has ever seen. You will see houses selling for a quarter on the dollar within five years or so. The housing crash will take down the stock market. This will completely undo our economy. True inflation is over 11% annually. It may actually be 13% now with the recent massive money injections. Unemployment is double the official figure, and many people, 1) are not reporting being unemployed, and 2) have taken jobs they are overqualified for. The trade deficit has never been this bad and is unsustainable. The budge deficit is totally out of control and the U.S. government was broke years ago. We are 9 trillion dollars in debt and 70% of that debt was created in the last 12 years- all this since since1776. Two hundred and thirty-one years only ran up 30% of that debt. The last 12 years ran up almost 6 trillion in debt. The U.S. dollar is hopeless. There are no good currencies in the world now. Even the stupid Swiss sold their gold. Fort Knox has been empty for decades (they have refused to do the required audit for decades). There are almost $500 trillion (that’s trillion folks) in “derivatives” floating around ready to detonate. We can’t even accurately define what derivatives are, and they have never existed before. The entire GDP (gross domestic product) of the entire world is only $60 trillion, so we have 800% more derivatives than worldwide production! This is prima facie insanity. When these “derivatives” come unglued so will the entire world economy. Warren Buffet has warned that these derivatives are a time bomb waiting to explode.

Even with “only” 11% true inflation the stock market would have to go to about 14,300 next year just to break even. After taxes you would LOSE money at 14,300. It would have to go to 16,000 the following year just to break even. Again, after taxes you would lose money at 16,000. Adjusted for inflation (without any taxes) the stock market has been a consistent loser for a long time now. Adjusted for silver and gold the stock market is a complete disaster. What can you do? Do you own your home and plan to stay there? If the value of your home was cut in half today would you still be willing to pay the mortgage off, or would you walk away and let the bank have it? If you don’t own a home then rent. In five to ten years you will get the home of your choice for a quarter on the dollar (based on peak summer 2005 prices). If you have any doubt of the housing crash please go to www.investmenttools.com and look at the Philadelphia Housing Index and Dow Jones Real Estate Index. Also look at the top six homebuilders such as Pulte, Hovnavian, and Horton. Hopeless. Do you own normal stocks? Sell them all, sell every one of them. Do you have an IRA? If you can’t change your stocks to silver and gold stocks then dump your IRA and take the 40% hit. That’s right, take the 40% hit. If you are in debt just keep paying it off at the lowest rates you can find.

Put every penny you have into silver and gold bullion and silver and gold stocks. This would include such unhedged silver stocks as Quaterra, Excellon, Silver Wheaton, First Majestic, Silverstone, ECU, Capstone, and Endeavor. Unhedged gold stocks would include such ones as Seabridge,Yamana, and Agnico-Eagle. Buy 100 oz silver bars for about $1,300 and one ounce gold Krugerrands for about $690. For high net worth people get 1,000 (about $13,000) oz. silver bars.

Silver went to $50 in 1982. Adjusted for inflation that is about $120 today. Silver is going to pass $100 in the next five years. Gold went to $700 in 1982. Adjusted for inflation that is about $1,600 today. Gold is going past $3,000 in the next five years. (Platinum is already very overpriced at $1,250 oz.) Oil is going to go up, but is much too political
to invest in. Silver is the best investment in the world bar none. Gold is second. Silver and gold are the only real money in the world.

For gamblers go buy COMEX silver futures and put down 25% margin. This gives you four times the profits you would make with bullion with almost no risk. At 5,000 oz. per contract each contract is worth about $60,000 at $12 silver. 25% margin would be $15,000 and you would be almost risk-free. You would make $5,000 every time silver goes up a dollar (and lose $5,000 when it goes down a dollar). At $20 silver your $15,000 investment would be worth $55,000 (eight times $5,000 plus your original $15,000). Silver would have to drop from $12 to $9 to wipe you out- and that isn’t going to happen. (Your author plays at 15% margin but has less than 20 contracts and this is only a game to play for fun.) Don’t do this if you don’t understand commodities futures.

Go to www.kitco.com every day and read the two dozen of so Contributed Commentaries. Some especially good writers are Roger Weigand, Jim Willie, and Richard Daughty. Go to Kitco every week and read the new commentaries. You’ll see the facts the media isn’t telling you. Educate yourself about the economic realities of the world.

Every month a new economic rant will be posted.


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