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September Economic Rant -Roger Mason

The looming war in Iran is the most important event in the world, not the collapsing economy. We have over 40 various warships over there, and things could kick off in the morning or next year. Russian Duma Deputy Markov said this would happen, “before the election”. Rusian President Medvedev met with President Ahmadeinejad last month and promised Iran a sophisticated, state of the art S-300 missile system. You didn’t read these things in your morning newspaper on hear them on TV did you? Maybe the Neocons don’t even know yet when they are going to attack. Ron Paul says Congress has already given the green light to it. This will be the worst mistake we have ever made.

McCain has already been chosen as your next president by the Powers That Be. Don’t let that stop you from voting for Bob Barr, the Libertarian, or Chuck Baldwin, the Consti-tutionalist. Please do not contribute to evil by voting for the lesser of two evils. Make your vote count by voting for someone you believe in. McCain is going to invade Iran Pakistan, and God only knows what other countries. He will draft your son and daughter as cannon fodder for his One World Insanity. That’s right, the military draft will be re-instated in 2009. Syria is now off the Neocon hit list, as they wisely partnered up with Russia. Syria will soon be loaded up with advanced Soviet war technology. They know the U.S. is after them, and aligned themselves with the Russians. Bad as that is, the Russians aren’t going to invade them!

The economic fundamentals get worse every day. Do not be fooled by the propped up stock markets, and propped up dollar. Realize the the collapse and bailout of Fannie Mae and Freddie Mac is the worst economic event we have ever experienced.  These were the largest financial institutions in the entire world, and held half of all U.S. mortgages. This socialist bailout will run over a trillion dollars and cost every American over $30,000 personally. The government should have never been in the mortgage business at all obviously, but they held HALF of all of them. Socialism always brings poverty and financial ruin in the end. Only free markets work. The Fannie and Freddie failure and bailout is huge and unprecedented.

Silver collapsed to under $13 and recovered somewhat. This is called a BUYING OPPORTUNITY. You can’t buy silver bullion as there isn’t any for sale. Buy the eight silver stocks we keep talking about. Silverstone (SST), Quaterra (QTA), ECU Silver (ECU), First Majestic (FR),  Endeavor (EXK), Impact (IPT), USA Silver (USA), and Genco (GGC). All are Canadian but EXK. We sold Fury since it was bought out. There are only about fifty (50) real silver mines in the world, but only about eight worth buying. Some are Chinese, some are  hedged, some have mines in Central or South America, some are exploration, some have poor management. There are various and sundry reasons for not owning the others. Your author has gone over every one of them in detail. We own a few others, but would never suggest you take the same risks.

Some “experts” are denying there is a physical shortage of silver. Well, if all the dealers of the world are out of 1,000 oz bars, 100 oz bars, 10 oz bars and the many, many 1 oz coins (“rounds”), then we sure as heck must be out of silver. Only the industrial users, understandably, are getting it. This situation is only going to get worse- and better for us. For the first time in over 2,000 years the world is out of silver. We now have a two tier price for silver- the official price and the real price of about $4 over that. This is wonderful news folks, as this means very soon the industrial people are going to be fighting for it, and paying whatever they have to in order to get it. Always remember you cannot have technology without silver, and you cannot replace it with anything else. The only replacements are gold, platinum, rhodium, and palladium. The COMEX (the largest cache of silver in the world) silver is owned and now basically available. The COMEX is going to default and go out of existence in the near future, as there is no silver for sale to back up the futures contracts. You can invest in Central Fund of Canada (CEC), as they hold massive amounts of physical gold and silver bullion and have a fine reputation. It is better to simply buy the eight silver stocks we talk about. Never buy ETFs or paper silver of any kind or have anyone store it for you. Yes, you can buy small amounts of silver on e-bay if you’re desperate enough to pay $4 over spot. This situation is only going to get worse. Ted Butler predicted all this over eight years ago.

For a year now (September 2007) Economic Rant has been telling you the housing crash is just getting warmed up and has a long way to go. The Case-Schiller Home Index (the gold standard) showed nationwide housing prices are falling at 16% a year on average. Run the numbers. In five years at that rate every house in America would lose 80% of their value. Well, it won’t be that bad, but houses will sell for a quarter on the dollar based on 2005 peak prices and continued inflation. Housing in Las Vegas is falling 29% yearly, Miami 28%, Phoenix 28%, Los Angeles 25%, San Francisco and San Diego both 24%. The housing crash is not even beginning to bottom at the media will tell you. The

U.S. median home price is now down to $212,400 and falling fast. 

Let’s go over the basics again:

Budget deficit is totally out of control. The government is a business like any other business. You cannot keep spending more than you take in and get away with it. Tax revenues are falling badly, and will fall even more as the recession deepens. The American socialism welfare state needs endless taxes. The good news is that we’ll have less government. We really have a $100 trillion deficit with unfunded programs like Social Insecurity, Medicaid and Medicare. That could never be paid off in 100 years no matter what we do. Impossible.

Trade deficit is hopeless. We buy everything, but export less and less all the time. The U.S. used to be the Big Exporter that supplied with world with high technology and food. Now we make useless ethanol out of our corn while people around the world starve.

We won’t drill our own oil. We let China drill our oil of the Florida coast though.

U.S. Dollar is going to 50 cents in the world currency basket. The temporary rise is manipulated by the Federal Reserve prior to the election. You don’t want to hold anything denominated in dollars. No currency on earth has any value anymore. Remember, we have 16% true inflation which is just going to go higher. You must make 16% on any investment just to break even!

Housing collapse has halfway to go. Commercial real estate is following, and will be just as bad. Look how many stores in your town have recently closed. Businesses are failing every day now. It could continue another five years. Hopeless.

Stock market can’t hold 11,000, and will go to 5,000- on a good day. The Dow has to rise 16% a year just to break even. Dump your IRA or 401k and take the tax bite. Buy silver stocks. If you don’t, you’ll starve during your retirement. The S&P 500 has a P/E ratio of 25 to 1 when historically it is less than 12 to 1.

Unemployment is really 14% and not 6% as the media tells you. This will go to at least 25% during the Much Greater Depression.

Derivatives neutron bomb is quietly exploding, and will take down the entire world economic system. We can’t even clearly define what a derivative is. Even Warren Buffet is up to his ears in derivatives while preaching against buying them. There is over one quadrillion dollars in derivatives. This is far more money than all the GNPs of all the countries on earth! More money than six billion people make every year. These are detonating worldwide as you read this.

Iraq war will continue forever under McCain (or Obama). The war in Afghanistan will continue. We have 40 warships in the Iran area, and that will kick off any day. Now we’re after Pakistan(!) for God’s sake. Syria allied itself with Russia so they are now safe from our insanity. Imagine having to go to Russia to save your country!

Immigration has ruined this country, and will continue to ruin it even more. Legal and illegal immigration that is. Latinos reproduce more than anyone, and will take over as the dominant race by 2050, so the U.S. will be Northern Mexico.

Civil rights are out the door never to come back. The Constitution and Bill of Rights were shredded long ago. More and more the U.S. will become an intolerable police state that makes Orwell’s 1984 look like fun in comparison. The great unwashed masses prefer slavery to freedom.

Bank failures could number 100 in the next year. We are going to see hundreds of banks Disappear in the next few years. This will make the Great Depression look like fun.  We’ve suggested putting at least 20 gallons of gasoline away and keeping your gas tank full all the time. Our Strategic Petroleum Stockpile is 1/3 good oil, but 2/3 sour crude which is hard and expensive to refine. We have no refinery capacity folks. We haven’t built a new refinery since 1989, will not upgrade any, and they close regularly. Crude oil without a refinery is useless. We don’t drill the ANWR preserve in Alaska due to the Democrats and some Republicans (your author is a Libertarian and see both parties as useless) even though it may have 200 years of oil and another 200 years of natural gas. This is a mere tiny 2,000 acre speck of wasteland in an area half the size of the United State. ANWR is the size of Los Angeles Airport. There is no energy shortage, and never has been. Stop blaming Big Oil and the Arabs, and blame “your” government. “Your” government is the reason we have $4 a gallon gasoline. We have 1,000 years of coal, but “your” government won’t allow even one SASOL plant. We could have $2 a gallon clear SASOL fuel this year if the government would get out of the way. 
Look at the silver chart for the last eight years. No one complained in July 2005 when silver rocketed up, and more than doubled in a matter of less than ten months. It just fell one third from $21 to $14, so that is a wonderful BUYING OPPORTUNITY.Silver is very volatile and will get even more volatile as the price rises. The only thing to concentrate on is that we are in a strong bull market headed for $200 an ounce and probably much higher. By Christmas we’ll all be happy again. 2009 will be a stellar year for us. We are out of silver folks. Silver bulls have predicting this event for years now. It is not a temporary situation that will be remedied. There are now two prices for silver- the official price, and the real price of about $4 an ounce premium. You can still buy silver stocks very cheaply. Back the truck up and load up on them. Silver is going to $200 an ounce or more, and you can only get silver from silver mines!

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