Monday, May 23, 2011

Major Inflationary Spiral

May 2011 Issue #85
Inside this issue ...
eight inflationary forces. 
of life and most widely traded commodities. 
Why the U.S. is getting hit by no less thanMy price projections for the basic necessitiesUpdate on core gold positions, and more!
In last month’s issue, I showed you how the dollar was
sitting on the edge of a cliff and how its long-term bear
market, which will soon accelerate, will send the U.S.
economy into one of its worst inflationary spirals, ever.
I also told you that in this month’s issue, I would show
you how high and how far prices can go for some of
the most widely traded commodities, and for the basic necessities you
consume each and every day.

Minimum Price Targets by 2016 For Select
Consumables And Commodities

Projected %
Item Current price by 2016                                      %Change

Unleaded Gasoline $3.94 $7.00                                77.6%
Folgers Coffee $3.58/lb. $15.40                                330.2%
Bananas $0.69/lb. $2.30                                            233.3%
Idaho Potatoes $0.80/lb. $1.81                                  126.3%
Land O’Lakes Butter $4.18/lb. $14.38                      244.0%
Large AA Eggs $1.89/dozen $3.31                           75.1%
Oscar Mayer Bacon $6.99/lb. $16.86                       141.2%
Milk $1.85/quart $5.50                                                197.3%
Bread $2.59/loaf $15.09                                             482.6%
Hershey’s Chocolate bar $1.55/1.2oz. Bar $7.47    381.9%
Corn $7.57/bushel $36.58                                          383.2%
Aluminum $1.25/lb. $4.25                                           240.0%
Copper $4.65/lb. $7.08                                               52.3%
Cocoa $1.93/lb. $11.32                                              486.5%
Gold $1,505/troy oz. $2,441                                       62.2%
Oi l $100/bbl $185                                                       85.0%
Palladium $859.30/oz. $3,000                                   249.1%
Silver $34/oz. $137.87                                               305.5%
Wheat $9.01/bushel $52.51                                      482.8%
Soybeans $14.33/bushel $62.12                              333.5%
Sugar $0.40/lb. $2.49                                                 522.5%
Tin $15.08/lb. $24.91                                                  65.2%

U.S. Economy On Verge Of
Major Inflationary Spiral

Wednesday, May 18, 2011

U. S. debt rated C - S&P, MOODY'S, FITCH LYING

U. S. ranked 33rd among 47 nations.
Weiss ratings just shook up the cozy world of credit. Smashing the lock on sovereign debt ratings held by Standard & Poor's, Moody's Investor service, and Fitch ratings. Weiss just announced their own ratings. The Weiss rated U. S. debt 2 notches above junk. Primarily because of large deficits.

Monday, May 16, 2011

Unemployment is 20%

Shadow Stats – Unemployment is 20%

June 9, 2009
Shadow Stats is reporting that the Unemployment rate in the United States is at 20% if measured like it was in the 1930′s. Meaning for an apples to apples comparison, we are in the year 1933, with 1934 being the worst year at 25%.
Many people view the Shadow Stats economists as more “real” than the fudged government numbers that drop counting the unemployed as unemployed when their benefits run out. Shadow Stats also counts the former Banker that was forced into a minimum wage part time job at McDonald’s as unemployed, whereas the government accounting states he is employed now.
Even though his salary went from $10,000 a month to $500 a month and is facing foreclosure.
The fact is that the unemployment rate is at about 20%, already at great depression levels circa 1933 and with a completely valid potential to reach the depression level of unemployment.
To be honest, the worst of the great depression came at that time, and from that point moving forward we entered into an economic recovery, but even during the recovery unemployment was still staggering.
So you have put this in perspective, if unemployment was 50% one month and the next month it’s at 49%, you are in some sort of recovery… but try telling that to the 49% of the people looking for a job.
Now you know how the government views a recovery..

Wednesday, May 11, 2011

Obama's Assault on South Carolina Jobs

by Newt Gingrich
Throughout the 2010 campaign, in this newsletter and elsewhere, I kept returning to a simple refrain to explain the intractability of America's economic woes: job killing policies kill jobs
This equation made sense to the American people. Amidst a bad economy sparked by the financial crisis, the Democrats had passed a $787 billion big government boondoggle, a massive government takeover of healthcare, and threatened to raise income taxes and a new tax on energy.  The American people understood that the natural resiliency of the U.S. economy had been damaged by the Left's big government ambitions and made the Democrats pay at the polls.
Despite a historic defeat in the 2010 elections, however, it is clear that President Obama and the left wing coalition he leads are determined to ignore this lesson. 
The latest job killing effort by this administration comes from the National Labor Relations Board (NLRB), which has filed a frivolous and devastating complaint against the Boeing Company.
It is frivolous because the complaint is unprecedented in the 76 year history of the National Labor Relations Act. 
It is devastating because the complaint puts thousands of jobs in South Carolina at risk.
Moreover, if this complaint is successful, the precedent set could prevent millions of jobs from being created throughout the United States, as entrepreneurs and businesses decide whether to invest in our country…or outside it.
Suspicious Timing
In October 2009, Boeing decided to open a new production facility in North Charleston, SC to meet the growing demand for its 787 Dreamliner airplane.
The decision came after months of negotiations with the machinists union leadership at Boeing's main production hub in Puget Sound, WA.  Since 1995, there have been five work stoppages in the Puget Sound plant. The most recent strike, in 2008, lasted 58 days and cost the company $1.8 billion. 
Still, Boeing negotiated in good faith with the union leadership for the Puget Sound facility to try and find a way to open the new factory there.  In exchange, Boeing wanted a ten year moratorium on strikes so the additional capacity upon which the company was about to spend billions of dollars would be a sound investment.
Boeing and the union were unable to reach an agreement so the company looked elsewhere.  They eventually settled on South Carolina, which is one of the twenty two “right-to-work” states in our country where workers cannot be forced to join a union. 
The complaint filed last month by the NLRB on behalf of the machinists union alleges that Boeing located the new facility away from Puget Sound in retaliation for the 2008 strike, which is illegal under the National Labor Relations Act.  It makes this accusation despite the months Boeing spent negotiating with the union to try and reach a deal to open the new facility in Puget Sound, and despite the fact that there is a clear legal precedent that allows companies to consider the impact of future strikes when deciding where to open new facilities.
It is the timing of NLRB's complaint, in fact, which seems retaliatory in nature, not Boeing's business decision.
The complaint comes a full seventeen months after Boeing announced the location of the new facility and thirteen months after the union leadership first asked NLRB to look into the issue. 

Boeing has already begun construction of the new facility, hiring over 1000 people in South Carolina and investing $1 billion. This complaint puts all those jobs created and all that money invested at risk.

This action by the NLRB is even more disturbing when you consider that it is being led by Lafe Solomon, the acting General Counsel for NLRB, who still needs to be approved by the Senate.  He only holds his position because of a recess appointment by President Obama.

The president also used a recess appointment to place Craig Becker on the NLRB after Becker was rejected by a Democratic Senate in 2010. 

As a recent Daily Caller article discovered, Becker's past writings reveal a disturbing socialist bent that bear directly on the Boeing complaint.

Becker has previously written that the federal government should control and constrain the freedom of companies to direct their capital and resources as they please in order to rig labor negotiations in favor of unions. Becker has also written that the NLRB possesses the power to impose card-check policies on the nation without an act of Congress.

An Assault on the Right to Work

It is clear that President Obama is packing the NLRB board with left wing ideologues as a payoff to his union boss allies, so that the fix is in with regard to this case and others like it.

The move is consistent with an ongoing pattern in the Obama administration, in which they use the apparatus of big government to reward their allies and punish their opponents. 

South Carolina Senator Lindsey Graham was exactly right when he characterized the complaint as “one of the worst examples of unelected bureaucrats doing the bidding of special interest groups that I've ever seen.” 

If the NLRB is successful in overturning Boeing's perfectly rational business decision, it puts tens of millions of future jobs in all 22 right-to-work states in jeopardy.  It would make it effectively impossible for U.S. companies to open new facilities in right-to-work states if they are currently located in one that allows forced unionization.

Global Competition Is a Fact, Not a Theory

The Left simply cannot come to grips with the intensity of global economic competition and the demands it places on U.S. economic policies. 

This blindness to reality was on display in the reaction to a recent USA Today article showing that Americans paid less taxes in 2009 than any time since the 1950s.  The article has been used by the Left in recent days as a counter to the conservative case that tax increases would be devastating to any economic recovery, possibly driving us back into recession.

Their argument shows the Left is completely missing the point.  In the new global economy, America is not competing against itself from 1990, 1970 or 1950. 

We are competing against Germany, which today has only a 15% federal corporate income tax (and recently hit a 19-year low in its unemployment rate), compared to a 35% corporate tax rate in the U.S., the highest of any central government in the industrialized world. 

We are competing against Singapore, which has a capital gains tax of zero, compared to a potential 35% capital gains tax in the United States.

We are competing against Switzerland, which caps the federal personal income tax rate at 11.5%. 

We are competing against Canada, which just last week reelected an incumbent Conservative government that has pledged to cut the corporate tax to 15% and lower the personal income tax for families – all while planning to balance its entire budget by 2015.

Consider the case of the New York Stock Exchange.  This icon of American free markets is now owned by a Dutch holding company. 

That $10.2 billion takeover was driven by simple economic reality. As Walter Gavin, Vice President of Emerson, explains, the Netherlands has a tax code which makes it more profitable for the NYSE to be owned by a Dutch company than by an American one.  In fact, according to Gavin, the United States lost almost forty companies to Amsterdam in 2010 alone thanks to their more business friendly environment.

This brings us back to President Obama and his union allies' assault on South Carolina jobs and all twenty two right-to-work states in America.

If the NLRB's complaint is successful, U.S. companies will simply increase their flight of capital and new facilities to places outside the United States.  In the midst of a struggling economy, it will make it harder for businesses to operate in America, not easier. 

The union bosses and their political allies in the White House aren't going to save union jobs by attacking right-to-work states.  They'll simply prevent new jobs from being created here in America.

Drop the Complaint, Withdraw the Nominees

In recent months, following his defeat at the polls in the 2010 elections, President Obama had been making overtures to the business community. The hiring of Bill Daley as Chief of Staff was supposed to send a signal to America's entrepreneurs and businessmen that he is trying to shed his anti-business image. 

This action by his appointees at the NLRB will throw all that effort out the window. 

The NLRB is an independent agency of the federal government, which means President Obama cannot order it to stop.  However, if President Obama really wants to convince American entrepreneurs their government is not actively hostile to job creators, President Obama should speak out against this destructive complaint.

More importantly, he should withdraw the nominations of Lafe Solomon and Craig Becker from consideration for Senate approval, which would effectively stop this complaint in its tracks.

Again, it all comes down to the simple fact that job killing policies kill jobs.  The president has a choice whether to allow this job killing policy to continue. 

The American people are now watching to see if President Obama values job creation more than he does paying off his union boss allies.

Your Friend,

Tuesday, May 10, 2011

Police state coming near you

All those billions of dollars spent to prepare law enforcement and the US military for civil unrest are not going to waste.
This past week, police converged on Western Illinois University (situated in a town of about 20,000 people) as students engaged in their annual block party. Unlike previous years, however, this year a decision was made to respond with riot gear, tear gas, sound weapons, intimidation and mass arrests.
The most curious issue surrounding the response is that students, by many accounts, were not engaged in any significant unlawful behavior (open containers, maybe some intoxication and tomfoolery) and the block party was behind held, for the most part, at private residences.
Bored with the usual, local and surrounding police forces decided to deploy officers in full riot gear – at least a hundred of them. They were undoubtedly anxious to play with their new federally funded non-lethal anti-personnel weapons, as evidenced by their use of everything from LRAD sound weapons to tear gas to disperse and aggravate the crowd.
The events that unfolded at WIU are just the latest in a trend we’ve seen develop around the world in recent years. We’ll note that the governor of Wisconsin, when recently faced with mass protests, responded similarly by putting the National Guard on alert within hours of demonstrators gathering in the Capitol.
We would like to say that in the very near future large-scale police response will be the norm, but this is not the case. The future is now. Block parties, protests and any gatherings of large groups of people are already seeing a strong storm trooper presence and being dealt with swiftly once the order is given.

Monday, May 9, 2011

Goodbye Obama and non Supreme Court appointees that we are stuck with

We have not had a Social Security increase since Obama took office.  :Yet, he has billions to lend Columbia to build refineries that we should be building.  He bails out  banks and insurance companies and leaves the seniors to do without.  Did you all know the FED which is largely responsible for the mess we are in aside from the "give everyone a mortage" fiasco by Fannie and Freddie.
            I say do away  with the FED which is not a government agency but is largely owned by banks, insurance companies and very rich people.  Do away with Fannie and Freddie so they can't continue their give away programs that will lead to another round of housing disaster.  Remember these past two years of struggling while Obama spent money flying to NY for a dinner theater night out.  Remember him at election time in 2012.  Don't buy into the dem bull that Ryan wants to do away with Medicare and Medicaid, he is trying to save it.  By the By did you know your medicare tax dollars go by funny accounting into the same budget as the rest of the government money flowing into the general fund and did you also know that it is the practice of governments from small to Washington to take any extra money from one line item, move it to another line item near the end of the budget year and spend it?  They play fuzzy math with the numbers and the way it shows in the budget but bottom line we pay for social security, medicare and medicaid which most of us never would use and they steal the money for buy votes programs and screw us over.  Vote these bums out.

Friday, May 6, 2011

The Value of REAL Sovereign Debt Ratings

The Value of REAL Sovereign Debt Ratings

Mike Larson | Friday, May 6, 2011 at 7:30 am
Mike LarsonIf there’s anything we’ve learned about the major ratings agencies, it’s that they’re almost ALWAYS a day late and several bucks short.
In the early 1990s, they failed to downgrade or adequately warn about ailing life and health insurance companies … until it was too late.
In the early 2000s, they didn’t cut Enron’s debt ratings until days before the company went broke.
In 2008, Moody’s actually rated Bear Stearns “A2″ on the very day the firm failed! Standard & Poor’s gave it an “A.”
Just a few months later, when Lehman Brothers crumbled, they screwed up again! On the very morning the giant investment bank collapsed, Moody’s still gave it a rating of A2; S&P gave it an A; and Fitch gave it an A+!
Finally, we all know that the agencies blessed billions and billions of dollars worth of crappy mortgage securities with tip-top AAA ratings. Those securities subsequently imploded, helping precipitate the worst credit crisis in the history of the U.S.

Saturday, April 30, 2011


  1. philipat Says:
  2. More completely:
  3. “A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship. The average age of the world’s greatest civilizations from the beginning of history has been about 200 years. During those 200 years, these nations always progressed through the following sequence:
  4. From bondage to spiritual faith;
    From spiritual faith to great courage;
    From courage to liberty;
    From liberty to abundance;
    From abundance to selfishness;
    From selfishness to complacency;
    From complacency to apathy;From apathy to dependence;
    From dependence back into bondage.”
  5. Hmm, wonder where we are in the cycle?

Thursday, April 28, 2011


On Easter Sunday the Obama family attended a service at Shiloh Baptist church led by yet another radical preacher, Rev. Wallace Smith. 

The Rev. Smith had this to say about what his Grandson would say if he could talk "I am here. ... They tried to write me off as three-fifths of a person in the Constitution, but I am here right now. ... I am not going to let anybody stop me from being what God wants me to be."  The famous line from Obama’s mentor, Jeremiah Wright, “No, No, No not God bless America God d—n America,” would fit in nicely after that little bit. 

My mom always told me “you can tell a lot about a man by the company he keeps,” and Obama has a consistent pattern of surrounding himself with radical American haters.  Whether it is his personal life with the Reverends Wright and Smith and the terrorists,  Bill Ayers and Bernadine Dorn, or his appointments Eric Holder, Van Jones, and the like, Obama has made it clear that he is comfortable in the company of radicals.  Why would somebody so blessed by America associate himself with those who constantly seek to tear down America? 

Our team here at is unabashedly pro-American.  We love our flag, our freedoms, and the Constitution.  We hold our hands over our hearts during the Star Spangled Banner, and we will never apologize for American exceptionalism! 

Thursday, April 21, 2011

Fight the Corrupt Public Employee Unions

Western Representation PAC is committed to fighting government corruption in every form. Unfortunately, the most pervasive form of corruption involves public employee unions. Public employee unions negotiate with politicians for bloated contracts. Then they use the taxpayer money they receive in those negotiations to influence the elections of the very politicians who can give them even more money! In any other circumstance, this would be called extortion.
With federal, state, and municipal governments suffering record-level deficits, we can no longer afford to stand by and accept the status quo. With your support, we will stand with our leaders who make the tough decisions necessary to rein in spending and restore fiscal sanity. Please check out our blog, get involved, or even make a donation to help us fight the corrupt public employee unions

Wednesday, April 20, 2011

Welfare Reform Tackles Debt Crisis and Unemployment

Welfare Reform Tackles Debt Crisis and Unemployment

House Republicans have begun reforming welfare programs as part of their efforts to cut government spending to tackle the budget deficit and reduce unemployment.  The House passed the Republican budget for Fiscal Year 2012 on Friday.  It reduces government spending on the welfare programs and increases employment through mandatory work requirements.

Also, Rep. Jim Jordan (R.-Ohio) introduced the Welfare Reform Act of 2011, which is an overall restructuring of the entitlement program.  Jordan’s bill would cut redundancy of the 77 federal welfare programs, cap overall spending on the programs, and mandate work requirements.

“This bill begins to treat all American families with the respect they deserve.  We’re giving the taxpayers, who are supporting the system, the facts of where your dollars are actually going, and showing this is why it needs change.  And for the families stuck in the system, we’re going to give them tough-love incentives they need for a better life,” Jordan said in an interview with HUMAN EVENTS.

The key provisions of the Welfare Reform Act are the following:  Formulate the total amount that taxpayers are spending on all means-tested welfare at all government levels, require that the President’s annual budget include the total cost for federal, state, and local welfare spending for the next decade, require able-bodied adult beneficiaries of food stamps to work or prepare for a job, and after unemployment falls to 6.5%, then cap welfare spending at 2007 levels as adjusted for inflation.

Jordan said that welfare reform is needed now because of the debt crisis.  The current national debt is $14.1 trillion, and is projected to hit the statutory debt ceiling in the next month.  And this year’s projected budget deficit is $1.6 trillion.

“Reason one, welfare reform is going to help with the spending problem eventually.  This is mandatory spending.  And there are 77 different means-tested social welfare programs out there,” said Jordan.  “When you factor in state tax dollars and federal tax dollars, it’s comparable to what is spent at the federal level for national defense.”

According to the House Republican Study Committee, which Jordan heads, the state and federal government are spending twice as much on welfare programs since reforms were instituted in 1996.  The committee predicts that welfare spending will exceed $10 trillion over the next decade.

“We have 77 different programs, and you just ask the obvious question, ‘Do you think there is some redundancy there?’  There are probably some programs that we can get rid of, and combine resources,” said Jordan.  “And actually if you combine resources, and you can combine programs, you can actually free up some dollars.  Some of the savings can actually go to help the needy families out there.”

Also, Jordan said that with the slow economy and high rate of unemployment (8.8%), instituting work requirements is necessary to help get people back on the job.

“We want to do things that actually help families, not trap families,” Jordan told HUMAN EVENTS.  “When they actively have to do the job search, or community work, or some kind of employment that supplements what they’re getting from the taxpayer, those are all things that help them with the kind of employment that they can get into long-term, and get away from any welfare program.”

In 1996, the Republican Congress worked with President Clinton to reform welfare by creating the Temporary Assistance for Needy Families (TANF) program.  The TANF program required recipients to work or prepare to work.  Jordan said that the 1996 reforms were successful in getting people back to work,
but other social welfare programs have since expanded in scope and costs, while the culture has reverted back to old standards due to liberal policies under President Obama and a Democrat-controlled Congress.
“The last several years under Democrats, we’ve begun to move back to the old model of thinking of welfare as, the more people you sign up, the more successful the program is, versus what it should be,” said Jordan.  “A successful social welfare program is one that would have fewer and fewer people, more and more people employed in the private sector, and more and more people who aren’t stuck in the old system.”

Jordan also pointed to Obama’s stimulus bill for contributing to the social welfare problems by incentivizing states to sign up more people onto welfare rolls in order to get more federal funds.  “The incentive I think has moved in the wrong direction,” said Jordan.     Welfare is up 54% on Obams’s Watch.
Jordan’s bill has 18 co-sponsors, including the original Republican co-sponsors, Representatives Tim Scott (S.C.), Scott Garrett (N.J.), Dan Burton (Ind.), Louie Gohmert (Tex.), and Jason Chaffetz (Utah).  As the 77 welfare programs are spread out among so many federal departments and agencies, the bill was referred to five committees of jurisdiction: Ways and Means, Budget, Rules, Agriculture, and Energy and Commerce.

Budget Committee Chairman Paul Ryan (R.-Wis.) included two major provisions from the Welfare Reform Act in the House GOP budget for FY12.  The Republican budget includes the new work requirement for food stamp recipients and puts a spending cap on all welfare programs at 2007 levels after unemployment falls below 6.5%.

The Republicans’ “Path to Prosperity” budget, which tackles entitlement reform of mandatory spending, passed the House last week along party lines, but is not expected to get a vote in the Democrat-controlled Senate.

Jordan is pushing for a stand-alone vote in the House this year on the Welfare Reform Act.

“Work requirements, having limits, having an overall cap, we think all these things are going to be helpful as we move forward,” Jordan told HUMAN EVENTS.  “And of course, there’s the other big issue that we talked about, and that is, we’re broke.  We’ve got to change.  And if we don’t begin to dramatically change things, the path we’re on fiscally is just not sustainable.”

Monday, April 18, 2011

A lesson in todays values

Monday, April 18, 2011
Let’s get “real” ...
by Larry Edelson

Dear George,
Over the past few years, I have warned my subscribers that the Dow Jones Industrials (DJI) — in real terms — had already lost over 80% of its value, when measured from its real, inflation-adjusted high of 14,198 in October 2007.
I also warned on several occasions that ... “The U.S. dollar was on the edge of the abyss.”
And that ...
“The only way to truly understand the U.S. economy — what’s happening, why, and where it’s headed — is to look at asset prices in terms of gold, the world’s only real form of money.”
In fact, looking at asset values, even the country’s GDP, not just in nominal terms, but against gold — is the only way to “get real” these days.
It is absolutely CRITICAL that you understand that last point, because I believe that concept is the most crucial information you need to know to financially survive and prosper — now and in the years ahead.
And because the dollar is now so close to careening of a cliff, if you don’t understand how its value affects you, you’re almost certain to see your wealth get vaporized.
But the simple fact of the matter is this: Ever since U.S. politicians severed the link between the dollar and gold, the only truly accurate way to analyze any asset price is to consider it in terms of gold.

Before President Nixon dissolved the gold standard in 1971, anything and everything you did in your business, in investing, even in your personal finances — could be converted into or exchanged for physical gold by simply going to your bank and redeeming your dollars for gold.
That’s no longer the case. And that’s also why since 1971, asset values have fluctuated much more wildly than they did before the U.S. went completely off the gold standard.
Don’t get me wrong. The gold standard had to go for a variety of reasons.
For one thing, there was not enough gold in the world back then to support the growth of our economy, yet alone any other. There still isn’t.

For another, the gold standard put central banks and politicians on the wrong path.
Instead of taking appropriate measures to boost their economies when growth was slow or sinking, central banks and politicians engaged in deliberate warfare to protect their nations’ gold, no matter what the cost to the economy or to human life and suffering.

So I understand why we do not have a gold standard today, and further, why putting the world back on a gold standard is not possible.
But that doesn’t mean you can’t have your own gold standard so to speak — as I have often implored you to do, by owning gold in your portfolio!
You must also, as I noted above, absolutely and unequivocally understand that in today’s world, the value of everything is relative!
Consider the Dow Jones Industrials, again, in terms of GOLD — TRUE MONEY, or what I like to call REAL WEALTH.
For instance, suppose you had $10,000 of paper dollars (or digital dollars in your brokerage account) to invest in the DJI at the beginning of 2001 ...
At the end of 2001, your original $10,000 investment in the Dow was worth $10,021 — a gain of 0.21%. Meanwhile, that $10,021 would have bought you 38.5 ounces of gold.
At the end of 2002, your original $10k investment in the Dow would have been worth only $8,341.64, a loss of $1,679.36, or 16.78%.
That $8,341.64 meanwhile, would have bought you even less gold, 21.8 ounces, or 43.4% LESS gold.
Put another way, in real terms, the DJI didn’t lose just 16.78%. It lost 43.4%!
Yes, it is true that the Dow had fallen and gold had risen. But that’s my point. The paper dollars that you had invested in the Dow lost more than you realized.
Let’s say that then, despite the loss, you stayed invested in the Dow ...
At year-end 2005, you would have been able to buy the equivalent of only 19.5 ounces of gold with your money invested in the Dow ...
At year-end 2006, only 15.8 ounces ...
At the end of 2007, only 13 ounces ...
At the end of 2008, only 10.4 ounces ...
At the March 2009 low of 6,440 in the Dow, your investment would buy you only 7.08 ounces of gold.
In other words, against gold, REAL MONEY, your investment in the Dow lost an amazing 81.61% of its purchasing power, falling from 38.5 ounces of gold to only 7.08 ounces!
Pretty amazing, eh?
So where does the Dow stand now, in terms of gold? Today’s Dow buys the equivalent of roughly 8.48 ounces of gold. That means it has snapped back from its low of 7.08 ounces in March 2009, by roughly 19.6%.
But think it through and you’ll notice that ...
That’s a heck of a lot less of a gain than the “nominal Dow” shows, which has rallied more than 92.3% from its 6,440 low in March 2009 to its current 12,390 level. Why?
Answer: Because the price of gold has not only gone up, but it’s gone up faster than the Dow has.
So, the “real gain” in the Dow since March 2009 is not 92.3%, but only 19.6%.
Assuming that’s the case, then that would explain why I don’t feel that much richer because of the Dow’s rally over the last three years, right?
You bet it is. Because you see, the value of paper money continues to lose purchasing power. Period.
That’s also why — almost everywhere you turn today — everything costs you more money. Your dollars are deflating, while other asset prices are inflating.
Deflation and inflation are two sides of the same coin. Your money is deflating — but just about everything that you use that money for, is, on the other hand, inflating.
I don’t expect that to change. In fact, if you’ve read my April issue of Real Wealth Report that published this past Friday, you know exactly what I mean.
In the months and years ahead, the purchasing power of your paper money is bound to go down, down and down.
It’s the way Washington wants it. Washington wants to inflate away its debt problems by raising asset prices, artificially, via a dollar devaluation.
I call it a “default on the sly” — because it’s terribly sneaky. It also robs you of your life savings and wealth ...
Unless you understand it and take appropriate measures to protect yourself — with your own gold standard.
Best wishes,
P.S. Assessing real estate values in terms of gold is another very interesting analysis. At the peak of the housing market in March 2007, the median U.S. home price was $262,600, equivalent to 346.4 ounces of gold.
Today’s median home price is $156,100, or 109.2 ounces of gold. So in terms of nominal values, the U.S. median home price has shed 40.6%. But in terms of real money, gold, the median home price in the U.S. has lost a whopping 68.47% since 2007.
At some point, housing prices will rebound and start to reflate. Just like the stock market is starting to do. But it won’t perform anywhere near as well as many other assets, especially tangible natural resources that the world depends upon and needs to consume on a daily basis.
For more in-depth analysis of how today’s world really works, including all of my recommendations, I encourage you to join Real Wealth Report.
Start with the April issue that just published. It’s an eye-opener. At $99 for one year, a membership costs less than one-fourteenth of an ounce of gold, a bargain in today’s money. Click here now to join.

Friday, April 15, 2011

Cairo Messenger - Dear Editor

Dear Editor, you have finally done it: came out of the Obama closet. I knew you would. But, like all die-hard Democrat hacks, you just stuck your toe out, with typically no facts of real domestic interest. Since you are now an economist, I want to add a few facts that your readers can identify with. Medicare and social security is up 14% and 16% respectively on Obama's watch. Domestic spending is up 41%, Welfare is up 54%. I wonder how Grady County likes Obama now. He is the worst president in history. Even worse than Woodrow Wilson, FDR, and Jimmy.
          Wilson and Obama are the only anti-Americans in our history. If I were you I would go back in the closet, so as to protect my image. There is nothing about Obama that is defensible.

George Bivins
dare you to print

Monday, April 11, 2011

Financial train wreck

U.S. Finances Are an Even Bigger Mess
Than is Generally Understood
Even before Obama took office, unfunded federal liabilities had blown past $500,000 per U.S. family of four. In fact, federal finances are in such shambles that David Walker, Comptroller of the Currency, resigned in disgust at the tail-end of the Bush administration.
Worse is what's happened since Walker resigned. As Rep. Ron Paul recently wrote, the trillions of dollars created to bail out banks have added the equivalent of a whole new federal establishment to Uncle Sam's bloated obligations.
Obama's new spending obligations stagger the imagination, amounting to...
  • More spending than the socialistic New Deal...
  • More spending than the Korean War...
  • More spending than the 1980s savings and loan bailout...
  • More spending than the entire Iraq War...
And that was even before the Congressional Budget Office discovered that minor little $75 billion miscalculation I mentioned earlier in the Obama team's math.
Now another CBO report shows that rising unemployment and falling tax revenue will likely force the Social Security "Trust Fund" into the red as soon as this yeara full decade before the Comptroller General's office had previously warned it would happen.

Smart Money Stampede

The Smart Money Stampede Out of the
Dollar Has Already Begun
Dow Falling Fast
The Dow may once again fall to a
1:1 ratio with the gold price.
If you've already heard a little voice in your head warning you that Wall Street paper assets are highly manipulated certificates of financial folly, you got this letter just in time. While rampant money creation may force the DOW upward in nominal terms, the DOW index itself has been collapsing against the value of hard assets for some time.
For example, it currently takes barely 8 ounces of gold to buy a share of the DOW industrials. Yet as recently as 1999, it took 44.8 ounces of gold to buy a DOW share – that's a whopping 80% crash in the real value of the DOW.
The money magicians in Washington can fool millions of investors in the short-term, true. But they can't fool those who measure their wealth in terms of precious metals, which retain their value over time. Gold is the mortal enemy of big government borrow-and-spenders. When the gold price shoots up, it signals to the world that the currency upon which government Ponzi finances operate is losing value.
For five years now, my Independent Living newsletter has discreetly advised my subscribers to accumulate physical precious metals. The investor flight to precious metals I predicted would occur (back when gold was quietly trading in the $400s) has, since the onset of the financial crash of 2008, been global in scope and has resulted in physical gold and silver flying off the shelves everywhere.

Wednesday, April 6, 2011

Obama Will Lose in 2012

Tuesday, April 05, 2011

Obama Will Lose in 2012

Predicting that Obama will be a one-term president is easy: Americans vote their pocketbooks.

There is nothing remotely ideological or personal in my prediction that President Obama will lose the 2012 election. Both parties are equally out of touch with reality in my view, and both suppport the same things: a global Empire, an increasingly intrusive Savior State, a shadow banking system which is no longer under the control of State institutions (rather, the banks control the institutions), and various crony-capitalist cartels which fund political campaigns and partner with the Central State's bloated, unaccountable fiefdoms. The only visible difference between the two parties is slight variations in the relative growth rates of the most-favored cartels and fiefdoms.

President Obama seems like a nice guy. Many people said the same thing about George W. Bush. While a likeable personality is a plus in a media-obsessed society, American elections boil down to this: Americans vote their pocketbook, and their pocketbooks will be a lot lighter by November 2012.

President Obama has several key flaws which have doomed his presidency.

1. His leadership style is one of consensus and compromise. This works OK in a caretaker setting in which there are no crises and no demands for bold changes of course. Unfortunately, this era is defined by structural crises, and a leadership based on gaining consensus and compromise is basically a rudderless one in this environment.

2. He does not understand economics or finance, nor is he secure about making decisions on financial topics. As a result he deferred to the "experts," who just happened to be Wall Street cronies and insiders who easily swayed the President with their hobgoblin stories of financial meltdown and ruin if we didn't "save the banking sector from losses."

3. His grasp of history is poor. The same can be said of most presidents, but Obama failed to grasp the historic opportunity to set a new sustainable course for the nation's banking and financial sectors, and thus for its economy. He opted instead to save and protect the corrupt and embezzlement-based banking sector from losses, and he continues to do so with "extend and pretend" policies.

In a similar fashion, he has allowed the National Security State and the Global Empire to expand without any limitations.

4. He has no visible core beliefs beyond a vague sense that the Federal government and its extension, the American Empire, are forces for good. His policies can be boiled down to: support and expand the Savior State and its many fiefdoms, support and expand the Global Empire and National Security State, and allow the banking system and its Power Elites to set the agenda and control the oversight agencies and institutions.

His signature accomplishment, the "Obama-care reform" of the nation's sickcare system, simply extends the power of existing cartels and fiefdoms and delivers an ever-larger slice of the national income to their coffers. In its basic parameters, the "reform" could easily have been supported and passed by socially liberal Republican presidents such as Richard Nixon. There is nothing remotely progressive or radical about "pooling" insurance cartels and wet-paper-bag bureaucratic tests of "the most effective treatments."

These are simply technocratic layers added to a bloated, corrupt, venal and destructive system that already costs twice as much as those of our advanced-economy competitors.

In addition to these flaws, he has made fatal policy errors which doom the economy to implosion by November 2012. All of his administration's policies can be distilled down to these three points:

1. The banking sector is the most important foundation of the economy. The Central State and its proxy, the Federal Reserve, pumped some $14 trillion (by some measures, $23 trillion) in cash, credit, guarantees and backstops into the banking sector and its cloaked twin, the Shadow banking System.

Meanwhile, little to nothing was done for the cash-strapped consumer or citizenry. Why?

2. The "problem" is lack of credit and "confidence." If the State and Fed flood the banking system with credit and "restore confidence" by goosing the stock market, then people will start borrowing and spending again, and everything will be "fixed."

This presumes demand is strong, and all that's needed is credit for people to satisfy their thirst for more goods and services.

Meanwhile, back in reality, people realized they didn't need a third car, fourth TV, 17th "cute blouse," 23rd pair of shoes, etc., and now that their home is worth less than their mortgage (or their remaining equity is minimal), they can't really afford the luxury travel, boats, etc. they enjoyed when they thought their house would keep rising in value forever and tapping that rising equity was painless.

Demand is slack because everyone who could afford more crap already owns more crap than they need or even want. The percentage of the populace who would like more stuff cannot afford more stuff. Their household incomes and wages are declining, and their expenses for essentials are rising.

The Fed's largesse to banks (free money in unlimited quantities) doesn't reach them; all it does is boost assets held by the top 10%.

3. Boosting the assets of this top 10% (or 20% if you include those who have equity of some sort beyond the $2,500 in their IRA) will cause a "wealth effect" that will "trickle down" to the lower 80% as the top 20% buy more Coach handbags, enjoy fine dining at tony upscale restaurants, etc.

Unfortunately, this may help boost Coach's profit margins, but the vast majority of the "trickle-down" consists of low-paying retail clerks and busboys.

In other words, the "wealth effect" is bogus, a charade deployed to defend the pillaging of the economy via financialization and Fed intervention.

4. Pushing the dollar lower in a "beggar thy neighbor" currency war is the best way to boost the U.S. economy. Apparently no one in the President's team looked at financial history to identify the nations which grew rich and powerful by debasing their currency.

In a perverse blowback to this misguided policy, corporate profits earned overseas were certainly goosed, but so were import prices, one of the reasons (along with the Fed's easy-money quantitative easing) for rising costs to consumers.

If you set out to design a policy that impoverished 80% of the citizenry and channeled a larger share of the national income to the top 10%, then this is precisely the set of policies you would pursue.

Nothing important has been fixed; nothing important has even been addressed. The institutions of governance are captured and corraled by the monied Elites to the point that the government has lost control of its own institutions, which now rule as quasi-independent fiefdoms. The citizenry, bought off on the cheap by stale Bread (rapacious student loans, food stamps which offer the veneer of normalcy, extended unemployment benefits so no angry mobs form, etc.) and dazed and distracted by the Media Circus, keep quiet in their complicity, while the Power Elites revel in the freedoms offered by a caretaker Administration.

If President Obama had fought for fundamental structural reforms and lost, he would still have support. Yes, Congress holds the pursestrings, but let's not forget the President appoints his own staff and advisors, and wields great power via Executive Orders. He could have submitted a 5-page Financial Reform Bill and promised to veto anything else. If the Power Elites watered it down, then he could have vetoed it and gone directly to the public. But he did none of these things.

Courtesy of correspondent George B., here is a chart of public and private debt over the past decade, from the St. Louis Federal Reserve. Notice that all the Administration and Congress have done is boost Federal debt to replace the "missing" private debt (missing because incomes are declining, housing equity has crashed and the consumer overborrowed for a decade).

This is mindless Keynesian policy on auto-pilot. As I have reported before, the Federal Government is borrowing and spending some $6 trillion in a mere four years, almost doubling the nation's debt, and all that's been accomplished is the Power Elites' share of the national income has risen and GDP has flatlined.

The structural dislocations and imbalances remain firmly in place; a financial sector dependent on fraud has been "saved," and an economy sick with an addiction to rampant financialization has been given plenty of smack to keep it from going through a desperately needed withdrawal.

The Keynesians have no answer as to when the economy will "recover" without the Central State borrowing 11% of GDP every year to prop up its various cartels and fiefdoms. They have no answer because they have no understanding of the imbalances, the fraud, the financialization or of the feudal partnership of the State and crony-capitalist cartels.

Obama has lost his "progressive" base, because he's done nothing remotely progressive. He has lost the middle because his Administration has overseen their gradual impoverishment at the hands of Financial Power Elites. He has offered them phony facsimiles of reform slicked down with the tiresome "soaring rhetoric" of a con artist so besotted with his own story that he actually believes the BS himself.

He can count on the public-union vote and a few of the State fiefdoms he's enriched and enlarged at the expense of the common good, but as the addict (the economy) goes downhill, slowly destroyed by the ever-larger doses of smack administered by the Fed and the Central State, then the consent of the governed will be irrevocably lost--not just by President Obama, but by the entire Status Quo.

The President is now a candidate hoping to scoop up a cool $1 billion to blow on another long, greasy media blitz, but I would be surprised if he rakes in much from the commoners and serfs straining to keep the wheels of their household finances turning. He will of course collect big bucks from various crony-cartels and contractors who have benefited from his bogus "reforms" and unstinting support of the banking sector, but his true-believer supporters will be thinned down to a few Elites, die-hard Democratic hacks and the delusional by mid-2012.

His opponents may fare little better unless they are willing to tackle the dominance of crony cartels, government fiefdoms and Financial Power Elites whose fat fingers remain firmly on the throat of the fast-expiring nation.

Gangster Government, a book

Columnist Michael Barone invented the phrase.
President Obama has perfected the practice.

And in this new and stunning book, New York Times best-selling author David Freddoso (The Case Against Barack Obama) provides the much-needed exposé of an administration that has brought Chicago-style corruption and strong-arm politics to Washington, looking to reward its friends (the unions, federal workers, and other liberal interest groups) and punish its enemies (the private sector workers and taxpayers who foot the bill for Obama¹s massive expansion of the federal government).

In Gangster Government you'll learn, among other shocking revelations:
How the Obama administration has used “czars” and “recess appointments” to install powerful bureaucrats, some with extreme views and shady pasts, without congressional oversight
How the Obama administration ignored the Constitution and reversed 100 years of bankruptcy law to reward its friends (the United Autoworkers) in the GM and Chrysler bailout
Why even the pretense of “cutting costs” in Obamacare came second to rewarding the Democrat-supporting trial lawyers' lobby
Why, ignoring federal law, the Obama administration is trying to shield the TSA workers who search passengers at airports from private sector competition
How the trillion dollar "stimulus" was directed overwhelmingly at protecting government workers supported by the taxpayers
Why “green jobs” are all about shaking down the taxpayer for favored businesses—not about truly “sustainable” energy or jobs
How the Obama administration bullies private businesses and even state governments that don't cooperate with gangster government

Gangster Government is a devastating and revealing look at the momentous first two years of the Obama administration and its subversion of our Constitution and laws. It casts a hard look at a president whose training on Chicago’s political playground shines through every bent law and every broken promise.

Saturday, April 2, 2011


In point of fact, though, I generally feel more at risk at a traffic stop in the U.S. these days. It seems that U.S. cops have been brainwashed into thinking that any contact with the public may actually be with a terrorist, or rampaging militia member, or a heavily armed religious cultist. Things have definitely changed in the last ten years, and these guys all seem to be on a hair trigger. I really don't like getting near droopy-eyed teenage soldiers in the Congo, but I now consider U.S. cops almost as dangerous.
All those soldiers and police in Belarus were essentially average people – although I'm sure, like police everywhere, more than a few have extra Y chromosomes. The key is that when they put on uniforms, they do as they're told. They're no different from their U.S. counterparts. Always remember with cops and soldiers: their first loyalty is to each other. Their next loyalty is to their employer. They aren't there to "protect and serve" the people in the street. People are all potential criminals and rioters. The people are the last priority, contrary to the fairy tales.
L: Hm. You know, things didn't go over the edge that night I was on the streets in Minsk, but I was thinking about how quickly things can change. The blood the police shed, beating peaceful, unarmed people, including women, reminds me of the amazing speed with which the "thin veneer of civilization" can be stripped away. The former Yugoslavia comes to mind: a relatively wealthy European country turned into a bloody chaos of multiple warring factions, war crimes, and mass graves, all in a matter of weeks.
Doug: And as you point out in this month's edition of the International Speculator, no matter where you live, even in the United States, it's dangerous wishful thinking to tell yourself, "It can't happen here."
L: Maybe especially in the United States. I used the links you sent me of the videos showing the police joining the looting in New Orleans, and National Guardsmen confiscating guns from people who wanted to be able to defend themselves from looters, in the wake of Hurricane Katrina.

Friday, April 1, 2011

Stansberry & ASSO. - Government employees

More Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined. We have moved decisively from a nation of makers to a nation of takers. Nearly half of the $2.2 trillion cost of state and local governments is the $1 trillion-a-year tab for pay and benefits of state and local employees.

City of WHIGHAM, GEORGIA - time to give up the ghost of city government

The 25% decline in the city's population from 631 to 471 hardly calls for a city government with a million dollar budget. It is high time to sell off the water system to a private operator, and the electical system to Georgia Power, then roll these monies back to the city property owners. Then, go home. The problem is, of course, is that the city council would have to vote to give it up. This they will not do unless they vote themselves a hefty retirement package in the process.
Do you remember when in 1995 Augusta City Council members voted to give themselves a $37,000 per year pension? the vote was 6-4, thankfully the Mayor vetoed the measure. Some how the consolidation of Augusta and Richmond County occured. The next headline stated
"After 197 years, council holds final meeting. The city of Augusta held its first meeting in 1798, when John Adams was president. You can read this news by going to the Thomasville Library and pulling the Thomasville Times Enterprise December 19, 1995.

Contact my email - - See my blog -

Wednesday, March 30, 2011


Obama's Libya Speech Crashes and Burns

We finally know what Barack Obama meant when he kept talking about “shovel ready” projects.  It wasn’t to boost our sagging economy and shrinking labor force.  Nah.  By shovel ready, Barack meant unloading a pile of manure into our faces while telling us it’s cookie dough ice cream, of the homemade variety.
Forget for a moment that Obama premised action in Libya on the fulcrum that “the United States of America has played a unique role as an anchor of global security and advocate for human freedom,” which pretty much validates George W. Bush’s Iraq policy, the same policy that state Sen. Obama called a “dumb war” and that he frenetically played up in order to create early separation between him and Hillary Clinton in the 2008 primaries.  Yeah, disregard that for now.
Obama’s entire speech last night was aimless, peppered with contradictions, and left us wondering, “Hmm.  It’s still not clear why we’re bombing the snot out of Libya.”

Sunday, March 27, 2011

American Fear

American Fear
By Don Cooper

Whether they realize it or not Americans live in a constant state of fear every day. I'm not referring to the fears of everyday life like losing a job or having an accident of some kind, but rather a more sinister and devious fear; a fear that Americans only dare talk about around the water cooler or at cocktail parties so as not to be taken seriously; a fear they try to mask with a whimsical tone of sarcasm or indifference. Whether Americans want to admit it or not, it's the single greatest fear in their lives: fear of the government.

Right about now there are those reading this thinking: Don Cooper is a drunk. To which I reply: what's that got to do with it? Maybe more people should drink if that's what it takes to sober up and confront what they are really afraid of.

In their defense, I'll admit that reality is scary. No argument that living in delusion is warmer, safer, cozier, and easier. Pretending is always more fun than reality, that's why we go to the movies. But fear of the government is a fear that invades a person's soul and - since the government intervenes in every aspect of our lives - it affects every move we make every day.

Fear of the government is hard to recognize and acknowledge. It's a fear that we are taught early on in life and to which we become accustomed. We inevitably end up tucking it away in the far reaches of our minds in order to function "normally" every day and live our lives. But just as a car backfiring will trigger a sense of fear from a shell- shocked veteran, so too can the State trigger that sense of fear they've instilled in us.

One need only ask: when you see a cop in your rearview mirror with his lights on, do you feel a sense of safety and comfort or do you get a shot of adrenaline from your body's "fight or flight" reflex? Do you immediately start asking yourself what he could possibly pull you over for, other than the fact that he was abused as a child, bullied at school and his mother didn't love him, and now he's going to whittle away at that chip on his shoulder by abusing you.

As you search for your proof of government permission to drive (i.e., your license), and your government permission to own the car (i.e., your registration), and your proof of government mandated insurance, do you do so calmly and with a smile on your face and with gleeful anticipation of speaking with someone who gives of himself to serve and protect you, or do you do so nervously, fumbling through your papers hoping everything's up to date and acceptable to him for fear of being detained for whatever reason and having it affect your job, your family, and every aspect of your life?

And when it's all over, do you feel glad that it happened or are you just glad it's over? Later that evening do you recount the story to others with a sense of pride, or do you do so with a sharp tongue and kick yourself for all the things you wish you would have had the presence of mind to say at the time but didn't? Do you feel happy that you have to pay $150 to the government because you were driving down the street faster than the government allows you to, or are you angry?

And in the end, do you send the money to the government even though you don't agree with it? Even though you feel it's unfair to have to pay so much money yet you've harmed no one? Of course you do. And why? Because you're afraid of what the government will do to you if you don't. In the end, you'll retreat back into your cubby-hole of delusion in order to justify paying the fine by convincing yourself that what you did was wrong, the government was right, and you deserve the punishment.

My favorite delusional argument from those still attached to the matrix is that they pay their taxes voluntarily. To these people I ask: when you do your tax returns, do you take as many deductions as the government will allow you? Of course, the answer is always yes. Then I ask them that if they could take enough deductions such that their tax liability was zero would they do so? Again, not surprisingly, the answer is yes. I then ask them that if their preference is to pay zero taxes then why don't they simply refuse to pay taxes. Inevitably, that's where their train of thought always runs out of track. Of course everyone knows the answer: because they're afraid of what the government will do.

I challenge everyone to ask themselves: when was the last time you even thought about the possibility you might be robbed, your house broken into or shot at? Can you even remember? Now ask yourself when was the last time you were afraid of doing something that could be deemed "illegal" by the government and for which you could be fined, detained or arrested? Something like not wearing a seatbelt, speeding, making a U-turn, going through a yellow light, not crossing the street at the cross-walk, riding a bike on a sidewalk, forgetting your license at home, taking too many deductions on your taxes, talking on your phone while driving, not allowing strangers to touch you or your children at the airport, cutting down a tree on your own property, owning and transporting a gun, collecting rain water and the list goes on. I would wager the answer is: daily! The first word out of everybody's mouth when asked a normal, completely benign question these days is: "Well legally..." It's first and foremost on our minds, and why wouldn't it be, there are 76,000 pages to just the federal register alone. Some argue that everyone commits at least three felonies every day!

Ignorance is a dangerous thing, and it must be stopped in our lifetime, fo' it kill somebody.

At the end of the day, all government mandates are enforced at the end of the barrel of a gun, and that scares the hell out of everyone, as it should. But if we truly believe we are free then we have to start acting like it. It's time we cared about something bigger than ourselves. It's time we stopped living our lives in fear.

Having said all that, I'm not holding my breath. It's proven to be difficult to convince people that freedom is more important than the real housewives of New Jersey.

And that's why I drink!


Don Cooper
for The Daily Reckoning

Contact my email - - See my blog -