June 11, 2012 The first recorded default in Greek history took place in the 4th Century BC when

13 Greek City States borrowed funds from the Temple of Delos. Most of the borrowers never made good on the loans and the Temple took an 80% loss on its principal. The Greeks have been walking away from their debt ever since. They declared bankruptcy in 1826, 1843, 1894, and 1932. It is estimated by some observers that Greece has been in default during its modern era totaling 90 years or approximately 50% of the total period that the country has been independent. David Pescod As the curtain eventually falls on the drama unfolding in Europe, the world will refocus its attention on the more spectacular events in the U.S. The sovereign debt crisis that is now playing out in Europe will cross the Atlantic, and when it opens here the Real Crash may indeed finally begin. The average American will have a front row seat but will hardly enjoy the show. Peter Schiff We are approaching a situation in which economic distress engenders political unrest and revolution. If this happens in Europe it will probably happen in the United States as well. Many people will think such a prediction is farfetched, but revolutions have followed on the heels of economic distress in ancient and modern times. It is safe to say that the present economic unraveling isnt going to stop. The reason for this may be found in the decadence of our civilization. We ourselves have degenerated from our ancestors. All the signs are present including signs of impending calamity. J.R. Nyquist It takes about a day and a half for Washington to rack up $6 billion in debt. With each passing hour, our debt crisis grows larger, our entitlement time-bomb ticks closer to detonation, and our politicians do everything in their power to change the subject. Reason Magazine There is no entity on earth that can bail out Europe. Graham Summers We are in the final innings of a debt super-cycle and I think the likely next move is a breakdown of the U.S. government bond market (historys largest Ponzi scheme). Since it is the heart of the worlds financial markets, you can draw your own conclusions. All of the rates and spreads are unreal. It may be the only game in

town, but the public has finally gotten wise and decided not to play. Buy gold and silver and salt it away under your mattress as it offers much better safety and returns. Aubie Baltin You cant solve deep-rooted structural problems mal-investment, social change, deindustrialization, global trade imbalances, systemic fragility, financialization, imperial decline, cultural stupefaction (etc, etc, etc) by throwing money at problems. All throwing more money can do is buy a little more time (and undermine the currency). John Aziz QE to infinity is more certain than death and taxes. Jim Sinclair In recent months as turmoil bubbled across the debt markets of Europe, the United States had beckoned as a safe haven. But in truth, the problems are as bad, if not worse, on this side of the Atlantic. Ironically, America has not had to deal with its day of reckoning because lesser problems surfaced first in Europe. But when Europe comes to some modest resolution of its problems, or when bond investors realize they have jumped from the frying pan into the fire, there will be no hiding from the unresolved problems here. Peter Schiff A disorderly break-up of the euro area will be far more damaging to global financial markets than the crisis of 2008. In fall 2008 the decision was whether or how governments should provide a back-stop to big banks and the creditors to those banks. Now some European governments face insolvency themselves. The European economy accounts for almost 1/3 of world GDP. Total euro sovereign debt outstanding comprises about $11 trillion, of which at least $4 trillion must be regarded as a near term risk for restructuring. It is almost certain that large numbers of pensioners and households will find their savings are wiped out directly or inflation erodes what they saved all their lives. The potential for political turmoil and human hardship is staggering. Peter Boone & Simon Johnson Millions of people in Europe and America are going to bear the brunt of economic pain far longer than they have to. And theyll do so because people with colossal egos cant admit that their socialist utopian schemes are utter failures.

Arnold Ahlert In the first four months of 2012 Chinese gold purchases have increased by an unprecedented 782% over 2011. Hong Kong Government A progressive American think tank begs Bernanke to bail out Spain. Tyler Durden Officials lie like rats in times of financial panic; they do it out of a sense of duty. They will insist that a given country will never leave the euro until the moment that it does; they will say that a deposit freeze is unthinkable until they announce that theyve done it; they will tell you a bank is rock solid until the moment they padlock its doors. This is all for your own good, of course. They dont want you to panic and they want to make sure that your money is trapped when they take it away. May 29, 2012 Civilization is about to confront its greatest crisis ever. James Dale Davidson, Editor The ultimate bank run will be when investors begin to panic out of the very bedrock of the global banking system, the U.S. Dollar. It is absolutely imperative that you understand exactly what your investments in Gold and Silver really are. They are the anti dollar or in effect the anti treasury security. In reality, when you made your purchase of precious metal you actually front ran the coming bank run. Bill Holter, Author I believe the notional value of the outstanding derivatives is comfortably north of one quadrillion dollars. John Embry, Analyst If Spain drops here, then you can just set an egg timer for when Italy will go. And then France. The dominoes will rapidly fall from there. Chris Martenson, Editor At such time as there is a next Fed accommodation, that likely will be a trigger for heavy global selling of the U.S. dollar, which in turn should become highly inflationary, very quickly. John Williams, Editor

A dollar collapse is not theory but undeniable fact in motion at this moment, driven by concrete actions on the part of the very nations that have until recently propped up our debt obligations. It is only a matter of time before the dollar diminishes and fades away. All signs point to a loss of reserve status in the near term. Brandon Smith, Editor I am asked, from time-to-time, why I write about Europe with such frequency. The answer is quite simple; there is nothing more important, nothing that will have a greater impact upon the worlds financial system, nothing that will impact any and all markets more than what is transpiring on the Continent. It is a grand experiment gone bad, a Federalists dream floundering in the dust, a vision of Heaven that is being dragged through the narrow gates of Hades and there is no longer any painless way home if home is to be found at all. The notion that there is some sort of decoupling in the marketplace between America and Europe is an adage quoted by the village idiots for the fools listening in the towns square; nothing more than that. Mark Grant, Author Greece and Spain are in the midst of a complete system breakdown that invariably will encompass the rest of Europe and then engulf the USA as well. This credit crisis, as they call it, is just an effect and not the root cause of the problem, which is a Socialist crisis. Socialism can never stand on its own two feet; it is a parasite and can only survive as long as it can confiscate the wealth that the capitalist free market generates. But like every other parasite, it eventually destroys its host. Margaret Thatcher explained it the most clearly and concisely when she said, Eventually Socialism has to run out of other peoples money. That is exactly what is now happening all over Western Europe, England and yes, America as well. Socialism has borrowed to such an excess that is has just about killed the host that laid the golden eggs that kept it alive. Aubie Baltin, Editor Sadly, Bernanke believes that the Fed can defeat the bear. And hell wreck the banking system if he has to prove his misguided thesis. The harder the Fed works to halt the bear and the pain the bear brings with it, the worse the bear market will be in the end. You cant defeat a bear market by increasing inflation through creating more fiat paper. Richard Russell, Editor For those who understand the Leftward drift of Europes political economy, and the inevitable bankruptcy that implies, there is no uncertainty whatsoever. Bankruptcy is coming for everyone and Greece is merely first in line.

J. R. Nyquist, Editor May 14, 2012 Europes entire banking system is a $46 trillion sewer of toxic PIGS DEBT that is leveraged at 26 to 1. Lehman was leveraged at 30 to 1 when it went under in 2008. Is the Fed going to create another $46 trillion in Fiat money to bail out all of Europe? If they dont what comes next? Or if they do, what comes next? Did I hear someone say Weimar INFLATION? I wonder if anyone in government really understands the gravity of what is coming. Aubie Baltin, Editor The Social Security Administration revealed that a record 5.4 million workers and their dependents have signed up to collect federal disability checks since president Obama took office. As a result, the country now has 10.8 million people collecting disability payments Arnold Ahlert, Columnist Reported economic gains largely have been illusions, tied to the effects of underestimated inflation. A much worse-than-expected underlying economic reality means much-worse-than-anticipated federal budget deficits, U.S. Treasury funding needs and banking-system solvency issues. John Williams, Editor History is littered with paper money that has gone bad, whether its Germanys famous Weimar Republic in the 1920s, or more recently the Hungarian pengo, the Zimbabwean dollar and Argentinas peso. John LaForge, Analyst There is no way the U.S. government can pay its debts, and that means currency debasement or default are the consequences we must face. Since treasuries have to be held in dollars, they are probably a train wreck waiting to happen for holders of them. Morris Hubbartt, Analyst This is the first time in history that all central banks have printed money at the same time. The central banks of Europe, the UK, China, India, Japan and the U.S. are all adding to their holdings (thus increasing the base money supplies of their respective countries). Weve never seen anything like it. A coordinated, worldwide effort to inflate the money supply. State-sponsored counterfeiting on an epic scale. But all this money printing is not bringing a worldwide recovery. Instead it is failing miserably. Bill Bonner, Editor We are in the last innings of a very bad ball game. We are coping with the crash of a 30-year-long debt super-cycle and the aftermath of an unsustainable bubble. Quantitative easing is making it worse by facilitating more public-sector borrowing and preventing debt liquidation in the private sector both erroneous steps in my view. The federal government is not getting its financial house in order. We are on the edge of a crisis in the bond markets. It has already happened in Europe and will be coming to our neighborhood soon. David Stockman, Author

In total, the United States spends nearly $1 trillion every year to fight poverty. That amounts to $20,610 for every poor person in America, or $61,830 per poor family of threeDespite nearly $15 trillion in total welfare spending since Lyndon Johnson declared war on poverty in 1964, the poverty rate is perilously close to where we began more than 40 years ago. Michael Tanner, Author May 7, 2012 Progressives do not like looking backward in the rearview mirror. There are too many things there that they would rather not see, like the Great Leap Forward, the Gulags, the ghosts of Five Year Plans and a thousand failed ideologies and dead philosophies taunting them. Daniel Greenfield The Obama administration has turned this into a handout state that breaks all previous records. Lofty rhetoric about stimulus, shovel-ready projects, green jobs or investment in the industries of the future all give political cover to what is plain old handouts to people who are likely to vote to re-elect Obama. Thomas Sowell April 30, 2012 By the fall of this year, it will become very evident that the U. S. is living beyond its means and that there is an entitlements deficit of truly mountainous proportions. By December of this year, we will be bumping up against the national debt ceiling and a possible downgrade of our sovereign debt. The budget and the deficit are out of control. Just as serious is the enormous liability America has created in the last ten years of unfunded promises to pay to our people when they retire and for their medical expenses. Investors, businessmen, and the people themselves sense these lethal imbalances, and if they are not addressed, they eventually will erode confidence, consumer and capital spending, and will drastically affect valuations. This is the Entitlements Cancer. Barton Biggs, Editor The governments total indebtedness its fiscal gap now stands at $211 trillion, by my arithmetic. Laurence J. Kotlikoff, CNN Based on March 2012, the 1980 silver price peak would be $534 per troy ounce [today] in terms of Alternate CPI [the inflation reporting method of 1980]. John Williams, Editor

Student debt is Americas largest unsecured debt category, at one trillion dollars, even more than credit-card debt, a crushing burden because it is not eliminated by bankruptcies and will haunt graduates to their graves. James Dines, Editor Consumer income currently is in contraction, while consumer credit continues to show no net growthWith consumer liquidity so impaired, and with the consumer confidence and sentiment measures still showing levels so low that they have not been seen outside of the deepest post-World War II recessions, the prospects of a near-term sustainable economic recovery are nil. John Williams, Editor I do not believe any longer, that the catastrophe can be avoided and I would immediately plan for an event that will eclipse the American Financial Crisis of 2007 2009 because this one will be far worse. Mark Grant, Author Although the mandate of the U.S. Federal Reserve is to maintain price stability, low level of unemployment and satisfactory economic growth, all we have seen is a false increase in the values of equities, a rise in the price of certain commodities, a stagnant economy and elevated levels of unemployment. Not to mention a never ending expansion of debt. As numerous holders of government debt slowly trim their holdings of U.S. Treasuries, the U.S. Fed has stepped in and now holds around 61% of the government debt issued by the Treasury Department, a trend that cannot last. David Levenstein, Editor Decades of manipulation by the Federal Reserve (through its creation of paper money) and by Congress (through its taxing and spending) have pushed the U.S. economy into a circumstance that cant be sustained but from which there is no graceful exit. Terry Coxon, Editor The entire Spanish banking system is garbage. Graham Summers, Editor When this money all finally decides to go out and spend itself while it still has some value, it will be quite a process to observe. Just think of stored-up money like potential energy, the same as a massive snow cornice hanging precariously over a

steep gully. Its not a question of if, but when it will finally release and cause the value of money to plunge. Chris Martenson, Editor The potential consequences of a disorderly default and exit by a euro area member are unpredictableIf such an event occurs, it is possible that other euro area economies perceived to have similar risk characteristics would come under severe pressure as well, with full-blown panic in financial markets and depositor flight from several banking systems. Under these circumstances, a break-up of the euro area could not be ruled outThis could cause major political shocks that could aggravate economic stress to levels well above those after the Lehman collapse. IMF, April 2012 April 16, 2012 As Federal debt skyrockets, the cost of debt service rises, even at super-low rates of interest. That means taxes must rise, because no constituency will allow its share of the Federal budget to decline by more than a symbolic amount. Higher taxes means there will be less money available for new investment, and the enormous sums of Federal debt that have to be sold, crowds out other investment. Without productive new investment, then debt service soon outstrips income growth and the economy enters a death spiral of declining productive investment, ever expanding debt and ever higher debt service costs. Charles Hugh Smith, Editor Fiat currencies not only destabilize economies but undermine the moral basis of society. Without exception, in every historical case when a currency has been decoupled from the objective world, i.e., from commodity money, the result has been disaster. Fiat currency schemes guarantee unending monetary and resulting economic, social and political chaos marked by brief periods of calm between inevitable abuses, bubbles and collapses. Ron Hera, Editor China continues to make progress in widening the use of the renminbi in global trade. Partner countries are using swap agreements to bypass the U.S. dollar. China has entered into currency swap agreements with about 20 nations, the largest of which is Brazil. It is only a matter of time before the renminbi joins the dollar as a major reserve currency, and it may happen sooner than most analysts believe is possible. Zero Hedge

We are now at the mercy of oil and the commodity markets. Bernankes plan to print our way to prosperity is destined to failure. Ultimately hes just going to spike inflation and collapse the global economy, resulting in a worse downturn than what we saw in 2008/09. Steve St. Angelo, Editor Recognition of an intensifying double-dip recession as well as an escalating inflation problem remains sporadic. The political system would like to see the issues disappear until after the election; the media does its best to avoid publicizing unhappy economic news; and the financial markets will do their best to avoid recognition of the problems for as long as possible, problems that have horrendous implications for the markets and for systemic stability. John Williams, Editor April 3, 2012 The mountainous debts that have been piled up can only be dealt with by dramatically expanding the supplies of dollars and euros. There is simply no alternative. Brien Lundin, Editor The nations sovereign debt is at a record level and the country is careening towards insolvency. The only thing holding the economy together is the Feds promise of free money forever. That shouldnt be misconstrued as a viable and healthy economy. Michael Pento, Editor Nobody, neither the public nor the politicians, is willing to take the pain of correction. In the end, the pain will be worse than expected. Richard Russell, Editor In every advanced nation today, those who vote for a living outnumber those who work for one. Bill Buckler, Editor All and all, a historic collapse in confidence in financial assets, and national fiat currencies is at hand. A day is soon coming when a panic into the actual precious metals will start. Mark J. Lundeen, Editor

We have seen the effects of Fed monetary policy on the U.S. Dollar. The Dollar buys 17% less today than it did in 2009 when the Fed increased its balance sheet with bonds paid for by printing money. Scott Silva, Editor JPMorgan holds 25% of the short side of the silver market. How the heck can that be allowed? It used to be in years gone by, we had a big copper manipulation and the CFTC found it to be manipulative, after the fact of course, and the basics of it was this big copper trader from Sumitomo who was called Mr. 5% - he held 5% of the market. My God, JPMorgans got five times that amount in the silver market! Theodore Butler interviewed on Financial Sense radio March 19, 2012 You cannot just print money forever without the unintended consequences coming back and biting you. Erik Townsend The reality is Europe is finished. Done. Curtains. The ESM, LTROs, all of that stuff is pointless as the math simply doesnt add up. As Jagadeesh Gokhale of the Cato Institute put it, The average EU country would need to have more than four times (434 percent) its current annual gross domestic product (GDP) in the bank today, earning interest at the governments borrowing rate, in order to fund current policies indefinitely. The money isnt there. Europe is broke. Completely and totally broke. The whole notion of bailouts and debt swaps is pointless here, youre talking about systemic failure due to the entire financial system being overleveraged and based on spending patterns that are unsustainable in any way. Make no mistake, we are heading into a crisis that will make 2008 look like a joke. The money for all of these various programs (both in Europe and the U.S.) simply isnt there. So this time around were going to see stock crashes as well as civil unrest, food shortages, and the like. Graham Sumner, Asset Manager The economy is weaker today than it has been in 21 months. Art Cashin, Trader Just as market regulators were finally getting wise to the fact that they have no clue how modern markets work, what modern market topology is, or how High Frequency Trading impacts the stock market (think Flash Crash), here comes Certichron, the supplier of a time service center at a Savvis market center in Weehawken, which says it has now mastered sub-nanosecond readouts which are

now compliant with the FINRA Order Audit Trail system and is likely to be compliant with any Consolidated Audit Trail that might be specified by the Securities and Exchange Commission. In other words, here come sub-nanosecond markets. Zero Hedge They have juiced the system for over 40 years now but have now come face to face with the reality. That reality is that it is taking greater and greater amounts of counterfeiting (creating money out of nothing) to keep the whole smoke and mirror routine going. The debt is growing much more rapidly than the general economy that they are trying to stimulate. At some point the fear of the debt and the interest that must be paid is going to totally overwhelm their ability to stimulate the economy by generating more debt. In my opinion this day is getting very close. Greg McCoach, Editor Massive liquidity injections and ultra loose monetary policies make silver increasingly attractive for hedge funds, institutions and investors. Gold Cove In a further step confirming that China is acting as a much more rational capitalist power, and is rapidly encroaching on the reserve status of the sacrosanct U.S. Dollar, the Financial Times writes that China intends to extend renminbi loans to other BRIC nations in another step toward the internationalization of its currency. To those following the stealthy Chinese incursion into currency markets as a dollar alternative, this is not news: already we know that China and Japan have bypassed the dollar entirely and now engage in direct bilateral tradeThis is merely the latest incremental step which will see China become the dominant player in the currency arena, and further puts to doubt the fate of the U.S. Dollar as the default currencyat that point, the U.S. will be merely another Zimbabwe case study, where it can print all the money it wants to fund its deficit, and the only ones who care will be wheelbarrow manufacturers. Zero Hedge If the American people truly understood what inflation was doing to them, they would be screaming bloody murder about monetary policy. Inflation is an especially insidious tax because it is not just a tax on your income for one year. It is a continual tax on every single dollar that you own. As your money sits in the bank, it is constantly losing value. Over time, the effects of inflation can be absolutely devastating. Greg McCoach, Editor

With every new dollar the Fed prints, the value of each dollar in your wallet declines. Scott Silva, Editor Regardless of what you think will happen over the remainder of this decade, one thing seems virtually certain: the value of paper money will be affected, perhaps dramatically. Even if the economy slips into deflation, the deflation wouldnt last long. A panicked Fed would print to the max and set off a wild rise in prices. This is why were convinced currency dilution will not only continue but accelerate. Jeff Clarke, Editor Bernanke can claim there is no need for QE all that he wants, but such claims lose credibility when they come at the same time that the ECB is forced to inject over $1 Trillion in stimulus to keep their banks afloat and help keep U.S. banks solvent. Ending QE is simply not an option in my opinion, which is why I believe precious metals will continue to climb much higher and surpass their inflation-adjusted highs before this bull market is over. Keep stacking! Jason Hamlin, Editor The communist revolutions in the 20th century sought to nationalize the wealth generated by privately held industries back to the exploited workers on whose backs the profits were supposedly derived. America has made the rejection of this idea and its support of free market principles the centerpiece of its economic narrative. However, as a result of our current and proposed tax policies towards corporate shareholders, our government collects a portion of industrial output that would inspire envy in even the most rabid Bolshevik. Peter Schiff, Author All of the available signals point to the likelihood that the Fed will have to turn to more vigorous creation of new money (inflation) at some point or face the possibility of rising market rates on government securities that sharply raise the Treasurys borrowing costs and devalue the Feds enormous balance sheet. George Melloan March 6, 2012 If you listen to governments, then you are not going to make a lot of money. Governments lie, distort, and make mistakes. Jim Rogers

Mark my words, if the interest rates on U.S. government debt truly reflected both the real level of inflation in this country and the rising risk of some form of default, rates would already be sky-high and the U.S. would resemble a massive Greece. John Embry There is an all out assault on the part of global central banks to destroy their currencies in an effort to allow their respective governments to continue the practice of running humongous deficits. In fact, the developed worlds central bankers are faced with the choice of either massively monetizing Sovereign debt or to sit back and watch a deflationary depression crush global growth. Since they have so blatantly chosen to ignite inflation, it would be wise to own the correct hedges against your burning paper currencies. Michael Pento The world has drunk at the punch-bowl of good times and debt ever since World War II. The world has avoided the discipline of pay-as-you-go and austerity for decades. But sooner or later the piper must be paid. Up to now, the piper has been paid with vast amounts of fiat paperIts the old beggar thy neighbor system, and it will ultimately result either in all out hyper-inflation and a collapse of the fiat currency system or a corrective deflationary crash. Richard Russell Currency debasement of all major currencies is happening today on a scale never before seen in history. Yet there continues to be a complete lack of awareness amongst the majority in the western world as to the risks posed by our current monetary and financial system. Zero Hedge The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost. Ben Bernanke, 2002 When the U.S. debt market collapses, trillions of dollars will be thrown on to the foreign exchange market, as foreigners repatriate dollars back into their domestic currencies. The destruction of our dollar and our debt will be very pernicious for the U.S. and we should be doing everything in our power to ensure the continuation of the dollar as the worlds store of wealth. Unfortunately for us, our government and central bank are working very hard to expedite its destruction. Michael Pento

The sole reason why crude prices are surging is because global liquidity has risen by $2 trillion in a few short monthsitcould well lead to$200 oil. Zero Hedge Last year, a federal program coughed up $1.6 billion to pay for free cell phones, along with the monthly bills, of 12.5 million wireless accounts. The program is overseen by the FCC to promote the availability of quality services at just, reasonable, and affordable rates for low-income Americans. Arnold Ahlert The seasonally-adjusted St. Louis Fed Adjusted Monetary Base just jumped to an historic high level in the two-week period ended February 22ndsuggestive of a deepening systemic solvency crisis. John Williams February 1, 2012 The Fed committed yet another major error this week. The worsening European crisis last year created a major artificial bid to perceived safe haven Treasury (and related) securities. This amounted to a major loosening of financial conditions for the commanding sector of U.S. Credit expansion. The Fed should have recognized how this dynamic had created heightened Bubble risk throughout our government debt markets (Treasury, agency, MBS, muni, etc.). Instead, the Fed has administered gas to the fire along with pronouncing that its content to stand gas can in hand for some years to come. The Bernanke Fed has created a backdrop further supportive of speculative leveraging and global risk market speculation more generally. Worse yet, our central bank is determined to punish savers into submission. Responding to the Fed announcement, Treasury, agency debt and fixed income prices rose; U.S. stock prices rose; gold, energy and commodities prices rose; and emerging debt, equity and currency prices rose. The dollar was one of the few losers. Forgive me for believing the Fed secretly fears a stronger dollar. And forgive me further for contemplating a scenario where the Feds incessant market circumventions backfire. Lets contemplate LTRO 1&2-induced bullish market sentiment meeting disappointment at the hand of faltering European economic performance and European debt markets finding themselves, there we go again, re-pricing risk higher. At some point, might global investors perhaps find a highly governed U.S. Credit market more appealing than dealing with the whims of ungovernable debt markets in Europe and elsewhere? And forgive me one last time for thinking that the invincible hand of the Federal Reserve along with unfathomable global central bank liquidity creation further bolsters boom and bust dynamics and heightens the risk of further rounds of global de-leveraging and de-risking. If it looks like a Bubble, smells like a Bubble

Doug Noland Reserve loses control of short and long term interest rates; and it will, rising interest rates will result in panic buying of real assets with no default risk. Until then, believing that precious metals are near their bull market top is nonsense. Marc Lundeen, Editor Weaning us off oil is part of Obamas promise to fundamentally transform America by attacking the engine of American prosperity, power, and national selfreliance. Bruce Thorton January 24, 2012 Current valuations of British and U.S. government debt signal that we are very close to a massive reversal, in which probably for several decades it becomes impossible for those governments to sell new debt except at very high costs. Martin Hutchinson, Author The aftermath of debt bubbles, when they burst, is measured, not in years, but in decades. Ive said before that my signal for the end of this extended top will be that time when the Dow breaks below 10,000. Once having violated 10,000, I expect consumers to turn dead-bearish, and I expect the currently optimistic analysts to become pessimistic. Once again I beseech (beg) my subscribers to be out of stocks. The outlook for the markets, all of it, is now very bearish. We are watching the greatest debt bubble in history about to deflate, and it wont be a pretty sight. All man-made money is a liability of the creator and I am afraid that man-made money is ultimately doomed. Richard Russell, Dow Theory Letter The developed world is perilously close to a monetary deluge that could make the Weimar Republics hyperinflation look like amateur hour. Mark Motive, Journalist The money needed to bail out Europe and to fund Americans spiraling debt and future unfunded obligations is in the tens of trillions. It does not exist. It has to be created by printing money in massive quantities, and despite all the rhetoric you will hear against such policies, in the end its the path of least resistance. Printing money is an invisible tax on savings, much easier to initiate, than, say, raising taxes or cutting back on services and entitlements.

Frank Giustra, Philanthropist Over the course of 600 years, five dynasties in China implemented paper money and all five made frequent use of the printing press in an attempt to solve problems. Economic catastrophe and political chaos inevitably followedthose who held it as a store of value found that in time all they held were worthless pieces of paper. Ralph T. Foster, Author The question for 2012 is not whether Europe will fix its sovereign debt problem. The problem is inherently not fixable. William Buckler, Editor Ben Bernankes Federal Reserve seems intent on pushing all the boundaries of monetary policy. In its most recent ploy, the Fed has engaged in a covert bailout of Europe through the use of currency swaps. From an investment perspective, this goes to show how deluded dollar investors are theyre buying into a currency that is being printed for any and all comers. Peter Schiff, Author The reality is that we are rapidly heading into a Crisis that will make 2008 look like a picnic. It could erupt tomorrow or next week, or even in a months time. But the fact remains that there is no possible happy ending for the current EU Crisis. Interbank liquidity is drying up and banks are parking record amounts of cash at the ECB in anticipation of widespread bank failures. Graham Sumners, Editor The unavoidable fact is that ever since the banking system began funding their operations with inflation from the Federal Reserve System, and not from the thrift of the general public; our world began changing for the worse. Mark J. Lundeen, Editor Consumer income and credit remain structurally impaired and continue to signal economic deterioration, not recovery, with the broad economy remaining in serious trouble. John Williams, Editor In early 2009, the national debt was roughly $10.6 trillion. The most recent request to take the limit to over $16 trillion will last the government less than another year if Congressional Budget Office projections prove to be accurate. Our

actual debt just passed 100% of GDP. Exhausting this new increase will push it well past the breaking point of the Eurozone. Does anyone really think there will be no consequences for this flagrantly irresponsible fiscal behavior? Andrew Sutton, Market Strategist January 9, 2012 I am convinced the whole derivatives market will cease to exist. Will become zeroI am ultra bearish. I think most people will be lucky if they still have 50% of their money in five years time. Mark Faber There are clear signs of a liquidity crunch in the asset markets right now, and the question I keep hearing is, Is this 2008 all over again? No, its worse. Much worse. Chris Martenson In the German hyperinflation of 1919-23, it is true, the average price of stocks increased billions of times, but average wholesale prices increased many more billions of times. The net result was that, at the end of the inflation in December 1923, the average price of stocks was equivalent to only one-fourth their gold value in 1913. Henry Hazlitt At its beginning, in 1966, Medicare cost $3 billion. The House Ways and Means Committee, along with President Lyndon Johnson, estimated that Medicare would cost an estimated $12 billion by 1990. In 1990, Medicare topped $107 billion. Thats nine times Congress prediction. Todays Medicare tab comes to $523 billion and shows no signs of leveling off. The 2009 Medicare trustees report put the unfunded Medicare liability at $89 trillion. Walter Williams Our current experiment in unlimited monetary expansion will continue until it explodes. John Browne December 27, 2011 We might be looking forward to the demise of civilization. Continuing to print money 24/7 will create international inflation of epic proportion! Its a whole new world, and we will all have to be courageous to survive. There isnt much

prosperity, peace, or stability in our future. If you believe there is, you have been living under the wrong rock. I will not sleep well knowing that the Fed has just elected to be the loan officer of the entire globe. Howard Ruff The debt and derivative mountains have grown to such monstrous proportions that they are bringing the world economy to a dead stop, verging on collapse. Clive Maund Gold and silver have been designed by the laws of nature and a free market to save you from total ruin brought on by fiat quackery. Peter Souleles Illegal aliens in Minnesota continue to receive public assistance and other benefits at the expense of Minnesota tax payers. In fact, public benefits to illegal aliens costs Minnesota residents as much as $744,000,000 annually, and U.S. tax payers as a whole up to $85 billion a year! Numbers USA The dollars you keep in a money-market account will steadily lose value year after year. In fact, monies deposited into a simple savings account in 2000 have lost an incredible 25% of their purchasing power since then. Jeff Clark The worlds financial potentates have printed themselves into an ever shrinking corner while locking their exit behind them. They dont dare admit the magnitude of their failure. Bill Buckler Wall Street is becoming little more than a glorified crack house. John Hussman America is getting deeper and deeper into trouble. Jim Rogers I continue to warn that with all the international money printing, inflation lies ahead. This also means higher interest rates. Subscribers must remember the interest rates are abnormally low today, which means that trillions of dollars are

being rolled over at almost negative rates. But when rates begin to advance, the compounding effect comes into play. This will present problems beyond anything ever seen by Americans and a massive slowdown in business. The slowdown will be addressed by the central banks by printing, printing and more printing! Richard Russell Thus far, the U.S. economy has remained resilient despite the turmoil overseas. However, European banks are major players in the U.S., and if the euro crisis remains unchecked the maelstrom will eventually engulf the U.S. economy. Bank Credit Analyst As European leaders press forward with failed attempt after failed attempt to suppress borrowing costs, control spending, reduce deficits and prop up what the markets have already told us is a broken monetary system, the data tells us that the citizens of the most troubled and profligate nations are losing confidence in the Euro dream. Trust has been lost, confidence in the system is being lost, and the ultimate consequence of this break down sovereign defaults are imminent. We continue to move ever closer to a great restructuring of sovereign debt. Kyle Bass The financial systems of the United States and Europe are more deeply tied together than ever before. When the financial crisis in Europe fully erupts, we are going to see lots of banks in the United States fail too. The U.S. economy never recovered from the financial crisis of 2008, and this next financial crisis could send us into a huge tailspin. 2012 is going to be a very interesting year for the financial world. I hope that you all are ready for what is about to happen. The Economic Collapse Letter In my opinion, whats going on now is significantly worse than 2008. Michael Platt Europes banks face a $7 trillion lending contraction to bring their balance sheets in line with the U.S. and Japan, threatening to trap the region in a credit crunch and chronic depression for a decade. Ambrose Evans If anyone thinks things are getting better, they simply dont understand how severe the problems are. London Bank Executive

If the world continues to print money, currencies will be debased against tangible things such as gold, farmland, exclusive real estate, rare art and collectibles, select equities to list a few. Therefore, having your savings invested in cash, bonds, money and markets, could mean a complete destruction of those savings by runaway monetary inflation. Frank Guistra The big money is tiptoeing back into silver. Last month, commodity trading advisors, pool operators, and hedge funds the big money werent interested in silver at allTheir short term objective was to help JPM and the rest of their gang of thieves drive the price of both silver and gold down so that they can cover some of their shorts and accumulate more cheap silver, while the regulatory bodies turn a blind eye. But sooner rather than later, as they move back into the market, silver prices will soar. Aubie Baltin The domestic and global financial systems appear to be on the brink of massive instabilitiesevents suggestive of accelerating movement towards a near-term dollar and inflation catastrophe, continue to unfold. John Williams The real story, which the mainstream media is neglecting, is that there are signs of an underground run on Europes banks. Almost nobodys talking about it, but there are indications money is already moving out of the European Union (EU) faster than rats abandoning a sinking ship. Keith Fitz-Gerald December 13, 2011 It is likely that a collapse of either the euro or the European banking system will flow rapidly to America, threatening U.S. banks, the U.S. Treasury market and even the continued viability of the fiat dollar-based monetary system. In short, the U.S. dollar and U.S. Treasury bonds are two massive but latent bear traps. Investors should be wary of both. John Browne, Analyst We are moving closer and closer to what I call survival period the period where the magic of compounding turns into what will be the poison of compounding. This isnt a time for timing. This is a time for action. Reduce your exposure to stocks. . .Those who are holding stocks in the hopes of the usual rebound are going to be

terribly disappointed in the years ahead. This bear market is going to be unlike anything weve ever seen before. . .The U.S. Government is now so loaded with evergrowing debt that it has become a mathematical freak. We return to different times, when rising interest rates will eat up the U.S. Government. With $55 trillion in assorted debts, the U.S. is in no shape to deal with rising interest rates. We are in a state of reverse compounding, leading to inevitable bankruptcy on a massive scale. Richard Russell, Newsletter Editor The worlds financial potentates have printed themselves into an ever shrinking corner while locking their exit behind them. They dont dare admit the magnitude of their failure. Bill Buckler, Editor Its not just our looming financial collapse; its not just a culture that seems on a fast track to perdition, full of hapless, indulgent, childish people who think government has the answer for every problem; its not just Americas potential eclipse as a world power because of the drunken sailor policymaking in Washington no, its all this and more that spells one word for America: Armageddon. Mark Steyn, Author It looks highly unlikely that Europe can be saved and even if it was we would be staring down the barrel of hyperinflation. Clive Maund, Editor Inflation is defined as an increase in the money supply. Deflation is a decrease in the money supply. Prices are a SYMPTOM of increases or decreases in the money supply. This is very, very basic stuff. Unfortunately, in world-improving, highly socialist institutions; such as Harvard, Yale and Princeton the last few sentences may as well have been written in Nepalese. They speak a language called Keynesian and have a religious belief that drawing pictures on pieces of paper can make everyone rich. They probably also stomp up and down on a bag of chips to make more chips, too. Jeff Berwich, Editor Were in the endgame for paper currency. John Hathaway, Asset Manager Every successful civilization in history has relied on sound money to grow, always in the form of precious metals. With globalization, we live in a world where investors dont have to live with governments bad choices. Allocating a portion of

your portfolio to precious metals means being able to sit on the sidelines and laugh at the comedy of the sovereign debt crisis. It means that when new dollars or euros are printed, your metals simply go up in price. Peter Schiff, Author If you look at the U.S. annual deficit on a GAAP basis generally accepted accounting principles with accounting for the year-to-year change and the net present value of unfunded liabilities in Social Security, Medicare and such, youre seeing a federal deficit in excess of $5 trillion per yearYou could take 100% of peoples salaries and the government would still be in deficit. You could cut every penny of government spending, except for Social Security and Medicare, and youd still be in deficit. You cant escape the eventual hyperinflation if those programs are not addressed. Originally, I was looking for hyperinflation by the end of this decade. Ive advanced it to 2014, and it may well come before that. John Williams, Editor Were approaching a state in which the government spends $4 trillion but only raises $2 trillion. Which is an existential threat to the nation, but at least has the advantage of being one whose arithmetic is simple enough even for politicians: Try to imagine every aspect of government having to make do with half of what it currently has. Thats the scale of reform necessary to save America from a future as a bankrupt, violent, Third World ruin. Mark Steyn, Author November 29, 2011 Theres an old saying that the higher you fly, the harder your fall. The U.S. government is, by any measure, the luckiest government in centuries. It has risen to unforeseen heights of monetary excess and has been rewarded for doing so. But it looks like lower flying planes are starting to stall out, and one can only imagine from this height how fast and how far the U.S. may fall. John Browne - Analyst In the modern regulatory democracies of the West, we have today a statecapitalistic system drowning in an absurd thicket of regulations and burdened by onerous taxes, which are laid down in what are by now entire libraries of statutes and codes of impenetrable complexity. The economy rests on the quicksand of a central bank-led fractionally reserved banking cartel and the irredeemable fiat money it issues, which has created a gargantuan edifice of unproductive debt that leaves us continually dancing on the edge of an abyss.

Pater Tenebrarum Analyst With no relief in sight for the structural income and credit problems facing consumers, there is no near-term prospect for broad economic recovery in the United States. John Williams, Editor The USA is indeed headed for the second stage of its continuing financial crisis, this time in the form of a sovereign debt nightmare that will make 2008 look like a game of Monopoly. Andy Sutton Investment Advisor The reality is that 2008 was just the warm-up. Were heading into the Second Round of the Great Crisis: the Sovereign Default round in which entire countries will go bust. By the time this mess ends, were facing systemic failure, bank holidays, debt defaults, and more. So if you have not already taken steps to prepare for systemic failure, you need to do so now. Were literally at most a few months, and very likely just a few weeks from Europes banks imploding. Graham Summers, Investment Advisor Italys debt load is expected to hit 120% of GDP by the end of the year. That number should be a Red Light warning for anyone with any sense of history. No country has ever been able to climb out of that kind of debt hole without encountering a major default or hyperinflationary event. Aubie Baltin, Editor Massive, fundamental dollar dumping and dumping of dollar-denominated assets may start at anytime, with little or no further warning. With a U.S. government unwilling to balance or even to address its uncontainable fiscal condition; with the federal government and Federal Reserve standing ready to prevent a systemic collapse, so long as it is possible to print, spend, loan or guarantee whatever money is needed; with the U.S. dollar at increasing risk of losing its global reserve currency status; much higher inflation lies ahead, in a circumstance that, again, could evolve rapidly into hyperinflation. John Williams, Editor November 14, 2011 Silver could top out at $250.00 an ounce in the next five years as global mine production crawls in the face of increasing consumer and industrial demand.

Peter Krauth, Editor Italys debt-to-GDP is not far behind Greece, at 119%. If the same solution were to be offered when Italy faces default, the EU itself estimates that the required bailout would have to be 28 times larger than what is being offered to Greece today. Michael Finger, Editor Strategies that focus on protecting investors from what I believe will be a global financial meltdown that is undoubtedly already underway, should be front and center of all investment decisions. It should be concentrated around physical Gold and Silver. . .which will be the investors best hedge and overall solution to what may become the worst financial crisis the world has ever witnessed. Aubie Baltin, Editor We continue to believe that the United States is going down a path that will end in a bond market and currency crisis. And unless we change course, the consequences for every American citizen and every foreign holder of U.S. debt may be severe. Neeraj Chaudhary, Editor China just introduced silver bars for investment. And now, state-run China Central Television (CCTV) is running campaigns encouraging the population to invest in silver. That means there are over a billion potential new silver investors hitting the market. Peter Krauth, Editor The bottom line is that real interest rates continue to fall across the globe as fiat currencies are being debased at an ever alarming rate. This is the case just as the debt of the U.S. continues to soar both in nominal terms and as a percentage of GDP. That leaves me to several conclusions: the U.S. dollar will soon lose its status as the worlds reserve currency, inflation and nominal interest rates in our country are about to soar. . . Michael Pento, Editor Back in April, the Financial Stability Board (FSB), an international super-regulator, wrote a. . .paper, Potential financial stability issues arising from recent trends in Exchange Traded Funds (ETFs) Its central warning that ETFs are not the cheap and transparent vehicles the marketers would have us believe. . .Many of these funds are now fiendishly complicated and way beyond the comprehension of the individual investors and professionals alike who are buying them.

What was once a straight-forward means of gaining access to a market has turned into a minefield for investors and one which. . .has the potential to become the next toxic scandal. Tom Stevenson, Investment Director Federal Reserve Now Backstopping $75 Trillion of Bank of Americas derivatives Trades. This means that the investment banks European derivatives exposure is now backstopped by U.S. taxpayers. . .JPMorgan is apparently doing the same thing with $79 trillion of notional derivatives guaranteed by the FDIC and Federal Reserve. Bloomberg Greece deserves to go bankrupt and will go bankrupt in time, along with all of Europe, followed by Great Britain and the U.S. . . .the whole financial system will collapse and all these countries will be bankrupt, it is only a matter of the path to get there and how long it can be delayed. Ron Struthers, Editor October 31, 2011 The latest COT charts reveal that Big Money has largely cleared out of its short positions in silver, which is mega-bullish, with the dramatic drop on the last rout being a sign that we havent got much further to go before silver reverses, possibly dramatically to the upside. . . Clive Maund, Editor The world is on the eve of the next financial crisis, with sovereign debt its epicenter. Mohamed El-Erian, Editor Unfortunately, the problem of unemployment is not going away anytime soon and we will never return to a true unemployment rate below 20%. The reason for this is that our entire debt-based economic system is unsustainable and with its best days behind us, is now set to implode. Jason Hamlin, Editor We are very close to the implosion point where countries, banks, and fiat currencies collapse. The world is choking on debt levels that can never be repaid in any manner. We are now witnesses to the total destruction of the Keynesian fiat based economic system that has been operating worldwide for the last 40 years.

The politicos will do what they always do as this inflexion point and critical mass is breached. They will hyper-inflate like the world has never seen. This will drive gold and silver prices into the next galaxy! Greg McCoach, Editor Massive, fundamental dollar dumping and dumping of dollar-denominated assets could start at anytime, with little or no further warning. With a U.S. government unwilling to balance or even to address its uncontainable fiscal condition; with the federal government and Federal Reserve standing ready to prevent a systemic collapse, so long as it is possible to print and spend whatever money is needed; and with the U.S. dollar at risk of losing its global reserve currency status; much higher inflation lies ahead, in a circumstance that rapidly could evolve into hyperinflation. John Williams, Editor From all Im hearing and seeing the real accumulation [of silver] is taking place in the physical market as sales records are falling almost daily at brokers and mints. With such accumulation youd think the price would be moving higher but its not. Its a paper price, not a physical price as prices are determined to a large degree in the futures pits and no physical silver ever actually changes hands. . .The premiums will be huge as we move forward and that is the best reason for owning the actual physical metals. Warren Bevan, Editor Eventually the Federal Reserve will lose control and will not be able to get the stock market reignited because it will reflect the reality in the economy. We think the Dow at 1,000 is probably a little optimistic. We think it could go below that to something like 500 if we were to emulate the 1929-1932 experience. Ian Gordon, Analyst Before this mess ends, the financial system as a whole will have collapsed. Whats coming is going to make 2008 look like a joke. Graham Summers, Editor The Bank of International Settlements pegs the total world over-the-counter (OTC) derivative exposure at around $600 trillion, but many experts say the real figure is more than twice that amount. No matter which figure you use, it is a gargantuan sum. The OTC derivatives are an unregulated dark pool of money with no public market. These are basically debt bets between two entities on things such as credit risk, currencies, interest rates and commodities. According to the latest report from the Comptroller of the Currency, just four U.S. banks have an eye popping $235 trillion of OTC derivative leverage. As a nation, U.S. banks have a total OTC

derivative exposure of $2500 trillion. So, the fact that just four U.S. banks have this much leverage and risk is astounding! The banks are listed below in order of size and approximate OTC exposure: 1. 2. 3. 4. JPMorgan Chase Bank NA OH Citibank National ASSN Bank of America NA NC Goldman Sachs Bank USA NY $78.1 trillion OTC derivatives $56.1 trillion OTC derivatives $53.15 trillion OTC derivatives $47.7 trillion OTC derivatives

Considering that the total assets of these four banks are little more than $5 trillion, I see a frightening amount of risk with a total derivative exposure of $235 trillion! This is nearly 50 to 1 leverage. On top of that, assets such as real estate or mortgage-backed securities can be held on the books at whatever value the banks think they can sell them for in the future. I call this government sanctioned accounting fraud, or mark to fantasy accounting. Who knows what the true value of the banks assets really are. I call this Sleight of Hand on a massive scale! Jim Sinclair, Editor With the Obama regimes shotgun-stimulus now exhausted, and with the Fed hyperinflationary money-printing (supposedly) about to wind-down, there are no more smoke and mirrors which can hide the magnitude of the U.S.s economic collapse. I give it no more than a month before B.S. Bernankes latest exit strategy once again morphs into just more money-printing. This wont fix anything, anymore than all the other $trillions printed-up by Helicopter Ben. It will, however, allow the U.S. government to hide its total economic collapse for a few more weeks/months. Jeff Nielson, Editor Social justice and economic equality are just the code words that they [Wall Street demonstrators] exploit to camouflage their true goal: destroying America and its democratic and capitalist system. The mainstream media, filled with leftists and run by leftists, is sympathetic to that goal... Jamie Glazov, Author A lot of Americans dont know it, but one of the demands being made by many of the Occupy protesters across the country is forgiveness of their college loans. Why? Because college graduates are shocked that a sheepskin they borrowed a couple of hundred grand to acquire doesnt guarantee them a cushy, high-paying, selfactualizing job. In other words, despite four years of higher education, these anarchistic nit-wits remain insulated from the one over-arching lesson that any decent university should have hammered into their self-aggrandizing, self-entitled heads on the first day of classes: The. World. Does. Not. Owe. You. A. Living. Arnold Ahlert, Editor

The Left seems unruffled by the inordinate wealth of certain types of rich people: actors, athletes, musicians. Thats because those folks are assumed to have made their cash on luck, sort of like lottery winners. The Left simply hates those who made their money in business while employing people, because it gives the lie to liberal ideology in two distinct ways: first, it suggests that wealth is a matter of skill rather than luck and does not require government intervention; and second, it suggests that the private sector rather than government creates jobs. Ben Shapiro, Editor October 17, 2011 A Greece debt default is now imminent because it cannot print money! It cannot print Euros therefore it cannot do what Britain, and the United States are doing which is to stealth default by means of high real inflation. You know it when you go to the super market to do your weekly shop and see that your money can barely buy 85% of what it could a year ago. Nadeem Walayat, Editor The financial markets and systemic conditions remain in turmoil and are extremely dangerous. Various heads of state, finance ministers, central bankers, Treasury Secretary Geithner and Fed Chairman Bernanke continue to behave and talk as though the system is at risk. . . There is no happy solutions available here, only tools devils choices for buying a little extra time. From the Feds standpoint, keeping the banking system afloat remains its primary concern, although needs for economic growth and contained inflation will be given as the rationale behind any overt change in policy. The ultimate cost in propping the system, however remains inflation. . .The root source of current global systemic instabilities largely has been the financially-dominant United States, and it is against the U.S. dollar that the global markets ultimately should turn, massively. The Fed and the U.S. Treasury likely will do whatever has to be done to prevent a euro-area crisis from triggering a systemic collapse in the United States. Accordingly, it is not from a euro-related crisis, but rather from within the U.S. financial system and financial-authority actions that an eventual U.S. systemic failure likely will be triggered, seen initially in a rapidly accelerating pace of domestic inflation ultimately hyperinflation. John Williams, Editor Reading Barronss and listening to CNBC, the consensus of thought seems to be that the reason for the massive across the board selling, including Gold and Silver is because U.S. Treasuries are the only risk free place for capital. Since when is a 1.6% yield (on 10 year Treasuries) on a depreciating asset (U.S. dollar) in a (realistic) 5% + and rising inflation rate a good risk free place to invest your money?

Aubie Baltin, Editor Following the IMF meeting this past Monday, we heard from PIMCOs head over there, Mohamed El-Erian. He said, What I learned in Washington is that the Europeans finally get it. They recognize they have deep problems and they recognize they need to do something about it and now they are going back and will try to do something about it. This was a very important wake up call to Europe. What wake-up call? What are they gonna do about it? Theyre gonna do about it the same thing the United States did about it, throw money after bad debt. They knew what was going on over there. Theres no solving it and the big lie is that if only the brilliant people put their minds together and work as a unified force, and speak with the same propaganda, that its all going to be fixed. Gerald Celente, Editor Sovereign balance sheets resemble an overweight diabetic on the verge of a heart attack. Bill Gross, Bond Manager You handed a multitrillion-dollar economy to a community organizer and youre surprised that it led to more taxes, more bureaucracy, more regulation, more barnacles on an already rusting hulk? Mark Steyn, Author The Fed is still trying to find ways to manipulate the bond market with the newly announced Operation Twist. This is yet another plan to suppress yields, encourage spending (as if too little spending was Americas problem), and paper-over the untenable interest payments hanging over Washington. The manipulated U.S. bond market is perhaps the greatest bubble in existence. Further manipulation only makes it more unstable in the long-term. Peter Schiff, CEO The European debt crisis is quickly spreading to Italy. On Sept. 28th, Italy was selling bonds at yields twice as high as the previous sale at the beginning of the year. The ECB may be able to keep Greece afloat, but Italy is the eurozones third largest member. Thats a load too heavy for the ECB to bear. Peter Schiff, CEO The poor in this country are not poor by any historical standard. They have cell phones, cable TV, a car, lots of food and plenty of disposable income. Whats more, there is no such thing as a fixed class called the poor. People come and go, depending on age and life circumstances. Plus, in American politics, when you hear

kvetching about the poor, everyone knows what youre supposed to do: Hand the government your wallet. Lew Rockwell, Editor The latest COTs show a TRULY MASSIVE DECLINE in commercial short and large and small spec long positions in silver. . .This is THE MOST BULLISH COT CHART FOR SILVER THE WRITER HAS EV ER SEEN. It alone suggests a stunning turnaround in the silver price before long. Clive Maund, Editor September 29, 2011 Im for the rich, and not just because the top 1 percent of earners in American paid 38 percent of income taxes in 2008. And not just because I suspect that attempting to tax the rich more will only lead to more tax avoidance, not more tax revenues for the federal government. Im for the rich because, with some exceptions, theyve earned their money. A Prince and Associates study found that only 10 percent of multimillionaires had inherited their wealth. In the process of earning their wealth, the rich have created products, services and whole industries that have dramatically improved my work life, my family life and my health. Im so grateful to them for the GPS, iPads, non-drowsy antihistamines, smartphones, XM radio and The Teaching Company courses to name only a few advances of the past decade or two. Im for the rich because nearly all of the rich people Ive met are extremely publicspirited. They volunteer. They form committees to improve things in their communities. And they are incredibly generous with their money. As Arthur C. Brooks of the American Enterprise Institute notes, The top 10 percent of households in income are responsible for at least a quarter of all the money contributed to charity, and households with total wealth exceeding $1 million give about half of all charitable donations. In general, I think they probably make wiser choices in their charitable giving than the federal government would make if it took their money and spent it. Im for the rich because they create the dynamism and energy of a growing economy. The rich create business and hire people. A wealthy person gave me my first job. And Ill bet the same is true of you. Im for the rich and for all the people who simply want an opportunity to become rich opportunities that are becoming scarcer with every passing day of Obamas presidency. Mona Charen

September 20, 2011 The vast majority of the U.S. public has lost faith in Wall Street, and has withdrawn about $2-trillion from the stock market. Instead, it is estimated that the wealthiest 10% of Americans are now left in control of 80% of the outstanding stocks. Furthermore, nearly 60% of the trading volume on the NYSE and Nasdaq is now handled by high frequency computerized Black Box traders, and in the first half of August, they accounted for 75% of the volume. Gary Dorsey, Editor In a series of insane actions over the past three years, governments the world over, led by the Fed and the U.S. Treasury, have burdened the public with levels of debt that cannot be repaid by liquidating the assets supposedly backing them. The collateral is largely fictitious. It does not exist in reality; therefore the repayment of that debt will burden the worlds economies for generations. That realization has been leading the quicker thinkers to decide to cash out of the con now rather than later. The ranks of those wanting out are growing. Theres just one problem. Theres not enough cash to make everyone whole, and more and more people are realizing that. The sense of fear and panic is growing. Lee Adler Massive, fundamental dollar dumping could start at anytime, with little or no further warning. With a U.S. government unwilling to balance or even to address its uncontainable fiscal condition; with the federal government and Federal Reserve standing ready to prevent a systemic collapse, so long as it is possible to print and spend whatever money is needed; and with the U.S. dollar risk of losing its global reserve currency status; much higher inflation lies ahead, in a circumstance that rapidly could evolve into hyperinflation. John Williams, Editor As a society, we owe an amount that is unserviceable relative to what we produce. Rick Rule, Asset Manager We believe the psyche of investors is on the verge of reaching a tipping point, which could cause a very rapid decline in asset prices. It is next to impossible to know if and when they will reach for the sell button in unison, but the risk for such an event is elevated and must be considered in all portfolio management decisions. Stocks dropped 34% in twelve trading sessions in 1987. High volatility occurred before that drop, indicating an increased willingness to run for the exits. If you have not noticed, the markets have been volatile recently. Chris Cioracco, Investment Officer If we subtract eight zeros from the government income, budget and debt figures and apply it to a family budget heres what it would look like. Total annual income for the family: $21,700 Amount of money the family spends: $38,200 Amount of new debt added to the credit card: $16,500 Outstanding current balance on the credit card: $142,710

Amount cut from the current budget: $385 Budget Control 101 The Silver Institute projects industrial demand to grow by 35% by 2015. Investor demand now is really starting to rocket, especially in the developing countries. You are seeing tremendous amounts of investor demand in China and India, where normally they would have bought more gold. Sprotts been tracking the capital inflow of each dollar of gold relative to each dollar of silver invested and they are equal on a dollar for dollar amount for both metals in most cases; for some bullion dealers a lot more money is being invested into silver and there is no way the gold:silver ratio is going to stay this much in favor of gold if this continues. Chris Marchese & Jason Burack, Portfolio Strategists European leaders may stave off a banking crisis for a few more weeks. Markets may even stage a relief rally as Greek debt worries abate. But make no mistake a deeper crisis in foreign banks is coming. Jim Jubak, MSN Money September 6, 2011 The basic unwillingness of politicians to face economic and financial realities has caused the United States and European Union to face currency collapse. The politicians are content literally to paper over the problem with massive amounts of newly printed currency. John Browne, Editor The real horror will be later in the year when the U.S. Treasury Bond goes into a freefall. Then a depression is possible. Soaring interest rates. Collapsing asset value. Contracting economic activity. Surging unemployment. And business closures. James Fitzgibbon, Asset Manager Europe may no longer be able to save itself. Too many countries have too much debt. Its economic growth which helps countries service their debts is too feeble. And nervous financial markets seem increasingly prone to dump the bonds of vulnerable countries. This is the real risk to the global and U.S. economic recoveries. . .The questions swirling around Europe are terrible to contemplate. But they will not soon go away. Robert J. Samuelson, Economist Massive, fundamental dollar dumping and dumping of dollar-denominated assets could start at anytime, with little or no further warning. With a U.S. government unwilling to balance or even address its uncontainable fiscal condition; with the federal government and Federal Reserve ready to prevent a systemic collapse, so long as it is possible to print and spend whatever money is needed; and with the U.S. dollar at risk of losing its global reserve currency status; much higher inflation lies ahead, in a circumstance that rapidly could evolve into hyperinflation. John Williams, Editor

Most people are puzzled by Doctor Bernankes persistent concern about deflation, during a time when consumer prices are climbing at high single-digit rates. This can be explained when we understand that while we are looking at consumer prices, he is looking at his banking systems vulnerable collateral underpinning many trillionsof-dollars of debt he and Doctor Greenspan created. Washington now allows the banks to use years of housing inventory from foreclosures to remain as marked-tofantasy assets on their books. If Washington insisted that banks mark-to-market these houses with deep discounts to the mortgages used to finance them, the banking system would fall into a gravitational black hole. Mark J. Lundeen, Editor Given the massive debt pile and sluggish economies of the developed world, it is obvious to us that debt restructuring is the only viable solution. If the West wants to avoid economic Armageddon and/or hyperinflation, debt pardoning must commence without further delay. The creditors and bondholders must accept their losses and take haircuts on their loans; otherwise, they will eventually be repaid in worthless money! The trouble with debt restructuring is that it will wipe out banks equity and the contagion will cause many financial institutions to go bust. Furthermore, debt restructuring or defaults will trigger billions of dollars of payments on the credit default swaps which were also issued by the same banks! Puru Saxena, Investment Manager Listening to most financial advisors right now is very hazardous to your wealth. Buy the dips, stocks still beat bonds over the long haul, buy good quality companies with relatively higher dividends, ignore the volatility and stay the course. If youre sailing in a boat into a hurricane that you have been warned about, would you continue to stay the course and just sail right into it or make a major course correction and batten down the hatches? Mark Thomas, Editor According to Maxine Waters, the Tea Party can go straight to hell. But Viva Fidel! she chanted, during the rapturous reception that greeted the Stalinist dictators visit to Harlems Riverside Church on Sept. 9, 2000. The overflow crowd packed the church to suffocation and spilled from the doors onto the streets and sidewalks. I came to Harlem because I knew it was here that I would find my best friends, beamed Castro, the jailer of the longest suffering black political prisoners in modern history. The Harlem church in which he spoke might still be radioactive today, if it werent for Khrushchev foiling Castros fondest wish to nuke New York City in October of 1962. If the nuclear missiles had remained, boasted Che Guevara to the London Daily Worker in November 1962, we would have fired them against the heart of the U.S. including New York City. The victory of socialism is worth millions of atomic victims. Humberto Fontova, Editor August 24, 2011 President Obama has declared that auto companies fleets must average 54.5 miles per gallon by 2025, almost double the current 27.5. Standing at his side when he made the announcement were executives from the Big Three automakers.

The New York Times reported: It is an extraordinary shift in the relationship between the companies and Washington. But a lot has happened in the last four years, notably the $80 billion federal bailout of General Motors, Chrysler and scores of their suppliers, which removed any itch for a politically charged battle from the carmakers. Right. Theyre happy to agree to stupid rules, since they are now dependent on government favors. Obama said that under his new rule, everyone wins. Consumers pay less for fuel, the economy as a whole runs more efficiently. Sounds impressive, but he didnt mention the costs. The Center for Automotive Research says the new standard will raise the price of cars by about $7,000. Youd need to save a lot on fuel to break even. But thats not the worst of it. The new rules will kill people. Sam Kazman of the Competitive Enterprise Institute explained this to me. The MPG standard has been killing people for the last 30 years, Kazman said. How can that be? It forces cars to be. . .made smaller and lighter. . .They are simply worse in just about every type of auto collision. The National Highway Traffic Safety Administration actually backs Kazman up. It estimates that smaller cars are responsible for an additional 2,000 deaths each year. John Stossel, Editor Justifying the new, thinly veiled immigration amnesty, President Obama continues to draw on the teachings of Rules for Radicals author Saul Alinsky. Alinsky, the neo-communist father of modern community organizing whose tactics Obama taught in college, wrote that you do what you can with what you have and clothe it with moral garments. According to Alinskys tenth rule of the ethics of means and ends, all great leaders lie and use moralistic propaganda in order to accomplish their goals. They invoke moral principles to cover naked self-interest. They must do this because [a]ll effective actions require the passport of morality. It irritates President Obama that Congress has not passed his beloved Development, Relief, and Education for Alien Minors (DREAM) Act so he has decided to bypass the nations lawmaking body, ignore existing law, and simply decree it.

Mathew Vadum August 8, 2011 I can tell you that the current government cannot raise enough taxes to bring the actual deficit under control. It could tax 100% of income and corporate profits, and it would still be in deficit. In terms of generally-accepted accounting principles (GAAP) that include annual increases in the unfunded liabilities on a net present value basis, the U.S. is long-term bankrupt. A true balanced budget approach would require excessive overhaul Im talking massive cuts in the social programs because cutting every penny of government spending except for Social Security and Medicare would still leave the country in deficit. We are spending well beyond the bounds of reason in a number of areas. The country just does not have the ability to pay for all the services it provides. John Williams, Editor I would say that the dollar-reserve system is going through a slow-motion collapse, much as the Bretton Woods monetary system did in the 1960s culminating with President Nixons ignominious closing of the gold window in 1971. With the continuation of trillion-dollar Federal deficits into the foreseeable future and the relentless and accelerating accumulation of the U.S. national debt in foreign hands, it is difficult to see how the American state can avoid defaulting on its debt or attempting to inflate it away by continuing its reckless monetary expansion. But long before this occurs it is likely that foreign holders of U.S. dollar assets like China will begin to reduce their holdings and replace their dollar reserves with other currencies or even precious metals. At this point the dollar-reserve system and with it the U.S. governments privileged access to international credit markets will disappear. Dr. Joseph Salerno, Economist Europe and America are starting to unravel before our very eyes. Yet nobody wants to admit that we are in a crisis, and the markets are still acting as if the problems in Europe and the U.S. can be easily resolved. . .There is a Financial and Banking crisis of massive proportions simmering and just about ready to boil over. It will end up being much worse than 2008 and it will affect the whole world including China and the rest of the BRIC countries. Aubie Baltin, Editor July 25, 2011 Whats going to happen to the price of silver is its going to go up, way up. All you had to do was close your eyes and hold it and shut your panicked membrane to all of the fools who say its too high. I tell you now that the price of silver is going far

higher than anybody realizes. Its going far higher than $50, its going to test the $100 an ounce level, and beyond that somewhere between $300 and $500 an ounce. Believe the unbelievable or not. James Dines Silver has always played a similar role as gold; it has been used as a monetary metal for centuries, just like gold. It moves in the same direction as gold although in a much more volatile way. On the upside, silver will outperform gold in a significant way, which makes it a very attractive alternative for people who cannot afford to buy gold. Eric Hommelberg Though still not widely acknowledged, there is both an intensifying double-dip recession and a rapidly escalating inflation problem. John Williams, Editor Obama claims that raising the debt ceiling is about getting a hold of the federal debt. Have you ever heard of anyone getting out of debt by taking on more debt? Peter Schiff, Editor I really believe that silver will trade at a 16:1 ratio to gold. I certainly believe that gold can get to $1,600/oz. this year, and while Im not suggesting that silver will make it to $100/oz. this year, itll certainly trade at a 16:1 ratio to gold within three to five years. By then, who knows? Gold could be at $2,500/oz. Eric & Larisa Sprott, Asset Managers History tells anyone who will listen what is coming up. Do yourself a favor and spend half an hour researching monetary history on Wikipedia or inflationary or hyper-inflationary events. Youll quickly realize the horror show that is coming and I wont have to try and convince you to buy physical precious metals, youll know why and feel confident and comfortable in your decision. Warren Bevan, Editor June 15, 2011 Despite the full onslaught of Keynesian economic policies, including the injection of unheard of sums of printed money into the financial system, state sanctioned accounting tricks, negative real interest rates, massive deficit spending, and debasement of the U.S. dollar, the American economy is slipping back fast towards recession.

John Browne, Editor Its very strange to see commentators claiming that QE3 will end and the Fed will no longer supply any juice to the system. After all, we have not had a period in which the Fed wasnt pumping tens of billions into the markets since 2007. Despite the formal declaration that QE1 was over, the Fed DID continue to pump north of $10 20 billion into the markets every month, always during options expiration week. Like I said, there hasnt been a period when the Fed wasnt pumping in years. And lets not forget that the Fed has also been put an additional $600 billion into the markets since November (on top of QE2). Thats correct, in the last six months, the Fed has been pumping another $100 billion per month into the system behind the scenes. So at this point, between QE2 and the Feds behind the scenes move, the markets are receiving nearly $200 billion per month in additional liquidity. The idea that the Fed will remove these props, when all the Feds done for four years is provide liquidity, is ridiculous. Graham Summers, Editor June 1, 2011 I think the rise to nearly $50, believe it or not, was justified. Its funny when you read the mainstream press, everybodys talking about bubbles and how big the correction is going to be, and they dont seem to understand the fundamentals. Yeah, I think the fundamentals for silver are impeccable. The fact were going through a tough correction here is not surprising. This is a paper-driven, COMEXsponsored correction and its to be expected. I mean, if youve been involved in the silver markets as long as we have at Sprott, were used to these things. Theyre not fun, but theyre just another buying opportunity. John Emery, Analyst As per the Federal Government reports, small businesses created a whopping 64% of net new jobs over the past 15 years. The IRS reported that in 2008, the latest year that it has made income data available, well over half of all the income earned by small businesses was taxed as households earning $200k+. Attacking the entrepreneurs who create most of the new jobs in the U.S. is insane. How in heavens name will we create jobs if we kill the goose laying the golden eggs Capitalism Works, Socialism Doesnt. Aubie Baltin, Editor

Chinese investors are snapping up gold bars and coins, buying more than ever before in the first quarter of 2011 and overtaking Indian buyers as the worlds biggest purchasers of the metal. Chinas investment demand for gold more than doubled to 90.9 metric tons in the first three months of the year, out-pacing Indias modest rise to 85.6 tons, the World Gold Council said in its quarterly report on Thursday. China now accounts for 25% of gold investment demand, compared with Indias 23%. Carolyn Cut and Rhiannon Hoyle, USA Today I dont recommend using any leverage in precious metals or their stocks. I do not recommend the SLV or GLD ETFs. There is no way I trust the integrity of the banks running these or whether they have the physical metal at all and certainly not free and clear physical. Like many of us know the physical metal is being leveraged between 50 to 100:1 There is no way everyone has good claim to the same metal. Ron Struthers, Editor May 12, 2011 Inflation and inflation expectations are on the rise. Outside of the U.S., inflation is actually old news. It has been obvious for quite some time that inflation is the inevitable consequence of reckless monetary and fiscal policy. Now, for the first time in nearly three decades, its also becoming more obvious in the U.S. as well. Thats very dangerous for the stock market. Why? Because history shows that stocks perform very poorly during times of rising inflation. And a fast change in inflation expectations has triggered some of the worst bear markets in history especially when markets were overvalued! It wont be long now before the American people wake up to the fact that the Government is lying to them. Aubie Baltin, Editor If and when banks start lending again, the consumers you and I will be robbed of the value of our dollars, just the same as if they came in with a gun and took some of our money. However, we wont know that they had been stealing the value of our money. We will just know that our dollars seem to buy much less than they used to. Patrick D. McConnell, Author As long as it is kept within certain limits, inflation is an excellent psychological support of an economic policy which lives on the consumption of capital. In the usual, and indeed the only possible, kind of capitalist book-keeping, inflation creates an illusion of profit where in reality there are only losses.

Ludwig von Mises, Author In decades gone by, various governments around the world took over mining operations. In all cases, the moved failed to achieve long-term benefits. In the absence of effective management, work forces and payrolls soared. Without considerable reinvestment, the government run mines soon required subsidies to stay in operation. Lawrence Roulston, Editor April 20, 2011 Silver will move to $50 this year before powering ahead. If you ask me in the three to five year time frame, obviously I think its going to go north of $100. Eric Sprott, Asset Manager Is the U.S.s financial position hopeless? Ive studied the U.S. finances backwards and forwards, as I see it the U.S.s financial position most definitely is hopeless. The actual posted national debt of the U.S. is $14.1 trillion. However, the U.S. reports its finances on a cash basis while omitting its unfunded obligations in such items as Social Security, Medicare and Medicaid and various other entitlements. If the entitlements are included, the total national debt including unfunded obligations would be over $100 trillion. Richard Russell, Editor Were going to see more and more foreign holders sell their dollars. I think theres high risk in the next year of panicked sell-off, a panicked dumping of USDdenominated paper assets. All of that will cause the Fed to continue to flood the system with liquidity, to buy up unwanted Treasury debt and stimulate inflation. As people increasingly dont want to hold the currency because of the inflation, well start to see higher inflation that quickly can evolve into hyperinflation. John Williams, Editor April 13, 2011 Democrats are never pressed to explain why allowing America to go bankrupt is not only illogical, but indecent. They are never asked to justify why the obvious moral failure of keeping millions of Americans dependent on government with all its attendant pathologies, most brutally expressed in the destruction of the nuclear family, is better than fostering self-reliance. They are never taken to task for fostering fear instead of hope, for playing one group of Americans off another, or why the accumulation of wealth is something to be envied instead of aspired to. They are never challenged by Republicans to explain their compassion whose goal is to put more people on government programs instead of weaning them off such unseemly dependency. Arnold Ahlert, Editor

Empire building also bears the seeds of its own destruction. The closer a state comes to the ultimate goal of world domination and one-world government, the less reason is there to maintain its internal liberalism and do instead what all states are inclined to do anyway, i.e. to crack down and increase their exploitation of whatever productive people are still left. Consequently, with no additional tributaries available and domestic productivity stagnating or falling, the Empires internal policies of bread and circuses can no longer be maintained. Economic crisis hits, and an impending economic meltdown will stimulate decentralizing tendencies, separatist and secessionist movements, and lead to the break-up of Empire. We have seen this happen with Great Britain, and we are seeing it now, with the U.S. and its Empire apparently on its last leg. Dr. Hans-Hermann Hoppe March 16, 2011 Its safe to say the future depends on a steady supply of silver. The burgeoning demand is reflected in the latest figures: global demand for silver is about 890 million ounces a year, while global mine production is about 720 million ounces a year. Were actually consuming scrap to make up the difference. And unlike gold, which tends to remain in a recoverable state as coins or jewelry, a large quantity of silver is ending up in trash dumps where it is essentially lost forever. As long as the emerging markets continue to trend toward freer markets, and consumers the world over continue to demand computers, electronics, and green tech, silver should only become more scarce and thus more valuable. I think these assumptions are pretty safe to make. Peter Schiff, Editor Perhaps the military dictatorship [Egypt] will be temporary, as its leaders say, but we have heard that song before. What we have also heard, too many times before, is the assumption that getting rid of an undemocratic government means that it will be replaced by a freer and better government. History says otherwise. After Russias czars were replaced by the Communists, the government executed more people in a day than the czars had executed in half a century. It was much the same story in Cuba, when the Batista reg9ime was replaced by Castro and in Iran when the Shah was replaced by the Ayatollahs. It is not inevitable that bad regimes are replaced by worse regimes. But it has happened too often for us to blithely assume that overthrowing a dictator means a movement toward freedom and democracy. Thomas Sowell, Editor

Given the relationship between politicians and public employee unions, we should not be surprised that public employee wages and benefits often average 45% higher than their counterparts in the private sector. Often they receive pension and health care benefits making little or no contribution. How is it that public employee unions have such a leg up on their private-sector brethren? The answer is not rocket science. Employers in the private sector have a bottom line. If they overcompensate their employees, company profits sink. The company might even face bankruptcy. Walter Williams, Editor March 7, 2011 Make no mistake about it, spending wins votes, and votes are the ultimate bottom line for politicians. If fancy words and lofty visions are enough to get the voters to go along with more spending, then expect to hear a lot of fancy words and lofty visions. One of the most successful political ploys is to promise people things without having the money to pay for them. Then, when others want to cut back on the things that have been promised, blame them for lacking the compassion of those who wrote the checks without enough money in the bank to cover them. If all else fails, politicians can always say that we can pay for the things they promised us by raising taxes on the rich. However, history shows that, when tax rates go up to very high levels, people put more of their money in tax shelters, so the government ends up collecting less revenue than before. But history is so yesterday. What is far more exciting is to think of high-speed rail in the future, even if it is speeding us toward bankruptcy. Thomas Sowell Irrespective of whether the political turmoil spreads or dies down, irrespective of Saudi efforts to help contain panicked oil prices rises, irrespective of short-lived fluctuations in exchange rates and precious metals price, the U.S. now stands at a point where it is particularly vulnerable to an evolving global loss of confidence in the U.S. dollar. Heavy selling of the U.S. currency and panicked dumping of dollardenominated paper assets, which could trigger U.S. financial market upheaval and the early states of a hyperinflation, is possible at any time with little or no warning. It could be triggered by an unhappy economic or political surprise, or otherwise. Where risks remain high of U.S. financial turmoil unfolding in the months ahead, the onset of a hyperinflation still has an outside timing estimate of 2014. John Williams

February 23, 2011 Silver, even at $30 an ounce is still a once-in-a-lifetime opportunity, the lowest risk, highest profit potential investment you will ever make. Mark J. Lundeen, Editor Amazingly, for all its flaws, the buck remains the worlds reserve currency. So, for now, the U.S. continues to enjoy all the rights and privileges that come from that status, including lower consumer prices and lower interest rates. But along with those benefits comes the great responsibility of not conducting monetary policy in a vacuum. Since the dollar is the benchmark currency, when it is debased, other currencies must follow suit. Because of the massive printing effort underway for some time now, the dollar has gone from an instrument of stability to an instrument of inflation. Peter Schiff, Author The small size of the physical silver market is seen in the fact that at $30 per ounce, the Comex silver inventories are only worth some $3 billion. The U.S. government is now paying some $4 billion a day merely on the interest charges for the national debt. It is also the same value as Twitters new venture round of financing or Fords debt pay-down in the first quarter. Mark OByrne, Author February 17, 2011 Merry Christmas offends leftist views on multiculturalism. So, its largely gone. Honest discussion of male-female differences is also largely gone a lesson the former president of Harvard Larry summers painfully learned when he simply asked if fewer women succeed in math and science because of innate difference between men and women. Discussion of disproportionate rates of black violence is not allowed, no matter how well intentioned unless it is to prove how racist American is because of the high number of black men in prison. In Europe and in all likelihood coming to America Christians who, citing the Bible, argue for a heterosexual ideal are arrested. Thanks to the left, students at colleges get speech codes. They learn early in life that much speech is not permitted. One may not favorably compare Western or American with that of any other. Led by Jesse Jackson, leftists chanted, Hey, hey, ho, ho, Western Civ has got to go at Stanford University. And away it went. The left owns the language. Married women are not to e referred to as Mrs. But as Ms. And the words lady, feminine and masculine have largely gone to their graves. High school and college teams with American Indian names must drop those names because by definition, according to the left, they offend American Indians. Dennis Prager

The sorry and tragic state of black education is not going to be turned around until theres a change in whats acceptable and unacceptable behavior by young people. The bulk of that change ahs to come from within the black community. Walt Williams Without Fear Or Favour: In 1896, a 38-year-old man named Alolph S. Ochs took over a failing newspaper in New York City and built it into what has ever since been the New York Times. In the editorial column, he published a declaration of principles. A phrase in that declaration has become part of the language: ...to give the news impartially, without fear or favour, regardless of party, sect, or interests involved. Leaving aside the question of whether the modern New York Times still lives up to the principles stated by its founder, consider that phrase - without fear or favour in the context of government itself. A number of fundamental principles should become almost immediately obvious. First, there is no government on the face of the earth which would continue to exist in its present form if it gave up the use of fear and favour as the bedrock of its existence. Any government which interferes in the lives, plans and aspirations of its citizens - and all modern governments seldom do anything else - does so almost exclusively by means of fear and favour. Second, a government which really did govern without fear and favour would be an infinitesimal fraction of the size of all modern governments. It would have no structure to re-distribute wealth, merely a structure to defend it in the hands of those who created and/or earned it. Its weapons would neither be turned inward against its own citizens nor would they be turned outwards against its potential rivals. They would merely be there if and when required to defend against attack. And, since it would not function by means of fear, it would not be looked upon to dispense favours. Ten years ago, the US Treasury was making fatuous noises about paying off the entire pile of government debt by 2012 or 2013". Today, that debt is not far off having tripled and it is said to be unsustainable. Of course it is, as are the finances of any government which operates through fear and favour. No credible progress towards genuinely shrinking the size of government can even begin without addressing this fundamental issue. It is not

being addressed anywhere, least of all in nations which are in the process of overthrowing or trying to overthrow their current government. . . Theres Mutt - Wheres Jeff?: Or - where is Bud Fisher, the creator of the famous Mutt and Jeff cartoon strip, when we need him? The other half of the financial dynamic duo, Fed Chairman Ben Bernanke, has been holding forth to the US media at no less a venue than the National Press Club in Washington DC. Mr. Bernanke strenuously denied that Fed monetary policy in general and Treasury debt monetisation in particular had anything to do with the fact that food prices worldwide have reached record highs in January and are still climbing. Clearly what is happening is not a Dollar effect, intoned Mr. Bernanke, its a growth effect. A growth effect??! The food supply is certainly not growing worldwide. So what is? Ah, its the number of US Dollars worldwide. And given the fact that many of these foodstuffs trade internationally in US Dollars and the US Dollar has been falling for years, food prices are miraculously rising. Can a farce be deadly? It can when it is being enacted by the worlds two most powerful financiers. William Buckler February 9, 2011 The Chinese view gold as an asset class which is far more reliable than say the dollar, the euro, or any other paper currency including its own. Its central bank, and its people, will continue to accumulate gold the latter in ever growing amounts as wealth spreads down through the countrys population. Lawrence Williams The all-time high price for silver in January 1980 of $49.45 per troy ounce would be $139 per troy ounce and would be $462 per troy ounce [adjusted for inflation] in terms of SGS-Alternate-CPI-adjusted dollars. John Williams, Newsletter Editor The major difference between Gold, Silver and all other commodities is that Gold and Silver have an intrinsic monetary value that all other commodities as well as stock market evaluations lack. Besides only Gold and Silver are Superior goods. (Demand increases as price increases). . . The manipulators, after having had a tremendously profitable 20 years (1980 to 2000), have by now given back all their ill gotten gains plus and are now sitting on losing positions in the $100s of billions and will soon be forced to cry UNCLE. (FED

and Treasury come bail us out). Then watch the fireworks. Aubie Baltin, Newsletter Editor The U.S. Postal Service today announced they are only going to sell forever stamps, which dont have a value printed on them. Immediately I know this is a scam- the post office is going to lose a fortune because they are selling all these stamps, collecting all this revenue and spending it now on current expenditures like salaries and rent and their gasoline costs. But their costs are going up because of inflation, and they are going to have to deliver all this mail and collect no money. Which means the post office is going to be bankrupt. Which means the post office is going to need a huge government bailout. Peter Schiff, Editor The U.S. government is trying to chase foreign depositors away from the dollar by broadcasting that the IRS wants to begin looking into all foreign-held U.S. bank accounts. Trying to keep ahead of the curve, JPMorgan, among others has told foreign account holders they have to close their accounts by March 31. The harder it becomes to do business with the U.S., the weaker the demand for dollars. The weaker the demand for the dollar, the weaker the dollar will be. . .interest rates will have to rise to offset the fall, and import prices will go up even further. Following that thread, China and Russia have recently struck a deal to bypass the U.S. dollar in bilateral trade the latest and most substantial act of foreign nations taking active measures to ditch the dollar. David Galland, Editor Remember, the U.S.s Federal debt is now at $13 + trillion. And if you include unfunded liabilities like social security and Medicare, youre talking about $70+ trillion in total debt on the U.S.s balance sheet. Lets be blunt here: the U.S. will never pay these debts and liabilities off. Graham Summers, Editor Out of thin air money is like heroin, initially the high is terrific (short term), but the list of accompanying side effects are long term and cumulative and are always worse than the disease it was supposed to cure. . . Inflation will show up not where the Fed wants it in house prices but in higher prices for Gold and Silver, commodities, especially food and gasoline (which they do not include when calculating inflation), clothing, electricity all of which could kill consumption. . . By using smoke and mirrors, the Fed wants to create targeted asset bubbles, praying that the wealth effect will make people feel wealthier and spend their phantom gains. But the paper wealth will vanish as bubbles burst (they always do) and real wealth, along with the phantom wealth, will be destroyed leaving a situation that is much worse than anyone could possibly imagine. Aubie Baltin, Editor January 26, 2011

As for silver, even if the world avoids the meltdown scenario for this year, silver is headed over $55 an ounce and will cross its old nominal high made back in 1980. If things go south in a major way during 2011, silver will grow wings and be priced in the hundreds of dollars an ounce. Either way its going to be a great year for silver. Greg McCoach, Newsletter Editor The bull market in precious metals is now in its tenth year. Ben Bernanke is debasing the U.S. Dollar with reckless disregard. A retiring CFTC judge admits that they covered up market manipulation. The U.S. Mint is continually setting records for sales of Silver Eagles. And a current CFTC commissioner is making very public statements about silver market manipulation (implied to be by big players such as JPM selling naked silver contracts and artificially keeping the price too low). If these arent reasons enough to want to rush out and close your 401k and transfer every cent into silver bullion, I dont know what is. Never mind that Eric Sprott is reporting that silver bullion in quantity is virtually unavailable. Never mind that the COMEX is running out of silver. Never mind that the financial crisis that started in 2008 has not been resolved and that previous metals have a multi-thousand year history as the worlds ultimate safe haven asset. Oliver Silverstein. Editor Even though I have continually urged investors to allocate some of their funds to silver since the price was trading just above $6 an ounce in 2004, many of these individuals, have preferred to remain in equities, funds, money market and bonds. But, when the price of silver broke above $30 an ounce, many of these same individuals asked if it is now too late to enter the market. While I cannot explain the psychological imprint of these investors, I have seen this behavior many times over the last 30 years or so. These types of investors invariably seem to need the validation of their bankers, stock brokers, accountants, etc., before making a decision. Yet, their advisers usually have no knowledge about these markets and are therefore not really qualified to render any advice on their potential or lack thereof. Then, by the time these investors realize that they have missed out on some major gains, and decide to enter the market, they deliberate, waiting for a pull-back that never seems to come. And then, out of pure frustration, they finally enter the market, but only when it is close to peaking. My point is very simple. Dont make this mistake regarding silver. Despite the massive gains we have seen in the last ten years, this market is still far from peaking and still offers investor huge potential. David Levenstein, Author

India is the largest consumer and importer of silver in the world. According to commodities brokerage Karvy Comtrade silver imports by India soared more than six times to $1.7 billion in the first-half of 2010. Commodity Online Demand and performance numbers show that silver is beating gold handily right now and has been for a while. Whats more, a look at the uses and possible supply bottlenecks of silver shows that this metal could have an upside gold may not enjoy in the New Year. While both gold and silver have rolled back recently a 5% decline for silver and a 3% decline for gold since Dec. 31 theres no doubt many investors are considering the drawback little more than a pause before the commodities skyrocket once more. Jeff Reeves, Editor The monthly December inflation releases for the CPI-U (annualized 7.8% inflation) and PPI (14% annualized inflation) were disasters, with December inflation far from being calm, as touted in one widespread media report. The sharp increases in December energy and food prices were not due to normal price volatility in those areas, instead, they were created directly by Federal Reserve Chairman Bernankes ongoing push to debase the U.S. dollar to destroy the purchasing value of the U.S. currency. . . Increasingly, global investors will shun the U.S. dollar, as its purchasing power increasingly gets hammered by Mr. Bernanke et al. As investors flee from the dollar, the precious metals and stronger major currencies will continue to be the primary beneficiaries in U.S. dollar terms, irrespective of any near-term market volatility, extreme or otherwise. More-prudent economic and fiscal actions taken by major U.S. trading partners will tend to make the U.S. dollar look all the worse on a relative basis. John Williams, Newsletter Editor The credibility of the U.S. government and the Federal Reserve is gradually deteriorating. In the worst case, a total collapse of confidence could trigger a race to divest of U.S. Treasuries and to shed U.S. dollars, i.e., a hyperinflationary currency event. The declining U.S. dollar and the diminishing desirability of U.S. debt and of the Federal Reserves credibility bode well for commodities and precious metals while warning away any sane investor from U.S. Treasuries. Ron Hera, Editor January 12, 2011

Nothing has changed fundamentally to improve the outlook for the U.S. economy. It remains in a protracted downturn that has started to deepen anew and that shows no signs of sustainable economic recovery in the year ahead. Due to spikes in certain business activity from short-lived stimulus effects, the National Bureau of Economic Research (NBER) declared June 2009 to be the end of the recession, so what now is unfolding eventually should gain recognition as a double-dip recession, with the second dip likely having commenced in the August to October 2010 period. .. As demonstrated in actions of the last several years, the U.S. Treasury, and particularly the independent Federal Reserve, will do anything, spend or create any amount of money necessary, in order to prevent a collapse of the financial system in the United States. The Fed and the Treasury actions since 2007 bought some temporary stability, but they did not revitalize or heal the system, and the risk of a systemic collapse remains high (hence the proactive dollar debasement efforts by the Fed). All these factors favor an environment that should see significant selling of the U.S. dollar eventually an outright dumping of the U.S. dollar and dollar-denominated paper assets and the onset of an increase in consumer inflation that likely will open the door to hyperinflation. Risks are particularly high of this dollar selling and early consumer inflation pressures breaking by mid-2011. John Williams, Shadow Government Statistics Debt continues to mount. The U.S. is running vast annual budget deficits that by some methods of calculation may be as high as $5 trillion annually (GAAP method generally accepted accounting principles) and not the reported $1.3 trillion. The official gross U.S. debt has reached roughly $13.6 trillion, but when one adds the unfunded liabilities of Medicare, Social Security and Medicaid, plus the liabilities of Fannie Mae and Freddie Mac, the total may be anywhere from $59 trillion (official reports) to $200 trillion. No matter how one looks at it, many are noting that the U.S. is in effect insolvent over the long haul because even if taxes were hiked to 100 per cent it would still not cover the long term liabilities. No wonder Moodys and other rating agencies have issued warnings about the possibility of downgrading U.S. debt, which could prove to be catastrophic for the U.S. and for the global financial system. David Chapman, BMG Funds It is as though silver has been kept in some kind of communist, controlled economy. And indeed, that essentially is what happened after the 1980 silver price crash. Several banks colluded to keep the silver price locked down and in a world of its own, trading silver to profit their own books. The silver market is incredibly small to absorb the scale of investment likely to come its way as other asset classes lose their appeal thanks to rising inflation and interest

rates. For the gold-to-silver price ratio to get back to its historic average then silver prices must treble; and that will be on top of the rise to come by following the gold price up and up. Peter Cooper, Analyst Silver is now more attractive than it has been in decades. Assuming gold hits my target of $2,000 an ounce and assuming the price of gold is 16 times the price of silver, then silver should be worth about $125 by the time the bull market in silver reaches its peak. Porter Stansbury, Editor The world has consumed so much silver in the last 50 years that the last time above ground available inventory was this low was 1300 A.D. Future Money Trends Silver is going to shine in the new year as investors are bullish on putting their money into the commodity. If you look at commodities in 2010, silver has been a sterling performer. So, in 2011, silver will pilot the commodity super cycle. Kevin Danny, Analyst December 29, 2010 Monetary policy is truly the hidden hand behind the strangulation of the American dream. It is the secret force at work that erodes our living standards, funds the growth of the leviathan state, and make every sector of economic life dependent on rising debt. Llewellyn Rockwell, Jr., Chairman, Mises Institute We dont think any fiat currency provides safe harbor because all will be inflated. What were living through today is a textbook case of rotating debasement occurring just prior to the fall of a global monetary regime. No paper currency has survived in the history of man. Theyve all gone away. Paul Brodsky, Analyst I think the rising cost of money will become the story of 2011. Its effect on consumers, the real estate market, and government borrowing costs will be profound. Apparently, most major brokerage firms have no fear of soaring interest rates causing our economy to implode. However, its clear to me that the bond market has already started to crack due to inflation and massive oversupply from the Treasury. Prudent investors should think twice before overlooking what could be the initial holes in the biggest bubble in world history the full faith and credit of the United States. Michael Pento, Economist Despite all the chatter the data show that financial asset investors simply dont own gold yet. Gold ETFs total about 67 million ounces, which is only about $90 billion. The aggregate market cap of gold and silver miners is less than Googles. Only $2.6 billion flowed into all resource mutual funds in the third quarter. These small figures compare to about $26 trillion in pension money alone a sector that has dedicated only about 56 basis points to precious metals. If we include all investment portfolios, we get a gold commitment of just 15 basis points. If you want to round that it would be 0%! Paul Brodsky, Analyst

The marketplace is a crime and punishment world and this Federal Reserve expansion is the greatest monetary crime of all time. Accordingly, the punishment will be far and away the greatest market punishment of all time. John Exeter, Gold Newsletter: June 1987 December 14, 2010 It is no wonder that foreign purchases of U.S. debt have been declining so rapidly and the Fed has to step in as the buyer of last resort to fund the governments deficit spending. The absolute faith in the U.S. government that has been prevalent for so many years is finally starting to wane. It is a huge house of cards that is destined to collapse and end very badly, especially for those holding their savings and wealth in paper dollars. Jason Hamlin, Newsletter Editor All of history says we shouldnt trust government, so why do we trust the money that the government says is worth something when the history of governments is one broken promise after another? The only thing theyve done, over the last 90 years or so, is to keep gouging the taxpayer, while at the same time racking up increasing debt. Theres very little responsibility at the government level for the financial well being of a country in the long run. Fiat money will all go back to its intrinsic value, which is zero. You need real things to support the valuation of currencies. I find it absolutely shocking that we trust government. Eric Sprott, CEO, Sprott Management The U.S. has no way of paying off its $13.7 trillion national debt and $80 trillion plus unfunded liabilities without printing the money and creating massive price inflation. Chinas Dagong Global Credit Rating Co. lowered its credit rating for the U.S. to A+ from AA on Tuesday with an outlook of negative, saying the Feds plan to buy government debt will erode the value of the dollar and entirely encroaches on the interests of creditors. The Fed, by buying U.S. treasuries, is effectively monetizing the debt. In fact, Federal Reserve Bank of Dallas President Richard W. Fisher admitted yesterday that the Fed is monetizing the debt, saying in a statement, For the next eight months, the nations central bank will be monetizing the federal debt. Bernanke testified under oath on June 3rd, 2009 in front of Congress saying, The Federal Reserve will not monetize the debt. This was a lie and perjury. With baseball great Roger Clemens being indicted for lying to Congress under oath about a personal matter that is trivial compared to this, Bernanke should also be charged with similar crimes. National Inflation Association

Can anyone stop out of control governments from eternal deficits, money printing and bailing out the banks and other cogs of the financial system of today? The answer is yes, someone can: Everyone. And they are. Around the world, individuals are slowly waking up to the tyrannical financial system that coercively forces them to use their paper money and fixes the price of said money (interest rates). Individuals are making the cognizant choice to sell their dollars, yuan, yen, rupees and pesos and buy things of real value with the proceeds. Jeff Berwick, Analyst Free Market Capitalism is the only system that is not a zero sum game; not only can it create wealth for the common man, but also gives him the opportunity to improve his lot in life. Its only through free market principles can we solve all of our most pressing problems. At this time of year, perhaps we might also reflect on Gods Covenant with Abraham whereby we inherited the obligation of spreading Gods Word, of individual freedom, individual responsibility and individual charity, throughout the world. Spreading freedom and democracy is everyones individual as well as collective responsibility. It is only in granting freedom to others that we can guarantee freedom to ourselves. Dr. Aubie Balton, Newsletter Editor Now you all know what has been going on in the markets over the past few weeks. The Fed has begun another program of the massive printing of money, this one labeled QE2 and estimated to amount to $600 billion (although larger numbers are mentioned). If we consider the (more than) doubling of the U.S. money supply which has occurred between mid-2008 and November 2010, then QE2 will bring the total increase in money up to approximately a triple. And this leads me to expect an increase in consumer prices (from current levels) to approximately triple over the next 3 years. First, commodity prices will rise. Second, producer prices will rise. And finally, consumer prices will rise. The first phase of this has already started. Howard S. Katz, Newsletter Editor How did the top 1% accrue all that wealth? Could it possibly be that they earned it created and produced it? And what do those filthy capitalists do with their illgotten gains? Why, they save it, spend it and invest it, presumably without regard for human needs or social responsibility. But somehow, human needs get met better under capitalism than under any other system, because there is no way, under a free-market regime, without privilege or prejudice, to earn profits consistently over the long term without meeting human needs; the needs of workers for jobs, the need of customers for the most valuable products and services at the lowest price, and the need of investors (such as workers with 401ks and consumers looking for something to do with their money other than consume it) for opportunities to increase their wealth and retirement income.

Howard Hyne, Author Unless politicians can be roused from their stupor, we will soon confront an imminent sovereign debt and currency crisis that will make the credit crisis of 2008 look like a happy interlude. Hopefully, when the first major shock strikes in the U.S., as is currently happening in Ireland and Portugal, it will finally provoke a 180degree change of policy in Washington. Hopefully, it wont be too late to spare millions from a life of subsistence, or worse. These are my hopes, but my fear is that we are on the cusp on the largest economic downfall in modern history. Peter Schiff, Newsletter Editor November 18, 2010 As voters who have been maligned by the ruling majority as stupid, unwashed, racists, selfish and violent headed to the polls Tuesday, Democrats released talking points attacking Republican leaders who are not willing to compromise. But no compromise is exactly the message that un-American Americans delivered to Washington this campaign season: No more compromising deals behind closed doors. No more compromising bailouts in times of manufactured crisis. No more compromising conservative principles for D.C. party elites. No more compromising the American economy for left-wing special interests. No more compromising transparency and ethics for bureaucratic self-preservation. Michelle Malkin, Newsletter Editor The left and its teachers unions have ruined public education in California. The left and its public service unions have saddled the state with $500 billion in unfunded pension liability. Californias left-governed cities have set themselves up as sanctuary cities for those who have come into America illegally. And the left passes more and more rules governing the behavior of California citizens. Two examples: San Francisco just banned McDonald Happy Meals because they come with a toy and therefore entice children to eat fattening food; and the Democratic legislature has made it illegal for a California employer even in a retail operation to ask a male employee who comes to work wearing a dress to wear mens clothing while at work. Dennis Prager, Newsletter Editor On the eve of a historic midterm election upheaval, President Barack Obama tried walk back his gratuitous slap at Americans who oppose his radical progressive agenda. I probably should have used the word opponents instead of enemies to describe political adversaries, Obama admitted Monday. Probably? Here is an ironclad certainty: Its too little too late for the antagonist-in-chief to paper over two years of relentless Democratic incivility and hate toward domestic

enemies. Voters have spoken: theyve had enough. Enough of the 2009 Nobel Peace Prize winners rhetorical abuse. Enough of his feints at bipartisanship. Whatever the final tally, this weeks turnover in Congress is a GOP mandate for legislative pugilism, not peace. Voters have had enough of big government meddlers getting things done. They are sending fresh blood to the nations Capitol to get things undone. Michelle Malkin, Newsletter Editor November 11, 2010 While the U.S. economy continues to weaken, many foreign economies continue to experience solid even spectacular economic growth. When the global economic crisis began in 2008, many forecasters doubted that the world economy could return to growth without the U.S. consumer. But the world is learning that the U.S. consumer is a drag on the world economy, not an engine for growth. As decoupling becomes more apparent, emerging economies are forming trade links among themselves, accelerating the process of decline for the United States. Neeraj Chaudhary The progressive assault on America continues, and their favorite whipping boy remains Arizona. A three-judge panel from the Ninth Circuit Court of Appeals has overturned that states requirement that people show proof of citizenship to register to vote, calling it inconsistent with the National Voter Registration Act. In other words, a United States court considers that proving one is an American citizen in order to vote in an American election an undue burden. How in the world did we come to this? Arnold Ahlert On the eve of a historic midterm election upheaval, President Barack Obama tried to walk back his gratuitous slap at Americans who oppose his radical progressive agenda. I probably should have used the word opponents instead of enemies to describe political adversaries, Obama admitted Monday. Probably? Here is an ironclad certainty: Its too little too late for the antagonist-in-chief to paper over two years of relentless Democratic incivility and hate toward his domestic enemies. Voters have spoken: Theyve had enough. Enough of the 2009 Nobel Peace Prize winners rhetorical abuse. Enough of his feints at bipartisanship. Whatever the final tally, this weeks turnover in Congress is a GOP mandate for legislative pugilism, not peace. Voters have had enough of big government meddlers getting things done. They are sending fresh blood to the nations Capitol to get things undone. Michelle Malkin

In a radio interview that aired Monday on Univision, President Obama chided Latinos who sit out the election instead of saying, Were gonna punish our enemies and were gonna reward our friends who stand with us on issues that are important to us. Quite a uniter, urging Hispanics to go to the polls to exact political revenge on their enemies presumably, for example, the near-60% of Americans who support the new Arizona immigration law. This from a president who wont even use enemies to describe an Iranian regime that is helping kill U.S. soldiers in Afghanistan. This from a man who rose to prominence thunderously declaring that we were not blue states or red states, not black America or white America or Latino America but the United States of America. This is how the great post-partisan, post-racial, New Politics presidency ends not with a bang, not with a whimper, but with a desperate election-eve plea for ethnic retribution. Charles Krauthammer November 3, 2010 As we have described for several years, the U.S. economy is virtually locked into a long arc of decline. There are no politically palatable solutions to this quandary. Until Americans are ready to take their lumps and accept a steep drop in their standard of living, the U.S. government will have no leverage with the creditor nations and no ability to keep its promises. Therefore, we should celebrate when China even gives our Treasury Secretary an audience. If China does manage to topple the U.S. dollar from its perch as the international reserve currency, our economy will very likely move into free fall as decades of inflation come pouring back into the country. We will be forced to live within our means or face hyperinflation. John Browne, Senior Market Strategist The fact that colossal stimulus spending, zero interest rates, the purchase of over a trillion in toxic assets by the Fed, and the loosest monetary policy in history have done absolutely nothing to revitalize the economy, has proven that Keynesian policies have been a wretched failure. Small businesses, which are the backbone of America (these are the folks who will create a recovery if there is to be one), are now being vilified by the president and portrayed as the evil empire (millionaire and billionaire Bogey men) and any wealth they have created and accumulated is ill gotten. No their wealth comes from hard work, saving, successful risk taking and delivering products and services for which

people want to pay. Something Obama and his congressional Marxist supporters only punish today. James Quinn, Newsletter Editor It is not an endlessly expanding list of rights the right to an education; the right to health care; the right to food and housing. That is not freedom. That is dependency. Those are not rights. Those are the rations of slavery hay and a barn for human cattle. Alexis de Tocqueville If Paul Revere were around, hed be riding through the streets of lower Manhattan yelling, Inflation is coming! Inflation is coming! Chris Mayer, Analyst There is no more a solution to the worlds debt problem than there is a perpetual motion machine or cold fusion generator to remedy the worlds energy problem. In the end, to restate C.V. Myers dictum, every penny of every debt must be paid if not by the borrower, then by the lender. Its as simple as that. And much as wed like to believe that some financial genius will come up with a way to spare us the pain of a Second Great Depression, it aint gonna happen. Because the worlds debts total in the many hundreds of trillions of dollars, there is simply no discharging those debts without ultimately ruining the financial lives of most creditors, debtors, or more likely, both. Rick Ackerman, Newsletter Editor October 21, 2010 The Fed now faces the hardest choices in its history. It can either redouble its past efforts to re-inflate Americas bubble economy (risking the destruction of the U.S. dollar) or it can stop pumping and let the economy deflate to a self-sustaining level. Unfortunately, both choices guarantee severe economic pain. Peter Schiff, Author The gold bull market will not end with a fizzle and a whimper. It will end with intense speculation and widespread interest from the funds and the public. We havent seen that kind of activity yet, but Im convinced that a period of wild speculation in gold lies somewhere ahead. Richard Russell, Newsletter Editor

Strip away all the trappings, and the U.S. dollar quandary is easy to understand. Huge debt, growing debt, and no politically feasible way to resolve it. With history as a guide, and political attitudes as they are, the road ahead for the dollar is somewhat predictable. More debt and more dollars, which should be supportive of golds ongoing long term price ascent, followed by U.S. debt saturation and dollar repudiation, potentially sending gold prices parabolic. Chris Blasi, Author Unfortunately and quite predictably, Washington isnt allowing the [currency] market to naturally correct. Instead, the Fed is attempting to devalue the currency by the printing press. Now we can expect not only the deluge of foreign exchange reserves to flood our economy, but also additional dollar tsunamis emanating from our own central bank. . .The Fed has gone radioactive, setting off a global currency meltdown. Perhaps only gold can truly shield investors from the fallout. John Browne, Senior Market Strategist And so it begins. In an apparent effort to prop up the stock market, the Fed is sending out all sorts of signals that it is about to launch a round of quantitative easing a euphemism for Fed monetization of U.S. Treasury debt in an effort to expand money supply and to increase U. S. dollar. . .Yet, raised on the false precepts that neither the dollar nor the budget deficit matters, Wall Street hypesters are touting the Feds pending largesse to equity investors. . .Buying U.S. stocks because the Fed says it will proactively debase the U.S. dollar is like sitting on the beach in order to get a great view of an incoming tsunami. Any pleasure so derived should be short-lived, when the terror of underlying reality quickly takes hold. John Williams, Newsletter Editor In the end, our bubble economy will not just deflate, it will burst. The dollar will collapse, consumer prices will skyrocket, real credit will completely evaporate, millions more will lose their jobs, and our economy will change in ways few of us can imagine. Our standard of living will plummet and legions of middle- and upperclass Americans will be impoverished. It is not a pretty picture, but unfortunately, its the one our government is painting. Unfortunately, we are running out of time to change artists. Peter Schiff, Author The really exciting news for silver, in addition to the strength of investment demand, is the advent of new industrial and commercial applications. Together, new applications may not amount to much this year or next. . .but within a few years the ounces will begin to add up.

Its outstanding qualities as an electrical conductor, its unique anti-microbial properties offering protection against infection and disease, its excellent reflectivity, make silver a 21st-century metal. Jeffrey Nichols, Analyst October 13, 2010 Alan Greenspan gave us another gem this past week while speaking at the Council on Foreign Relations. When questioned as to why Gold was hitting all-time highs he responded, Fiat money has no place to go but gold. Fiat money fails. Never in history has fiat currency lasted much more than 40 years, which is the age of the U.S. dollar. Warren Bevan, Newsletter Editor This fiat currency experiment will end badly in a currency crisis and when that happens, as it surely will, gold will go parabolic and silver along with it but even more so as the gold:silver ratio adjusts itself to a more historical correlation. The wealthiest people in the future will be those who put 10% to 15% (or perhaps more much more!) of their portfolio into physical silver today. Lorimer Wilson, Editor Deflation just isnt a possibility in a purely fiat monetary system. A determined government can create inflation any time it wants as long as they are willing to sacrifice the currency. I think its safe to say the United States has no compunction against destroying the dollar. We are now heading into an inflationary storm that will expose deflation theory as the pure nonsense that it is. Toby Connor, Analyst The CRB Commodity Index that is widely followed and quoted in the mainstream media is designed to severely understate commodity inflation or rising prices. . .this new widely followed CRB index has only one purpose and that is to mislead the investment community by severely understating commodity price inflation. It is simply another tool in the Fed/Governments chest for the management of economic data. Ron Struthers, Newsletter Editor Any way we look at it, physical silver is currently undervalued compared to gold bullion and is in position to generate substantially greater returns than investing in gold bullion. Lorimer Wilson, Editor

Over the next two decades China will build 20,000 to 50,000 new skyscrapers. Richard Mills, Editor For the U.S., I estimate this total debt amounts to some $134 trillion nearly ten times the official figure. . . real debt-to-net GDP is a staggering 358%, making the U.S. the most insolvent nation. . .even behind Greece! John Browne, Editor The ability of private individuals to buy gold reduces the ability of the government to steal the value of their money by printing more money. Thomas Sowell, Author The Fed, by engineering collapsing bubbles successively in dotcoms, housing and now junk bonds and leveraged loans, will have de-capitalized the U.S. economy. . . the majority of the countrys magnificent and unmatched capital stock will have been poured down a succession of ratholes. In an era of globalization, the result of such de-capitalization will be a rapid downward convergence of U.S. living standards towards those of the less provident members of the Third World. Martin Hutchinson, Author September 30, 2010 We must stop giving tax breaks to companies that are shipping jobs overseas. A familiar trope from the 2008 campaign, this idea is really another tax increase. The presidents refrain notwithstanding, there is no section of the U.S. tax code that rewards U.S. companies for outsourcing American jobs. American firms pay taxes on their worldwide income. Our corporate tax rate, the highest in the OECD, according to a Cato Institute study, puts our companies at a competitive disadvantage abroad. The tax code accordingly does permit U.S. multinationals to defer taxes on income earned abroad that is reinvested abroad. They pay taxes on that income only when they repatriate the earnings to the United States. But eliminating the deferral would simply increase corporate rates still further, undercutting the profitability of American companies with overseas operations. As Catos Daniel Griswold explains, There is no evidence that expanding employment at U.S. owned affiliates comes at the expense over overall employment by parent companies back home in the United States. In fact, the evidence and experience of U.S. multinational companies points in the opposite direction: foreign and domestic operations tend to compliment each other and expand together. . .More activity and sales abroad often require the hiring of more managers, accountants, lawyers, engineers, and production workers at the parent company.

Reducing the rate of corporate taxation would make U.S. companies more competitive overseas while also attracting more foreign investment here. But reducing taxes, like reducing regulation, or permitting the market to shape digital medical records, offends President Obamas preference for top-down decision making. He isnt deciding, Carter-like, who should use the White House tennis courts, but he is attempting to do pretty much everything else, with similar results. Mona Charen, Editor There will be zero tolerance for this type of misinformation and unjustified rate increases. That sounds like a stern headmistress dressing down some sophomores who have been misbehaving. But its actually from a letter sent Thursday from Health and Human Services Secretary Kathleen Sebelius to Karen Ignagni, president of Americas Health insurance Plans the chief lobbyist for private health insurance companies. . . The threat to use government regulation to destroy or harm someones business because they disagree with government officials is thuggery. Like the Obama administrations transfer of money from Chrysler bondholders to its political allies in the United Auto Workers, it is a form of gangster government. The rule of law, or the rule of men (women)? economist Tyler Cowen asks on his marginalrevolution.com blog. As he notes, Nowhere is it stated that these rate hikes are against the law (even if you think they should be), nor can this misinformation be against the law. According to Politico, not a single Democratic candidate for Congress has run an ad since last April that makes any positive reference to Obamacare. The First Amendment gives candidates the right to talk or not talk about any issue they want. But that is not enough for Sebelius and the Obama administration. They want to stamp out negative speech about Obamacare. Zero tolerance means they are ready to use the power of government to threaten economic harm on those who dissent. Michael Barone, Editor Heres Obama in his Cleveland speech Wednesday, describing the philosophy that defined the Bush years: Cut taxes, especially for millionaires and billionaires. Cut regulations for special interests. Cut deals even if they didnt benefit our workers. Cut back on investments in our people and our future in education and clean energy, in research and technology. The idea was that if we had blind faith in the market, if we let corporations play by their own rules, if we left everyone else to fend for themselves, America would grow and prosper.

What movie was he watching? At best this is a rock em-sock em robot battle between delusion and dishonesty. Rhetorically, Bush never advocated anything like any of this. Indeed, Bush the compassionate conservative described his philosophy thus: When somebody hurts, government has got to move. More concretely, under Bush we had massive spending increases on education, alternative energy, NIH and health care. We saw the passage of the Sarbanes-Oxley bill, and the trade deals Bush pushed are now part of the Obama agenda. But Obama needs to spout such hogwash in order to sell some very old new ideas. Jonah Goldberg, Editor September 27, 2010 The left hates Republicans not because of what they are, but because of what the left thinks they are. What the left thinks is this: Republicans are objectively racists and reactionaries. The idea of being objectively something especially if it is retrograde is a timehonored concept of the left. When Lenin ordered the liquidation of the kulaks, he didnt mean that particular individuals should be punished for particular acts they had committed. In Lenins eyes, being a kulak was itself a crime. To own lad made one objectively an exploiter. Though Democrats obviously dont intend to put Republicans before firing squads (other than verbal), they view Republicans t he same way. They are convinced that Republicans are defenders of exploiters, racists and other oppressors and that whoever they may actually be objectively, Republicans stand in the way of a better world. This conclusion flows inexorably from progressives belief that if the left can accumulate enough power, they can remake the world. Progressives think they can use the powers of government to end poverty, racism, sexism, pollution, war and even bad habits like smoking cigarettes. The only thing that prevents them from accomplishing these noble ends is the Republican party, which stands in their way. Republicans, in other words, are people who objectively oppose the happiness of mankind if only because they wont spend the tax dollars necessary to buy it. David Horowitz, Editor Barack Obama has spent the past year doing bit-time Islamoschmoozing, from his announcement of Gitmos closure and his investigation of Bush officials, to his bow before the Saudi king and a speech in Cairo to the Muslim world with far too many rhetorical concessions and equivocations. And at the end of it the jihad sent America a thank-you note by way of Umar Farouk Abdulmutallabs underwear: Hey, thanks for all the outreach! But were still gonna kill you.

According to one poll, 58 percent of Americans are in favor of waterboarding young Umar Farouk. Well, you should have thought about that before you made a community organizer president of the worlds superpower. The election of Barack Obama was a fundamentally unserious act by the U.S. Electorate, and you cant blame the worlds mischief-makers, from Putin to Ahmadinejad to the many Gitmo recidivists now running around Yemen, from drawing the correct conclusion. Mark Steyn, Editor Why has the left directed so much time and effort into demonizing ordinary Americans? Because the Tea Partys three primary planks limited government, fiscal responsibility and Constitutional fealty represent the greatest threat to liberalism since its flowering in the 1960s. A smaller, fiscally responsible government dedicated to a Constitution expressly designed to limit the power of the state is the death knell for those dedicated to the idea their worldview must be imposed on Americans by an ever-expanding state. September 22, 2010 With polls showing that about 70 percent of Americans believe building an Islamic cultural center containing a mosque just two blocks away from Ground Zero is inappropriate, the far left is once again on the run. Failing with the bogus freedom of religion argument, the crew that is offended by the manger scene at Christmas is now saying the mosque controversy is another attempt to scare the white people. Washington Post columnist Eugene Robinson has put forth that loopy argument from his second home: MSNBC. You may remember that the radical left designated the Shirley Sherrod story, the ACORN scandal, the New Black Panther Party-voting booth-Justice Department situation and the resignation of White House green jobs czar Van Jones as attempts to frighten me. I hope Im not out of the white loop. Bill OReilly The first open attack on the Constitution by a President of the United States was made by our only president with a Ph.D., Woodrow Wilson. Virtually all the arguments as to why judges should not take the Constitution as meaning what its words plainly say, but interpret it to mean whatever it ought to mean, in order to meet the needs of the times, we made by Woodrow Wilson. It is no coincidence that those who imagine themselves so much wiser and nobler than the rest of us should be in the forefront of those who seek to erode Constitutional restrictions on the arbitrary powers of government. How can our betters impose their superior wisdom and virtue on us, when the Constitution gets in the way at every turn, with all its provisions to safeguard a system based on a self-governing people? To get their way, the elites must erode or dismantle the Constitution, bit by bit, in one way or another. What that means is that they must dismantle America. This has

been going on piecemeal over the years but now we have an administration in Washington that circumvents the Constitution wholesale, with its laws passed so fast that the public cannot know what is in them, its appointment of czars wielding greater power than Cabinet members, without having to be exposed to public scrutiny by going through the confirmation process prescribed by the Constitution for Cabinet members. Now there is leaked news of plans to change the immigrations laws by administrative fiat, rather than Congressional legislation, presumably because Congress might be unduly influenced by those pesky voters with their Constitutional rights who have shown clearly that they do not want amnesty and open borders, despite however much our betters do. If the Obama administration gets away with this, and can add a few million illegals to the voting rolls in time for the 2012 elections, that can mean reelection, and with it a continuing and accelerating dismantling of America. Thomas Sowell September 14, 2010 Business and the economy are headed for hard times. As I see it, this will force the Fed to turn to all-out printing, printing and more printing. Richard Russell, Editor The consumer hasnt cut back at all. They are still spending and borrowing. It is beyond my comprehension that no one on CNBC or in the other mainstream media can do simple math to figure out that the deleveraging story is just a Big Lie. . . The Big Lie will eventually lose out to the grim truth. Americas economy is built on a debt based foundation of sand and the tide of reality is relentlessly eating away at that foundation of debt. Collapse is just a matter of time. Jim Quinn, Newsletter Editor Whatever your investment strategy may be, proactive measures taken now will minimize the impact of the crash of 2010 that, by the New Year, will be unmistakable and undeniable. Rather than debating the probabilities of a doubledip recession, the business media will be glomming on the financial body counts littering Wall Street as though it were another Katrina. John Anthony West, Executive Editor As the renewed tumbling in the U.S. economy throws off statistics suggestive of a continuing collapse in business activity, as a looming contraction in third-quarter GDP becomes increasingly evident to all except Wall Street and Administration hypesters, who professionally never admit to such news, it would be quite surprising if the financial markets did not react violently, with a massive sell-off in the U.S. dollar contributing to and coincident with massive sell-declines in both the U.S. equity and credit markets. Recognition is growing rapidly of the re-intensifying economic downturn. Yet, little analysis so far has been put forth to [the] public as to some of the unfortunate

systemic implications of this circumstance. The problems range from extreme growth in the federal governments operating deficit, tied to reduced tax revenues and to bailout expenditures for the unemployed, bankrupt states and continuing banking industry solvency issues, to U.S. Treasury funding needs to pay for same. The latter issue promises eventual heavy Federal Reserve monetization of Treasury debt, with resulting inflation problems with eventual hyperinflation. John Williams, Editor Silvers status as a precious metal was unequivocally reaffirmed last year by investors who purchased it not only as a speculative commodity-play on economic recovery but also as a safe haven asset, particularly at a time when the global financial crisis was raging. World Silver Survey 2010 by The Silver Institute September 2, 2010 In his weekly radio address this past Saturday, President Obama happily commemorated the 75th anniversary of Social Security. From my perspective, the milestone is nothing to celebrate. For although the president spoke earnestly about the obligation to keep the promise of Social Security, in reality, the program will wreck the governments finances within 10 years. The numbers are simply astounding. Social Security is the largest social program in the world making up over 40% of all federal spending. Over 58 million Americans 1 in 5 citizens receive a monthly check from Social Security program (which includes Medicare and Medicaid) that will have gotten so big that only 7 cents of every dollar of federal revenue may be left for everything else. What exactly does everything else include? Try the entire military, FBI, freeways, disaster relief, NASA, housing agencies, and the postal service to name a few. If new revenue is not found, and if current Social Security obligations are not changed, the remainder of federal programs would have to be cut by 88% by 2020. Simply put, the third rail of American politics is about to electrocute us all. Neeraj Chaudry, Investment Consultant Due to ongoing structural banking problems, the broad domestic money supply has been in contraction, the economy is turning down again, and the Fed is scared. It signaled that this week when it agreed to start monetizing some Treasury debt. Ultimately, the U.S. dollar should face massive dumping as foreign investors flee dollar-denominated paper assets, and the Fed appears to be doomed ultimately to become lender of last resort for the U.S. Treasury. Such monetization and the flood of dumped foreign-held dollars into the U.S. will lead to higher inflation. As promised by Mr. Bernanke in 2002, a central bank always can debase its currency, creating inflation. Critics of that concept offer that the process did not work in Japan, but the Japanese were not out to debase the yen.

As risks for a likely U.S. dollar panic and Treasury debt monetization near high risk of same in the next six-to-twelve month the general outlook for the economy and the markets is unchanged. For those with soft assets denominated in U.S. dollars, circumstances continue to suggest looking at actions for long-range wealth preservation. John Williams, Editor, Shadow Government Statistics The debt will be defaulted on one way or another. The trouble is theyre almost certainly going to default on it through inflation, by destroying the currency, which is much worse than defaulting on it overtly. Thats because inflation will wipe out the relatively few people who are prudent in this country those who are actually saving money. Because they generally save in the form of dollars, theyre going to wipe them out financially. Its just horrible. Runaway inflation will reward the profligates who are in debt people whove been living above their means. And punish the producers whove been saving and trying to build capital. Thats in addition to the fact it will destroy millions of productive enterprises. A runaway inflation is the worst thing that can happen to a society, short of a major war. They just should default on it honestly, as it were. Doug Casey, Editor Half a century ago, at the end of World War II, total known stocks of silver amounted to ten billion ounces (with the U.S. government holding 4 billion ounces of that total amount). At that time, we were just entering an era of unprecedented global economic expansion that has lasted to the present. In this era, silver was consumed in a variety of vital modern applications at a phenomenal rate. Today, known stocks of silver have shrunk over 95%, to maybe a half a billion ounces. The nine and a half billion ounce drawdown in total silver inventory, was the result of the persistent shortfall between supply and demand, which continues to this day. Not coincidentally, the current 150 to 200 million-ounce annual deficit in silver mirrors the long-term trend line average. This continuing deficit is remarkable in that there has been decent growth in world production of silver over the past 50 years, but obviously not enough to satisfy the surge in industrial demand. Hinde Capital America is effectively bankrupt, but refuses to acknowledge the losses. Instead, they are being assumed by Washington, which is itself hopelessly indebted to foreign governments. This risks an international run on the dollar, which early indications show has already begun. Meanwhile, the American private sector is exhausted. Anxiety over future stimulus and debt is now combined with fears over tax increases, greater corporate regulation, renewed political strength of organized labor, and new employer health care burdens. John Browne, Senior Market Strategist August 26, 2010 Its not enough that the White House is moving to lock up hundreds of millions of acres of land in the name of environmental protection. The Obama administrations

neon green radicals are also training their sights on the deep blue seas. The presidents grabby-handed bureaucrats have been empowered through executive order to seize unprecedented control from states and localities over conversation, economic activity, user conflict and sustainable use of the ocean, our coasts and the Great Lakes. Michelle Malkin With regard to the Ground Zero mosque, I am truly fascinated by the progressive elitists newfound enthusiasm for religious tolerance. Arent these the same people who have spent the last few decades doing their best to exorcize virtually any expression of religion from the public square? Arent these the same people whose fellow-travelers in Hollywood have done their utmost to debase Christianity and its adherents at every opportunity? Arent these the lovable folks doing their best to turn the Christmas season into a Winter Solstice celebration? Didnt the president himself ridicule Americans who cling to religion? So why are progressives suddenly gung-ho regarding religious freedom? Arnold Ahlert

August 18, 2010 The increasing divergence of the U.S. and EU economies, and the sluggish statistics coming out of the former, point to one inescapable conclusion: the U.S. policy mix, in fiscal, monetary and regulator areas, has been uniquely bad. This is not simply a question of party or ideology: under the Democratic Clinton administration economic policy was pretty good, while Fed Chairman Ben Bernanke was appointed by a Republican President. Nevertheless, the combination of misguided theories and poor execution is now doing damage to the U.S. economy that will take a very long time to repair. Martin Hutchinson The inspector general noted that it is clear that tens of thousands of dealership jobs were immediately put in jeopardy as a result of the terminations by GM and Chrysler. After extensive investigation, the watchdog concluded that the acceleration of dealership closings was not done with any explicit cost savings to the manufacturers in mind. Only after Capitol Hill critics both Republican and Democrat started questioning the Dealergate decisions did Obamas auto experts come up with market studies and estimated job loss data to assess the impact of their reckless, arbitrary orders. In sum, the inspector general found: (A)t a time when the country was experiencing the worst economic downturn in generations and the government was asking its

taxpayers to support a $787 billion stimulus package designed primarily to preserve jobs, Treasury made a series of decisions that may have substantially contributed to the accelerated shuttering of thousands of small businesses and thereby potentially adding tens of thousands of workers to the already lengthy unemployment rolls - all based on a theory and without sufficient consideration of the decisions broader economic impact. This is no surprise, of course, considering the amount of actual business expertise among Obamas auto czars and key staff. That is: zero. Obamas first auto czar, Steve Rattner, ran a private equity firm in New York before resigning his position amid a financial ethics cloud. Rattners chief auto expert adviser, Brian Deese, is a 30-something former Hilary Clinton/Barack Obama campaign aide and law school grad with no business experience, who openly boasted that he never set foot in an automotive assembly plant. And Rattners auto czar successor, Ron Bloom, is a far-left union lawyer who cut his teeth under Big Labor boss John Sweeney, has ideological ties to the corporatehating labor Zionist movement; and opined that the blather about free trade, freemarkets and the joys of competition is nothing but pabulum for the suckers. Michelle Malkin With the economy and housing sliding faster again, lenders are worried that many of the 11 million homeowners who owe more than their house is worth the 24% of homeowners who are underwater will walk away from their mortgages. This would burden lenders with even more unsold homes a category known as shadow inventory because lenders dont always list a newly foreclosed home for sale immediately. This shadow inventory could reach as high as 7 million homes by some estimates. Other analysts have calculated that it would take 103 months (about 8.5 years) to clear this gigantic inventory of foreclosed, distressed and defaulted homes. Put these numbers in context: according to the U.S. Census Bureau, 51 million households have a mortgage and 24 million own homes free and clear (no mortgage), and about 37 million households rent. Ron Struthers Washington policymaking (fiscal and monetary) is on trajectory that will inevitably destroy the creditworthiness of our nations vast liabilities. With ominous parallels to the mortgage/Wall Street finance Bubble, Federal Reserve policies have fostered Bubble dynamics throughout our Treasury, agency and debt markets, more generally. Instead of market dynamics working to discipline Washingtons profligate debt expansion, Federal Reserve interventions ensure that a distorted marketplace

again accommodates perilous credit excess. Our central bankers should heed Mr. Trichets warning. Additional quantitative ease will only fuel the Bubble and risk calamity. Doug Noland In practice, socialism didnt work. But socialism could never have worked because it is based on false premises about human psychology and society, and gross ignorance of human economy. In the vast library of socialist theory (and in all of Marxs compendious works), there is hardly a chapter devoted to the creation of wealth to what will cause human beings to work and to innovate, and to what will make their efforts efficient. Socialism is a plan of morally sanctioned theft. It is about dividing up what others have created. Consequently, socialist economies dont work; they create poverty instead of wealth. This us unarguable historical fact now, but that has not prompted the left to have second thoughts. David Horowitz The unfolding renewed decline in economic activity now is likely to be one of the proximal triggers for an even greater systemic solvency crisis, one that will pummel the U.S. dollar, threaten the solvency of the U.S. government and set the stage for a hyperinflation in the United States. In turn such a crisis would exacerbate the intensifying downturn into a hyperinflationary great depression. John Williams August 12, 2010 Silver is very close to exploding higher, but we may have to wait until September or October to see that materialize, but its coming. Investors are realizing the real shortage of physical silver that is our reality today. Its just a matter of time, so dont give up the fight yet. Our time is very near. Warren Bevan, Newsletter Editor Long-time silver investors are well aware that there is a tendency for the prices of precious metals such as gold and silver to trade sideways to lower, hitting bottoms by mid-August. And, as we have seen prices plunge over the past few weeks I am certain many silver investors have cause for concern as they see this sideways pattern in price continue. However, there are many analysts who will tell you that August is the perfect time of year to bargain shop for physical holdings. And, once we enter the northern hemisphere autumn months, the prices of gold and silver should recover from their lows as the buying season resumes in many regions of the world in particular India. David Levenstein, Author There is still just enough freedom and a never ending stack of fiat currencies available to buy gold and silver, but not for long. Over abundant paper of every

color and nationality will eventually pursue stores of value with which to see out the economic winter ahead. How will you get through winter? By buying the ultimate financial insurance of history or by burning worthless fiat paper in your fireplace? The date of this winter can be decades or just a few minutes away. Knowing the time and date is not relevant. Being prepared is relevant. If the great unraveling is to take place after we are gone, then even more reason why we should prepare our children. Peter Souleles, Editor If the practice persists of covering government deficits with the issue of notes, then the day will come without fail, sooner or later, when the monetary systems of those nations pursuing this course will break down completely. The purchasing power of the monetary unit will decline more and more, until finally it disappears completely. Ludwig von Mises, Economist August 5, 2010 The argument has been made that this rise in the monetary base will do no harm because it has not yet been turned into money by the nations banks. I wish I had a gram of gold for every time I have heard that argument. I would be a very wealthy man. First, we cannot be sure of this because the Federal Reserve is lying about the nations money supply. They have reclassified demand deposits (which are money) as time deposits (which are not money). The Fed is telling the individual owners of these deposits that they are demand, but it telling the nation that they are time. They cannot be both. Second, the idea that there is a middle ground in which the Fed can create enough money to stimulate the economy but not so much as to cause inflation is more banker gobble-de-gook. These idiots do not even know what the economy is, and when they use the word, they meaning it has is the bankers and their associate vested interests (i.e., the paper aristocracy). So to stimulate the economy means to help the paper aristocracy at the expense of the American working man. This idea goes back to Keynes, and ever since the 1930s the establishment economists have been trying to find that middle ground. They havent hit it once. Back in the 1950s Arthur Burns (later the moving force behind the price and wage controls of 1971) complained that they were getting inflation in a recession (1958), and that was not supposed to happen. The fact that the impossible was happening, however, did not faze Burns one iota. Like the Red Queen, he used to believe 6 impossible things before breakfast. Typically, the banks do not start to lend until sometime after the Fed has sharply increased their reserves. That is the period we are now in. This is a variable time lag because it is based on decisions by individual bank managers, and it depends on how scared they have been by the previous contraction. But lend they always do.

And to have the money to lend they have to create it out of nothing. A good clue here is an increase in corporate profits (which is just starting to happen). As profits increase (because of the low interest rates caused by the Fed), business starts to dream of new projects. For these projects, they need their bank loan. As the projects unfold, they create demand, and this demand begins in the commodity markets (because all consumer goods come from commodities). Neither is there any increased supply (as is sometimes argued) to offset this increased demand. This is the stupidity of GDP. A free economy (and all the businesses in it) has two jobs, not one. Yes, it is nice to create more goods. But it is also crucially important to create those goods which satisfy the consuming publics most important needs. This is every business mans number one concern. What do the people want? In a free market, tremendous energy and effort goes into answering this question. But in government projects, the question is never considered. To measure only the quantity of goods produced and to ignore the larger question of which goods are most wanted and needed is insanity. In the 1930s, Stalin gave the Russian people industrial goods when they needed food. Eight million starved to death, but if they had had GDP in those days, then the Soviet GDP would have looked very good. Howard Katz July 29, 2010 The last month or so generally has seen economic reporting turn to the downside, and, importantly, the concept of an intensified economic downturn, or a doubledip recession, appears to be gaining broader acceptance. Weak reports on retail sales, industrial production and trade activity this week all showed that broad economic activity has slowed in the second quarter. . . Accordingly, as the recession intensified anew, the implications of worse-thanexpected ballooning federal deficits, Treasury fundings, bank industry solvency issues, etc., increasingly will bring the issues of U.S. solvency and U.S. dollar soundness to the fore. As suggested perhaps by some recent rebound in the euro, market concerns already may be shifting from European solvency issues to those of the United States. At such time as U.S. solvency become the focus of global financialmarket concerns, it is hard to imagine the U.S. dollar and the U.S. equity and credit markets not being pummeled. As reported today (July 16th) by the Bureau of Labor Statistics, consumer inflation appears to be contained. That should change quickly and sharply at such time as the U.S. dollar comes under heavy selling pressure, along with broad dumping of dollar denominated paper assets. Not only will oil prices spike in response to the dollar weakness, but the Fed will find itself forced to become lender of last resort to the U.S. Treasury, with a resulting sharp jump in Fed monetization of Treasury debt and related money supply issues. Both the dollar weakness and monetization developments are of increasing probability within the next year, with the time-

horizon beginning to come in. These developments should result in a rapid increase in consumer inflation, with the base then being set for a hyperinflation. . . John Williams, Newsletter Editor People who make more are taxed more. Thats being punished for being more productive. And then youre being rewarded for being a parasite. If you dont do anything, if youre just a bum, why, you can go on relief. You get something for nothing. Thats a violation of rationality and morality in the short run too. The less you do, the more you get. The more you do, the more youre punished. Thats a fine standard for a culture! The most productive people are punished the most for being productive; the ones who produce the least are rewarded for being parasites. Now, if I tried to design an irrational structure of a society, this is exactly what Id pick. Andrew J. Galambos Gold has industrial uses in addition to being used to make money or jewelry. Its a good conductor of electricity and is also used in dentistry. But silver has the same uses and many more. Whats the big difference between silver and gold? Gold is $1,200 an ounce and silver is $18. If you can choose between the two for your industrial use, youd always choose silver. Thats why the world gold supply keeps going up. Almost every ounce mined remains in supply forever, as opposed to silver, which gets mined and then consumed. James Altucher, Wall Street Journal Silver, trading around $18 an ounce, is really, really depressed on a historic basis, says Jim Rogers, a commodity investor and former Barrons Investment Roundtable member. Barrons If youre a long-term bull on precious metals, I believe the [gold-silver] ratio will go back below 20. At 20-to-1, silver would fetch almost $60 an ounce, assuming that golds price didnt change. James Turk, Author There is more disposable income on a global basis with people looking to invest, and precious metals will likely be one asset group that savers, such as the Chinese, will target. Writer Robin Blumenthal, quoting Silver Mining executive Robert Quartermain in Barrons

July 22, 2010 Ted Butler, whom I regard as the worlds leading expert on silver and its market machinations, perhaps summed it up best in his recent newsletter when he stated: Increasingly it is looking like the CFTC is the most hopeless or corrupt federal agency of all, in spite of great hopes by me for change that Gary Gensler might bring. As a matter of interest, Gensler is the former Goldman Sachs co-head, who was installed as head of the CFTC in early 2009.

I am actually somewhat more optimistic than Butler when it comes to ultimate response from the CFTC. It is admittedly a bureaucratic organization but, following the explosive revelations at the March hearing with respect to position limits on gold and silver on the Comex, it seems to me that it is painted into a corner and will be forced to act or lose all credibility. John Embry, Asset Manager A century ago, U.S. government debt (funded and unfunded) was a bit less than U.S. $ 30 per person. Today, the funded portion of the debt alone is nearing U.S. $43,000 per person. Bad as this progression is (add in the unfunded debt and the number explodes to well over U.S. $325,000 per person), it is the minor problem. The major problem is the destruction of the monetary system. The legacy of debt and deficits is already almost 100 years old. Bill Buckler, Newsletter Editor Massive quantitative easing for the past 18 months, at least in the U.S. and the U.K., has not led to an explosion of money as one would have expected. In effect, the money multiples have shrunk dramatically; banks have build up record excess reserves and the asset side of their balance sheets has experienced a slight shrinkage, as loans have declined at a precipitous rate and Treasury holdings have only partially offset this decline. Clearly banks are nervous about extending new credit. Albert D. Friedberg, Hedge Fund Manager A recent cartoon suggests, Mr. Bernanke is getting ready to make good on his promise to drop money from helicopters. This counterfeiting activity is bad news for people on fixed incomes, but good news for people who buy physical gold and silver to protect themselves from Mr. Bernanke and his Keynesian friends. In the history of civilization, there is not one country that escaped the destruction of its fiat currency, once monetary inflation became part of the process. Not One. . . This trend is bad news for people on fixed incomes and those holding fixed rate investments. It is good news for people who own pure gold and pure silver. Peter Degraaf, Newsletter Editor Those with a long view of history know that the real risk is the current monetary system and not Gold/Silver. Every fiat currency in history has failed. Is it doom and gloom to expect the current monetary system to fail? No, its just prudence and foresight. Jordan Roy-Byrne, Newsletter Editor\ Your editor has avoided recommending ETF instruments that pretend to own gold or silver. We say pretend, because a careful reading of the prospectuses of those instruments does not rule out the same kind of behavior that has enabled central banks (in conjunction with commercial/bullion banks) to manipulate the markets. Jay Taylor, Newsletter Editor July 16, 2010

Double-Dip Begins to Surface in Market Fears. A number of recent economic releases have shown slowing or contracting monthly activity, often surprising consensus expectations on the downside. From the standpoint of conventional wisdom in the financial markets and the happy hype from Wall Street and the Administration, the patterns here are suggestive of two unfolding and troubling developments. First, the recent "recovery" was weaker than touted and not much more than a short-lived impact from temporary stimulus measures . . . Second, the economic downturn is intensifying anew, as was signaled in advance six months ago by annual real (inflation-adjusted) growth in broad liquidity turning negative. With hints of renewed economic weakness surfacing in the numbers, and as financial analysts increasingly have mentioned the possibility of a U.S. "double-dip" recession, the Fed began playing language games with its latest FOMC statement (June 23rd) . . . Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad . . . The italicized text places blame for a negative shift in the economic environment a shift unforeseen by the Fed upon the sovereign solvency crisis in Europe. The Administration already is hinting also that European austerity measures could kill the U.S. economic recovery. Such is nonsense; the problems are not abroad, but at home. Decades of unsound U.S. fiscal, monetary, financial-regulatory and trade policies . . . have culminated in the current crises. The United States led the global financial system into the current systemic solvency crisis and into the current severe economic downturn. Only politicians and Federal Reserve officials without viable options and Wall Street hypesters would claim that the current structural economic depression would be turned fundamentally by short-lived stimulus measures. The structural issues never were addressed. Now, as the structural fundamentals reassert themselves, it is the problems at home that still are at the base of the systemic woes. .. The intensifying economic contraction has serious consequences that do not seem to have surfaced yet in financial-market concerns consequences that are unexpected including unexpected additional explosive growth in the federal deficit, an unexpected further surge in Treasury funding needs, and unexpected renewed solvency concerns for the banking system. Such conditions are not happy news for the U.S. equity or credit markets. The broad outlook is unchanged. The economy still is in a particularly severe and protracted downturn. The consequences of that and the extreme fiscal abuses practiced by the U.S. government over decades promise a shift in global market concerns to the U.S. dollar, with an eventual massive flight from the U.S. currency and a U.S. inflation surge that should lead into hyperinflation. Over the long haul,

those with dollar-denominated paper assets would do well to consider preserving their wealth and assets. John Williams, Editor July 1,2010 Keynesians are now arguing the Europes austerity packages will plunge the continent back into recession. President Obama penned an official letter to this effect prior to this weekends meeting of the G20 leaders of the worlds major economies, and was reinforced by Larry Summers and Treasury Secretary Tim Geithner in a Wall Street Journal op-ed. Obama is right to be worried. If the Keynesians are right, Europes budget cutters, by pushing the United States largest market back into recession, will damage the United States embryonic recovery. If however the Keynesians are wrong, and Europe does not plunge back into recession, then the United States with its titanic budget deficit will become an isolated example of fiscal laxity, damaging its credit rating. Since the Unites States makes an excellent return on seignorage from the dollars it provides to the world economy and to fearful Chinese central banks, causing the worlds bankers to focus on the dollars problems could push the country even further into downturn. Martin Hutchinson, Author

So far this year, the U.S. dollar has enjoyed a strong performance. Traders carefully watch this flagship currency since its fortunes affect virtually everything, from world=-trade balances to global financial markets to commodities prices. Given the dollars universal impact, understanding its drivers is essential for gaming all kinds of markets. Today conventional wisdom attributes the dollars recent strength to the brutal selloff in the euro, its primary competitor. And this is certainly logical. The U.S. Dollar Index (USDX) is the primary tool traders use to track the dollars progress. And the euro dominates this key metric at 57.6% of its weight. So the dollar, which really means USDX inmost traders minds, is heavily affected by the euro. But what if this causality is backwards? What if the dollar isnt strong because the euro is weak, but the euro is weak because the dollar is strong? Identifying the prime mover in this relationship is exceedingly important for traders. If the driving force behind this years wild currency moves is emerging from the dollar side rather than the euros, it radically changes trading outlooks in all kinds of markets. Europe has all kinds of problems today, the chickens coming home to roost on biggovernment socialism and out-of-control government spending. It is tragic to see Washington asininely dragging the U.S. into this same socialist cesspool today given Europes woes. And if the Europe situation truly is the driver of the dollars recent strength as nearly everyone assumes, its rally could continue for a long time to come.

But amazingly given the stellar popularity of this thesis, the market action really doesnt support it very well at all. If you carefully study the dollars price action, this currency is marching to the beat of a different drummer than the euro. Its primary driver actually lies outside the currency realm entirely. The fortunes of the U.S. stock markets have utterly dominated dollar behavior over the past couple years! Adam Hamilton, Author June 24, 2010 The international order has thus returned to the Kaisers world of multiple states, high tariff barriers and unfair trade competition. Small countries have no alternative but to seek protection in the spheres of influence of their larger neighbors. Participants in the protectionist new world order will be a diminished United States, a sclerotic and inward-looking EU, projecting its power no further than the Balkans, one or possibly two left-leaning Latin American blocs led by Brazil and Venezuela (which may or may not combine), a resource-rich and oppressive bloc led by Russia, a highly unstable Middle East dominated by Turkey and Iran, and an impoverished and unstable south Asian bloc led by India. By far the most powerful and successful bloc will be led by China, which will include much of southeast Asia and large parts of Africa. There will remain a few substantial independent states: an isolationist Japan, an unstable Indonesia, perhaps a modestly prosperous Australia. Martin Hutchinson, Author Lets do a brief review of the policies he has endorsed or helped promote over the last three years. The Federal Reserve cutting interest rates from 5.25 0.25% (Sept. 07- today) The Bear Stearns deal/Fed buys $30 billion in junk mortgages (March 08) The Fed opening various lending windows to investment banks (March 08) The Treasury buying Fannie/Freddie for $400 billion (Sept 08) The Fed taking over AIG for $85 billion (Sept 08) The Fed dishing out $25 billion for the auto makers (Sept 08) The Feds $700 billion Troubled Assets Relief Program (TARP) (Oct 08) The Feds commercial paper (non-bank debt) purchasing program (Oct 08) The Feds $540 billion backstop for money market funds (Oct 08) Another $40 billion to AIG (Nov 08) The Fed backstops up to $140 billion of Bank of Americas liabilities (Jan 09) The Feds $300 billion Quantitative Easing program (Mar 09) The $1.25 trillion I mortgage backed securities purchases (Mar 09 10) The Fed buying $200 billion in agency debt (Mar 09 10) Opening up currency swap lines with foreign central banks (Spring 10) The Fed and various economists like to dress these moves up in fancy language and financial terms, but in reality they all boil down to one of three strategies: Printing money

Letting bankrupt, failed institutions stay in business via handouts Buying garbage debt no one wants at 100 cents on the Dollar from said bankrupt institutions Graham Summers, Author June 18, 2010 Robert Reichs The Jobs Picture Still Looks Bleak is at least an implicit admission that he is partially philosophically responsible for the obvious consequences of tax, spend, pander politics and the policies of the last 60 years. Jobs were outsourced because the unions were destroying American businesses ability to compete in labor cost. That would have been much more difficult to do had the politicians not pandered to organized labor in return for votes. Since the good professor has no good economic solution to the circumstances which his positions have helped create, he is reduced to informing us of the obvious: The standard of living in the U.S. will be coming down for just about everyone except, of course, career politicians and public employees. Thank you Prof Reich. James F. Chambliss There is perhaps no better example of the destructive nature of government intervention than the current housing and retail goods markets. For the past three years a spend-happy Congress lavished these areas with stimulus spending, tax credits, and other palliatives all aimed at papering over the structural defects in these markets. In the case of retail goods, it was years of abuse of various types of credit to expand a spending bubble and increased reliance on foreign products. However, Congress has not buttoned up - in fear for their political existence in many cases. The public is aware and fearful of debt for the first time in recent memory. Living in a post-stimulus world; even if it is only until the next Congress is seated will be interesting to say the least. Andy Sutton Every year about this time, big government liberals stand up in front of college commencement crowds across the country and urge the graduates to do the nobles thing possible become big-government liberals. That isnt how they phase it, of course. Commencement speakers express great reverence for public service, as distinguished from narrow private greed. There is usually not the slightest sign of embarrassment at this self-serving celebration of the kinds of careers they have chosen over and above the careers of others who merely provide us with the food we eat, the homes we live in, the clothes we ear and the medical care that saves our health and our lives. What I would like to see is someone with the guts to tell those students: Do you want to be of some use and service to your fellow human beings? Then let your fellow human beings tell you what they want not with words, but by putting their money where their mouth is. Thomas Sowell June 8, 2010

The broad money supply continues to tumble on a year-to-year basis, with May data likely to show deepening annual contraction. . . Some on Wall Street and/or the Administration may be anticipating a double-dip recession, since stories already are surfacing of how the systemic solvency problems in Europe could push the U.S. economy back into recession. While politically it may be worth the effort to divert blame abroad, the problem remains a liquidity squeeze at home, where the Fed and the Administration have been unable to provide longterm stability to the system or adequate liquidity to consumers and businesses. . . The weakness in the money supply foreshadows the economic renewed downturn, which in turn should set the stage for a serious inflation problem. The systemic crises of the last couple years may be contained, temporarily, but they are not resolved. Renewed economic downturn would threaten whatever systemic stability has been in place. The worst is still ahead. . . John Williams, Newsletter Editor And speaking on ETFs, in general these are very poor instruments, designed by the big investment banks for the big investment banks. They are skimming $billions off these things with their flash trading, front running the market in the name of a holy grail called Market Maker. . . GLD and other ETFs have no audits. We can only go by what some Investment Bank says and if you trust their word, you better quit investing. Even their prospectus is worded quite vaguely in many areas. I doubt GLD or SLV holds any real metal at all. These ETFs just like other leveraged ETFs are just a computer program making trades designed to mimic some other asset or index. And these computers of the Investment Banks are running all this flash and high frequency trading on these ETFs. Ron Struthers, Newsletter Editor The M3 money supply in the United States is contracting at an accelerating rate that now matches the average decline seen from 1929 to 1933, despite near zero interest rates and the biggest fiscal blitz in history. Ambrose Evans-Pritchard, Editor May 28, 2010 Obama has nominated Donald Berwick to run the Centers for Medicare and Medicaid Services. I discovered in research on my upcoming book that experts believe that under Obamacare, the role of the CMS will be greatly expanded to define the quality of health care for every insurance plan, set reimbursement rates for physicians in Medicare and Medicaid and decide how valuable certain treatments are. According to Robert M. Goldberg of the Center for Medicine in the Public Interest, Berwick, essentially, will get control of the practice of medicine. It would be scary enough for a bureaucrat of normal sensibilities and saner politics to have such control, but RedState has uncovered the extent of Berwicks radicalism

 like so many of Obamas other appointees. Berwick is an Ivy League academic who loves wealth redistribution and believes that health care is an ideal vehicle to achieve it. He said: Any health care funding plan that is just, equitable, civilized and humane must. . .redistribute wealth from the richer among us to the poorer and the less fortunate. Excellent health care is by definition redistributional. Berwick also lusts after the British system of socialized medicine, saying that Americas health care system runs in the darkness of private enterprise. David Limbaugh Welfare. Democrats view taxes as contributions to charity. (Seriously. You should talk to a few Democrats if you doubt it.) Consequently, when Democrats designed a welfare system that cost taxpayers trillions, they considered it a double good deed. Welfare taxes benefited the poor and forced Americans to do the right thing. Over the years, however, it became clear that government charity dollars were actually producing a social disaster driving fathers from their children, bribing teenage girls to have children out of wedlock, subsidizing drug abuse and destroying the work ethic of entire inner city communities. To address the problem, Republicans proposed welfare reforms that would put recipients to work and get others off the rolls. Democrats said No, and dug in their heels. They had to defend the vast patronage system that welfare created for government bureaucrats, social workers and other beneficiaries, who could be counted on to vote for the Democrat Party. But Democrats also knew that the romance of the victim would work in their favor. When Republicans proposed welfare reform, Democrats attacked them as meanspirited and heartless. They said Republicans lacked compassion. David Horowitz

The markets have shut down for Greek banks, money is fleeing the country and the big Greek banks are about to collapse as the repo market is closed to them. But the bigger story is the downgrading of Greek debt to junk, forcing institutions to sell and prohibiting holders of the debt from borrowing against them from the European Central Bank. The money on their balance sheets just took a 30% haircut at the minimum, and no one will lend against them, except the European Central Bank (which changed the rules to keep them eligible to use as collateral). It is only a matter of time before this spreads to the other social welfare states. As this crisis spreads to Italy, Portugal and Spain the interbank lending market will become increasingly dysfunctional and freeze up, as the Counter Party solvency issues which emerged with Lehman Brothers resurfaces.

Ty Andros I believe that were living through a time of historic change for the U.S. and the world. I believe the stock market is telling us an ominous story, but as usual, the stock market is well ahead of the story. I believe the stock market is heading into what may be the worst and most decisive bear market in history. The generations since World War II have been enjoying decades of good times with the help of fiat money and massive borrowing a process that has created an international house of cards. The stock market has forecast our great and borrowed period of the good life in its own way by giving us the greatest bull market in history. Now the bull market is over, and the great correction (bear market) is upon us, but its still in its early stages. The bear market will be hair-raising in its intensity and persistence. The bear market will produce losses that will be a wonder to behold. The bull market was sustained by systematic inflation and fiat money created by the central banks of the world. Before the bear market is over the very worth of fiat money will be in question. . . Richard Russell May 26, 2010 Whenever real M3 has contracted on a year-to-year basis, the economy always has followed, either falling into a recession, or if already in recession, intensifying. . .The lead-time appears to be shorter in an existing recession, and evidence of an intensifying downturn should be imminent. . .near-term economic activity will turn down with major negative implications for the federal budget deficit, U.S. Treasury fundings, systemic solvency and the U.S. dollar. Such developments should place significant upside pressure on domestic inflation. U.S. difficulties eventually should dwarf the European sovereign solvency concerns currently helping to roil the markets. Accordingly, the long-term outlook for the U.S. dollar and U.S. equity and credit markets remains bleak, while the long-term outlook for gold and silver remains extremely strong. John Williams, Editor Gold is speaking to us, in its gleaming, grinning, golden silence, from its distant historical perch in the affairs of commerce among humans. Its telling us what fools we are to believe in the fiat paper issued by governments. James West, Editor Its clear the U.S. dollar will suffer inflation due to high and growing debt-servicing costs, government payrolls, and unfunded entitlement promises. The U.S. can either default or inflate, and the former is unthinkable to a career politician. At some point and we think it is fast approaching global investors will see that U.S. indebtedness has reached unsustainable levels and exit the dollar, which today

means selling bonds. Interest rates will be forced higher, and the U.S. will face it owns Greek Moment. Jeff Clark, Editor The United States is the largest debtor nation in history. Our continued solvency depends upon low interest rates. But low rates are engendered either naturally from increased savings or artificially from money printing. Without having the adequate savings to bring down rates the Fed has supplanted savings with monetization of debt. However, money printing eventually leads to intractable inflation and will send bond yields much higher, especially on the long end of the curve. To make matters worse, we currently see the difference between revenue and spending headed further in the wrong direction. The budget deficit for the month of April was reported to be $82.7 billion. That figure was nearly 4 times last years reported deficit in April which was $20.9 billion. Michael Pento, Editor Strategic defaults accounted for at least 12 percent of all [mortgage] defaults in February, up from about 4 percent in Mid-2007. . . Housing analysts say strategic defaults mainly occur when a homes value has dropped below remaining the balance on the mortgage. A homeowner in that position may decide that continuing to make payments is throwing money away, or may default to get the lender to modify the loan. . . Zillow.com states that one in five U.S. homes with a mortgage has negative equity so the number of potential strategic defaulters is rather huge; what we have on our hands is a ticking time bomb and purchasing real estate now is one of the dumbest moves an investor could make Sol Palha, Editor The EU has simply thrown a trillion dollars at the problem to make the symptoms go away temporarily. But the debt is still there, and no increased economic engine of production has been facilitated or enhanced. The austerity measures, even if sufficient (which they are not), cannot be implemented given the massive power of the unions and benefit corrupted public employees and welfare recipients. Entrenched socialism wont allow real cut backs in government spending at least sufficient to eliminate the need for more debt and fiat money creation. John Brown of Euro Pacific Capital explains: As the health of much of the global economy weakens on a daily basis, political leadership increasingly ignores the source of the malady and instead focuses on short term band-aid remedies. These measures which may buy a few months, or years, of relative well being will convince the public that problems have been solved and will thereby take pressure off governments to make the needed structural changes. The recently announced $1 trillion EU bailout is a perfect example of this band-aid approach. Joel Skousen, Editor

April 19, 2010 Our economy is being transformed from a mostly capitalistic one to a mostly socialistic one. More decisions are being made by politicians and lawyers in Washington and fewer by entrepreneurs. The motivation behind this shift is the mistaken belief that the financial crisis of 2008 was caused by too much capitalism and a lack of proper government oversight. This conclusion is self-serving for those in power, and couldnt be more economically misguided. Through corruption or just plain ignorance, Congress and this Administration have embraced an ideology that has failed every time it has been tried. Peter Schiff Forced redistribution makes eminent sense to most people these days, which fills me with shame for my species. Humans will believe the darnedest things and then do evil with righteous delight in their hearts. Notice how the problem increasing disparity of wealth is assumed to have no definite cause. All we get to read is that government redistribution is the noble answer, the hard choice that a crusading meddler like Obama must fix. But the world-improvers never for a second suspect that government intervention could be the cause of the very problems that they call on government to fix. And like children, they really dont understand the consequences of their actions. They think theyre justified in their theft and their coercion . . . but consequences tend to be perverse and in the long run people tend to get what they got coming. The growing disparity in incomes is a result of corporatism, inflation, fractional reserve banking, debt creation and a few other bits of mischief government and central banks exist to perform. Jeff Clark May 12, 2010 It would seem that statism, historical amnesia, economic ignorance and bigotry are the mental and moral dispositions that will be shaping the passage of our financial re-regulations bill in the Senate this week. The current, ill-fated 111th Congress continues to blunder its way into our history books along with the dreadful 94th (cut off money to South Vietnam in 1975, lost the war and triggered the Cambodian genocide); 71st (1929-1930, passed the Smoot-Hawley Act, which led to the Great Depression); 63rd (1913-1914, passed the 16th Amendment income tax; the 17th Amendment direct election of the Senate; and creation of the Federal Reserve, which led to weakening of the states, encroachment of the federal government); and 33rd (1854-1855, passed the Kansas-Nebraska Act, which quickened steps to the Civil War). A couple of more destructive laws enacted and the 111th will be No. 1. Tony Blankley, Editor

May 5, 2010 Ironically, the United States is moving in the direction of the kind of economy that China has been forced to move away from. China once had complete government control of medical care, but eventually gave it up as the disaster that it was. The current leadership in Washington operates as if they can just set arbitrary goals, whether affordable housing or universal health care or anything else and not concern themselves with the repercussions since they have the power to simply force individuals, businesses, doctors or anyone else to knuckle under and follow their dictates. Friedrich Hayek called this mindset the road to serfdom. But, even under serfdom and slavery, experience forced those with power to recognize the limits of their power. What this administration and especially the President does not have is experience. Barack Obama had no experience running even the most modest business, and personally paying the consequences of his mistakes, before becoming President of the United States. He can believe that his heady new power is the answer to all things. April 28, 2010 When distortions in the economy are still small, and only a minor recession would be necessary to correct the misallocation, a modest amount of monetary or fiscal stimulus often will be sufficient to make the boom continue; this represents another source of deception. Central bankers and finance ministers enjoy praise for this cheap feat of having prevented what would otherwise have been only a mild and short slump. Yet by not letting mild recessions happen, these policy makers heap one pile of economic distortions upon another until the big downturn becomes unavoidable. When finally confronted with the threat of a severe depression, these same authorities fall into panic. Acting in fear, they tend to deny experience and to flout prudence and rationality. In the face of a major economic downturn, monetary authorities resort to flooding the economy with even more easy money. Furthermore, their deficit spending heaps new debt upon old debt. Antony P. Mueller April 14, 2010 Whether it is in education, housing, health care, automobiles, insurance, or banking, greater government involvement in the economy means higher prices, lower

productivity, more bailouts, bigger deficits, increased taxes, diminished industrial capacity, fewer private sector jobs, less freedom, and a falling standard of living. March 5, 2010 Foreign owners of U.S. government debt reduced their holdings by the largest monthly amount ever in December, with China offloading so many Treasury securities that it is no longer the largest foreign holder. Total foreign holdings of Treasury securities plunged by $53 billion in December. China led the sell-off reducing its holdings by $34 billion, while Japan increased its holdings by $11 billion to become the new largest foreign holder of Treasuries. This news has seriously bearish implications for the U.S. dollar and is extremely bullish for precious metals. If China stops buying U.S. debt, the Fed will be forced to monetize a greater portion of the auctions, creating currency at a blistering pace and sending the dollar much lower in an inflationary tailspin. This news also calls into question the U.S. governments triple-A credit rating and could lend further support to my belief that investors will stop turning to the dollar as a safe haven in the near future and instead begin turning to precious metals. Jason Hamlin, Editor, GoldStock Bull On February 17, the President of the Federal Reserve Bank of Philadelphia gave a speech to the Philadelphia chapter of the World Affairs Council. The President of the Philadelphia Fed, Charles Plosser, titled his speech, The Federal Reserve System: Balancing Independence and Accountability. This sounds boring. For those who understand the function of the Federal Reserve and its influence, the speech is not boring to read. The target of the first half of the speech was Ron Paul. It was a warning against Ron Pauls bill in the House of Representatives that would authorize the Government Accountability Office to audit the Fed. The Houses leadership has kept the bill from coming to the floor for a vote, despite the fact that a majority of the membership has officially supported it, and despite the fact that a majority of the House Financial Services committee voted for it, 43 to 26, in November 2009. The Fed has consistently opposed this bill. The official explanation is that this would in some way constitute interference with the Feds policy-making. This argument has never been clear. The fact that the General Accountability Office will verify the numbers in no way constitutes interference with Fed policy, unless Fed policy has been carried on under false numbers. Nobody at the Fed will say what is really at stake: an independent audit of the governments gold holdings, which are officially held for the government by the Fed for safekeeping. If the gold is gone, or if there are legal claims against it by foreign central banks as a result of Fed swaps, this would constitute fraud on a massive scale. The real power in the Fed has always been the Federal Reserve Bank of New York. In all textbook accounts of the years leading up to the Great Depression, the focus is on Benjamin Strong, the President of the New York Fed. He set policy, not the Board of Governors. The bulk of the worlds gold holdings are stored in the vault of the

New York Fed. This includes most of the deliverable gold (99.9%) owned by the Fed as trustee of the U.S. governments gold. The gold at Ft. Knox (probably coin melt, 90% fine) constitutes a second holding area, said to be 20% of the nations gold. No one knows. It has not been audited since the early 1950s, not even by the private accounting firms that audit the Fed on an annual rotation basis. The Fed demands secrecy. It proclaims that it pursues transparency, but does not on any issue of substance. Bloomberg News in November 2008 sued the Board of Governors under the Freedom of Information Act to find out which institutions received how much money in October 2008 bailouts. The Board of Governors refused to comply on this legal basis: this would expose trade secrets of the recipient banks. Gary North March 2, 2010 Another dangerous power toward which we are moving, bit by bit, on the installment plan, is the power of politicians to tell people what their incomes can and cannot be. Here the resentment is being directed against the rich. The distracting phrases here include obscene wealth and unconscionable profits. But, if we stop and think about it which politicians dont expect us to what is obscene about wealth? Wouldnt we consider it great if every human being on earth had a billion dollars and lived in a place that could rival the Taj Mahal? You can see the agenda behind the rhetoric when profits are called unconscionable but taxes never are, even when taxes take more than half of what someone has earned, or add much more to the prices we have to pay than profits to. Thomas Sowell February 24, 2010 True to their mission as the organs of the liberal establishment, Time magazine and The New York times ran stories in the midst of the great snowmaggeddon warning us against drawing any politically incorrect conclusions. Skeptics of global warming, cautioned The Times, are using the record-setting snows to mock those who warn of dangerous human-driven climate change this looks more like global cooling, they taunt. Most climate scientists respond that the ferocious storms are consistent with forecasts that a heating planet will produce more frequent and more intense weather events. Time agrees: There is some evidence that climate change could in fact make such massive snowstorms more common, even as the world continues to warm.

Note how The Times contrasts skeptics of global warming with climate scientists. Bill Nye the Science Guy, appearing on MSNBC, used the same tactic, accusing skeptics about manmade global warming of denying science. Those who now protest that any particular weather pattern should not be confused with global climate have short memories. Only yesterday, they were attributing every forest fire, drought, hurricane and toad disease to global warming. Remember the plight of the polar bears? Turns out that polar bear populations have been increasing, not decreasing, for the past 30 years. Mona Charen, Editor December 10, 2009 Scooped by Fox News, conservative blogs and talk radio on the exploding ACORN scandal, the New York Times whitewashed its own role in covering up the community organizing rackets financial shenanigans last fall when it cut off a reporters investigation a few weeks before Election Day. Jill Abramson, the Times managing editor for news, acknowledged that her staff was slow off the mark and blamed insufficient tuned-in-ness to the issues that are dominating Fox News and talk radio. They assigned a new opinion media monitor to track the competition, but refused to identify the watchdog for fear that he/she would get too many mean, intrusive e-mails and phone calls. More recently, the papers website demonstrated that its real motto is All the inconvenient news thats fit to suppress. The Times lead environmental blogger, Andrew Revkin, haughtily refused to reprint damning e-mails leaked by a hacker in the burgeoning ClimateGate scandal. The documents reveal a long trail of manipulated data, but Revkin balked at the ill-gotten trove. The blabbermouths at the Times had no problem exposing national security secrets to undermine Bush. But shed light on scientific hoaxes that undermine Al Gore? Unethical! Michelle Malkin The holders of Dubais real estate assets and sovereign debt are the major Western financial institutions already weakened by their escapades at home. Though the government of Dubai has distanced itself from the mess, the bursting of the Dubai bubble will mean even more write-downs for Anglo-American investment banks. This may prove to be the first of a new wave of defaults as the commercial mortgage markets begin to buckle. Worse still, any news series of major defaults could spread rapidly to and within the derivatives market. If that were to happen, a sudden cascade of settlement defaults could cause a devastating implosion of international financial markets one that central banks may be powerless to contain.

John Browne November 9, 2009 The most severe economic downturn since the onset of the Great Depression continues, as does the systemic liquidity crisis. The employment and unemployment numbers remain coincident, not lagging indicators of broad economic activity, and their ongoing deterioration in October means that the economy is not recovering. At best, activity in key areas such as retail sales, housing and production has flattened out at extremely low levels. Those levels also have enjoyed short-lived support from one-time stimulus gimmicks that largely have run their courses. . . . . The Fed continues in panic mode, spiking the monetary base at annualized paced not seen since the worst of the crisis a year ago. At the same time, broad money supply is contracting at a pace that even in the best of times would a promise a recession in the months ahead. The broad outlook remains unchanged. I cannot remember stock market prices ever being so far removed from reflecting underlying economic and financial-system reality. Irrespective of near-term market gyrations, the long-term outlooks remains extremely bearish for U.S. equities and the U.S. dollar, and extremely bullish for gold and silver. The economy still faces an eventual hyperinflationary great depression, with high risk of that circumstance beginning to unfold in the year ahead. John Williams Maria Shrivers new report, A Womans Nation Changes Everything, has received a full dress media rollout. . . . . . . Hundreds of pages, lots of photos and charts, and its the same old song. It completely misses the most important fact about modern womens lives the decline of family stability. And not just womens lives. The decline of marital stability and the rise of unmarried parenting (currently almost 40 percent of children are born to unmarried parents) has not only been a catastrophe for children, it has also made combining work and family harder than ever. Just at the moment women entered the workforce en masse, marriages so essential to providing stability to home life unraveled. The solution, says the Shriver report, is for our social insurance programs to recognize how family life is changing and increase benefits for a range of domestic needs. See how it works? The more that families disintegrate, the more demands are made upon the government to step in to fill the gaps. Thats a downward spiral from which there may be no escape. Mona Charen

October 30, 2009 In the past week, both Chis Matthews and Keith Olbermann have rolled out the Willie Horton ad, claiming that it marked the beginning of vicious personal attacks in politics, as opposed to what it was: The most devastatingly relevant campaign commercial in all of American history. In the 80s, the Massachusetts Supreme Court ruled that a prison furlough policy had to be extended to convicted murderers, who were ineligible for parole. Even the Massachusetts Legislature, which contained about three Republicans, realized this was insane, and quickly passed a bill excluding first-degree murderers from the weekend furlough program. But in a desperate bid for the ACLUs BrainDead Liberal of the Year Award, Gov. Michael Dukakis vetoed the bill. Horton, who was later released under this program, was in prison for carving up a teenager at a gas station and then stuffing his body into a garbage can. (He had already been convicted of attempted murder in South Carolina through no fault of his own, the victim survived.) Even after Horton used his Dukakis-granted furlough to rape and torture a Maryland couple in their home for 12 straight hours, the Greek homunculus issued a statement reaffirming his strong support for furloughing murders. The Bush campaign commercial about Dukakis furlough program never showed a picture of Horton. In fact, the actors playing criminals passing through a revolving door in the ad were all white. Voters considered it relevant that a candidate for president was so beholden to the ACLU that he backed an idiotic furlough program that released first-degree murderers. Every informed student of the 1988 campaign knows that the Bush ad didnt show Hortons picture. And yet in Keiths discussion of Bushs allegedly vile, racist use of Willie Horton, he used a phony version of the ad, doctored to include a photo of Horton. I dont blame Keith personally for this blatant distortion: He gets all his research material from Markos Moulitsas and other left-wing bloggers, so he cannot be held responsible for the content of his show. Keiths principle contribution to the program is his nightly display of self-congratulation and pompous douche-baggery. Ann Coulter October 28, 2009 The worst remains ahead for the economic and systemic-solvency crises. Economic reporting has shown no meaningful signs of business recovery, with the current depression likely to evolve into a great depression, in conjunction with the collapse of the value in the U.S. dollar and a hyperinflation. Risks are high for these crises to explode in the year ahead. The general outlook is not changed.

A full review of the economic outlook will follow with next weeks third-quarter GDP commentary. In the interim, some selling pressure has continued against the U.S. dollar, along with continued strength in oil and gold prices, generally reflective of the Federal Reserves ongoing efforts to debase the U.S. currency. Rarely have market expectations (economic recovery, contained inflation, contained solvency crisis) been so far removed from underlying economic and financial-system fundamentals and reality. That circumstance leaves open the possibility of extreme, negative market reactions, with highly volatile and disorderly markets possible. Such is true particularly for U.S. equities and the U.S. dollar. John Williams Meanwhile, a great bull market starts . . a bull market that mirrors the demise of the dollar. Gold is priced in dollars, and as the dollar weakens, it takes an increasing amount of fiat dollars to buy an ounce of gold. Beginning in 1999, gold started up a primary bull market. In my personal opinion, this is fated to be one of the greatest bull markets in history. It will be a bull market built on not one, but tow powerful human emotions greed and fear. The speculative third phase lies ahead. Slowly but surely, the US public will finally realize that the US government is bankrupt both morally and monetarily. People will panic into gold . . . I believe that there will be a world panic to buy gold. This will set off one of the wildest and most explosive bull markets in history. Richard Russell October 27, 2009 History has shown us time and time again that the masses never seem to understand what is happening to them until it is too late. This is providing us with an exceptional opportunity to profit and make spectacular gains for being smart, informed and able to make key decisions at moments when most others have no clue or feel caught like a deer in the headlights. Have confidence in your decisions to own the physical metals and quality mining shares. You re doing the right thing. The truth is gold is going to go much higher whether John or Mary Q. Public get it or not. This reminds me of the great quote from Arthur Schopenhauer, which says: All truth passes through three stages. First it is ridiculed. Second it is violently opposed. Third, it is accepted as self-evident. Take the example of poor Galileo who was ridiculed, persecuted and eventually prosecuted for his belief that the earth revolves around the sun. What is taken as being self-evident now was total heresy when it was then believed that the sun revolved around the earth. We have similar flawed thinking in todays society when you look at how the masses believe in politicians who keep creating money out of thin air to fix anything that ails us. The general public votes for and believes in deficit spending as if there are no consequences simply because a majority of Americans dont want to take

responsibility for themselves. They have a sun-revolves-around-the-world entitle mentality that the government can and should take care of us from cradle to grave. How pathetic! Turning over your destiny to government fools is the antithesis of what the founding fathers stood for. Unfortunately for all of us, this entitlement fantasy will not have a good conclusion as the government runs the country into the ground trying to do what simply cannot be. Greg McCoach October 20, 2009 Rep. Diane Watson said, in praising Cubas health care system, You can think whatever you want to about Fidel Castro, but he was one of the brightest leaders I have ever met. W.E.B. Dubois, writing in the National Guardian (1953) said, Joseph Stalin was a great man; few other men of the 20th century approach his stature. . . . But also and this was the highest proof of his greatness he knew the common man, felt his problems, followed his fate. Walter Duranty called Stalin the greatest living statesman . . a quiet, unobtrusive man. George Bernard Shaw expressed admiration for Mussolini, Hitler and Stalin. John Kenneth Galbraith visited Maos China and praised Mao and the Chinese economic system. Gunther Stein of the Christian Science Monitor admired Mao Tsetung and declared ecstatically that the men and women pioneers of Yenan are truly new humans with spirit, thought and action, and that Yenan itself constituted a brand new well integrated society, that has never been seen before anywhere. Michel Oksenberg, President Carters China expert, complained that America (is) doomed to decay until radical, even revolutionary, change fundamentally alters the institutions and values, and urged us to borrow ideas and solutions from China. . . . . The most authoritative tally of historys most murderous regimes is in a book by University of Hawaiis Professor Rudolph J. Rummel, Death by Government. Statistics are provided at his website: (http://www.hawaii.edu/powerkills/welcome.html). The Nazis murdered 20 million of their own people and those in nations they captured. Between 1917 and 1987, Stalin and his successors murdered or were otherwise responsible for the deaths of, 62 million of their own people. Between 1949 and 1987, Mao Tsetung and his successors were responsible for the deaths of 76 million Chinese. Walter Williams, Editor October 13, 2009 The U.S. government is bankrupt, but that isnt stopping it from dramatically increasing its share of the economy. The deficit will soon skyrocket due to $63

trillion in baby boomer retirement obligations. New taxes and social programs grafted to an already bloated government will further drain the private sector, push productive endeavors offshore, and leave large numbers of the heavily indebted middle class out of work and out of luck come retirement. This will trigger a negative feedback loop, as the unemployed, underemployed, and senior boomers become increasingly dependent on the state for the basic necessities of life. The shift now underway is not that associated with a typical business cycle but rather with a long-term restructuring. Casey Research September 21, 2009 Since the Federal Reserve and the administration are both determined to continue "stimulus" policies, it is more likely that the bounce will continue for another six to 12 months, with the stock market getting back towards 2007 levels, removing the effect of the credit crunch, pushing oil prices above $100 and sending gold past $1,500 per ounce. In that case, by next spring, inflation will be running around 5%. Bulls will chortle that the recession is over, and will attempt to ignore the excessive prices of stocks, commodities and bonds (with real yields on 10-year bonds being by then negative), but the market will not allow them to do so for long. The rebound will end in one of three ways. The least likely is that Ben Bernanke and the administration will come to their senses and begin to withdraw the excessive fiscal and monetary stimulus. They won't dare withdraw much, but even the beginning of withdrawal will cause panic in overextended financial markets. Since politicians generally and Bernanke in particular are above all determined to avoid blame, it's unlikely they will choose this course, which would leave their fingerprints too clearly on the subsequent unpleasantness. The second possibility, as I discussed last week, is a bond market strike, in which yields shoot upwards and the market refuses to absorb the ever increasing amounts of Treasury confetti Tim Geithner attempts to offload. In that event, the Fed would almost certainly step in to buy Treasuries, intensifying the monetary stimulus. That would then bring about the third possible denouement, in which rapidly accelerating inflation and rapidly accelerating commodity prices cause a collapse in real demand, plunging the United States into renewed recession. That process is likely to take longer than the others, perhaps a year. At that point, the Fed will also be forced to stop buying Treasury bonds, or watch the United States slide into the situation of 1923 Weimar, with wheelbarrows needed for daily cash. Martin Hutchinson September 16, 2009

Three stories bubbled up in the past week, although if you read The New York Times and the administrations other airbrushers youll be blissfully unaware of them: The resignation of Van Jones, former (?) communist and current 9/11 truther, from his post as Obamas Green Jobs Czar. The reassignment of Yosi Sergant at the National Endowment for the Arts after he was found to be urging government-funded arts groups to produce art in support of Obama policy positions. And, finally, the extraordinary undercover tape form Andrew Breitbarts Big Government Website in which officials from ACORN (the Obama chums wholl be helping with the next census) offer advice on how pimps can get government housing loans for brothels employing underage girls from El Salvador. What do all these Obama associates have in common? I mean, aside from the fact that Glenn Beck played a key role in exposing them. We are assured by the airbrushing media and moderate conservatives that Beck is crazy, a frothing spokesnut for the lunatic fringe. By contrast, Van Jones, Yosi Sergant and ACORN are all members of the lunatic mainstream, embedded philosophically and actually in the heart of Obamaland. What all these individuals share is a supersized view of the state, from a makework gig coordinating the invention of phony-baloney green jobs to Soviet-style government-licensed art in support of heroic government programs to governmentfunded community organizers organizing government funding for jail bait bordellos. OK, government-funded child prostitutions a bit of an outlier even for this crowd for the moment. But you get the general idea. Mark Steyn Government is a parasite economy. Parasites cannot succeed if they kill the host. And yet, the government is killing its economic host, the U.S. economy. The same thing happened in the 1930s in the U.S. and in Japan in the 1990s. Its not the end of the world and its not doom and gloom, but I does create hard economic times for those not suckling on the government teat. Adam Brochert September 3, 2009 Because the central banks of the world have flipped the lever on the printing presses and the global economy is drowning in liquidity, the new game in town is to get hold of printing press money, preferably first and to convert it into a store of value. Flipping cash for stores of value is the way to go. Cash burning a hole in your pocket has a whole new meaning. Sarel Oberholster, Anaylst

A double dip recession is more than just a danger in my book it is more like a probability. . . . Make no mistake the credit crunch is like a smoldering bush fire and the embers are everywhere. . . . Neil Charnok, Analyst I know the media is now rife with folks predicting the end of the recession. I even know smart analysts who are saying the same at independent research firms. In terms of the REAL economic picture, these folks are completely misguided and wrong. The US is facing the worst economic contraction since the Great Depression. This is NOT a plain vanilla recession. Graham Summers, Newsletter Editor The stimulated revival of housing is not the pivot upon which the economy will turn, nor will it be the epileptic stimulus spending that will do the trick. The economy will only turn when bank balance sheets acknowledge the truth, depositors and investors (both foreign and local) take their losses and new industries begin to produce real products using local people. Peter Souleles, Analyst The White House is finally admitting that there is a substantial and extensive gap between its earlier rosy economic forecast and reality. What? Higher unemployment rates and higher deficits all around. A nightmare brewing? Unemployment is headed to double-digit figures and add to that the fact that unemployment benefits are rapidly coming to an end for the vast majority of those unemployed. David N. Vaughn, Newsletter Editor The number of people calling for a new bull market, saying the recovery is upon us and saying that the stock market sees a future recovery and is discounting it is funny to me. Funny in a sad way, because I know what comes next and how upset many retail investors are going to be in a few short months. I have taken my licks and learned a lot about trading bear market rallies over the past few months, to be sure. Mr. Market never fails to humble. Adam Brochert, Editorialist The corruption of government and finance is total. It has become so bad, I have to laugh! Market prices we see today are all phony. This will be the case until our foreign creditors put an end to the monetary and fiscal insanity of our Keynesian Policy Makers. Expect lower asset prices and higher CPI inflation to result from this. Mark J. Lundeen, Analyst

As the balance sheet of the Fed has blown up, as the deficit of the U.S. and the debt has increased, people have asked the obvious question: will there be inflation in the future? Right now were facing deflation, but sometime in the future, there will be consequences. Joseph Stiglitz, Economist The global financial crisis, which began with the collapse of the U.S. subprimelending market in 2007 has led to almost $4 trillion of write-offs and credit losses at banks and other financial institutions around the world. . . . . What about the People? How much wealth have they lost in their homes, stock portfolios, and other financial assets? Such a number is difficult to calculate, although various estimates have been given by different authorities running from $25 trillion to $50 trillion. This sum is staggering and equals the yearly GDP of the entire world. Gold & Silver Report Most economists think that we are going to see a clear recovery between late 2009 and early 2010, although they argue about how strong or weak this recovery will be. The bearish minority mostly fears an inflationary blow-out sooner or later. We are clear about seeing a deeper downturn or depression starting next year, with the markets very likely to turn downward by early September. Harry Dent, Author The US has lent or committed $13 trillion to prop up its collapsing financial system and economy . . . . . It is still our view that the total cost to the US alone of the current crisis will be at least $25 30 trillion. And where is the money coming from? Governments believe they can manufacture endless amounts of money and that this will create eternal wealth for their economies. But governments are not just creating money out of thin air. They are also looking after their affairs better than any other group in the economy. The only net increase in jobs in the last few years has been in the government sector, both in the US and the UK. Whilst the rest of the economy is suffering and cutting down, government is adding hundreds of thousands of jobs. Also pay and pensions in government jobs are superior to the private sector. So the main growth sector in the economy in the last few years has been the government sector that produces nothing but consumes 50% of GDP. No wonder we are all in trouble. Government spending has gone from 10% of GDP in 1932 to almost 50% in 2008. Egon von Greyerz, Asset Manager

To those who study the numbers, it is now obvious that Americas fiscal situation is hopeless. Given the countrys current debt and unfunded liabilities of $75,000,000,000,000, an amount growing by a least $5,000,000,000,000 per year, it will be statistically impossible for the United States to pay its obligations unless it repudiates them in large measure, or the dollar is sacrificed on the altar of searing society-altering inflation. Congress and much of the nation are in utter denial about the countrys unfolding fiscal catastrophe, as evidenced by federal spending that is accelerating, producing all-time debt and deficit records that exceed anything ever experienced by any nation on earth, at any time in history. Denial is a psychotropic, mind-altering drug that by comparison makes crack cocaine look like health food, and addiction to it shuts down the brain. Americas denial about its out-of-control spending, non-repayable debt, financial sector fraud and deceit, decadent political institutions, epic dereliction of leadership duty, fiscal and monetary immorality, and disastrously dishonest system of cronyism is leading the nation into an economic nuclear winter of desolation and chaos. Stewart Dougherty, Analyst August 31, 2009 With the U. S. now hopelessly insolvent, its imperative for the U.S. government to convince the world that demand for its debt remains strong. Should the foreign creditors who hold a mortgage over the U.S. economy see such demand evaporate, this would cause interest rates to immediately soar followed shortly by a downgrade to the U.S.s national credit rating, which still holds the same farcical AAA rating as trillions of dollars of Wall Street scam-products . . . . . In a post from his blog on Thursday, Chris Martenson revealed that during the previous weeks Treasury auctions that the Federal Reserve secretly bought nearly half of the Treasuries which were auctioned. . . . . . It reveals that demand for U.S. dollar-products is much lower than what is pretended by the Obama regime. Secondly, the much greater degree of monetizing debt (i.e. printing money to pay the interest payments on its debt) reveals much greater money-printing (i.e. dilution) of the U.S. dollar than what is claimed by the U.S. government. Jeff Nelson, Analyst There are, as always, isolated bargains to be found in equities, but the markets themselves are anything but a bargain today. Instead stocks are pricing in a powerful economic/earnings recovery that is expected to materialize just as the U.S. consumer looks prepared to go down for the count. Can monetary and fiscal

stimulus measures alone really do for the economy and markets what the unprecedented housing/credit bubbles did during the 2002-2007 recovery? There is also the risk that as the Fed eyes removing some of its emergency easing strategies and/or interest rates begin to rise (possibly because of decreased foreign demand for U.S. debt?), that an economic relapse will come to pass. Can economic stability in the U.S. really be sustained if interest rates jump sharply higher? Finally, there is the threat that policy makers will be unable to sustain their attack against the deflationary monsters still threatening to devour markets and asset prices across the globe. Thanks to QE measures and Chinas seemingly robust (bubble?) recovery, the deflation argument has recently lost some of its backers. This could quickly change . . . Brady Willett, Analyst July 9, 2009 The problem for us is that Bush, Obama, Geithner, and Summers are all following the Keynesian playbook, with Nobel laureate Paul Krugman serving as head cheerleader. If instead we just allowed the free-market process to work, the economy by now would likely have already bottomed; companies like AIG would be emerging from bankruptcy and the unemployment rate would be dropping instead of continuing to rise. Mark Thornton July 8, 2009 The most ridiculous argument is that the average American is so tapped out he cant borrow anymore so the money supply cant grow. This totally ignores the multi-trillion dollar expenditure of the US government which is multiples of its tax revenue and is being funded by money that is created by the Federal Reserve. The US Government can spend into existence as much money as it deserves to create. For the critics who say that M3 is not yet reflecting the monetary debauchery I would remind them that inflation is relatively more money chasing relatively fewer goods and services. So a contraction of things to spend money on with even a static money supply will lead to an increase in the general price level. Adrian Douglas July 2, 2009 It has now become clear that the new regime in Washington is intent on inserting itself into every aspect of the economy and private business, without regard to the consequences, the rule of law, or even common sense. Brien Lundin

June 16, 2009 Why is DEPRESSION inevitable? With a President, a solid Democrat controlled Congress as well as a bi-partisan consensus believing that deficit spending is vital in fighting the RECESSION, there is absolutely no constraint on government spending. The sky is the limit with deficit spending, now approaching two trillion (with a T) plus dollars over each of the next two years alone and thats not counting healthcare reform. There are only two ways to pay for it: (1) By printing more money, which debases the currency causing inflation, and (2) By hiking taxes, which kills investment, businesses and jobs, destroys what is left of the housing market and results in a Depression. Or, as in this case, the worst of both worlds AN INFLATIONARY DEPRESSION. Aubie Baltin Spurring the growth of the California budget was the States phenomenally large capital gains tax base. The top one percent of earners generates 40% of the states revenues; 250,000 people have been doing the heavy lifting for a state with a population around 36 million. From 1994 to 2007, this top-heavy tax system flourished as virtually every class of investment vehicle, including stocks, residential real estate, commercial real estate, commodities, art, collectibles, oil, gold and U.S. Government bonds participated in a bull market. During this period of economic expansion, the state was collecting roughly $25 billion in capital gains driven taxes. Since the middle of 2008, most investments have declined precipitously in value. The losses associated with all investments have created tax-loss carry forwards that will offset about 80% of any capital gains tax liabilities for the next 5 years." Chriss Street June 10, 2009 How can you trust a government that first creates the biggest financial bubble in history and then, as proof of their total idiocy, attempts to solve the problem by massively increasing the size of the bubble! It is totally comprehensible that the rest of the world is not prepared to buy the currency which is not worth the paper it is printed on. The dollar is going to disappear into oblivion and run down into the Atlantic and the Pacific and if there is anything left, this will trickle down into the Gulf of Mexico. In the next few years there will only be one buyer of US Government debt namely the US Government itself. This will of course exacerbate the fall of the dollar and of US T debt in an ever faster spinning vicious circle. So, Who is Paying the Bill? Nobody, of course. The bill will never be paid. It is like a gigantic Ponzi scheme where the issuers and the arrangers - the government and the financiers - are the

beneficiaries whilst the US people, who are burdened with this massive debt, become paupers. So far in history no country has abolished poverty by printing paper. How can the government continue to issue paper that they know will never be repaid? Because it gives them temporary power and perceived glory. And by the time the debt is due for repayment, that will be the new government's problem. The Government is socialising every entity that is powerful enough to effect their popularity or can line their pockets. But the people who are on their way to poverty and destitution are getting no help whatsoever. Matterhorn Asset Management June 9, 2009 "The Fed is buying up all this government paper in an attempt to keep interest rates low. Its plan is to spur economic activity via artificially low interest rates. THEY NEVER LEARN. There is only one main problem that all Socialists seem to overlook: Natures Laws of Supply and Demand. Thus their problem is that it's not working. Even with all that firepower at their disposal, because of the Laws of Supply and Demand, they cannot keep rates from rising. As such, just as I have been warning you since January 2009, the next major financial bear market crash will be in U.S. government bonds including Munis and although is started back in January, it has not yet been recognized by Wall Street." Aubie Baltin June 4, 2009 "If there is one thing above all others that would snuff out any talk of "green shoots of economic recovery" sprouting across the US, it is a spike in mortgage rates. Not only would this greatly increase the already record levels of foreclosures and simple abandonment of housing of all descriptions, it would deter anyone who can still get a mortgage loan from taking advantage of the depressed housing prices already available. It would be the broken straw pushing the US from recession into depression." Bill Buckler June 3, 2009 "Based on these official US reports, it is clear that there will be no fiscal moves made by the Obama administration as long as it is in office towards a balanced US budget. It is equally clear that neither will any moves be made to diminish the US budget deficit. The federal government intends to continue to roll on towards bankruptcy. On these plans, the only thing that will stop it IS bankruptcy."

Bill Buckler May 29, 2009 "The Fed recently said that there were $US 12.1 TRILLION in US mortgages. Other estimates go to $US 14.1TRILLION. It is estimated that 30-35 percent of those areunderwater regardless of the interest rate. That, roughly, leaves $US 4 TRILLION in mortgage loansexposed! The entire US financial system only has about $US1.4 TRILLION in capital. It is horribly exposed recentstress tests to the contrary notwithstanding - to a new wave ofcapital losses. This is what happens in a credit money systemwhen the collateral foundation crashes out from under thefinancial system. Shrink that collateral foundation far enoughand the banking and financial system becomes insolvent. Thisis the REAL US stress test." Bill Buckler May 21, 2009 "The American economy cannot tolerate a stagnant or contracting state for very long. The economy does not generate sufficient cash flow to meet debt obligations, requiring strong economic growth in order to avoid a collapse of the bond markets. Should the economy not respond to the present stimulus, even the federal government may not be able to borrow. A collapse of the bond markets not only takes away the ability of the government to stabilize the banks and the economy, but the resulting high interest rates will bring America down both economically and politically." John Kutyn "It now takes over $7.00 of new debt stimulus to produce only $1.00 of GDP growth. Like trees that cant grow to the sky, a debt pyramid can only grow so much before imploding. Believe it or not, deflationary forces have now caused the Federal Reserve to lower short-term rates to zero thus setting the state for a Treasury Bond Collapse that will end up destroying all savers." Dr. Aubie Baltin May 20, 2009 "The stunning thing about the proposed budget is that nothing announced looks like it will improve the efficiency of the economy. Nothing looks like its in the direction of freedom or liberty. Nothing looks like it has any faith whatsoever in markets. Its all about rewarding interest groups: unions, the green lobby, the education lobby, and the health care sector."

Jeffrey Miron "Fiscal conditions continued collapsing in April 2009, as the big tax collection month had a sharp enough fall-off in deficit in a quarter century. The severe, deepening recession and surging government outlays have continued to pummel the government' finances."" John Williams May 15, 2009 "Off we go, into the wild red yonder -- President Obama, how could they have done this to you? You listened to the Wall Street crowd, and it's going to destroy your presidency. Why? The latest White House estimate for this year's deficit has been raised 5% from its earlier February estimate to the new estimate of (deep breath) $1.84 trillion. And the deficit for next year will be $1.25 trillion. That's over three trillion dollars in two years! Who in hell is going to buy all the securities that will have to be offered? "Who the gods would destroy, they first make mad." Welcome to mad America." Richard Russell May 14, 2009 "After virtually every disaster created by Beltway politicians you can hear the sound of feet scurrying for cover in Washington, see fingers pointing in every direction away from Washington, and watch all sorts of scapegoats hauled up before Congressional committees to be denounced on television for the disasters created by members of the committee who are lecturing them. The word repeated endlessly in these political charades is "deregulation." The idea is that it was a lack of government supervision which allowed "greed" in the private sector to lead the nation into crises that only our Beltway saviors can solve. What utter rubbish this all is can be found by checking the record of how government regulators were precisely the ones who imposed lower mortgage lending standards and it was members of Congress (of both parties) and who pushed the regulators, the banks and the mortgage-buying giants Fannie Mae and Freddie Mac into accepting risky mortgages, in the name of "affordable housing" and more home ownership. Presidents of both parties also jumped on the bandwagon.

Most people don't have time to spend digging into the Congressional Record and other sources to find out the ugly truth being covered up by the blizzard of lies coming out of Washington and echoed in much of the media." Thomas Sowell May 11, 2009 "The U.S. economy remains in a deepening depression that will prove to be particularly protracted and unresponsive to traditional stimuli. Despite all efforts by the Fed and Treasury to debase the U.S. dollar, broad money growth has stalled anew, suggesting an intensifying solvency crisis, with new or expanded Fed actions likely. Broad money growth should pick up, however, with escalating Fed monetization of Treasury debt. Although the U.S. dollar generally has held its recent relative strength in the currency markets, global investors increasingly will shun the greenback, and intense dollar weakness eventually will push dollar-based prices such as oil much higher, igniting consumer inflation that ultimately will feed into a U.S. hyperinflation." John Williams "We find ourselves facing the horror of what has always been the Achilles Heel of the left wing: its abysmal ignorance of economic science. The ideological tendency has gone from Keynesianism to outright socialism in a matter of a few weeks. And the trajectory seems to be accelerated mainly by the logic of the interventionist cycle: bad policy leads to bad results that are addressed through bad policy, and so on, straight down the fast track to serfdom." Llewellyn H. Rockwell, Jr. "Federal government loans, spending or guarantees to rescue the financial system now total more than $US 12.8 TRILLION since the international credit crisis began in August 2007, according to data compiled by Bloomberg as of March 31. That includes the $US 2 TRILLION on the Fed's balance sheet. This amounts to lending, spending or guaranteeing 89.5 percent of current nominal US GDP! That, on the face of it, should make it obvious that the US has entered into the land of the economically absurd." Bill Buckler May 7, 2009 "The book that permanently made me a sadder and hopefully, wiser man was Edward Gibbons The Decline and Fall of the Roman Empire. To follow one of the greatest civilizations of all time as it degenerated and fractured, even before being torn apart by its enemies, was especially painful in view of the parallels to what is happening in America in our own times. The fall of the Roman Empire was not just a matter of changing rulers or political systems. It was the collapse of a whole civilization the destruction of an economy, the breakdown of law and order, the disappearance of many educational institutions. It has been estimated that a thousand years passed before the standard of living in Western Europe rose again to the level it had once had back in Roman times. How long would it take to recover

from the collapse of Western civilization today if we ever recovered?" Thomas Sowell "While many in the media are now saying that things are looking up, and that the worst may now be over, I think its just begun. For several reasons For starters, stocks are cheap relative to where theyve been over the last five years, but theyre not cheap relative to historic bottoms (e.g., 1 times book, around 6.6 times earnings after big earnings cuts and 6-10% dividend yields). Treasuries are in a bubble. And, as hard as it has fallen, residential property has not yet bottomed. But the worst is yet to come. And Im not talking about student loans, car loans, and credit card debt. Or Social Security, Medicare, and Medicaid. Or the looming bankruptcy of most states and many municipalities. The real crisis will be in pension funds, commercial real estate, and life insurance companies. The life insurers own mostly commercial real estate, mortgages, and bonds; many will be totally busted, even before people start cashing in their whole life policies. You dont even hear about these three things in the press yet. Of course thats all in addition to the fact half of U.S. hospitals are currently running at a loss even before legions of the poor start really overwhelming their emergency rooms. And the balance of trade deficit has yet to turn around and go positive which will be devastating to both the dollar and the average Americans standard of living. Sorry to be unremittingly bearish. But the Greater Depression is still very early days. Hang on to your hat." David Galland "The real big danger is derivatives, not sub-prime mortgages. The Bank for International Settlements (BIS) has issued a report stating that Derivatives are now $1.14 quadrillion dollars. That is a one with 15 zeros after it. AIG has now been given $180 billion dollars, with a good portion of that money going to Merrill Lynch, Goldman Sachs, J.P. Morgan, Deutsche Bank and a list of others covering one whole page. These are the counter parties to insurance contracts (DERIVATIVES) written by AIG which, like the money given to the banks, is supposed to keep the worlds financial system afloat. But as large as these monies are, it is just like spitting in the ocean. As these Derivatives implode, there will be no end to the monies given to AIG, which has on its books $400 billion of OTC Derivatives and $200 billion of subprime mortgages (in a large measure directly due to government malfeasance). But remember the size of the problem. As AIG comes to the feeding table for more and more money, they are not the culprits the Government is making them out to be. They are the Governments RED HERRING to deflect scrutiny away from themselves AND to funnel taxpayer money into the banks in their effort to prop up their prime campaign contributors and frat-buddies. Perhaps by the 10th time, John Q. Public will finally get it with regards to the enormous FRAUD that Socialism really is, as you the taxpayer, are being asked to pay for it. But the taxpayer is completely taxed out and there will be a great many tax defaults since people cannot pay as they just try to survive. How much Capital Gains Taxes do you think will be collected next year, regardless of what Congress raises the rates to? What I am saying is that the tax short fall will be tremendous." Aubie Baltin

"Fannie Mae had a yearly loss of $59 billion dollars and Freddie Mac lost $50 billion for 2008 alone and there is no end in sight to their losses. And thats after buying $5 billion of their Bonds. If the FED is determined to continue to buy up all the defaulted Derivatives, then the easy conclusion is that the Fed will debauch the currency. Ive also come to the conclusion that hyper-inflation is the inevitable outcome, as there is not enough money in the world to take care of the Derivatives.. Sell your long term Treasuries, Corporate and most Municipal Bonds. Most have escaped the real blood bath thus far, but they are living on borrowed time. Sooner rather than later, the FED will be forced to raise interest rates in a futile effort to defend the US Dollar. So sell while the selling is good. This Recession/Depression, whatever you want to call it, is not going to be a short term affair, more likely it will last years and Government deficits will grow larger than even the most pessimistic are projecting." Aubie Baltin May 4, 2009 "The government today is marshalling every resource and every means at its disposal to prop up a failing system of the past. Meanwhile, we live in completely new times. These new times are characterized by systematic destruction of the establishment in media, banking, and finances. What is emerging to replace them is something that no government on the planet can stop. Markets will not be crushed and they resist control as never before. "These new times are not the 1930s when a few eggheads in Washington could set most prices and wages and gather the captains of industry to cobble together business cartels. The economic and financial world moves at the speed of light and is so diffuse that no political authority can act quickly enough to control it. The establishment is going down. This is another reason that all believers in freedom have reason to rejoice today." Llewellyn H. Rockwell, Jr. April 23, 2009 "The bond market may be backing off for fear of rising inflation. Fed Chief Ben Bernanke has embarked on an all-out policy of print and spend. The government is creating trillions of Federal Reserve Notes in a massive effort to support a debtladen economy. Today a trillion is the new billion. The sheer amount of fiat money that is being created is frightening many of our creditors, such as China and Germany. Frightening them to the point where the talk is of a new world reserve currency. The new currency will be a basket of currencies including the yuan, the euro, the dollar and gold, and it will be run by the IMF. As Bernanke goes wild in printing, our creditors become increasingly worried about the dollar as a store of value. Let the dollar take care of itself, thinks Bernanke. Our first priority is to ward off deflation and another depression."

Richard Russell April 22, 2009 "Without one iota of doubt the U.S. is between a rock and a hard spot. Increasing money supply via QE [Quantitative Easing] will indeed keep interest rates low. Consequently, this will help alleviate the real estate debacle (i.e. failing banks and tidal waves of foreclosures throughout the land). On the other hand near zero interest rates, coupled with massive monetization of the ballooning national debt to finance President Obamas overtly ambitious Rescue (bailouts) and Stimulus Programs, will inadvertently cause a draconian devaluation of the U.S. greenback. It is as sure as rain is wet. How To Protect Your Accumulated Wealth? We all know what is coming down the pike: Continued exploding money supply; Massive debt monetization, and; Eventual hyper-inflation. This begs the question: What can an investor do to mitigate the governments efforts to effect WEALTH DISTRIBUTION? Lamentably, all uninformed investors are destined to suffer material loss of the purchasing power of their savings (accumulated wealth) as QE relentlessly evolves in the coming years of Obamas planned annual Trillion Dollar Budget Deficits. However well-informed smart investors will recognize that as the value of the dollar declines, the value of gold and silver will inexorably appreciate (as will most other commodities)." Oracle April 16, 2009 "The book that permanently made me a sadder and hopefully, wiser man was Edward Gibbons The Decline and Fall of the Roman Empire. To follow one of the greatest civilizations of all time as it degenerated and fractured, even before being torn apart by its enemies, was especially painful in view of the parallels to what is happening in America in our own times. The fall of the Roman Empire was not just a matter of changing rulers or political systems. It was the collapse of a whole civilization the destruction of an economy, the breakdown of law and order, the disappearance of many educational institutions. It has been estimated that a thousand years passed before the standard of living in Western Europe rose again to the level it had once had back in Roman times. How long would it take to recover from the collapse of Western civilization today if we ever recovered?"

Thomas Sowell April 15, 2009 "While many in the media are now saying that things are looking up, and that the worst may now be over, I think its just begun. For several reasons For starters, stocks are cheap relative to where theyve been over the last five years, but theyre not cheap relative to historic bottoms (e.g., 1 times book, around 6.6 times earnings after big earnings cuts and 6-10% dividend yields). Treasuries are in a bubble. And, as hard as it has fallen, residential property has not yet bottomed. But the worst is yet to come. And Im not talking about student loans, car loans, and credit card debt. Or Social Security, Medicare, and Medicaid. Or the looming bankruptcy of most states and many municipalities. The real crisis will be in pension funds, commercial real estate, and life insurance companies. The life insurers own mostly commercial real estate, mortgages, and bonds; many will be totally busted, even before people start cashing in their whole life policies. You dont even hear about these three things in the press yet. Of course thats all in addition to the fact half of U.S. hospitals are currently running at a loss even before legions of the poor start really overwhelming their emergency rooms. And the balance of trade deficit has yet to turn around and go positive which will be devastating to both the dollar and the average Americans standard of living. Sorry to be unremittingly bearish. But the Greater Depression is still very early days. Hang on to your hat." David Galland April 10, 2009 "My overall advice here is to do nothing. The odds are that what ever you do in this area is going to be WRONG. It' observing time, as far as I' concerned. The markets are saying, 'Things are happening so move. Im doing just the opposite. Subscribers who bought the DIAmonds have been doing well. Profits, no matter where they come from, are always welcome. OK Russell, so those are your thoughts, but what do we really know? The US is continuing to run massive deficits with the national debt climbing annually by units of trillions of dollars.

The US consumer is strapped for money and still loaded with debt. Unemployment across the US is climbing dangerously and rapidly. The average American (with little or no savings) is not positioned to withstand an extended recession or a depression." Richard Russell April 8, 2009 "Weve averted" the risk of a depression, Federal Reserve Chairman Ben Bernanke said this week. "Now the problem is to get the thing working properly again. Appearing on CBS networks 60 Minutes, Bernanke told correspondent Scott Pelley that concerted efforts by the government likely averted a depression similar to the 1930s. He also stated the nations largest banks are solvent, and that he doesnt expect any of them to fail; and that the U.S. recession will come to an end "probably this year." Is this finally the light at the end of the tunnel for the U.S. economy? We dont want to appear as perpetual gloom-and-doomers, but fact is, when Bernanke tries to predict the future, hes usually wrong." Casey Research April 3, 2009 "Job destruction is a relentless force behind this economic downturn. Unfortunately, real unemployment is grossly underreported almost every month because of the governments Birth Death Model (see.www.bls.gov), which magically adds jobs for firms that are estimated to have been started. For example, in the February 2009 job release, the Birth Death Model added 134,000 imaginary jobs. (How silly is that?) Therefore, the actual job loss in February was 758,000 not the 651,000 reported. "The mainstream financial press also fails to report that only 60 percent of people who lose their jobs are eligible to file for unemployment. Many millions of workers are independent contractors or private business owners who dont qualify for unemployment benefits. Even if youre a real estate agent, mortgage banker, insurance salesman, etc., good luck trying to file for unemployment. So, when initial claims are reported as being 600,000 for a week, you can safely assume one million people actually lost their jobs that week." Richard Benson April 2, 2009

"The ability of the United States Federal Reserve and the United States Department of the Treasury to administer the national currency and bank account is being severely undermined by policy moves that erode the faith of international holders of U.S. debt. The situation is exacerbated by the disingenuous attempts by these same offices to obscure the severity of the dilutive effects of unbridled money fabrication in press release language that is blatantly dissembling. George Orwell should be slapping himself on the back in congratulations for the foresight with which he predicted the advent of DoubleSpeak, whereby the government pretends that negatives are positives. Assisted in large part by broadcast media, who lend the appearance of legitimacy by debating the pros and cons of the sundry policy machinations in all seriousness, the rest of the world is not so easily fooled. Take, for example, the Feds announcement that it was going to spend $300 billion in the purchase of long term U.S. Treasurys. Does that agency honestly believe that that press release would obscure the simultaneous rollout of expanded Toxic Asset, or, as they have been translated into DoubleSpeak, Legacy Assets expenditures totaling an additional $1.5 trillion?" James West April 1, 2009 "The truth is that this stimulus will be impossible to remove without bringing about another collapse in the economy; hence, inflation will be with us for a very long time. However, an inflationary path is seen as the Holy Grail by the Fed. Ben Bernanke, a student of the Great Depression, was apparently absent from class when the part of history that dealt with the hyperinflationary economies of South America and Africa was taught. Banana Ben believes inflation could have saved us from the Depression of the 1930s. He couldnt be more wrong. Depressions are caused by debt, not by a decrease in the money supply. "The truth is inflation completely destroys an economy by wiping out savers, crushing those who exist on a fixed income and crippling those at the lowest end of the income scale by raising prices of the most basic goods. "Further, what might surprise the new President-allegedly a champion of the poor is that an increased supply of money is never evenly distributed throughout the economy; it always finds a home with the nations most wealthy citizens who have access to credit first. Skyrocketing prices relegate the middle and lower classes to use all their available funds for the basic necessities of life. Since the demand for discretionary purchases collapses, unemployment rates explode and the economy is left in shambles.

"Investors would be wise to continue trading in measurable portions of their cash holdings for gold. It may also be prudent for some to speculate in the beaten-down bank and home building sectors for a brief period of time, as I believe the entire market will benefit from the initial stages of inflation the Fed and Administration may be able to provide a truncated period of ersatz prosperity before the terror begins. But because of their decision to monetize away what would have been a deep-and-necessary-recession, the economy and country will be far worse off in the long run." Michael Pento March 31, 2009 "Quantitative easing is the word of a euphemism for monetization or the printing of money, to buy U.S. Treasuries or debt by the Federal Reserve. Why this attempt at debasing the dollar would be deemed as a reason to buy stocks is beyond me. Once again the herd mentality is well and alive jump on the bandwagon and buy because everyone else is buying. This rally will fail and meet the same fate as its predecessors. Why am I so confident in my prediction? It is high valuations and low demand. Valuations are not low enough in most sectors to support a sustained rally. That is especially true in, the often lusted after, technology stocks. Not only are valuations high but the outlook for earnings is negative and the economy is deteriorating. Just because some stocks are down 50% from their all time highs does not mean that they are undervalued or that they make good investments. Ghassan Abdallah, Ph.D. March 30, 2009 "Last week a very dangerous precedent was set when the Fed announced that it is going to start overtly intervening to backstop the ailing Treasury market. The markets verdict on this announcement was immediate and unequivocal. While Treasuries rallied sharply as one might expect, the dollar cratered and gold staged a dramatic turnaround to close sharply higher. The reason that this precedent is so dangerous is that once they start monetising this debt, which means creating money to buy that portion of newly created Treasury debt that cannot be sold off, there will be no end to it they will eventually find themselves buying more and more of it, as foreign buyers continue to withdraw, deterred by a combination of pitifully low yields and any prospective capital gain being wiped out by the continued combination of pitifully low yields and any prospective capital gain being wiped out by the continued decline in the dollar that must transpire as a result of diluting the currency by creating money to absorb unsold Treasury paper." Clive Maund

"Let me tell you something. While we are all working (those of us with jobs) and living, the entire financial and political world is in a panic over what is happening, but we only see a small picture. But your leaders are panicking right now and will be for a while. Our world is in the process of turning inside out. If you think things are going to normalize much at all in the next several years, I think you will be surprised by whats going to happen." Chris Laird March 24, 2009 "As time passes, more people are realising the fact that the worlds monetary system is fraud and that gold and silver is real money and not the paper money that the world uses today. The traffic is one-way, more, not less people come to the realisation that paper money is fraud and ditch it for gold and silver (the potential is huge). Maybe, right now someone who is reading this is ditching paper money for gold and silver. This fact is what makes me most bullish about silver, since it is the form of money that has the greatest potential due to the fact that is has more room to move from where it is (a demonetized monetary asset) to a fully monetized asset. "The debt levels in the world are enormous, and it is an inescapable fact that debt can only be properly and fully settled with real assets. Some assets are better than others when it comes to discharging debt. Gold and silver are real assets, and due to the fact that they are money, they are the ultimate form of payment and settlement of debt. "Due to these enormous debt levels, assets that are acceptable as proper settlement of debt will be in huge demand if these debts are to be properly settled; and this holds true whether debt levels are extinguished by default as well. Gold and silver is in huge demand, and this will accelerate. "Should the big debtors of the world attempt to settle their debt with more debt (inflationary) such as paper promises (like what is currently happening), then paper prices of real assets will explode, with gold and silver leading the way. "Paper money, bonds and other promises to pay are all subject to possible default, and during these times, default is a very common occurrence. Real assets are not subject to default, and gold and silver are real assets that you can hold in your hand, and are financially liquid (liquidity is even more essential during such times)." Hubert Moolman March 23, 2009 "The political response to this economic downturn has differed from previous responses to downturns in a number of ways, the most economically significant of

which lies in the extent to which failure has been subsidized. Counterproductive economic pathologies have been encouraged, financial structures that endangered global prosperity have been bailed out and trillions of dollars have been poured into industries that obviously needed to downsize. Far from providing stimulus, such subsidies both deepen the recession moderately and extend its duration inordinately." Martin Hutchinson March 18, 2009 "The Manhattan Bank (later merged into Chase-Manhattan and then to J.P. Morgan) established a chair of economics at Harvard University for John Kenneth Galbraith. Galbraith was one of a group of crackpots who said that, if the bankers are given the privilege to legally counterfeit money, this is the road to plenty for the society. Harvard was not going to hire Galbraith on its own. But when the Manhattan Bank waved around its money, they grabbed it. Using the prestige of Harvard (which they had just bought and paid for) these bankers took over the economics departments of first the most prestigious and later all the schools of economics in the country." Howard S. Katz March 17, 2009 "Lest one is not yet convinced of the stupidity of government (and yes we do mean all governments, even those with popular and charismatic leaders), one need only take a gander at the latest Obama budget. On top of having the inane title, A New Era of Responsibility: Renewing Americas Promise, the document is chock full of grossly overoptimistic assumptions, that show a government in abject denial of reality. Firstly, they project GDP growth of 1.2% for this fiscal year, i.e. a mild recession. Based on the huge negative revision to 4th quarter GDP just released (which, incidentally, is the first quarter of this fiscal year), for the budgets projection to be even close implies that the US is already out of recession this quarter and will grow strongly for the remainder of the year! Absolute nonsense, but it gets even more ridiculous. The budget then projects strong economic growth next year of 3.2%, to be followed over the next three years by real GDP growth of 4.0%, 4.6%, and 4.2% up to fiscal 2013. After this period of superlative growth under Obamas watch, the economy will then return to a normal long term growth rate of 2.6% per year thereafter. All told, according to the budget, for the six years 2008-2013 inclusive (a period that includes a severe global financial crisis and a once in a lifetime global depression) the US economy is projected to grow a cumulative 17.1% which, moronically, is even greater than it would have grown if it grew by the long term growth rate of 2.6% over this six year period (16.6% cumulative) instead. In short, the depression, the financial crisis and the banking catastrophe are good for the economy!! The US is projected to grow by more with

them than it would have grown if they had never happened in the first place. Truly mind boggling logic!" Eric Sprott and Sash Solunac March 13, 2009 "The US government currently possesses the largest bureaucracy in the countrys history and weve never had as many laws as we do now. So, despite calls from people like Barney Franks we dont need any more laws or bureaucrats, we have too much as it is. The SEC has thousands of people and yet they ignored all their own reports about Bernard Madoff. The IRS is one of the largest employers in the United States, they knew that Stanford owed taxes for years, and yet nothing happened. Donations to the right people count more than your rights. Thats the society that has been meticulously crafted, and thats the society that will find itself standing in bread lines in another year or two. Its a hell of a price to pay for trying to avoid what cannot be avoided." Dow Theory Analysis March 11, 2009 "Since 2000, The New York Times Company has generated a respectable cumulative net income of $1,598,062,000. Yet management, over the same period, has paid out $2,779,601,000 for stock buybacks and dividends. This means, during the present decade, stock buybacks and dividends have exceeded cumulative net income by an astonishing $1,181,539,000. Is it any wonder The New York Times balance sheet is such a train-wreck? Operationally, this company has done well during the past nine years. Conversely, the companys balance sheet has been hideously mismanaged by an incompetent executive management team as supervised by a grossly negligent board of directors. The New York Times, most certainly, is encountering a difficult operating environment. The internet has posed a serious challenge to companies involved in print media. Advertising revenues, moreover, are dropping dramatically due to the current economic depression. Nonetheless, had executive management been prudent and conservative with respect to balance sheet management, the Times would have had a war chest full of cash, strong working capital, and strong equity; thus, allowing it the financial flexibility to survive these very challenging times. As things stand today, in my opinion, the Times strategic alternatives are probably limited to either seeking an acquirer or reorganizing under Chapter 11 Bankruptcy. In closing, it is appropriate to bring The New York Times op-en columnist, Maureen Dowd, into the picture. She recently savaged executives from A.I.G., Bank of America, Citigroup, Merrill Lynch and the U.S. automakers; deeming them to be incompetent, self-serving charlatans. In this January 28, 2009 op-ed piece titled Wall Streets

Socialist Jet-Setters, she calls these executives boobs, dumb, obtuse, and careless ghouls who murdered the economy. So Ms. Dowd, what do you think of the executives who murdered The New York Times Companys balance sheet? What names would you like to call them.?" Eric Englund March 4, 2009 "Personally, I find these bail-outs absurd, unethical and a total waste of valuable resources! Who gave these politicians the authority to act like investment bankers? Mr. Geithner is not a qualified merger & acquisition expert, so how does he have the audacity to use other peoples money to take over insolvent banks? Likewise, Mr. Bernanke is now using American taxpayers money and buying distressed debt! I find this outrageous! Is he going to act like a debt collector when people default on their loans? "Mark my words the establishment is only making matters worse and prolonging the pain. Moreover, by printing insane amounts of paper, the politicians are setting everyone up for an inflationary nightmare! One thing is for sure before this drama ends, the viability of the U.S. dollar as the worlds reserve currency will come under question. When the U.S. dollar starts to implode, hard assets will go through the roof. Remember, commodity prices went ballistic in the late 1930s as well as during the 1970s. We should expect similar action in the years ahead." Puru Saxena "Now that the credit crisis is about one and a half years old, since Aug 07, bank/financial pressures have expanded to a new phase. First causing credit markets to freeze, then threatening bank and business solvency worldwide, the new phase is currency instability. "To give a partial list: The Russian Ruble, UK Pound, Hungarian Forint, Korean Won, Swiss Franc unbelievably, and the Euro are all having serious problems. Other places like Ireland, the Baltic states, the Southern/East European states, Ukraine are on the verge of insurrections. The EU is quite concerned. "At some point, the USD would be threatened as well. What happens is that countries have to do a blanket guarantee to stop a run on their entire banking establishment, and thus assume huge public liabilities that in some cases dwarf the size of their entire economy. For example, Icelands banks had made bad loans totaling over 8 times the size of their GDP. Ireland is in a similar predicament, after they did a blanket guarantee. Russia is in a similar situation, having to use their 30% of their foreign reserves to prop up the Ruble.

"So, the gigantic losses in the financial markets not only paralyzes credit and is causing massive business shrinkage, but as nations nationalize the losses, their bond markets come under pressure, and thus their currencies too become threatened. This currency phase is already well underway, and is a new and pernicious phase of the credit crisis." Chris Laird