How to Think Clearly

"Never argue with stupid people. They will drag you down to their level and then beat you with experience." –Mark Twain

If you want to fully understand and appreciate the work of Mike Stathis, from his market forecasts and securities analysis to his political and economic analyses, you will need to learn how to think clearly if you already lack this vital skill.

For many, this will be a cleansing process that could take quite a long time to complete depending on each individual.

The best way to begin clearing your mind is to move forward with this series of steps:

1. GET RID OF YOUR TV SET, AND ONLY USE STREAMING SERVICES SPARINGLY.

2. REFUSE TO USE YOUR PHONE TO TEXT.

3. DO NOT USE A "SMART (DUMB) PHONE" (or at least do not use your phone to browse the Internet unless absolutely necessary).

4. STAY AWAY FROM SOCIAL MEDIA (Facebook, Instagram, Whatsapp, Snap, Twitter, Tik Tok unless it is to spread links to this site). 

5. STAY OFF JEWTUBE.

6. AVOID ALL MEDIA (as much as possible).

The cleansing process will take time but you can hasten the process by being proactive in exercising your mind.

You should also be aware of a very common behavior exhibited by humans who have been exposed to the various aspects of modern society. This behavior occurs when an individual overestimates his abilities and knowledge, while underestimating his weaknesses and lack of understanding. This behavior has been coined the "Dunning-Kruger Effect" after two sociologists who described it in a research publication. See here.

Many people today think they are virtual experts on every topic they place importance on. The reason for this illusory behavior is because these individuals typically allow themselves to become brainwashed by various media outlets and bogus online sources. The more information these individuals obtain on these topics, the more qualified they feel they are to share their views with others without realizing the media is not a valid source with which to use for understanding something. The media always has bias and can never be relied on to represent the full truth. Furthermore, online sources are even more dangerous for misinformation, especially due to the fact that search algorithms have been designed to create confirmation bias. 

A perfect example of the Dunning-Kruger Effect can be seen with many individuals who listen to talk radio shows. These shows are often politically biased and consist of individuals who resemble used car salesmen more than intellectuals. These talking heads brainwash their audience with cherry-picked facts, misstatements, and lies regarding relevant issues such as healthcare, immigration, Social Security, Medicaid, economics, science, and so forth. They also select guests to interview based on the agendas they wish to fulfill with their advertisers rather than interviewing unbiased experts who might share different viewpoints than the host.

Once the audience has been indoctrinated by these propagandists, they feel qualified to discuss these topics on the same level as a real authority, without realizing that they obtained their understanding from individuals who are employed as professional liars and manipulators by the media. 

Another good example of the Dunning-Kruger Effect can be seen upon examination of political pundits, stock market and economic analysts on TV.  They talk a good game because they are professional speakers. But once you examine their track record, it is clear that these individuals are largely wrong. But they have developed confidence in speaking about these topics due to an inflated sense of expertise in topics for which they continuously demonstrate their incompetence.

One of the most insightful analogies created to explain how things are often not what you see was Plato's Allegory of the Cave, from Book 7 of the Republic.

We highly recommend that you study this masterpiece in great detail so that you are better able to use logic and reason.  From there, we recommend other classics from Greek philosophers. After all, ancient Greek philosophers like Plato and Socrates created critical thinking.   

If you can learn how to think like a philosopher, ideally one of the great ancient Greek philosophers, it is highly unlikely that you will ever be fooled by con artists like those who make ridiculous and unfounded claims in order to pump gold and silver, the typical get-rich-quick, or multi-level marketing (MLM) crowd.





STOP Being Taken

If you want to do well as an investor, you must first understand how various forces are seeking to deceive you. 

Most people understand that Wall Street is looking to take their money.

But do they really understand the means by which Wall Street achieves these objectives? 

Once you understand the various tricks and scams practiced by Wall Street you will be better able to avoid being taken. 

Perhaps an even greater threat to investors is the financial media.

The single most important thing investors must do if they aim to become successful is to stay clear of all media.

That includes social media and other online platforms with investment content such as YouTube and Facebook, which are one million times worse than the financial media.

The various resources found within this website address these two issues and much more. 

Remember, you can have access to the best investment research in the world. But without adequate judgment, you will not do well as an investor.

You must also understand how the Wall Street and financial media parasites operate in order to do well as an investor. 

It is important to understand how the Jewish mafia operates so that you can beat them at their own game.

The Jewish mafia runs both Wall Street and the media. This cabal also runs many other industries.

We devote a great deal of effort exposing the Jewish mafia in order to position investors with a higher success rate in achieving their investment goals.

Always remember the following quotes as they apply to the various charlatans positioned by the media as experts and business leaders.   

“Beware of false prophets, which come to you in sheep's clothing, but inwardly they are ravening wolves.” - King James Bible - Matthew 7:15

"It's easier to fool people than to convince them that they have been fooled." –Mark Twain

It's also very important to remember this FACT.  All Viewpoints Are Not Created Equal.

Just because something is published in print, online, or aired in broadcast media does not make it accurate. 

More often than not, the larger the audience, the more likely the content is either inaccurate or slanted. 

The next time you read something about economics or investments, you should ask the following question in order to determine the credibility of the source.

Is the source biased in any way?  

That is, does the source have any agendas which would provide some kind of benefit accounting for conclusions that were made? 

Most individuals who operate websites or blogs sell ads or merchandise of some kind. In particular, websites that sell precious metals are not credible sources of information because the views published on these sites are biased and cannot be relied upon.

The following question is one of the first things you should ask before trusting anyone who is positioned as an expert. 

Is the person truly credible?  

Most people associate credibility with name-recognition. But more often than not, name-recognition serves as a predictor of bias if not lack of credibility because the more a name is recognized, the more the individual has been plastered in the media. 

Most individuals who have been provided with media exposure are either naive or clueless. The media positions these types of individuals as “credible experts” in order to please its financial sponsors; those who buy advertisements. 

In the case of the financial genre, instead of name-recognition or media celebrity status, you must determine whether your source has relevant experience on Wall Street as opposed to being self-taught. But this is just a basic hurdle that in itself by no means ensures the source is competent or credible.

It's much more important to carefully examine the track record of your source in depth, looking for accuracy and specific forecasts rather than open-ended statements. You must also look for timing since a broken clock is always right once a day.  Finally, make sure they do not cherry-pick their best calls. Always examine their entire track record. 

Don't ever believe the claims made by the source or the host interviewing the source regarding their track record. 

Always verify their track record yourself. 

The above question requires only slight modification for use in determining the credibility of sources that discuss other topics, such as politics, healthcare, etc.

We have compiled the most extensive publication exposing hundreds of con men pertaining to the financial publishing and securities industry, although we also cover numerous con men in the media and other front groups since they are all associated in some way with each other.

There is perhaps no one else in the world capable of shedding the full light on these con men other than Mike Stathis.

Mike has been a professional in the financial industry for nearly three decades. 

Alhough he publishes numerous articles and videos addressing the dark side of the industry, the core collection can be found in our ENCYCLOPEDIA of Bozos, Hacks, Snake Oil Salesmen and Faux Heroes

Also, the Image Library contains nearly 8,000 images, most of which are annotated.


At AVA Investment Analytics, we don't pump gold, silver, or equities because we are not promoters or marketers.

We actually expose precious metals pumpers, while revealing their motives, means, and methods.

We do not sell advertisements.

We actually go to great lengths to expose the ad-based content scam that's so pervasive in the world today. 

We do not receive any compensation from our content, other than from our investment research, which is not located on this website. 

We provide individual investors, financial advisers, analysts and fund managers with world-class research and unique insight.







Media Lies

If you listen to the media, most likely at minimum it's going to cost you hundreds of thousands of dollars over the course of your life time.

The deceit, lies, and useless guidance from the financial media is certainly a large contributor of these losses.

But a good deal of lost wealth comes in the form of excessive consumerism which the media encourages and even imposes upon its audience.

You aren’t going to know that you’re being brainwashed, or that you have lost $1 million or $2 million over your life time due to the media.

But I can guarantee you that with rare exception this will become the reality for those who are naïve enough to waste time on media.

It gets worse.

By listening to the media you are likely to also suffer ill health effects through excessive consumption of prescription drugs, and/or as a result of watching ridiculous medical shows, all of which are supportive of the medical-industrial complex.

And if you seek out the so-called "alternative media" as a means by which to escape the toxic nature of the "mainstream" media, you might make the mistake of relying on con men like Kevin Trudeau, Alex Jones, Joe Rogan, and many others.

This could be a deadly decision. As bad as the so-called "mainstream" media is, the so-called "alternative media" is even worse.

There are countless con artists spread throughout the media who operate in the same manner. They pretend to be on your side as they "expose" the "evil" government and corporations.

Their aim is to scare you into buying their alternatives.  This addresses the nutritional supplements industry which has become a huge scam.  

 

Why Does the Media Air Liars and Con Men?

The goal of the media is NOT to serve its audience because the audience does NOT pay its bills.

The goal of the media is to please its sponsors, or the companies that spend huge dollars buying advertisements.

And in order for companies to justify these expenses, they need the media to represent their cause.

The media does this by airing idiots and con artists who mislead and confuse the audience.

By engaging in "journalistic fraud," the media steers its audience into the arms of its advertisers because the audience is now misled and confused.

The financial media sets up the audience so that they become needy after having lost large amounts of money listening to their "experts." Desperate for professional help, the audience contacts Wall Street brokerage firms, mutual funds, insurance companies, and precious metals dealers that are aired on financial networks. This is why these firms pay big money for adverting slots in the financial media.

We see the same thing on a more obvious note in the so-called "alternative media," which is really a remanufactured version of the "mainstream media." Do not be fooled. There is no such thing as the "alternative media."  It really all the same. 

In order to be considered "media" you must have content that has widespread channels of distribution. Thus, all "media" is widely distributed.

And the same powers that control the distribution of the so-called "mainstream media" also control distribution of the so-called "alternative media."

The claim that there is an "alternative media" is merely a sales pitch designed to capture the audience that has since given up on the "mainstream media."  

The tactic is a very common one used by con men.

The same tactic is used by Washington to convince naive voters that there are meaningful differences between the nation's two political parties.

In reality, both parties are essentially the same when it comes to issues that matter most (e.g. trade policy and healthcare) because all U.S. politicians are controlled by corporate America. Anyone who tells you anything different simply isn't thinking straight.

On this site, we expose the lies and the liars in the media.

We discuss and reveal the motives and track record of the media’s hand-selected charlatans with a focus on the financial media.  




 

Why Stathis Was Banned

To date, we know of no one who has established a more accurate track record in the investment markets since 2006 than Mike Stathis.  

Yet, the financial media wants nothing to do with Stathis.  

This has been the case from day one when he was black-balled by the publishing industry after having written his landmark 2006 book, America's Financial Apocalypse

From that point on, he was black-balled throughout all so-called mainstream media and then even the so-called alternative media. 

With very rare exception, you aren't even going to hear him on the radio or anywhere else being interviewed.  

Ask yourself why. 

You aren't going to see him mentioned on any websites either, unless its by people whom he has exposed.  

You aren't likely to ever read or hear of his remarkable investment research track record anywhere, unless you read about it on this website.

You should be wondering why this might be.

Some of you already know the answer.

The media banned Mike Stathis because the trick used by the media is to promote cons and clowns so that the audience will be steered into the hands of the media's financial sponsors - Wall Street, gold dealers, etc. 

Because the media is run by the Jewish mafia and because most Jews practice a severe form of tribalism, the media will only promote Jews and gentiles who represent Jewish businesses.  

And as for radio shows and websites that either don't know about Stathis or don't care to hear what he has to say, the fact is that they are so ignorant that they assume those who are plastered throughout media are credible.

And because they haven't heard Stathis anywhere in the media, even if they come across him, they automatically assume he's a nobody in the investment world simply because he has no media exposure.  And they are too lazy to go through his work because they realize they are too stupid to understand the accuracy and relevance of his research. 

Top investment professionals who know about Mike Stathis' track record have a much different view of him. But they cannot say so in public because Stathis is now considered a "controversial" figure due to his stance on the Jewish mafia. 

Most people are in it for themselves. Thus, they only care about pitching what’s deemed as the “hot” topic because this sells ads in terms of more site visits or reads.

This is why you come across so many websites based on doom and conspiratorial horse shit run by con artists.

We have donated countless hours and huge sums of money towards the pursuit of exposing the con men, lies, and fraud.

We have been banned by virtually every media platform in the U.S and every website prior to writing about the Jewish mafia.

Mike Stathis was banned by all media early on because he exposed the realities of the United States.

The Jewish mafia has declared war on us because we have exposed the realities of the U.S. government, Wall Street, corporate America, free trade, U.S. healthcare, and much more.

Stathis has also been banned by alternative media because he exposed the truth about gold and silver. 

We have even been banned from use of email marketing providers as a way to cripple our abilities to expand our reach. 

You can talk about the Italian Mafia, and Jewish Hollywood can make 100s of movies about it.

BUT YOU CANNOT TALK ABOUT THE JEWISH MAFIA.

Because Mr. Stathis exposed so much in his 2006 book America's Financial Apocalypse, he was banned.

He was banned for writing about the following topics in detail: political correctness, illegal immigration, affirmative action, as well as the economic realities behind America's disastrous healthcare system, the destructive impact of free trade, and many other topics. He also exposed Wall Street fraud and the mortgage derivatives scam that would end of catalyzing the worst global crisis in history. 

It's critical to note that the widespread ban on Mr. Stathis began well before he mentioned the Jewish mafia or even Jewish control of any kind.

It was in fact his ban that led him to realize precisely what was going on.

We only began discussing the role of the criminality of the Jewish mafia by late-2009, three years AFTER we had been black-listed by the media.

Therefore, no one can say that our criticism of the Jewish mafia led to Mike being black-listed (not that it would even be acceptable).  

If you dare to expose Jewish control or anything under Jewish control, you will be black-balled by all media so the masses will never hear the truth.

Just remember this. Mike does not have to do what he is doing. 

Instead, he could do what everyone else does and focus on making money. 

He has already sacrificed a huge fortune to speak the truth hoping to help people steer clear of fraudsters and to educate people as to the realities in order to prevent the complete enslavement of world citizenry. 

  

Rules to Remember

Rule #1: Those With Significant Exposure Are NOT on Your Side.  

No one who has significant exposure should ever be trusted. Such individuals should be assumed to be gatekeepers until proven otherwise.  I have never found an exception to this rule.

Understand that those responsible for permitting or even facilitating exposure have given exposure to specific individuals for a very good reason. And that reason does not serve your best interests. 

In short, I have significant empirical evidence to conclude that everyone who has a significant amount of exposure has been bought off (in some way) by those seeking to distort reality and control the masses. This is not a difficult concept to grasp. It's propaganda 101.   

Rule #2: Con Artists Like to Form Syndicates.

Before the Internet was created, con artists were largely on their own. Once the Internet was released to the civilian population, con artists realized that digital connectivity could amplify their reach, and thus the effectiveness of their mind control tactics. This meant digital connectivity could amplify the money con artists extract from their victims by forming alliances with other con artists.

Teaming up with con artists leads to a significantly greater volume of content and distraction, such that victims of these con artists are more likely to remain trapped within the web of deceit, as well as being more convinced that their favorite con artist is legit. 

Whenever you wish to know whether someone can be trusted, always remember this golden rule..."a man is judged by the company he keeps." This is a very important rule to remember because con men almost always belong to the same network.  You will see the same con artists interviewing each other,referencing each other, (e.g. a hat tip) on the same blog rolls, attending the same conferences, mentioning their con artist peers, and so forth.

Rule #3: There's NO Free Lunch.  

Whenever something is marketed as being "free" you can bet the item or service is either useless or else the ultimate price you'll pay will be much greater than if you had paid money for it in the beginning. 

You should always seek to establish a monetary relationship with all vendors because this establishes a financial link between you the customer and the vendor. Therefore, the vendor will tend to serve and protect your best interests because you pay his bills. 

Those who use the goods and services from vendors who offer their products for free will treated not as customers, but as products, because these vendors will exploit users who are obtaining  their products for free in order to generate income.   

Use of free emails, free social media, free content is all complete garbage designed to obtain your data and sell it to digital marketing firms.

From there you will be brainwashed with cleverly designed ads. You will be monitored and your identity wil eventually be stolen. 

Fraudsters often pitch the "free" line in order to lure greedy people who think they can get something for free. 

Perhaps now you understand why the system of globalized trade was named "free trade." 

As you might appreciate, free trade has been a complete disaster and scam designed to enrich the wealthy at the expense of the poor. 

There are too many examples of goods and services positioned as being free, when in reality, the customers get screwed.  

Rule #4: Beware of Manipulation Using Word Games. 

When manipulators want to get the masses to side with their propaganda and ditch more legitimate alternatives they often select psychologically relevant labels to indicate positive or negative impressions.

For instance, the financial parasites running America's medical-industrial complex have designated the term "socialized medicine" to replace the original, more accurate term, "universal healthcare." This play on words has been done to sway the masses from so much as even investigating universal healthcare, because the criminals want to keep defrauding people with their so-called "market-based" healthcare scam, which has accounted for the number one cause of personal bankruptcies in the USA for many years.  

When Wall Street wanted to convince the American people to go along with NAFTA, they used the term "free trade" to describe the current system of trade which has devastated the U.S. labor force.

In reality, free trade is unfair trade and only benefits the wealthy and large corporations.

There are many examples on this play on words such as the "sharing economy" and so on.  

Rule #5: Whenever Someone Promotes Something that Offers to Empower You, It's Usually a Scam.

This applies to the life coaches, self-help nonsense, libertarian pitches, FIRE movement, and so on.

If it sounds too good to be true, it usually is.

Unlike what the corporate fascists claim, we DO need government.

And no, you can NOT become financially independent and retire early unless you sell this con game to suckers.  

Rule #6: "Never argue with stupid people. They will drag you down to their level and then beat you with experience." –Mark Twain

Following this rule is forcing the small and dewindling group of intelligent people left in the world to cease interacting with people. 

You might need to get accustomed to being alone if you're intelligent and would rather not waste your time arguing with someone who is so ignorant, that they have no chance to realize what's really going in this world. 

It would seem that Dunning-Kruger has engulfed much of the population, especially in the West.     

Start Here

Golden Dreams & Delusions: The Story about Gold You Haven't Heard (PART 5)

Continuing from PART 4

Gold Dealers are Ripping You Off

You certainly don’t have to be an annoying, brainless talking head to make money pumping gold. Anyone without a conscious could have been a millionaire if they had been a gold dealer over the past few years, and if indeed their goal was to make money by that means.

But hey, for those of you out there who don’t mind ripping people off or at the very least deceiving them, there’s still time to make buckets of cash selling gold.

After all, with typical fees of around 3-5% per transaction, it doesn’t take more than a third grade education to realize that the higher the price of gold rises, the more money gold dealers extract from buyers.

Gold bugs will most likely cherry-pick this statement (while neglecting mention of others I’ve made) by claiming that “such and such charges 1% or 2%,” but that’s generally only the case if you buy a HUGE amount of gold. But still, even when purchased in very large quantities in a retail setting, the fees are excessive.

When you buy gold from a dealer, it’s like an ATM transaction, except you’re paying a whopping 3-5% fee. This is huge. Even 1% is excessive in my view considering that the gold dealer doesn’t do much to snag that fee.

To put this into perspective, consider that professionally managed investment funds charge similar fees. However, the costs are much more justified in relation to the fees charged by gold dealers because funds have very large expenses. They employ a large number of individuals; they spend large amounts of money on research and other resources for the benefit of managing the fund. And let’s not forget that the fund is managed every day as they look to maximize the return on investment.

In contrast, when you buy gold, dealers are simply placing an order for you. They do basically NOTHING, yet they charge huge fees which are based on the amount of gold you buy and the price of gold. This in itself represents a huge scam in my opinion.

Thus, compared to the fees charged by gold dealers, those charged by professionally managed funds represent a bargain. At least you’re paying 3-5% annually to fund managers for doing something requiring some level of skill and constant oversight in the process of managing the fund.

What this amounts to is that gold dealers have been ripping off their customers for decades. This scheme only scratches the surface of the widespread fraud that has become a standard practice in the precious metals industry.

The types of scams used by gold and silver coin dealers are even more numerous. Many dealers charge huge markups for gold and silver coinage claiming the coin’s numismatic value is worth the premium over the spot price of gold. In many cases this is simply not true, especially during a gold market.

The fact is that as gold and silver prices have soared, the numismatic value has vaporized for the vast majority of coins (unless they are very rare and very old).

But since the gold and silver industry has very little regulation, gold dealers can basically charge whatever they want. To carry out this heist, they disseminate myths and delusional statements about gold so that the sheep won’t pay much attention to the huge fees they are charged. Because the vast majority of gold “investors” are unsophisticated in the realm of investments, they don’t realize that the fees being charged by dealers are exorbitant.

This adds another incentive for gold dealers to flood the Internet and other media venues with propaganda about how gold is headed to the moon. After all, if you believe gold is headed to $6000/ounce, what does it matter if you pay some parasite a 5% fee to get your gold? After all, you stand to make 400%, right?  Keep dreaming.

The gold charlatans make sure to keep things real simple so that the most naïve individuals can follow their dog-and-pony logic. When it comes to the sales pitches used by gold dealers, nothing goes beyond the tenants of what is taught at Simpleton University. They never discuss the full picture. That is, they don’t look at inflation and gold data from sufficiently long periods. If they did, they would see that gold underperformed inflation.  

Instead, they cherry-pick the data, much like Wall Street does when they want to convince you that you should buy-and-hold. The same goes for mutual funds.

When the gold bugs cherry-pick the data, they certainly won’t mention the 1980s and 1990s because gold got decimated versus inflation.

The Myth about Money Supply and Inflation

When they want to really drive their point home to the sheep they’ve herded, these charlatans talk about all of the money the Federal Reserve has printed. They show charts of the money flow and point out that it has soared.

Like roaches in the ghetto, these analogies spread to every website as do these charlatans. And no one is permitted to publish articles on these websites that discuss the other side of the picture because it would counter everything these sites are trying to accomplish; duping people into paying high fees for gold and silver, pumping up the prices of these metals, clicking gold and silver ads and so forth.

The more false claims about gold are repeated, the more people believe them due to the flooding effect. Moreover, the validation through consensus effect comes into play. The only problem is that whenever you visit a pro-gold website the consensus is always going to be filled with myths and lies about gold, hyperinflation and so forth.

Think about it; would you go to a realtor website to find out about the health of the real estate market? 

Let me tell you something. If anyone knows about the money that’s been printed and the effect it will have on the economy, it’s me. My track record proves I know what the hell is going on. And I have no bias for gold.

What’s more, I rode the gold wave up from the very beginning in 2001. I realize that there is a time to buy and a time to sell. And I understand this because I AM NOT SELLING GOLD or MAKING MONEY IN ANY WAY FROM GOLD.

So I have no motive to deceive people.

The only other possible source of attack against me would be to challenge my credibility. As far as my credibility is concerned, consider this. I know of no one in the world who has ever issued a $100,000 challenge for anyone who could prove that someone could match my track record.

Although gold could rise from current levels, the fact is that now is not the best time to be buying it unless you are able to actively manage your position.

Once again, I’m not saying gold will not rise from current levels. We provide gold and silver forecasts in the Intelligent Investor.

This article is not a forecast. It is a description of reality.

What I am telling you is that these claims about gold going to the moon, never again falling below $1000, protecting against inflation, imminent hyperinflation and the dollar going to 0 are all bullshit.

I could make a boatload of money by pumping gold, like thousands of others. These other guys have no way to provide real value so they always jump aboard of a bull market so as to make you think they are geniuses. We will see just how genius these guys are when I am proven right.

At some point, the sheep need to pin gold charlatans down to a time frame for their forecasts to materialize. Otherwise, this grand delusion could continue for eternity.

I am actually sacrificing a huge amount of money by telling the truth because people tend to subscribe to newsletters and research that validates their views. And since most people have a delusional view of gold, I am obviously missing out on potential subscribers who want me to preach $10,000 gold.

Now let’s get back to the printing of money by the Fed. Obviously, the Fed has printed a massive amount of money over the past few years. And gold bugs are using this fact to position gold as the place to be when hyperinflation takes off.

But the money flow argument used by gold bugs is weak for several reasons.

First, as I have pointed out on numerous occasions, gold is NOT a hedge against inflation.

But let’s assume for a moment that gold does protect or even outperform inflation. Economists recognize the association between the money supply and inflation. However, there is one very important caveat to this relationship that many economists fail to understand, so you can imagine how lost the gold bugs are. While an increase in the money supply is often an indicator of future inflation, this is not always the case because it depends on where that money goes.

Obviously, when the Fed prints large amounts of money, this might seem to imply that hyperinflation is on the way. The money supply-inflation argument assumes that banks make this money available to lend to consumers and businesses because that’s what they normally do. Because this money has gone almost exclusively to the banks, they ultimately determine whether there will be a commensurate level of inflation relative to the money supply. 

How do banks determine this?

By whether or not or by how much money they make available to consumers and businesses. In other words, if the Fed prints massive amounts of money, the money supply will soar since it measures the currency in circulation. However, unless the banks distribute this money into the economy so as to shift the supply-demand curve for consumer goods and services, there will be no inflation.

Now, ask yourself what banks have done with this stash of cash from the Fed.

Have they flooded it to consumers and businesses?

Of course not (at least not commensurate to the increase in the money supply).

Where has this cash gone? 

A good portion of it has gone to purchase U.S. Treasury securities. The other portion has flooded into emerging and developing economies.

This is largely why the U.S. has not experienced a level of inflation commensurate with the growth in the money supply.

Some might counter that inflation has not soared according to the official data due to the government’s suppression of the data.

I know well about the methods used to mask inflation data. I wrote a detailed chapter discussing the methods used to manipulate government data in America’s Financial Apocalypse in 2006. So when I tell you that hyperinflation isn’t coming to the U.S., I have obviously factored the suppression of inflation data into my analysis.

While inflation data is being suppressed, the amount of suppression is not sufficient to mask hyperinflation.

Furthermore, one of the strongest forces suppressing inflation data over the past few years has been the excessive weighing of shelter costs, largely rent and owners’ equivalent rent, which makes up around 41% of the core CPI.

As you can imagine, with home prices having declined by a larger percentage than during the Great Depression, the inflation data is not providing us with an accurate picture of costs, unless you just bought a home.

Essentially, the deflationary effect of the housing price collapse is neutralizing the inflationary effect of other items in the CPI basket. But a collapse in home values does nothing to lower the costs for those who bought a home prior to the collapse. So yes, the CPI is being suppressed using the deflationary effect of shelter costs. There are many other ways Washington is suppressing the CPI.

So why hasn’t the price of gold risen over the past several months? Inflation is real no matter what the government reports right?

The reason why gold isn’t rising is the same reason why gold fell in 2008 during the most rapid acceleration of inflation in years (the run up of oil to $148/barrel). Gold is NOT a hedge against inflation.

Won’t massive inflation eventually hit the U.S.? 

This is quite possible. In fact, I think it will, but it won’t be for several years. Regardless, again we must ask to what extent inflation will be created relative to the growth in the money supply. That is all that matters for those who believe gold hedges against inflation.

Depending on how the Fed scales down its balance sheet and how banks withdrawal this wave of foreign capital, the effects of inflation in the U.S. would range from above average to massive, but nowhere near enough to be considered hyperinflation.

Why Hyperinflation Isn’t Going to Happen in the U.S.

Depending on who you ask, you’re likely to hear many different definitions of hyperinflation. Generally speaking, hyperinflation is defined at around 30% to 50% inflation EACH MONTH.

The exact amount doesn’t really matter. What matters are the effects of hyperinflation.

So what happens when a nation experiences a period of hyperinflation?

The price of everything soars very rapidly. As a result, hyperinflation destroys the currency of the affected nation, making its essentially worthless. 

But hyperinflation isn’t going to materialize in the United States; at least not in our life time. I will guarantee it.

In fact, I would like you to contact Peter Schiff, Marc Faber or any of the other media clowns who insist the U.S. will experience hyperinflation and let them know I am willing to bet them $10,000 that it isn’t going to happen. Then ask them why they fear an open debate with me on a neutral platform.

By now, I think you know what their answer will be.

Salesmen make poor research analysts and vice versa. But salesmen make all of the money. Some people focus more on HOW they make their money rather than how MUCH they make. Some people have a conscious, others don’t. Some people are very honest, while others aren’t.

It doesn’t matter to the gold charlatans that the U.S. won’t enter a period of hyperinflation. As long as they have suckers naïve enough to buy into their rubbish, the gold charlatans will keep making excuses to explain why it hasn’t happened, year after year. In the meantime, they’ll have made millions of dollars suckering their sheep into sending them money to buy stocks using a buy-and-hold approach, and selling their useless self-promoting, generic books which serve as marketing tools rather than real insight that investors can use to make money.  

Why do I say hyperinflation isn’t coming to the U.S., and how can I be so sure? 

As I first detailed in America’s Financial Apocalypse, the key to understanding why hyperinflation is a virtual impossibility in the U.S. is to understand how the game is played.

You see, the U.S. dollar is linked to oil and other commodities. President Nixon inked this arrangement with the Saudis in the early 1970s. Since that time, all commodities have been denominated in U.S. dollars. This is why the U.S. dollar is the world’s reserve currency.

As a result of the dollar-oil link, the U.S. is able to export inflation throughout the world since you must have dollars to buy commodities. The net effect of this is that the U.S. taxes the world via inflation. In fact, one could argue that based on the dollar-oil link, the U.S. dollar is not a fiat currency.

Although I have written about the dollar-oil link several times over the years, apparently some individuals who have read these articles have been unable (or unwilling) to connect the dots. As they say, “You can lead a horse to water, but you can’t make it drink.”

Instead of rewriting the reasons why the U.S. won’t experience hyperinflation, I will present some excerpts from a previous publication…


“Many feel hyperinflation is a certainty due to the printing frenzy by the Fed. Upon first glance, this seems possible. However, once you use stop and think for a moment, you’ll realize it’s a ridiculous assertion.

Why? First of all, the banks have held most of this newly printed currency so it hasn’t reached consumers. It’s a well-established fact that bank lending during this economic collapse has been much lower than in previous recessions dating back to the Great Depression. Since consumers account for about 70% of the U.S. economy, how can the U.S. experience hyperinflation if consumers aren’t receiving the dollars printed by the Fed?

The banks are using this cash to make risk-free profits via buying U.S. Treasuries. Of course, investors don’t hear this from the financial media, but I can assure you this is what is happening. It should be obvious.

In fact, based on what I see today, I don’t even think the U.S. will experience massive inflation as long as the banks continue to hold onto the money they’ve received from the Fed. As a caveat, I feel the Fed will intentionally cause inflation in order to pay off the massive federal debt, much as I predicted in America’s Financial Apocalypse.

Interest rates ~0% for two years or longer won’t in itself create massive inflation. Ultimately, the money has to be made available to consumers. This is basic economics, but for some reason, I’ve never heard this point mentioned anywhere.

In terms of inflation, oil is the best hedge you can get, specifically, oil securities that pay good dividends. Dividends are the most important thing to own during bear markets. And oil is the best asset to own during inflation. That’s why I like oil securities that pay nice dividends like oil trusts.

Commodities generally provide a good hedge against inflation. But oil is much better because it's more than a commodity. It’s got the dollar-oil link going for it that’s so critical to the U.S. economy. This vital economic link enables the U.S. to export inflation throughout the globe.

But let’s assume a magical fantasy occurred; the U.S. experienced hyperinflation. Oil would eventually soar to millions or even billions of dollars per barrel. So if anything, investors should want to own oil because it serves as the best hedge against inflation.

The next best things to have if hyperinflation were to occur in the U.S. would be food, water, guns and bullets, but not gold.

If gold is such a great investment, why is everyone trying to sell it to you?

If it's still such a great investment, after having already quadrupled in price in the past ten years; if all these guys out there love it so much why are they so desperate to sell it to you? Why don't they just hold on to it?

Gold dealers know gold prices are driven by supply and demand. Unlike securities and most other investments, supply and demand for gold is only based on hype; fear, panic and greed, along with market manipulation of course.

In contrast, supply and demand for securities is based on valuation, which is assessed by comparing business risk versus cash dividends, cash flows and earnings growth.

Gold doesn’t generate a cash flow based on fundamental economics so it doesn’t generate earnings. There’s no way you can produce an income from gold other than if you are a gold dealer and you sell it to people, unlike silver, which has inherent value. Silver is used extensively throughout industry, so it's an income-producing asset. Gold is not. Gold is kind of like artwork.”

Source

Even still, remember that gold doesn’t even protect against inflation so it doesn’t matter anyway!

In not one instance have any of these gold charlatans attempted to refute my claims about gold, hyperinflation, the dollar-oil link, the proper use of gold or anything else.

The reason is simple. In the world of marketing deceit, the last thing you want to do is shine the spotlight on an unbiased voice of reason, especially when he has been right about so many things for so long. Doing so would erase the efforts by the media to keep such an individual from waking Main Street up. 

As the largest purchaser of gold, India has been a frequent topic of discussion by gold bugs who have always been eager to tell you how Indians will keep buying more gold. But India has significantly cut back on its gold purchases over the past several months. So why aren’t you hearing anything about this from the gold bugs?

The answer is obvious.

They only discuss factors that favor higher gold prices, while making sure to leave out factors that support lower gold prices. You’d have to be a complete fool to listen to what gold cheerleaders say. They simply have no credibility because their views are one-sided.

As the European debt crisis continues to spiral out of control, gold pricing continues to weaken. This behavior is contradictory to previous arguments made by gold bugs. Let’s not forget, most gold bugs insisted that as currencies failed or nations collapsed, gold would soar. But gold continues to face a much needed correction.

So if you are going to invest in gold, you are wise to keep these facts in mind instead of the delusional portrayals and myths that have been flooded into every media venue by gold charlatans.

Gold is not a hedge against inflation. It hedges against deflation which typically occurs during a time of crisis. The stock market sells off during a crisis or panic. As a result, gold is often a good hedge against rapid market declines.

But after the panic has subsided, gold often sells off as institutions get back into the stock market. These dynamics add to gold’s volatile pricing. Therefore, you need to actively manage your gold position, and you can’t do that efficiently and expediently if you buy physical gold.

 

 

Read PART 6

 

 

 

 

 


 

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