Thursday, June 30, 2011

America's Oil Price Inflation Crisis is Yet to Come

America's Oil Price Inflation Crisis is Yet to Come

NIA is very disturbed by President Obama's decision to sell off oil from the U.S. emergency oil reserve, in an attempt to drive down oil prices. One week ago it was announced that the U.S. and other oil-consuming nations that are a part of the International Energy Agency (IEA) will begin releasing 60 million barrels of oil from their reserves, with 30 million barrels coming from the U.S. government-owned reserve. They hoped that by flooding the market with excess supply, they would cause an artificial forced liquidation of oil futures contract holders who bought using leverage.

The U.S. Strategic Petroleum Reserve is the world's largest government-owned stockpile of emergency crude oil reserves and is maintained by the U.S. Department of Energy (DOE). It holds 727 million barrels of oil reserves at four different sites along the Gulf of Mexico. Considering that the U.S. is releasing 30 million barrels of oil from these reserves, we are reducing the size of our emergency reserve by 4.1%.
After Obama's decision was announced on June 22nd, crude oil prices originally dipped as much as $5.71 per barrel from $95.41 per barrel down to a low of $89.70 per barrel on June 23rd. Oil prices declined slightly more during the next two trading days, reaching a low this past Monday of $89.61 per barrel and closing Monday at $90.61 per barrel. However, oil prices have surged $4.81 during the past three days and are currently $95.42 per barrel. Oil has recovered the entire dip that came after Obama's decision was announced and is now a penny higher than before his announcement. Unlike 2008 when most oil futures contract holders were hedge funds using leverage in an attempt to make short-term profits, today most oil investors are much stronger hands who bought with cash, because the world is now flooded with dollars thanks to Federal Reserve Chairman Ben Bernanke.
It certainly wasn't worth jeopardizing the homeland security of this country by reducing our emergency oil reserve by 4.1%, just to see a $4 reduction in oil prices that lasted for only 3 days. If the White House had any faith whatsoever in Bernanke's assertion that rising oil prices are only transitory, there would be no reason to release 30 million barrels of oil from our emergency reserve. The rising oil prices we have experienced so far is far from an emergency. The emergency will come soon when the world turns its back on the U.S. dollar and we see a rapid decline in its purchasing power. The emergency will be here when the U.S. can no longer import oil from foreigners at any price due to hyperinflation, and we are forced to live with only the oil produced in this country.
At any time that they choose, China has the power to set off in our country the economic equivalent of a nuclear bomb. China can at any time announce that they are no longer going to buy U.S. treasuries, but they are going to take their $2 trillion in U.S. dollar reserves and use them to buy gold. The price of gold would double overnight, with the U.S. dollar immediately losing half of its purchasing power. The yuan would then skyrocket in purchasing power, automatically giving China the world's largest economy with the Chinese GDP soaring past U.S. GDP. There would be a massive rush out of the U.S. dollar with our trading partners unwilling to export any oil to us.
The U.S. currently produces only 5.5 million barrels of oil per day, but consumes about 19.3 million barrels of oil per day, with total input into refineries of 14.7 million barrels of oil per day. This means the U.S. currently needs to import 9.2 million barrels of oil per day. U.S. commercial crude oil stockpiles are currently 359.5 million barrels or enough to last for 24 days without any domestic production. In the event of hyperinflation where the U.S. is cut off from oil imports, if we were forced to live off of our own oil production of 5.5 million barrels of oil per day, our commercial stockpiles would be gone in 39 days.
Without an emergency oil reserve, in the event of a major oil shortage due to hyperinflation, after a period of just 39 days, farmers won't have enough oil to produce food, manufacturing plants won't have enough oil to process and package food, and logistics companies won't have enough oil to get finished food products into our supermarkets. This is why we have an emergency oil reserve, to prevent store shelves from becoming empty in our supermarkets due to a fuel shortage.
It takes 13 days for oil from our emergency reserve to begin entering the market and once it does, the most it can add to the market on a daily basis is 4.4 million barrels of oil. Therefore, in a crisis we must first use only our commercial stockpiles for 13 days, which would cause our commercial reserve to decline down to 239.9 million barrels of oil. Beginning on the 14th day of a crisis, 4.4 million barrels of oil per day can come into the market from our emergency reserve with 4.8 million barrels of oil per day entering the market from our commercial reserve.
After 50 additional days, our commercial reserve will be depleted and all that will be left is 507 million barrels of oil in our emergency reserve. That will give us 115 more days where we can withdraw 4.4 million barrels of oil per day, but the U.S. will be forced to reduce its daily oil consumption by 33% during those 115 days. This is based off of an emergency reserve of 727 million barrels of oil. With Obama this month prematurely releasing 30 million barrels of oil from our emergency reserve, we will actually only have 108 days where the U.S. will be able to consume 2/3 of its normal oil consumption, after 63 days of full oil consumption.
The solution to high oil prices is not more government intervention, but is less government interference in the free market. Instead of trying to manipulate oil prices down using artificial methods that will only last temporarily, the U.S. government should look at the root cause of rising oil prices. Oil is rising due to the U.S. government's deficit spending and the Federal Reserve's willingness to monetize our deficits and debts. If they want to see lower oil prices, the government should start out by eliminating the DOE. The DOE was created in 1977 to make the U.S. less dependent on oil imports. In 1977, we imported 44% of the oil used in U.S. refineries. Today, we import 63% of the oil used in U.S. refineries. Eliminating the DOE would save this country $27 billion annually.
Priced in terms of real money (gold), oil prices haven't been rising at all. The Federal Reserve's QE2, in which it printed $600 billion out of thin air, has created artificial demand for oil. If it wasn't for the Federal Reserve working tirelessly trying to prevent a much needed recession, Americans would be cutting back on oil consumption and oil prices would be declining. If the free market was allowed to operate, falling oil prices would make it easier for Americans to live with the real unemployment rate currently at 22.3%.
It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at:

Posted via email from cash-gifts-gifting-generosity's posterous

Monday, June 27, 2011

The Manchurian Candidate

----- Original Message -----  From: Tony

 The Manchurian Candidate

    How could our current president have stayed hidden from birth until he
convinced the democrat party that he was their messiah?   He is truly a
magician (illusionist) of the Houdini class.  Help me out here. Your
Pulitzer Prize is awaiting!!


  I hadn't thought about this - but where are O's past girlfriends - surely
he had at least one? No past girl friends popping up anywhere? Strange -
strange to the point of being downright weird!

  OK, this is just plain old common sense, no political agendas for either
side. Just common knowledge for citizens of a country, especially American
citizens, who know every little tidbit about every other president (and
their wives) and even know that Andrew Jackson's wife smoked a corn cob pipe
and was accused of adultery, or that Lincoln never went to school or Kennedy
wore a back brace or Truman played the piano.

  We are Americans! Our Media vets these things out! We are known for our
humanitarian interests and caring for our 'fellow man.' We care, but none of
us know one single humanizing fact about the history of our own president.

  Honestly, and this is a personal thing ... but it's bugged me for years
that no one who ever dated him ever showed up. Taken his charisma, which
caused the women to be drawn to him so obviously during his campaign, looks
like some lady would not have missed the opportunity....

  We all know about JFK's magnetism, McCain was no monk, Palin's courtship
and even her athletic prowess were probed. Biden's aneurisms are no secret.
Look at Cheney and Clinton-we all know about their heart problems. How could
I have left out Wild Bill before or during the White House?

  Nope... not one lady has stepped up and said, "He was soooo shy," or "What
a great dancer!"
  Now look at the rest of what we know... no classmates, not even the
recorder for the Columbia class notes ever heard of him.

  Who was the best man at his wedding? Start there. Check for groomsmen.
Then get the footage of the graduation ceremony.

  Has anyone talked to the professors? Isn't it odd that no one is bragging
that they knew him or taught him or lived with him.

  When did he meet Michele and how? Are there photos? Every president
provides the public with all their photos, etc. for their library. What has
he released? Nada - other than what was in this so-called biography! And
experts who study writing styles, etc. claim it was not O's own words or
typical of his speech patterns, etc.

  Does this make any of you wonder?

  Ever wonder why no one ever came forward from Obama's past, saying they
knew him, attended school with him, was his friend, etc. ?
  Not one person has ever come forward from his past.
  This should really be a cause for great concern. Did you see the movie
titled, The Manchurian Candidate?

  Let's face it. As insignificant as we all are... someone whom we went to
school with remembers our name or face...someone remembers we were the clown
or the dork or the brain or the quiet one or the bully or something about

  George Stephanopoulos, ABC News said the same thing during the 2008
  Even George questions why no one has acknowledged that the president was
in their classroom or ate in the same cafeteria or made impromptu speeches
on campus.
  Stephanopoulos was a classmate of Obama at Columbia-class of 1984.
  He says he never had a single class with him.
  Since he is such a great orator, why doesn't anyone in Obama's college
class remember him?
  And, why won't he allow Columbia to release his records?
  Do you like millions of others, simply assume all this is explainable -
even though no one can?


  Looking for evidence of Obama's past, Fox News contacted 400 Columbia
University students from the period when Obama claims to have been there,
butnot one remembers him. For example,Wayne Allyn Root was (like Obama) a
political science major at Columbia, who graduated in 1983.  In 2008, Root
says of Obama, "I don't know a single person at Columbia that knew him, and
they all know me. I don't have a single classmate who ever knew Barack Obama
at Columbia ... EVER!  Nobody recalls him.

  Root adds that he was, "Class of '83 political science, pre-law" and says,
"You don't get more exact or closer than that. Never met him in my life,
don't know anyone who ever met him."

  At our 20th class reunion five years ago, who was asked to be the speaker
of the class?  Me.  No one ever heard of Barack!  And five years ago, nobody
even knew who he was. The guy who writes the class notes, who's kind of the,
as we say in New York, 'the macha' who knows everybody, has yet to find a
person, a human who ever met him."

  Obama's photograph does not appear in the school's yearbook, and Obama
consistently declines requests to talk about his years at Columbia, provide
school records, or provide the name of any former classmates or friends
while at Columbia. How can this be?

  NOTE: Wayne Allyn Root can easily be verified. He graduated valedictorian
from his high school, Thornton-Donovan School, then graduated from Columbia
University in 1983 as a Political Science major in the same '83 class in
which Barack Hussein Obama states he was.  Some other interesting questions.

  Why was Obama's law license inactivated in 2002?

  Why was Michelle's law license inactivated by court order?

  According to the U.S. Census, there is only one Barack Obama - but 27
Social Security numbers and over 80 aliases.  WHAT!?

  The Social Security number he uses now originated in Connecticut where he
is never reported to have lived.  No wonder all his records are sealed!

  Please continue sending this out to everyone. Somewhere, someone had to
know him in school...before he "reorganized" Chicago and burst upon the
scene at the 2004 Democratic Convention and made us swoon with his charm,
poise, and speaking pizzazz.

  One of the biggest CONS this country has ever seen, and getting away with
it. Go watch the movie The Manchurian Candidate, with Lawrence Harvey! Good


Posted via email from cash-gifts-gifting-generosity's posterous

Wednesday, June 22, 2011

NIA's Options Suggestions Report

On Friday morning, NIA will be releasing its exclusive private report with its top options suggestions for the next 7 months! Tomorrow (Thursday) morning, NIA will be releasing all of the details on how you can receive the report Friday morning. Be ready for NIA's extremely important alert tomorrow morning on how you can be the first to receive NIA's options suggestions report coming this Friday.
NIA believes that over the next 7 months, we will see a massive decline in the U.S. dollar with huge gains in a select few gold/silver, agriculture, and commodity related stocks and ETFs.
NIA believes we will also see the U.S. college bubble begin to collapse with a huge surge in student loan defaults and a large nationwide drop in college enrollments.
NIA believes the U.S. consumer will be hit hard by surging price inflation and will need to cut back big time on discretionary spending, in order to put food on their tables, air condition and heat their homes, and buy fuel for their automobiles.

By utilizing put options, NIA believes there are massive gains to be made by betting against the stocks of companies that will be hurt the worst by the collapsing college bubble. NIA also believes there is potential to make astronomical gains in the upcoming months by utilizing put options to bet against a select few U.S. discretionary spending stocks.
Just like how NIA suggested call options in the silver ETF "SLV" that gained 1,002% last year, NIA believes there are more huge gains to be made during the next 7 months with brand new call option plays related to precious metals and other real assets.
In NIA's opinion, interest rates on U.S. treasuries are set to rise dramatically in the upcoming months, and NIA's report will also have an options suggestion that we believe could make large gains due to rising interest rates.

By diversifying and utilizing an options trading strategy of betting on both call and put options based on NIA's economic outlook for the rest of 2011 and early 2012, NIA believes options can provide huge leverage to maximize profits, while simultaneously hedging against market risks.

NIA has so far been 3 for 4 with options suggestions for a success rate of 75%, with its 3 winning options suggestions making gains at their highs of 1,002%, 276%, and 74%! NIA's President has proven his ability to pick huge options winners and hopes for his options trading success to continue in the months ahead!

If you haven't read it yet, please be sure to read NIA's free educational report on options trading:
If you have no options trading experience, NIA's upcoming options suggestions report is not for you. Options are very risky and our report coming this Friday is for experienced investors only.
Options trading is extremely risky. Past performance is not an indicator of future returns. NIA is not an investment advisor. NIA's options suggestions are not a solicitation or recommendation to buy or sell any option. Never make investment decisions based on anything NIA says. Always do your own research and make your own investment decisions based on your own personal level of experience and risk tolerance. Never invest money into any option unless you can afford to lose 100% of your investment.

Posted via email from cash-gifts-gifting-generosity's posterous

NIA Extremely Important Update

Add billionaire "Bond King" founder of Pimco, Bill Gross, to the nearly 1 million people who have watched NIA's critically acclaimed documentary 'College Conspiracy'! In Gross' brand new July newsletter that he released today, he focused entirely on a college education in America being a waste and featured many of the facts, statistics, and viewpoints that NIA was the first to expose to the world in 'College Conspiracy'.
It is not a coincidence that before the release of 'College Conspiracy' 5 weeks ago, almost nobody in the U.S. was calling college education a scam. Since the release of 'College Conspiracy', in a period of just 5 weeks there have been literally hundreds of articles and stories in the mainstream media about how college is a scam and why American students are much better off avoiding college all together.
We would like to thank all NIA members who worked tirelessly to spread the word about 'College Conspiracy'. When we all work together to spread the facts and truth about the U.S. economy and inflation, our message is able to reach nearly every single American across the country!
We just posted Gross' July newsletter to our blog for you to see:
We have been receiving many emails over the past week asking us to comment on Kitco, which is one of the companies in our online gold and silver sellers review. We had previously given Kitco an overall rating of 3 1/2 stars out of 5 stars.
About a week ago, Kitco's offices were raided by Canadian authorities as part of an investigation into if Kitco has been paying all of their sales taxes owed. Kitco has allegedly avoided paying $150 million in sales taxes on $1.8 billion in transactions. Although we must presume Kitco to be innocent until these allegations are proven, we are going to temporarily lower Kitco's overall rating to 1 star and issue a warning on our site until this matter is resolved.
The Kitco situation proves just how valuable NIA's 'NIAnswers' have been for NIA members. Note: 'NIAnswers' is currently offline as we finish programming the final version of our software, but will be back online very soon with much improved functionality and many new features.
A few months ago, an NIA member submitted the following question on 'NIAnswers': "I am going to purchase silver from Kitco. I'm wondering would you recommend or consider a pool account more advantageous over delivering and physically owning the silver?"

NIA's response to this question on 'NIAnswers' was: "If you purchase silver through a pool account with Kitco, your silver is unallocated and therefore you are at risk of losing the silver in the event of the firm's insolvency. Basically, by owning unallocated silver in a pool account, you are a general creditor of the firm. We suggest staying away from Kitco pool accounts and only purchasing physical silver from them."

NIA's response to this question could have saved this NIA member and possibly others from losing their silver. If it is proven that Kitco owes this $150 million in Canadian taxes, Kitco will likely become insolvent and the Canadian government will go after all assets owned by Kitco, including unallocated gold and silver that Kitco's customers have in pool accounts. The Canadian government will have priority over other Kitco creditors, and there is a strong likelihood that those who purchased unallocated gold and silver through Kitco and were storing it in a Kitco pool account, will lose everything!
Hopefully, NIA's response on 'NIAnswers' was enough to convince this member and other NIA members not to buy unallocated gold and silver in a pool account with Kitco or any other firm!
NIA will soon be updating its unbiased reviews of online sellers of gold and silver bullion. If you would like us to review a company that isn't already in our review, please send an email to and we will review that company next month in our latest review update. The company must allow you to purchase gold and silver entirely online. It can't be a company that requires you to call them on the phone to place your order.
NIA's President sold his Moody's (MCO) put options at the perfect time. On May 23rd, NIA's President purchased 150 MCO November 2011 $35 put options at $1.98 for a bet of $29,700 that MCO would decline in value, and NIA immediately sent out an alert suggesting this option. On June 17th, MCO declined by as much as $3.14 down to $35.13 per share and NIA's President sold his options at $3.45, earning a gross profit of $22,050 on a percentage gain of 74% in less than one month! NIA alerted you to his sale immediately afterwards. MCO has bounced in recent days back up to $37.84.
NIA has had 4 options suggestions so far, with 3 of them or 75% of them being huge winners! NIA's 3 winning options suggestions gained by 1,002%, 276%, and 74% at their highs, with NIA's 1 losing options suggestion expiring worthless and losing 100% of its value. Most stock options expire worthless, so to be right 75% of the time is like a baseball player batting .750 for the season.
Because only a small number of NIA members have the knowledge, experience, and sophistication necessary to successfully trade options, we will no longer be sending out options suggestions to our main email list. If you would like to learn about NIA's top options suggestions for the second half of 2011, please go to and submit your email address to be added onto our special email list.
It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at:

Posted via email from cash-gifts-gifting-generosity's posterous

Monday, June 20, 2011

Bernanke to Invent New Term for Printing Money

Bernanke to Invent New Term for Printing Money

When the U.S. Bureau of Labor and Statistics (BLS) reported their latest consumer price index (CPI) inflation data last week, everybody in the mainstream media worked tirelessly to spin the data in order to proclaim that U.S. price inflation is not a problem. Most articles in the media reported that inflation slowed in May due to falling gas prices. The truth is, gas prices rose last month and U.S. price inflation is spiraling out of control.
Price inflation based on the CPI on a year-over-year basis rose during the month of May to 3.57%, up from 3.16% in April, 2.68% in March, 2.11% in February, 1.63% in January, 1.5% in December, and 1.1% in November. The official rate of price inflation has more than tripled over the past 6 months. Yes, maybe the rate of year-over-year price inflation rose by slightly less in May over April, than it did in April over March, but this isn't good news at all. This U.S. dollar is still rapidly losing its purchasing power and the rate at which it is declining in purchasing power is accelerating.
On an unadjusted basis, gas prices rose 3.6% in the month of May. The media is reporting gas prices based on the BLS's seasonal adjustments. Only with the BLS's deceptive seasonal adjustments did gas prices decline by 2% in the month of May. The BLS's seasonal adjustments will actually reverse starting in the month of July and add to reported gasoline prices. NIA predicts that come August when the BLS releases its July CPI report, the media will begin focusing on unadjusted gasoline prices because the unadjusted gain will be less than the adjusted one. The media always reports the data that supports their agenda and ignores the data that works against it.
The media is obviously just saying what the U.S. government wants them to say. Larry Summers, a Keynesian economist who served for 5 years last decade as President of Harvard and was up until late-2010 director of President Obama's White House National Economic Council, just said last week that, "the underlying rate of inflation is still trending downwards". The media's favorite economist Paul Krugman, a Keynesian who has an op-ed column in the New York Times, said last week that, "There's really nothing here to shake my view that deflation, not inflation, is the threat."
Krugman, who has been calling for massive price deflation the whole entire time that NIA has been predicting massive price inflation, is refusing to admit he has been wrong and is telling all Americans to ignore rapidly rising food and energy prices because he claims they are too volatile. He is telling the world to focus solely on the core CPI, which ignores food and energy, the two items that Americans need most to live and survive. Core CPI is weighed heavily by rents and America's Real Estate bubble still isn't done deflating. The only purpose of having a core CPI is for Keynesian economists like Krugman to use it to mislead Americans and deceive them into believing that inflation is not a problem.
Core CPI was an invention of the Nixon administration, which right there should tell you all you need to know about it. President Nixon's idea for creating core CPI, was to deceive Americans about price inflation by excluding the items that were rising the most, which he would justify by calling these items "too volatile". NIA has predicted from the very beginning that inflation will not effect all goods and services equally and that as inflation begins to spiral out of control, inflation would gravitate most towards the prices of the items that Americans need the most, and there is nothing that Americans need more than food and agricultural products, and to a lesser extent energy.
Whenever the mainstream media reports about global inflation and they show a map of the world, the map always shows massive inflation in Middle Eastern and Asian countries, with the U.S. having the least price inflation. The truth is, inflation in Middle Eastern and Asian countries isn't many times worse than the U.S., it is just that their governments are many times more honest and aren't as advanced in manipulating economic statistics as our government is. While all of the headlines from major American news organizations about U.S. inflation said last week that inflation is slowing and not a problem, those same news organizations wrote articles about Chinese inflation being at a new 34-month high of 5.5%. The fact is, official U.S. price inflation is also at its highest level in nearly three years and our real price inflation rate is actually higher than China's reported rate of price inflation.
Based on the BLS's CPI, year-over-year U.S. price inflation in the month of May of 3.57% was the highest year-over-year price inflation rate since October of 2008, right before the global financial crisis. If it wasn't for the global financial crisis of late-2008/early-2009 and the world's mistake of liquidating real assets and hoarding fiat U.S. dollars as a safe haven, it is likely that the official rate of U.S. price inflation would already be in the double-digits today. NIA estimates the real rate of U.S. price inflation, minus geometric weighting and hedonics, to currently be approximately 7.5% on a year-over-year basis. It is possible that the real U.S. price inflation rate will reach double digits in the second half of 2011. That will be devastating to the U.S. economy because at that point it will just about guarantee that the Federal Reserve will have to raise the federal funds rate to north of 10% by the middle of this decade.
The Federal Reserve's balance sheet just reached a brand new record of $2.832 trillion, up from $2.815 trillion in the prior week, as we approach the end of QE2 at the end of June. The stock market is already anticipating the end of QE2 with the Dow Jones currently down over 900 points from its high at the end of April. The declining stock market is pretty much sowing the seeds for a QE3. After all, Federal Reserve Chairman Ben Bernanke doesn't want to see the phony U.S. economic recovery blow up in smoke.
Bernanke will do everything possible to disguise QE3 and will never admit to there being a QE3. Remember, this is the same Federal Reserve Chairman who lied to every single American on '60 Minutes' when he said, "We're not printing money." That is exactly what QE2 is, printing money, but just like how Bernanke won't admit to printing money, Bernanke is now going to retire the term "quantitative easing" and come up with a new term for the Fed's latest destructive policy of creating massive monetary inflation.
It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at:

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Posted via email from cash-gifts-gifting-generosity's posterous

Sunday, June 12, 2011

FAQ for the Week starting June 12, 2011

Here are the top 10 most important economic questions that NIA answered during the past week.
NIAnswers is currently offline as we program the final version of our software. Up until now, NIAnswers was in the beta phase. The final version should be online by the end of June. Until then, please email your economic questions to us.

1) I bought silver when NIA declared it the best investment for the next decade at $17 per ounce. Should I get out now while I am still up big? For my friends who don't own silver, should I tell them it is too late to invest? What is your outlook for silver in the second half of 2011?

It is dangerous not to own gold and silver. Although the U.S. dollar seems like a safe haven to most Americans because it has a number on it that always stays the same, the U.S. dollar is a fiat currency with no real value because it is no longer backed by gold. The only reason the U.S. dollar still has any purchasing power at all is due to the public's perception that it will always be accepted as money. Gold is the world's most stable asset and silver possesses all of the same monetary qualities as gold, but is a lot more volatile than gold.

We believe silver is a much better bargain than gold because the gold/silver ratio is currently 42 and during periods of high inflation it always declines to 16, which is where the Coinage Act of 1834 defined their values until silver was demonitized in 1873. Ever since silver was demonitized, America has been a fiat country gone insane with Americans being brainwashed into believing silver is only an industrial metal and paper dollars are money. Bernanke's devastating inflationary monetary policies will soon wake Americans up to the truth and we will see a decline in the ratio back to 16 or below permanently, which means we will see at least a 2.625 times increase in purchasing power for those who own silver vs. gold from their current levels. We are 100% confident the gold/silver ratio will at least decline to 16 this decade.

Because silver has been so undervalued for so long with a gold/silver ratio averaging north of 50 for the past century, most silver produced in recent decades has been consumed by industrial purposes and there are actually much larger inventories of gold available above ground today. Most likely we will probably see the gold/silver ratio overcorrect to the downside, possibly down to 10 or lower. Only 10 times more silver has been produced in world history than gold so a gold/silver ratio of 10 is actually a very realistic possibility. This means those who own silver will likely more than quadruple their purchasing power from current levels this decade, while Americans with savings in U.S. dollars lose all of their purchasing power.

COMEX registered physical silver inventories have declined 30% over the past six weeks down to 28.8 million ounces or just $1 billion worth of silver. A major shortage of physical silver is developing. A COMEX default is likely coming in the near-future as those holding futures contracts demand physical delivery and COMEX can't deliver. This could cause an explosion in silver prices, possibly to $100 per ounce overnight.

Silver prices rose too far too fast during the month of April. When we announced silver as the best investment for the next decade at $17 per ounce, we never thought silver would nearly reach $50 per ounce in early 2011. We were looking for silver to reach $50 per ounce in late 2011 with a decline in the gold/silver ratio this year to 38.

When silver reached a new all time nominal high of near $50 per ounce in April, the gold/silver ratio temporarily declined as low as 30.5, far below NIA's outlook for 2011 of 38. Silver prices were due for a natural pullback, but because COMEX raised margin requirements on multiple occasions right when silver began to dip, we saw a very rapid and steep pullback in silver prices due to forced liquidations, profit taking, and panic selling. The timing of COMEX's margin requirement increases can be described in no other way than manipulation.

COMEX has been manipulating down the price of silver in order to help their friends at JP Morgan, who have a huge silver naked short position. The manipulation has allowed JP Morgan to decrease its silver short position to just about its lowest level since it was acquired in 2008 from Bear Stearns with the backing of the Federal Reserve. Without this manipulation, it is possible that after a brief pullback, JP Morgan would be covering its silver short position today above $50 per ounce.

Although the pullback in silver was steep, this was not unexpected. It is something that NIA has warned about on countless occasions. We believe the pullback in silver is now over and most of the silver sold by speculators is now owned by stronger hands that are holding for the long-term. In our opinion, silver will make another move towards $50 per ounce and instead of pulling back, this time silver will break $50 per ounce and reach new all time nominal highs. We don't see much downsize risk for silver, because there are many investors who are waiting to buy as much silver as possible on any kind of dip from these levels.

2) What do you think about the new Utah money where people will be able to pay taxes and each other in gold and silver coins? Do you think this will pass the U.S. Senate and what will that do to silver?

Utah just legalized gold and silver as a currency, which is something that NIA strongly supports. Gold and silver will now be exempt from state capital gains tax in Utah. However, Utah doesn't have the power to exempt it from Federal capital gains tax. We support Ron Paul for President in the 2012 election because he will eliminate Federal taxes on gold and silver. After all, when gold prices go up you actually aren't making money. You are simply retaining your purchasing power as the U.S. dollar goes down. Ron Paul is the only candidate who understands this and understands that the U.S. constitution mandated only gold and silver to be used as legal tender. Fiat currencies are unconstitutional. Ben Bernanke is a criminal who is stealing the wealth of all Americans through inflation and NIA will not stop until all Americans understand the truth.

3) At the price of gold and silver now, is it safe to continue to purchase these metals? When do you plan to sell?

We are still buying gold and silver, and we will hold our gold and silver until the Dow Jones/gold ratio at least declines to 1, the median U.S. home/silver ratio at least declines to 1,000, and the gold/silver ratio at least declines to 16. Only when these ratios are met will it be a sign that it is time to diversify from precious metals. However, we will never sell precious metals in order to buy a fiat currency. We plan to use our precious metals to buy dirt cheap Real Estate in the U.S. once the market has completely bottomed, which is still many years away from happening.

4) What do you mean when you say, "No amount of tax increases and spending decreases will ever allow the U.S. to balance its budget."? Is there no way out of this hole? Is there no way to turn this bus around and prevent it from going over a cliff and into the abyss of hyperinflation?

If the government acted immediately and cut expenses across the board by 50% including entitlement programs, and the Federal Reserve raised interest rates to at least 5% or 6%, we believe hyperinflation could be prevented. However, the government doesn't believe inflation is a problem because the Fed looks at the core consumer price index (CPI), which excludes food and energy, because the Fed says food and energy inflation is transitory. The core CPI is mainly comprised of rents, which is very misleading because rents aren't going to rise by much in the short-term being that we just had the largest Real Estate bubble in history that still isn't done deflating.

Even core CPI will begin rising dramatically eventually. When price inflation becomes so large that the government realizes something must be done and can no longer ignore it, it will be too late. Our budget deficit as a percentage of annual government expenditures is at a level that many other countries were at right before they experienced hyperinflation. What triggered hyperinflation in prior instances is when foreigners stopped lending and a country's own central bank needed to print the money to fund the bulk of a country's deficit spending. We believe our two largest foreign lenders China and Japan are about to pull the plug on the U.S. and the Federal Reserve will become the U.S. treasury buyer of last resort. The Fed already owns more U.S. treasuries than China and Japan, but soon the Fed will be the only treasury buyer left.

If we wait another year to make dramatic spending cuts, it will be too late because soon we will have to deal with rising interest payments on our national debt. The annual interest we pay on our national debt is currently only around $200 billion per year due to our artificially low interest rates. When rates start to rise, annual interest on our debt could easily exceed $1 trillion and cause our budget deficits to explode even higher. The first place the U.S. needs to cut is the military. We need to leave Afghanistan immediately now than Bin Laden is dead and we must stop attacking countries that are no threat to us like Libya.

5) One of the issues that has propped up the dollar for decades is the ability of the U.S. government to "enforce" the dollar because of its enormous and superior military. What are your thoughts about this?

We don't think we can threaten other countries by force and make them continue buying U.S. treasuries because if they stopped buying our debt, the dollar would collapse and we won't have the resources to fund our military. Some people believe the world is buying our treasuries because they like the U.S. military policing the world, but we strongly disagree. We believe the world resents the U.S. for maintaining its 700 military bases in 130 countries. In our opinion, we are gaining enemies this way. China and Japan would be much better off using the money they spend on U.S. treasuries to expand the size of their own militaries. When the dollar collapses due to hyperinflation, no longer will the U.S. be the world's superpower due to its military. China's military will eventually exceed the size of ours. Our current military empire where we spend just about the same on defense as the rest of the world combined is unsustainable and over the long-term this wasteful spending is making us a lot less safe as a result. Having a safe and stable currency is the most important fundamental building block of having a safe and stable country.

6) We have a nation full of incredibly financially smart folks who should be concentrating on the solution instead of the problem. Where are they and why isn't anyone stepping up to the plate to try to save our country?  I heard that Donald Trump had a plan to get us out of debt but don't know what that plan is. Have you heard about this plan and is it credible?

Donald Trump isn't very credible when it comes to getting out of debt, because his casino company is one of the most indebted companies in the world and it has filed for bankruptcy on numerous occasions. But then again, the U.S. is for all intents and purposes bankrupt so if Donald Trump changed his mind and decided to run for President, he could campaign based on his experience with reorganizing under bankruptcy and keeping companies alive and operating despite them being bankrupt. Unfortunately, Donald Trump has screwed over his shareholders countless times who were left with nothing, so he would probably also screw over holders of U.S. dollars who would be left with worthless pieces of paper that have no purchasing power.

7) When do you expect inflation to crimp the margins of consumer discretionary stocks?

Inflation is already hurting the margins of many consumer discretionary stocks that have been reporting earnings in recent weeks, which is something NIA predicted would happen late last year. Retailers are passing some of their rising costs on to their customers, but are reluctant to pass all of them on. Many retailers are passing on 1/2 of their rising wholesale costs by raising retail prices and eating the other 1/2 through shrinking gross margins. This same thing is happening to the product manufacturers who are seeing large raw material input cost increases. They are eating some of their rising costs to stay competitive and passing the rest on to their customers. Many manufacturers and retailers are hoping that Bernanke is right and that commodity inflation is transitory. Although some commodities have run too far too fast and will dip in the short-term as the dollar makes a possible temporary bounce, we can assure you that inflation is not transitory and the dollar collapse has just begun.

8) NIA says there is no chance of the U.S. ever balancing its budget, without eliminating the so-called untouchable entitlement programs like Social Security, Medicare, and Medicaid. How exactly would the disabled live if these entitlement programs were gone? It sounds like retirement would have to be eliminated. Would a person basically have to work to death?

Retirement will become a thing of the past for Americans relying on Social Security to retire as well as Americans with their savings in U.S. dollars. Seniors who are not relying on Social Security and have at least one third of the savings necessary to retire, and are smart enough to invest their savings now into silver, we believe will be able to retire and stay retired as they will increase their purchasing power while the rest of America goes broke. NIA expects to see a major trend in the upcoming years of retired Americans reentering the workforce as their Social Security checks continue to buy less and less. Seniors haven't seen any Social Security cost-of-living adjustment increases in years, despite there being massive price inflation, especially for food and energy. Adjusted for real price inflation, Americans receiving Social Security today should be receiving almost triple the amount that they are currently receiving.

9) When the U.S. dollar drops to zero value and it becomes necessary to use gold for daily needs, how will the exchange of goods for gold be accomplished? How do I use a 1 ounce gold coin, with present value of about $1,500, to purchase a loaf of bread and/or a quart of milk, for example? How will these 1 ounce coins be broken down?

It is possible to buy American Eagle and Canadian Maple Leaf gold coins that are as small as 1/10 of an ounce, but NIA strongly recommends against buying these coins because you will likely end up paying a 15% premium for them compared to just a 4% premium for the 1 ounce versions of these coins. We believe silver will be more commonly used for bartering purposes, as silver is currently around $36 per ounce and a few ounces of silver can easily buy a week's worth of groceries for a family. In fact, with the gold/silver ratio currently at 42 despite the fact that only 10 times more silver has been produced in world history than gold (with most of this silver being consumed for industrial purposes never to be seen again), NIA believes silver is undervalued compared to gold and will increase around 3 to 4 times in purchasing power compared to gold this decade. Therefore, it is possible that only 1 ounce of silver could be enough to buy a week's worth of groceries for a family during hyperinflation.

10) One of your stock suggestions from August of 2009 was Capital Gold at $2.48 per share and it was recently acquired by Gammon Gold for $6.56 per share. Do you have any opinions on Gammon?

A few weeks ago one of NIA's co-founders had a meeting with the co-founders of Gammon Gold (they left Gammon years ago and we didn't know them until after Gammon had already acquired Capital Gold). They told us that they have strong confidence in Gammon's current management team. We believe Gammon is a solid company for the long-term, but we also believe there are much bigger opportunities out there. We liked Capital Gold because it was one of the lowest market cap publicly traded gold producers that was profitable with a strong balance sheet. Gammon was very smart for acquiring Capital Gold because it was accretive to their EPS. However, it will be very difficult for Gammon to grow organically. Gammon's future revenue growth will likely come from both rising gold prices and possible further acquisitions. It will be hard for them to find another amazing acquisition opportunity like Capital Gold was. Gammon is changing its corporate name and starting next week will be known as AuRico Gold.

NIA is not an investment advisor. NIA's NIAnswers are meant for informational and educational purposes only. Never make investment decisions based on any information contained in any of NIA's NIAnswers. Just because many of NIA's previous economic predictions and forecasts were accurate, doesn't mean NIA's future economic predictions and forecasts will be accurate. All of NIA's predictions and forecasts could turn out to be completely wrong.

It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at:

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Monday, June 6, 2011

U.S. Economic and Inflation Update, just the facts folks not the fraud

NIA Releases U.S. Economic and Inflation Update

The official U.S. unemployment rate rose during the month of May to 9.1%, up from 9% in April, with only 54,000 non-farm jobs being created for the month. The real unemployment rate including short and long-term discouraged workers is now 22.3%. The Bureau of Labor Statistics (BLS) used the birth/death model to produce a positive monthly bias during the month of May of 206,000 jobs, up from 175,000 in April, 117,000 in March, and 112,000 in February. Without the birth/death model, 152,000 jobs were lost during the month of May.
By utilizing the birth/death model, the BLS is assuming that during the month of May, the number of new jobs created by start-up businesses were 206,000 greater than the number of jobs lost from companies going out of business. NIA finds this assumption to be absurd and believes it is likely that jobs lost from companies going out of business were actually much higher than jobs created by new start-up firms. It is obvious to us that the BLS is using the birth/death model to manipulate unemployment figures to make the U.S. employment situation seem far less worse than it truly is. There is absolutely no legitimate reason for the birth/death model upward bias to have increased 84% over the past three months.
McDonald's recently had their own "National Hiring Day" in which they encouraged Americans to apply for new jobs at the company. All together, 1 million Americans applied for 62,000 jobs at McDonald's and over 900,000 Americans had to be turned down. To us, this is a sign that despite government economic statistics that are bottom bouncing from their lows due to the Federal Reserve printing trillions of dollars out of thin air, the U.S. economy is still in a severe downturn without the possibility of a real recovery. It is NIA's belief that the Fed needs to allow the U.S. economy to enter into a severe depression where all bad debts can be liquidated and the free market can rebalance the economy from the ground-floor with a solid foundation.
The fact that the BLS needs to resort to deceptive birth/death model manipulative practices to give the appearance of any job creation, proves that the Federal Reserve's destructive monetary policies of zero percent interest rates and endless money printing are not creating a sustainable reduction in the unemployment rate. Bernanke can claim all he wants that America's inflation is transitory, but the only thing transitory about our economy is the artificial decline in the official U-3 unemployment rate from its peak in October of 2009 of 10.1%. The real unemployment rate has increased since October of 2009 and NIA believes that the official unemployment rate will likely rise back into double-digit territory in 2012.
From October of 2009 until now, the number of employed Americans has increased by 1.09% while the U.S. population has increased by 1.12%. The only reason the official unemployment rate has declined from 10.1% down to 9.1% is a decline in the labor force participation rate from 65.1% down to 64.2%. Based on what the labor force would be today if the participation rate had stayed the same over the past 20 months and factoring in the increasing population, 2.1 million Americans have completely given up looking for work.
The 1.09% increase in employed Americans over the past 20 months comes at the expense of a $1.30 increase in the price of gas from $2.48 to $3.78 per gallon for a gain of 52% during this time period. Many agricultural commodities have increased over the past 20 months by an even greater percentage than gas. Although prices of all commodities are volatile and have many short-term ups and downs, NIA believes that gas prices are heading to $5 per gallon over the next 12 months and food inflation is going to rapidly accelerate in the months and years ahead.
Prices are now beginning to rapidly rise for U.S. goods outside of the food and energy sectors. 90% of sporting goods manufacturers have seen their input costs rise substantially this year and 41% of them have already announced major price increases for athletic apparel, footwear, and sports equipment. As the 8,000 toy manufacturers in China are forced to raise the wages they pay their employees, Toys R' Us is now beginning to see major wholesale price increases for their products, which they will have to pass on to U.S. consumers. Hasbo recently raised prices on all of their products by 6% to 7%. Mattel recently imposed an across the board high single digit price increase after reporting a 33% decline in quarterly profits (despite sales surging by 8%) due to skyrocketing raw material costs.
The U.S. is about to be cut off from its two largest foreign lenders China and Japan, which means the Federal Reserve will need to fund all of the U.S. government's deficit spending through outright money printing. Federal Reserve holdings of U.S. treasuries just reached a new record of $1.532 trillion. Meanwhile, China's U.S. treasury holdings have fallen five months in a row down to $1.145 trillion. Chinese central bankers are now calling for the country to reduce their foreign exchange reserves, which have increased by $200 billion this year up to over $3 trillion. Japan is currently the third largest holder of U.S. treasuries with treasury holdings of $907.9 billion. Unfortunately, Japan is in desperate need to raise $300 billion to fund their rebuilding efforts and this will likely come from them dumping some of their U.S. treasuries, during a time when the U.S. desperately needs Japan to buy more U.S. treasuries than ever before.
If we look back at previous occurrences of hyperinflation in countries like Bolivia and Brazil, hyperinflation broke out as soon as their central banks were forced to begin monetizing the bulk of their government's deficit spending, as foreigners stopped lending. China's inflation crisis is a direct result of the Fed's quantitative easing and the monetary inflation that we have exported to them in return for their sporting goods, toys, and other products they produce. If China stops buying U.S. treasuries and decides to instead use their foreign currency reserves to accumulate gold that can be used to back their own currency, the Fed will have no other choice but to become the U.S. treasury buyer of last resort. Not only will we see quantitative easing to infinity, but we will see the $1.5 trillion in excess reserves currently parked at the Fed enter into the money supply and increase the money supply by as much as $15 trillion.
Besides gold, one place where the Chinese are investing their money in order to diversify out of U.S. dollars is Real Estate. Housing prices in Beijing and Shanghai rose 28% and 26% last year respectively. With concerns that Chinese Real Estate is becoming a bubble, the Chinese are now buying Real Estate in North America. However, they are avoiding the U.S. Real Estate market because of the civil unrest that will take place in major U.S. cities during hyperinflation due to empty store shelves. The most popular destination for the Chinese in North America is Vancouver, where Real Estate prices are now more expensive than New York City. While New York City Real Estate prices still haven't finished deflating, Vancouver Real Estate prices are soaring to new record highs due to Chinese buyers, with the average Vancouver home price rising 14% last year. In the Westside section of Vancouver, housing prices are up 77% since 2005.
Canada's GDP grew by 3.9% in the first quarter of 2011 on an annualized basis, up from 3.1% in the fourth quarter of 2010, 2.5% in the third quarter of 2010, and 2.3% in the second quarter of 2010. Canada's GDP growth has increased for four straight quarters. U.S. GDP growth in the first quarter of 2011 declined to 1.8% on an annualized basis, down from 3.1% in the fourth quarter of 2010. Canada's Prime Minister Stephen Harper just announced plans on Friday to attract more foreign capital and diversify trade in an attempt to protect Canada from a collapsing U.S. economy.
The U.S. still has a AAA credit rating even with its 2011 budget deficit projected to reach 43% of government expenditures, exactly the same as Brazil's budget deficit as a percentage of expenditures right before they experienced hyperinflation. There is a major charade taking place in Washington today where Republicans are calling for spending cuts to take place in order for them to approve an increase in the debt ceiling. NIA predicts that the debt ceiling will be raised no matter what, most likely at the very last minute. We have zero confidence that Washington will implement any kind of meaningful spending cuts. The U.S. government clearly chose inflation over austerity in its attempt to stimulate the economy. It doesn't make sense for them to reverse course now, because then they will look incompetent for not having chosen austerity to begin with.
The U.S. currently has a budget deficit from Social Security, Medicare, Medicaid, and other mandatory programs alone, without even paying the interest on our national debt. Major entitlement spending cuts are necessary if we are going to have even the slightest hope of balancing the budget and preventing hyperinflation. Unfortunately, most Americans have become dependent on entitlement programs and government transfer payments just to survive. These Americans fail to realize that the reason they are dependent on food stamps and other transfer payments to survive is because of the government's deficit spending and the Federal Reserve's massive monetary inflation. Only when the dollar completely collapses and Americans' unemployment and Social Security checks aren't worth enough to pay for the gas needed to drive to the bank to cash them, will they understand the need to elect a President like Ron Paul who will mandate a balanced budget and return the country to sound money, but by that time it will be too late. The only way America will survive as an industrialized nation is if we educate as many Americans as possible to the facts and truth about the U.S. economy that the mainstream media ignores, so that as many Americans as possible can prepare for hyperinflation and we have enough resources to rebuild afterwards.
It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at:

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