Inflation Nation 2012

8/2/2019 Inflation Nation 2012

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nation, peak oil, and the unprecedentedchanges in our economy.

What you absolutely must know in order to be

prepared for the future.

Riots, looting, 401k’s decimated, and dreamshattered are all something that you will seehis decade, in my opinion. In fact, early in this

decade! This will be the ultimate game changeror the entire world, especially for Americans.

Americans who are caught unprepared willbe devastated, perhaps some will never recoverrom this catastrophic scenario I see playing out

over the coming months and years. The goodnews is that by preparing for the future today,you can not only survive a global currency crisis,you can even prosper in it!

This special report will cover not only thecenario I see playing out, but how it will affect

your daily life, investments, housing, work, andcountry. I will also cover what I am doing toprepare for not only ination, but peak oil andhe aftermath of living in a failed empire. What

you can personally do is exactly what I am doing,at least while there is still time.

‘Ination in America’ is a statement whichmost economists think is absurd, just asabsurd as my prediction in early 2008 aboutLehman Brothers, Washington Mutual, and AIGcollapsing!

In my experience, having most economistsdisagree with you is actually a good thing since

personally can’t recall when major economistshave gotten something right. I mean, how ist possible that main stream economists wereorecasting growth in 2008 when we were

actually headed into the greatest downturn sincehe Great Depression? Jim Cramer famously told

a caller days before Bear Stearns collapsed thatelling Bear Stearns was “silly.”

Time and time again I hear from the so-calledexperts who get it wrong, but are invited to be expand the authority on a specic issue the very n week. How many times have we had to hear abo

the gold bubble every time we see a correction inthe price of gold?

Oil production has been almost at for the pas7 years, yet we regularly hear about speculatorsdistorting the market place. Some experts andgovernment ofcials have even called to ban oilspeculators, as if this was the core of our problemin the energy market.

This idea has been foolishly tried before and

the results couldn’t have been more pathetic. I1958, traders were blamed for onion volatilityand a law was passed to ban all futures tradingonions. The law still stands today, which is whis a perfect example of just how stupid this ideis that blames speculators. Onion prices makefutures look tame.

Futures trading has actually diminishedextreme price swings. Onion prices in 1958 were being driven down because of new farms

sprouting up in Wisconsin. The futures marke was pricing that incorrectly, just as the currenfutures market is pricing in a higher oil price with rising tensions in the Middle East and peproduction happening in three of the four supoil elds.

My point in bringing up peak oil is that even with a sign as obvious as peak production, thecalled experts are clueless and fail to point outthe real problems that face our economy.

Here is a headline from one of my favorite socalled experts in May of 2010:


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Defying Conventional Wisdom

I have made myself rich from simply doingone thing: defying conventional wisdom. So far,defying the experts has never failed me. When

hear “buy” on CNBC, I sell and when I hearsell”, I start buying.

I remember talking to highly educated peoplen the nancial world who told me to load

up on the mortgage companies in 2007 afterscreamed from the rooftops for people tohort them. Instead of loading up on mortgage

companies, I purchased option puts and saw gains as high as 1,400% in just a few months.

When it comes to predicting a currency collapse in the U.S., there is heavy resistancerom the mainstream. In fact, they will ignore

you or even laugh as you speak.

I remember being interviewed by the Wall Street Journal for a story they did about 2years ago, and I mentioned a wide range of opics about how Ination was coming. They

did mention my YouTube Channel in the story,but failed to mention anything else that wasdiscussed during my interview.

The media, due to their economic ignorance,purposely ignores questions about the currenttate of our economy because they simply don’t

understand economics.

I’m certain that most in the media don’t know anything about the economy. Look at how hey treat economic stats that come out from

the government. Their fact checking remindsme of the lead-up to a recent war—make thegovernment evidence t, repeat White Housetalking points, and don’t let the facts get in yo way.

Right now the Federal Reserve (FED) andgovernment ofcials are screaming from therooftops about the deation threat—again makthe evidence t, have CNBC repeat it, and donlet the facts get in your way.

Of course manipulating government datais even easier than manipulating intelligencedata. Government economic data is NEVER questioned by the media: GDP, CPI, U-3,and other reports that come out on a weekly,monthly, or quarterly basis.

They aretreated as if Moses just broughtthem downfrom Mount

Sinai. Itdoesn’t takea degree ineconomicsfor someoneto realizethat thegovernment underreports price ination.Currently the FED is worried about deation when the very people living under their policie

are worried about food and gas prices being tohigh.

I have stated and written many times abouthow dysfunctional government data is. Theproblem of course is that millions make lifechanging decisions off of this data, like nanciadvisors and fund managers, all makingdecisions off of fatally awed data.

I’m sure he will be invited back on FoxBusiness to discuss the future of the markets. My only question to him is what’s his secret? How doyou always get it wrong and continue to be asked

on as a guest or even host a show for a majornancial network?



The government has even hijacked the basicmeanings of economic words. Printing money has been replaced with quantitative easing. Theword ination, according to most of the experts,means prices are going up, when prices going ups actually the result of ination. Ination is anncrease in the money supply—the result is anncrease in prices. It’s no wonder we have people

on CNBC running stories titled, “Will higheroil prices cause ination?” That statement isabsurd and completely backwards—it is inationhat causes higher oil prices, not the other way

around.

The headline “unemployment number” is alsoextremely deceiving considering that not only are millions of people who have given up lookingor work not included in the headline number,

but the Bureau of Labor Statistics (the BLS, oras I like to referto them, as theBS) also addsthousands,sometimes

hundreds of thousands of fantasy jobsthrough the“birth/deathmodel.”

The birth death model literally allows thegovernment to assume jobs are being createdno matter what the economic climate. In fact,prior to their annual revisal, the birth death

model created jobs throughout the entire 2009downturn. Knowing about all of the fraud iscrucial to anyone who wants to make a sound lifedecision.

A great example of just how reckless anddangerous awed data can be is when youconsider people who actually made careerdecisions off of what they thought to be a

fundamentally sound housing market. WithGreenspan and other economists tellingeveryone things were great, imagine how manpeople renanced their homes, or how many people became realtors? Basing their decisionoff of government propaganda has now put thin the unemployment and food stamp lines.

Of course the government will blame the freemarket in order to have new reasons to intervand take charge of more of our economy.

This is exactly what I’m expecting them to do when it comes to a currency crisis because thegovernment has now put us on an irreversiblecourse. It is imperative that you know the facts athink through the next decade because the next t years will be radically different from the last ten years. Don’t base your decisions off of fatally awgovernment data—base them off of the truth.

The Irreversible Course

The irreversible course is Keynesianeconomics—the idea that it is the government

role to prime the pump—to keep the economystimulated. It is also the idea that thegovernment can and should alter behaviors byoffering up incentives for good behavior andpunishment for bad behavior.

Consider all the tax credits, deductions,and special loans the government offers us—these have created a massive distortion of oureconomy. In fact, we have so much governmen

spending in our economy that I believe it is noirreversible.

The government has created the illusion of an economy, but in reality the foundation isdebt, at currency, and outright fraud. Thegovernment subsidizes thousands of businessfrom alternative energy to conventional energfrom farming to genetically modied seeds.



The government is now propping up the entireraudulent economy they have built and it is

coming to an end.

Since the housing market is usually a favoriteopic for people, let’s start there. Currently 90%

of mortgages are either being funded, backed,or guaranteed by the treasury department.The FED is also keeping interest rates low by etting the FED funds rate near 0%. In addition,he FED has also been purchasing private and

government bonds in order to create a falsedemand for government debt.

Both the treasury department and the FEDhave also bent over backwards with taxpayerdollars or guarantees to make sure that failedbanks don’t fail. I bring this up because mostof the experts think housing has bottomed, butactually they are only half right. It has bottomedn the sense that the government has proppedt up, but if the government was to allow the

market to function, housing has a long way to go.

I have written and stated that a housing crash

s the only way housing can actually recover. Of course my idea of a housing recovery is wherebuyers can actually afford to buy a home.

The government and most mainstreameconomists’ idea of affordability is paymentaffordability. By the way, the 30-year loan isanother brilliant government idea in order tohelp its citizens become indentured servants, if you ask me.

My point is that if the government was tonot be able to prop the Housing market up, itwould collapse. Not because of something themarket did wrong, but because of the decades of government involvement in it.

Well, it isn’t just housing, it is the entireeconomy down to the last tax deduction. Thiss what I mean by an irreversible course. The

government is at a point where it needs to cutspending or face a currency crisis. However, ifcuts spending—it risks collapsing the illusionaeconomy which will inevitably collapse thecurrency anyway.

It is my opinion that the government has creasuch a monster that the dollar is doomed. Theillusionary economy the government has builtneeds more spending, housing as we speak is beginning to enter another leg down despite thtrillions that have been thrown at it. This goesfor many other industries as well. The need forarticial government demand is constant, which i

why government never contracts, it only gets bigg

Democracy’s Fail

Democracies fail because eventually the voterealize they can vote themselves gifts. Thepoliticians realize that they can continuously get re-elected by becoming some type of distorted Robin Hood where they steal wealthfrom everyone, including the poor, and thenredistribute it. This is one reason our foundingfathers set up a Republic—a limited governme whose role was to defend liberty, not to allow mob rule where 51% of the population votes totake the rights away from the other 49%.

Today, Americans rely on the government(other taxpayers) to pay for their retirement,



healthcare, student loans, down payment ona house, mortgage loan, internet, alternativeenergy, and thousands of other things. Butust like a late night infomercial, “wait, there’s

more.” Taxpayers are also on the hook for theecurity of other countries, foreign aid, charities

you may not agree with, dictators, and a foreignpolicy that breeds terror. All of this governmentpending is a burden on future taxpayers and

current ones.

In the end, governmentpending actually hurts the

poor the most. The result

of government spending isnflation, an increase in the

currency supply. As pricesise, the poor and middle class

nd it harder and harder tomake ends meet.

The government of course iswilling to stepn and help,

providing

not only anentitlementociety,

but a permanent voting bloc that is willing tocontinuously give government more power.Many impoverished citizens may think that thegovernment is helping them, but in the end, they cannot escape the ination tax.

If borrowing robs the wealth of future generations,

t is ination that robs the wealth of current ones.People who are paid and save in dollars have seenheir savings decimated in the last 100 years. A one

dollar bill may be equal to a one dollar bill from 100years ago in nominal terms, but the value has lostover 97%. A one dollar bill from a 100 years ago isbarely worth 3 cents in today’s purchasing power.

Most don’t even notice this type of savingsdestruction because they feel safe holdingdollars. I mean, if you deposit cash in a bank it’s even FDIC (taxpayer) insured. However,people who hold cash and have xed incomeinvestments suffer from the loss of purchasingpower.

The loss of purchasing power is so bad thatthe government has even changed the way theBLS calculates the cost of living increases for osenior citizens. According to economist John Williams of ShadowStats.com, by changing th way we calculate price ination, the governme

is currently underpaying seniors on socialsecurity by 44%.

Even though I don’t believe in having agovernment retirement plan, I think it’snoteworthy that in order to pretend thatthese programs work and are sustainable, thegovernment is literally robbing some of the weakest members in our society. In fact, for thlast two years while gas, food, and rent haveseen an increase in price because of the way

the government applies price ination to sociasecurity checks, seniors haven’t seen an increain pay in the last three years.

With all of this talk about this entitlement being unfunded and bankrupt, imagine what i would look like if the government was actuallyhonest about how much we should be payingout. This all of course comes from ination bydevaluing the currency—the government has

not only lied to seniors, but harmed every hard working American who saves in governmentcurrency.

Government spending has also increased prifor some of the most important things we willever purchase, like our healthcare. Since thegovernment has gotten involved, healthcarecosts have risen more than any other product.

Congressman

Ron Paul



Interestingly though, if you look at healthcarecosts where the government isn’t involved, likeaser eye surgery, braces, breast augmentation,

or other medical practices not covered by a

$5 copayment, the costs have declined yearafter year, allowing more people to purchasehem. The current system eliminates the cost of

behavior, so consumers don’t look for the bestprice, nor do they really care, because in the end,he government will take care of the costs.

One of the biggest tragedies besides ourhousing market is college. The government, in

order to make college more affordable, offersgrants and loan guarantees—throwing billionsdollars at the college industry, making it the nnorm that the average student racks up $22,0in college student loans.

Throughout the downturn, colleges continueto increase tuition. Consider the logic in thegovernment loaning money to students—monthat they don’t even have—to make paymentson until leaving school. Colleges can charge whatever they want, there is always a willing buyer, and the buyer has a willing creditor.Students don’t feel the cost of their behavior

until it’s too late. The colleges are getting richof course because there is no concern aboutmeeting the supply of students with the rightprice—the right price is whatever they set.

These types of government aid programs onlinject more money into the system and createan articial demand that causes price ination Apply this type of government aid into any othindustry and watch what happens to prices.

When talking with government advocates whI disagree with, I love to ask them why aren’tthey advocating for single payer groceries. Thi would guarantee that no one would ever go to bed hungry. Yet, even they will acknowledge thif everyone could go into a grocery store and b whatever they wanted, it would cause shortageand prices to soar.

Well, it works this way with all governmentspending no matter how little. As soon as

the government creates a little demand by redirecting wealth into a certain industry, pricrise.

Now the catch 22 is the democracy part and new role of government in our daily lives. Themore of other peoples’ money the governmentgives away, the harder it becomes to take back



n fact, it is more likely that the government willust take away more of the minority in order to

keep the votes coming in from the majority.

This eventually becomes a vicious cycledownward as the more wealth you steal frompeople, the more you nd yourself with adependent society. This may be good for re-election and big government advocates, but noto good for the real economy.

Radio talk show host Michael Savage put itbest when he titled his last book, “Trickle UpPoverty.” The stronger the government is and itsole in our lives, the poorer we become, and theess liberty we have.

Like Rome, the U.S. has many similarities: weare actively debasing our currency, extendingmilitarily across the globe, and have turnedour legislative branch into nothing more thana dog and pony show. The fact is the Presidentcan spend, go to war, and do anything he wantshrough executive order—something that has

become the de facto rule of law.

Notice how we no longer amend theconstitution, a perfectly legal way we can changehe law of the land. Now the President just

declares it to be done and it is. This has put ournation in the situation it is in today—overspentand a powerless people. The system itself of ax, borrow, print, and spend has by default

corrupted all of us.

Ination Has Already Started When looking at the amount of inationince post World War II, it’s quite shocking.

However, when you look at a chart of inationpost Lehman brothers, it’s jaw dropping. In fact,

believe these charts shows that ination hasalready started and it’s only a matter of timebefore prices get out of control.

Most economists consider the recent expansin the currency supply not a problem becauseit is just sitting on a banks’ balance sheet.However, this is not true. The currency is beinloaned to the government by the banks, and believe me, the government is spending all of it, every last dime. So we have to go back tothe basics—massive ination will result in anincrease in prices. With the economy already itrouble, I believe this will eventually lead to aloss of faith in the currency itself.

This next part of my report will focus on why believe ination is inevitable. It is important t

understand these unavoidable and irreversibletrends that will happen over the next 10 years

Baby Boomers, the LargestDemographics Shift, Will Force th

Government to Print

Baby Boomers are about one third of thepopulation. Having had 76 million Americans born from 1946–1964, the baby boomer

generation dwarfs the generations before andafter it. The wave of births after WWII was sosignicant that 1957, for 50 years, was the recholder for most births in the U.S. The baby boomers and their spendinghabits have shaped ourentire consumer economy.

The rst baby boomerreached adulthood in 1964,

with the last baby boomerreaching 18 years of age in1982. This is huge when you think about it because who spends the momoney in an economy? It is the people who armarried, getting promotions, having kids, and buying houses.



Now, according to the U.S. CommerceDepartment, the average American gets marriedat age 25, has a child around 28, buys their rsthome at 32, peaks in home buying around 45,and peaks in spending between ages 46–50.

Economist Harry Dent lays it out simply in hisecent book, “The Great Depression Ahead”. The

math is quite simple: if the average American hasheir rst child at 28, all of the sudden they have

a lot more spending to do.

The cost of a child is $200,000 from birtho age 18, with the bulk of that cost happeningn the last 6 years. New parents have to buy

diapers, but with older kids you need to purchasemore food than ever, more expensive clothing,cars, auto insurance, and college. So, it is nourprise that if you take age 28 (rst child) and

add 18 years, the parent is now 46 years old, theexact age where people begin to peak in spendinghabits.

The rst baby boomer hit age 46 in 1992 andhe last baby boomer turned 46 in 2010. So it is

afe to say at this point in time that the largestgeneration living in the U.S. has ofcially peakedn spending. Now because the generation behindhem is signicantly smaller, what we can expectn the U.S. is less spending—at least until the

echo boomers, the baby boomers’ children, starto hit their peak spending levels around 2020.

If it was just a matter of a 71% consumereconomy losing its biggest consumer, that wouldbe a major deationary problem. However, it is

much bigger than that due to entitlements andhe collapse in tax receipts we will see. As baby

boomers make less and spend less, we can safely orecast that the U.S. government will take iness than it has in the previous decade.

Yet, the U.S. government will have a waveof over 70 million people enter entitlement

programs from 2011 to 2029. Like a classic poscheme or money pyramid mailer, this isn’tgoing to end well.

The U.S. government will be forced to borrowand print in order to not only compensate fora collapse in revenues, but an acceleration inmandatory spending. With the baby boomers just peaking in spending and now just enterintheir retirement years, 2011 is literally thetipping point for this demographic change in tlargest economy in the world.

The Credit Bubble Is Bursting

One of the biggest drivers of ination for thepast 40 years has been the credit bubble. If yolook at the Dow Jones and a chart of personal

credit expansion, they literally overlap. Creditof course is needed for business, however, it isnot needed for personal consumption. Yet thaexactly what it has been used for by millions o Americans from clothes to vacations. Americahave been swiping away.

Most economists see the credit bubble burstias deationary and I would too if we actually had a functioning market without governmenintervention.



economy is now dependent on an ever increasin consumer spending. Plus their funders on Wall Street need them to keep the pump goingThe government also knows that if our economcollapses, than the currency will soon follow, athe only value the dollar has is the perception a robust economy.

The second thing we will see is a plateau inthe economy like we are seeing now. Mainly because once Americans nally default on thedebt, like they are in the mortgage market, itactually frees up some cash that they can speninto the economy. CBS’ “60 Minutes” did a sto

about how $50 billion a year is being added inthe economy from homeowners defaulting andspending the income that would have went totheir mortgage on living expenses, includinggoing to restaurants and buying iPads.

Of course this type of stuff will eventually coto end, but it does distort economic indicatorsin the meantime. In fact, Keynes might even cit brilliant since these defaults are inevitably causing more spending.

In the end, it won’t matter because borrowinis borrowing from the future. Once Americanshave to live within their means, the economy “should” contract. The reason I say “should”contract is because it will rst take a global criin government borrowing to see the economy contract.

This will have horrible effects on our creditand value of our currency, which is why I see t

economy contracting and prices rising. This isnot because of an increase in wages, but becauof a loss of faith in the American dollar.

Government Debt

The rst trillion dollars in debt took 204 yeaand 39 presidents, while the second seven

Two things will happen as the credit bubblebursts. First, the government will do everythingt can in order to offset the lack of spendingrom credit card consumers. So even though the

personal credit bubble is bursting, the spendinghould be offset by Keynesian politicians in D.C.,

which it has been for the past three years.

U.S. household debt was estimated at $11.5

rillion at the end of March 2011, $33 billionmore than where it stood in 2010. However,he government is $1.3 trillion more in debthan it was last year. So even though the credit

expansion has slowed signicantly, governmentdebt has accelerated.

I see no reason why this trend won’t continueconsidering our elected ofcials know that the



rillion took ve years and a full term in ofceor president Reagan. However, we have now

entered a phase of exponential growth—the lastrillion added onto our debt only took seven

months!

In fact, since President Obama took ofce twoand a half years ago, we have added nearly $5rillion dollars in new debt. President Obama hasound himself in the awkward situation in whichf he didn’t push the spending pedal to the metal,he illusion of our economy would collapse on

his watch.

The only problem is that all of this new pending has now created jobs—jobs that are

dependent on more government spending. TheU.S. is now borrowing nearly 50 cents for every dollar it spends. In the year 2000, the entirebudget for the U.S. was $1.7 trillion—in 2011 its likely that we will borrow nearly $1.6 trillion.

That’s right, we are nearly borrowing enoughmoney to pay for the entire year of 2000’sbudget. The current budget is $3.8 trillion, withour income being around $2.2 trillion.

Now, in my opinion, even if we balanced ourbudget with only $2.2 trillion in spending, thiswould still be paying for a government that is tooarge. We are spending so much now that even if

you taxed every American 100%, we still could balance our budget. Currently, we are fundingour illusion (economy) with borrowed money.

Recently, we have become so desperate that have been borrowing from the FED. The FEDprints the money and we issue out bonds. Thisscheme is the truest form of ination. It is oftesaid that China is the largest debt holder of U. bonds, but that’s not true. They are the largestforeign holder, but overall they are a distantsecond. The largest holder of U.S. debt by far ithe FED with nearly $6 trillion in U.S. debt.

We are beyond a nation just looking to cutrecognized waste, fraud, and abuse. We are atthe point where we need to cut the nancialunderpinnings of our government built econoLife as we know it is about to change.

I want to discuss what I believe are the vecurrent scenarios that are most likely to bethe catalyst for a full blown currency crisis inthe U.S. There are a lot of different things thatcould happen, and of course details will not be

exact, but these are the ve that I’m paying cloattention to.

Scenarios that could spark Inflation

1. Debt ceiling extension is in the trillions with no major cuts

2. Quantitative Easing 3

3. More Government Stimulus

4. Ofcial devaluation5. Black Swan Event

Debt Ceiling

When the debt ceiling is extended, investors will be looking to see if there is a feasible planreduce decit spending and ultimately the deb



What I expect is for Congress to attempt to foolbondholders by offering up some proposed cuthat will take 10 years to happen. Most bond-

holders and investors will at this point know justhow hopeless this situation really is.

The fact is the only budget that Congress hasull control over is the one right in front of it.

Unless massive cuts are agreed to for scal year2012, it’s just never going to happen.

The amount they raise the debt ceiling is also avery important number to watch, especially sincea trillion dollars isn’t what it used to be. It used tobe able to buy them a few years, now it won’t evenbuy them nine months. So, I expect Congress toeither kick the can down the road with a smallncrease or make it so they don’t have to deal withhis until after the 2012 election.

This would mean they would have to increasehe debt ceiling to at least $17 trillion in ordero ensure that they won’t be facing voters withhe next debt ceiling increase in November 2011.

Either way, all of these numbers are getting

eally big, really fast.Remember, when President Bush took ofce

he debt was around $5.5 trillion, after morehan doubling it in eight years. President

Obama is about to take the debt he inheritedand double it in less than six years. Weiterally just went from a $5.5 trillion decit to

discussing a $17 to $21 trillion debt ceiling inhe last 11 years. I believe as we approach the

$20 trillion mark, bond investors will begin to

head for the exits, especially since it is going toake the Federal Reserve in order to get there.

There simply isn’t enough willing borrowers toatisfy U.S. debt demand.

Expecting China and others to accelerateheir purchases of our bonds to match all of

our spending is just ridiculous. In fact, China

as a whole for 2011 has been reducing theirtreasury holdings and diversifying out of U.Sdollar. They have even made steps along witother countries to start doing transactionsoutside of dollars.

My concern is of course that a panic in the bond market could spark an increase in bothinterest rates and FED buying, which will veryrapidly turn into a currency crisis. A collapse ithe dollar and the U.S. economy could literallyhappen as soon as later this year.

Quantitative Easing 3

First of all, let me begin by saying quantitatieasing is simply a euphemism for ‘printingmoney.’ When it comes to the FED ending QEI think they are already past the point of noreturn. In fact, as I write this, many are sayingit won’t happen. But actually if you look at whthe FED is doing, it already started.

The FED is now taking current maturing bonon their books and purchasing more treasurieThis isn’t as pure as previous QE, but it’s stilltaking money from the left pocket to place intothe right pocket. This is stealth QE, but it is sti



QE—billions of dollars entering the bond marketn order to keep interest rates low.

All of this new money (easy money) is

nevitably nding its way to the stock market,commodities, and other investments causingnot only articially low interest rates for bonds,but articially high volume for more speculativenvestments as well. In my opinion, it is no

coincidence that stocks began to rise exactly when the rst round of quantitative easingtarted, nor is it a coincidence that stocks begano fall in the summer of 2010 when it looked as if

quantitative easing was about to end.

From late August 2010 when the FED rstmentioned QE2 to the time QE2 ended, theDow saw a 28% increase. On June 1st, the day raders were told QE2 had come to an end, the

Dow was down 218 points. Once an ofcial QE3s announced, I believe we could see a massive

commodity ally that could

eventually becomehe catalyst for

nation.

With a 2011drought in China,oods in the U.S.,and a massiveamount of money printing, we couldee food priceseach dangerous levels. In fact, recently the

World Bank President statedhat food prices were already reaching dangerousevels—of course that was when oil was around

$80. Food prices already sparked the middle eastevolutions, and soon we could see similar unrest

by unhappy hungry Americans.

If the FED continues quantitative easingo fund the U.S. government, this will be an

absolute signal to the world that the U.S. hasabsolutely no intensions of ever repaying itscreditors with an honest payment. The U.S. will simply continue inating its currency, notonly paying back its creditors with less valuabcurrency, but causing severe price ination forthe entire world.

By being in charge of the world reservecurrency, the FED is literally the most powerfuorganization in the world. However, if they abthis power, it is very likely that other nationslike Russia and China will ght back with a ful blown currency war. China being the second

largest holder of U.S. debt is in a position tocrush the U.S. ponzi scheme, their willingnessdo such a thing may increase greatly if they sethat Bernanke will just keep printing to pay th back.

More Government Stimulus

The 2011 slowdown, despite all the propaganto the contrary, is happening. ISM numbers,

unemployment, GDP, housing, and other key economic indicators are showing us that the Ueconomy is deteriorating.

When looking at GDP “growth” the federalgovernment has borrowed and spent $5.1trillion since the downturn began in 2007. Forthis massive amount of government spending we generated $700 billion in the nation’s GDPSo, for every $7.28 we borrowed and spent, wereceived about $1 back in “growth.”

GDP in 2007 was $14.08 trillion and in 2010it was $14.51 trillion. However, if you get rid othe ination factor using 2005 dollars, the yeaof a great dollar rally, GDP in 2007 was $13.23trillion and in 2010 it was 13.04 trillion. Inconstant dollars, GDP actually shrank.



bond market crisis as the world watches D.C.destroy any investment they get their hands o

An ofcial devaluationof the U.S. dollar

This borders the realm of conspiracy, butI think we need to go there since it has beendone in past, most notably during the GreatDepression. Back then, the dollar was backed gold. However, President Roosevelt outlawedgold for Americans, a ban that lasted until 197 After Americans turned in their gold or had

it conscated from their safe deposit boxes,the United States government did an ofcialdevaluation of the dollar.

The Gold Reserve Act of 1934 forced Americto turn in their gold in exchange for $20.67 peounce of gold. Once the government had thegold, they revalued the dollar to $35 per ounceThis was an ofcial 41% devaluation of ourcurrency, something at the time that had also been enacted by nine other countries includin

Japan, Australia, and New Zealand.

Knowing that the FED believes the cure fordeation is ination, I believe this is a realpossibility.

So here we are in the last half of 2011 and weare starting to see the wheels of governmenttimulus come off. Going into an election year is

going to be tough because if Obama doesn’t passmore stimulus, he probably won’t be re-elected.And if the Republicans in Congress don’t block any new stimulus, they probably won’t get re-elected. However, without stimulus to fund thellusion of a recovery, the economy will certainly ee a huge contraction.

If we are spending $7 in order to see $1 ingrowth, imagine what will happen if we stop.This really is the damned if you do, damned

f you don’t scenario because if you allow theeconomy to actually correct—as the U.S. willpublicly by then be heading into a greaterdepression—you may cause a dollar crisis asnvestors ee U.S. assets.

As I’ve stated before, without the governmentpropping up this economy, a major correctionwill occur in order to x all the imbalances. If we see more stimulus, this will also be a sign tonvestors that America just isn’t what she used to

be. She’s fallen and she can’t get up.

This recession is already the longest onewe have seen since the last depression. Thedepression in housing is already down 33%nationally from the peak, which means it isactually the worst ever, worse than in the 30’s.We have thrown trillions at the problem andwe still have anemic economic numbers. Any attempt to throw more borrowed money at it

will be an admission that the U.S. economicdownturn is much bigger than anyone has everadmitted.

More stimulus could also spark even moreprice ination in commodities, which willnevitably hurt the economy and the middle

class. All of these factors will cause a massivedecline in the U.S. dollars’ value and a potential



Consider the current state of banking—28%of homeowners are underwater, and strategicdefaults and defaults from job losses have causedoreclosures to be at record levels. However, if he Treasury Department was to do an ofcial

devaluation of all debt, government and privatewould remain the same. This would eliminateunderwater mortgages and cause housing priceso soar, in fact, because other assets would riseike stocks, banks balance sheets would improve.

Banks not only own houses and stocks, butheir non-performing loans would shrink mmediately as homeowners now have the

llusion of a rising asset. The government wouldalso have essentially wiped out a lot of debthrough ination and would now be able to get a

perceived handle on its decits.

I doubt the U.S. could get away with just doingan ofcial devaluation without the cooperationwith other nations, specically China and Japan.f the U.S. does plan on doing this, obviously hey will wait for a crisis where you have all

currencies falling together, something that I

hink we may be already seeing.

When you look at gold, for example—it’s notust hitting an all time high in dollars: it’s hitting

an all time high in Swiss francs, Canadiandollars, euros, and all other currencies. Recentheadlines from Brazil to Russia have talkedabout a global currency war.

With the world in a slump, nations arecompeting for exports to revive their economies.

One that all are using is to devalue their owncurrency in order to make their productscheaper abroad. This is one of the reasons why

personally ignore the dollar index: it is simply paper trash priced against other paper trash.So using the dollar index as an honest measureof dollar value is absolutely ridiculous in my opinion. In order to know the true value of a at

currency, you have to price it against real asselike oil, gold, or food. That’s why I personally don’t save in ANY at currency. I prefer to eithhold my wealth in physical precious metals ornatural resource related companies.

If the government decides to do an ofcialdevaluation, those that hold their wealthin dollars are going to get hit the hardest.Real wealth will be revalued, however, thedollars themselves will see a signicant loss ofpurchasing power.

When covering this topic of ofcial devaluatipeople always ask me if they think we will seethe government conscate gold again. Firstoff, I think physical gold should be part of aportfolio, but not the majority of it. Is the riskof conscation there? Yes, but I believe owningold and other ination related investments is worth the risk.

We already know that the government is gointo conscate the value of our dollars whetherofcial or unofcial. The dollar has lost over 9

of its value since the creation of the FED in 19In my opinion, people should be more concernabout that than government conscation of goRemember, those of us who invest in inationrelated investments are nothing more than amargin of error.

Black Swan Event or Events

A theory put forth by American philosopher

Nassim Nicholas Taleb was the Black SwanEvent; the theory of the unexpected, undirecteand unpredicted—an event or series of eventsthat will have signicant consequences. A gooexample of a recent Black Swan Event is 9/11.

Now even though a Black Swan Event is notpredictable in the sense of timing, we are awar



is only a perception—the perception that theU.S. is scally strong and able to continue togrow its way out of debt. Once this mirage islifted, the dollar priced against anything will bastronomical.

Let’s look at the 10 events that I think couldhappen in the near future. I will only discussthem briey since they are all by denitionspeculative at this point in time.

Spike in Oil

A spike in oil, in my opinion with the Mideas

revolutions and peak oil production already happening, is the most likely scenario that couactually happen this year! Obviously, if oil spikto over $200 a barrel and Americans began topay $6—$10 a gallon at the pump, things coulget ugly overnight.

Since currencies are only backed by percepti

it’s hard to see creditors lining up to buy U.S.treasuries in this type of scenario. The likely shaven will be energy companies themselves,preferably ones in geographically safe regions

As far as what the catalyst could be for a supspike in oil: a war between Israel and Iran,the Saudi government being overthrown, a

of some known risks out there. Below are my op three Black Swan Events that have a high

probability of happening in the very near future:

All of these would be considered majorevents, ones that investors will have NO IDEA as to the exact timing or even the extent of thecircumstances. The reason a Black Swan Event,

ike the ones mentioned above, could spark aU.S. currency crisis is because things are already o fragile.

A Black Swan now could essentially be theknockout blow to an already weak economy and overburdensome decit. For example,after September 11th the FED was able to lowernterest rates, the government was able toncrease spending, and Americans were for the

most part feeling optimistic.

Today, according to the most recent CNN/Opinion Research Corporation poll, a recordnumber of Americans feel that the country isheading into an economic depression. An allime high of 48% of those surveyed said another

Great Depression is likely in the next 12 months,compared to just 38% in 2008 during the greatpanic and banking crisis.

I nd these numbers shocking since the

amount of ‘recovery propaganda’ that hasaken place in the last three years has not

only not helped the economy, but it has alsonot been able to persuade at least 48% of thepopulation. That is why I think that with allhe current stress on the underpinnings of our

economy, a Black Swan Event would collapseat dollar’s reign. Remember, the dollars’ value

CRUDE OIL WTI NEAREST FUTURES

06 07 08 09 10 11

1. A spike in oil

2. A major credit rating agency downgradesthe U.S.

3. A major creditor dumps U.S. treasuries



dictator attacking his own oil elds, or anythinghat could disrupt supply for a few months.

Remember, once humpty dumpty goes, he won’tbe easy to put back together.

Oil is the one thing that connects the entireglobal economy. Irreplaceable in my opinion,because oil is even required when manufacturingalternative energy.

The numbers don’t like that the U.S. haspeaked in oil production, producing 9.6 millionbarrels per day in 1970 and around 5.5 millionbarrels per day today. The numbers that concernme the most are discoveries because the U.S.peaked in oil discoveries in 1930, while the worldpeaked in 1964. When you do the math it getseally eerie— it took the U.S. approximately 40

years to peak in oil production from the time ithad peaked in discoveries. Applying the samemath to global discoveries would put world peak oil production around 2004, the very year aproduction plateau started.

We are still in the production plateau today. I

don’t know how close we are to where we startedo actually decrease in oil production, but onehing I do know is that we aren’t increasing in

production.

At some point in the very near future, the worldwill not be able to satisfy demand. China aloneconsumes 9 million barrels of oil per day, andexperts are forecasting the number to rise to 15million barrels in just four years. This means fromust Chinese demand alone, the world will need to

come up with 6 million more barrels per day.

This of course is just one country, so youcan’t cut your way out of this mess, nor can youeliminate the use of oil. Not only would it take 750nuclear power plants just to replace 10 millionbarrels of oil per day, but oil is used in everythingrom toothbrushes to ice cream. A decrease in oil

production will cause prices to rise.

OPEC nations may even reconsider the forof payment they want in exchange for this

precious finite resource. Already we have sethe Malaysian Prime Minister advise Saudi Arabia to demand gold for its oil. Also, do you honestly believe that China is going tocontinue to loan its largest energy competitothe funds to continue taking much neededenergy off the market? Any disruption inenergy is a disruption in the fiat currency system itself.

A Major Credit Rating AgencyDowngrades the U.S.

In the past year, all ve of China’s credit ratiagencies have downgraded the U.S. In early June, the rst western credit rating agency, Feout of Germany, downgraded the U.S., the

Dagong Global Credit Rating Agency out of China stated that the U.S. is already defaulting

on its debts by allowing the dollar to weakenagainst other currencies.

This year, starting with the S&P, U.S. basedagencies also changed their outlook of U.S. deand warned that if we don’t get our nancialhouse in order, we could see a full downgrade the next two years! For U.S. based agencies likthe S&P, this is the rst time the U.S. outlook been downgraded since the Pearl Harbor attac70 years ago.



If the U.S. based credit rating agencies want tohave any credibility for the future, they must soondowngrade the U.S. I’m happy to see them at leastre a warning shot to our Congress and President,but they should be prepared for our government tognore them.

U.S. agencies looked foolish and showedhemselves to have zero credibility throughouthe entire House debacle. Lehman Brothers didn’t

even get downgraded to junk until after lingbankruptcy.

On March 22, 2008, Imade a prediction thatLehman Brothers wasdoomed. How was I ableo gure this out withimited research from

Google and SEC lings,yet Moody’s and S&Pwho are paid to gurehis stuff out missed it by

a long shot?

In 2007 when I was shorting mortgagecompanies, these agencies were still tellingnvestors that subprime was as good as gold. In

my opinion, agencies like Dagong Global Creditare doing themselves a huge favor by cutting theU.S credit rating now—in a few years it will becompanies like Dagong that investors trust andook to for risk assessment.

S&P and Moody’s still have a chance to provehemselves, but if they miss the biggest call

of the century, I have a feeling they won’t bearound for very much longer. That is why I think hey may force themselves to nally join the

other credit rating agencies outside the U.S. anddowngrade the U.S.

I happen to agree totally with the DagongAgency. The U.S. is already defaulting on its

debts. If the U.S. is borrowing money from theFED, and some of the money that is borrowedfrom the FED is used to pay the interest to othcreditors, than that is in my opinion defaultthrough ination—literally printing money anpaying back the creditors.

Once a major agency downgrades the U.S.there will be a mad rush to the exits. In fact,some pension funds will be forced to sell U.S.treasuries since many of them have rules

about only holdinginvestment grade bonds. Interest rates

would rise not only for the government, but rates increasing would be passed on tmortgages, auto loanand credit card debt.

Currently becauseof the dollar’s worldreserve status, no onepaying attention to ou

default risk. Instead they are focused on nationlike Greece who actually have a better balancesheet than the U.S. when you compare apples tapples.

When economists and pundits talk about U.Sdebt they mention the $14.5 trillion of publicdebt. Yet, in order to be honest about our actudebt, you have to look at government guarantelike Medicare, Medicaid, Social Security, and

bailouts. According to Bill Gross, the largest bond fun

manager in the world, that number puts U.S.debt much closer to $100 trillion. That’s almoseven times the size of GDP and obviously sohigh that it is unrealistic to think that the U.S.can ever become debt free again without makiits currency completely worthless.



A Major Creditor DumpsU.S. Treasuries

Most think of China when this statement ismade, but it wouldn’t take the largest foreigncreditor to spark a panic. Throughout 2011, Chinahas been reducing their holdings (for ve straightconsecutive months as I write this). China’s

oreign ministry spokesman Hong Lei even toldeporters in June that, “I’d like to point out that

we hope the United States can adopt effectivemeasures to improve its scal situation.”

Clearly China is concerned about their $1.45rillion in U.S. Treasury Securities. As they hould be because it isn’t just them that can

decide to dump treasuries. The U.S. has many creditors including city states like Singaporeand very volatile OPEC nations. If one of thesecreditors decided to stop buying and start selling,

his could cause a panic in the bond market.China, who has the most to lose, may actually

have to come to the rescue—unlikely in my opinion. As the Chinese are fully aware of theend game for the U.S., China has been buyinggold, silver, oil, and loaning money to nationshat are rich in natural resources. In fact, China

loaned more money to emerging markets thanthe IMF did in 2010.

China, the largest gold producer, is now

the largest gold importer as well. China isdiversifying its foreign reserves and makingall the right moves to prepare for a completecollapse in the U.S. dollar. Their sell and reduslowly approach seems to be their game plan, the doom-and-gloomers dream of waking up theadlines saying, “China dumps dollar”.

The wild card in this is that it might not be aforeign nation that sells rst. It might be U.S.pension funds fearing complete devastation asthe debt crisis heats up.

2011 so far has seen Pimco’s Bill Gross,manager of the largest bond fund in the worldsell U.S. government debt. In fact, Pimco alsodisclosed that they even have short positions otreasuries. Bill Gross has done several interviestating his concern about the U.S. dependencyon the FED monetizing its debt.

Since selling treasuries, Pimco has focusedon more higher yielding bonds in Canada and Australia. These two currencies are heavily tiedthe commodity market, so not only can investoreceive a higher yield, but when valued against U.S. dollar, they should also see a nice return.

I want to point this out since I have to wondeif Bill Gross is a little more concerned about thdollar than he is disclosing to the public. Thething with the bonds or any other market is

once panic selling starts, the fear spreads like California wildre.

How To Prepare

Now that you know the danger and theinevitability of a U.S. currency crisis, what do you do?



Asking yourself this question now will keep yourom asking it the day the dollar dies. Believe

me, you do not want to start preparing whenhere is absolute pandemonium in the streets.

Trying to buy gold or ination related stocks may be impossible since the markets will likely shutdown temporarily.

Positioning your family, wealth, andnvestments at the right place before the crisiss the most important decision you may make in

your entire life.

What will your life look like in 10 years?Will you ignorehe economic

warnings of oday? Will you

be a refugee orhe person whos in a position to

give aid to others?Today, rightnow, you havehe opportunity.

f the economicproblemsconcern you,hen I encourage

you to seize theopportunity and take action now!

Life Changing Decisions

Altering the course of your own life is much

easier than trying to alter the course of history or an entire nation. Yet, that doesn’t mean we

can’t try and do both.

The rst thing I want you to do is to educateyourself and then educate others. The more of you there are, the more likely we will be able toebuild America after the currency crisis. You

DO NOT want to be a refugee—think about

hurricane Katrina. There were those who tookthe warnings seriously and then there were th who were on rooftops with signs asking for he

Many people in this country assume that thegovernment will be there to help us during anyemergency, yet in 2005 the government showus that they couldn’t even handle one city.

The typical three days of emergency suppliesshould be upped to a minimum of three monthI always tell people to just expand your pantryDon’t buy 100 cans of green beans if you don’teat them—buy what you eat and eat what you buy. Having food collect dust in a closet makeno sense: buy what you eat and simply rotate irst in, rst out.

I don’t see things being bad for that long.Please don’t confuse my strategy of preparednfor someone who thinks society will shut downforever, like some type of Mad Max world. Ithink we will have civil unrest in the U.S., butmore than likely things will calm down in therst six weeks and a new normal will take over

within the rst three to six months.The reason I think we should prepare as muc

as possible is because so many others will not. you only purchase enough food for your familylive comfortably for one week, imagine how this going to work out when your friends, familyand neighbors need help on day two.

I’m personally preparing for 10 people to be able to survive and thrive for six months,

however, I only have a family of three. Why bufood? Because with civil unrest, disruptions intransportation, and high oil prices, we could sruns at the grocery store literally over night.

Plus, if this inationary depression continueto drag out, it’s good to have several months ofood that you can eat in case you lose your jobor you have to close your business. I remembe


http://slidepdf.com/reader/full/inflation-nation-2012 21/26 2FutureMoneyTrends.com

investment world, and specically real estate, learned about leverage at a very young age.

For example, $100,000 can buy you a nice

house in Texas or it could serve as a downpayment on a $1,000,000 dollar house. If thecheaper house goes up 10% in value, you justmade $10,000, if the more expensive home goup 10%, you just made $100,000.

Now most of you will say it’s a no brainer, buI assure you the peace of mind knowing you owno one anything for your house—no payment,zero obligation—is priceless. When it comes to your home, treat as such, like a home.

I am not talking about rental properties andother business activities that can service debt with income. I’m talking about the place you livObviously for cars, education, and other itemsthat nowadays are purchased with loans, in myopinion if you can’t afford to own it, don’t buy iIf you already have the debt, then focus on payiit off after you have prepared for ination.

Once the mindset of ownership andindependence becomes a lifestyle, I assure youthat you will never look back. Dening thismindset in our own lives and then electingleaders who feel the same way is what must bedone in order to rebuild America.

when I purchased my rst 50 pound bag of asmine rice at Costco in 2005, I purchased it foroughly $18—that same bag of rice today costs

$33.

I have the mindset of exchanging a soon-to-beworthless currency for as much stuff as possible.My belief level is 100%, which is something thathas changed my life. No longer am I thinkingabout putting in a new kitchen. Instead I prefero buy ination related stocks or householdtaples that my family will need in the future.

My preparedness doesn’t stop with food. I buy water, dog food, toothbrushes, and whatever I canhat will be consumed in the future. Only I am

able to use my current dollars’ purchasing poweror products that will cost more in the future.

Remember, not only will oil prices go up, but thehousands of items that are petroleum based, like

your toothbrush, will cost much more as well.

Become Independent

Being debt-free is probably the biggestdisagreement I have with others who seenation on the horizon. Many people believehat you should get in debt to your eyeballs, buy nation related investments, and then inate

your way out of all your debt.

In theory this will work, but it also depends onhe government to somehow try and screw us. Its very possible that debt could be revalued along

with the currency, you just never know. That

s why I prefer and advocate for independencehrough ownership. Own your car, home,

appliances, gadgets, and whatever things youneed or want.

Making the decision to be debt-free was not aneasy decision for me, having a background in the



Ignore Nominal Gains andFocus on Real Value

When looking to position your wealth to notonly be protected, but to prot from the future,you have to rst understand what real value is.

Since the world went to at currencies only n 1971, most assume an increase in the Dow is

equivalent, or even more, than an increase in theDow 50 or 100 years ago. The Dow is, of course,till priced in U.S. dollars.

The biggest difference is that the dollar is no

onger backed by anything—it’s simply a pieceof paper that the governmentays has value. In reality, it

has no inherent value. In fact,he paper currency itself has

about a two year life spanbefore it gets physically wornout.

One of the biggestdeceptions in human

history is the idea that yourime, energy, and work are

exchanged for worthlesspieces of paper. Think aboutt for a second. People are

willing to work, exchangehings of value, and do almost

anything in order to receivepieces of paper that takealmost no energy to create.

In fact, the FED and banks can literally justype in some numbers in order to create more

at currency. Yes the Dow has been going up forhe past four decades, but so has the currency upply. If you priced the Dow in gold, in the last0 years the Dow has fallen 81%. However, in

dollars it is actually up 8.9%.

Pricing the Dow against silver, oil, wheat, bananas, heck even dog food, the Dow is actuadown when priced against real things. In facteven the dollar, which the Dow is priced in, isdown 25% priced against other at currencies

Knowing real value is the key to becominga good investor, otherwise as you can see youmight be increasing your nominal dollars withoactually increasing your wealth. I think in termof purchasing power—what can I exchange my own personal labor for? I’m not interested inexchanging it for anything that doesn’t have anhonest chance of increasing in value.

Let me go back in time fora second: let’s say 30 yearsago. Thirty years ago a grocclerk could support a familyof four, just like many jobscould support families. Singincome households were vecommon, however, today it very rare.

Most economist will agreethat our standard of livinghas increased, therefore thecurrent at system seems to working. We’re growing, rig

Well, not exactly.Technology may haveimproved, but as far asour actual quality of life?

I completely disagree with most economists.

How can anyone make this argument when itnow takes two income earners and a few credcards just to make ends meet for your averag American?

Since leaving the gold standard in 1971, priceination has been constant. This has made ou



value and will always decrease in purchasingpower. The dollar has lost over 95% of itspurchasing power since the creation of the FEin 1913. All at currencies also share the samefate—extinction—if given enough time.

Investing

When investing it is important to think of thingthat will increase in real value—what is going toincrease your purchasing power, not just give younominal gains. I want to cover 3 specic industrithat I believe can potentially protect and increase your wealth for the next decade and beyond:

energy, precious metals, and agriculture.

Energy

As previously discussed in this report, energand peak oil production is going to be a majorissue for the next several decades. I believe thidecade will more than likely see a major energcrisis due to an oil shortage, however, it couldeven earlier than I think if even one major eve

happens in the Middle East that effects supply

Owning oilcompaniesdirectly, in my opinion, is the best way toprot from anenergy crisis,especially ones

in regionally safe areas. A lot of money is about to gointo rampingup our energy output. Owningoil companies

401k’s go up, but it has also made everything elsego up with it.

Back in 1971, oil was $3.60 a barrel, gold was

$35 an ounce, and a Corvette was $5,259. Today,oil is $100 a barrel, up 2,677%; gold is over$1,800 per ounce, up 5,142%; and a Corvettenow sells for $55,000, up 945%.

Now these are all massive gains, but remember:prior to 1971, the dollar was backed by gold.So let’s see if these items have the same resultpriced in our old money. In fact, let’s see if all of our new technologies may have actually helpedus when it comes to real value.

In 1971, you would have needed 150 one-ouncegold coins in order to purchase a Corvette. Today,t would cost around 36 ounces. So in terms of eal value, technology has actually brought costs

down when priced against real money. The 1971Corvette is now 76% cheaper priced in gold. Usingoil you get almost the same result: the Corvette is62% cheaper priced in crude.

My point in all of this is that if you use thedollar as your metric for dening value, youare making a grave mistake when it comes toyour wealth. The dollar is not a constant unitof account, and this is what causes so muchvolatility in markets.

You can’t expect stability when you priceomething so easily created against things that

actually took time and labor to produce—be thata Corvette or barrel of oil. When comparing gold

and oil, you will nd a much more stable price.n 1971 they had a 10:1 ratio, and today they have

a 15:1 ratio. However, I predict that before theend of 2012, gold and oil will once again be muchcloser to 10:1.

People who save in dollars, are fools, over theong term. The dollar because it has no inherit



now will not only put you in a position of owningbefore a crisis, but owning before everyone isushing into the sector for safety.

Remember, as oil goes up, so do all the protsrom potential reserves. Of course, there is a

premium to purchasing major energy companieswho are already household names. Largercompanies will also have to pay for costly acquisitions in order to keep growing.

However if you do your research, there aremany companies positioned to produce in theuture, yet are completely undiscovered today.

Oil and natural gas companies, preferably ones that are involved in both, should be thecompanies with the most attention.

These companies are also in my opinion likely o be taken over eventually by much larger

companies who are looking for operationalproperties rather than to spend money onexploration. The world runs on energy, and theact is, cheap energy is getting harder to nd.

If China (which currently has one-tenth of he number of cars per capita as Americans)eaches par with the U.S., the world would needo discover seven more oil elds the size of Saudi

Arabia’s. Clearly, having a few solid energy companies is a must for anyone who wants toplan for the future.

Precious Metals

Obviously the rst thing that comes to mind

when discussing ination is gold and silver. My avorite quote regarding money comes from

Norm Franz, Author of Money and Wealth in theNew Millennium. Norm Franz eloquently putst this way, “gold is the money of kings; silvers the money of gentleman; barter is the money

of peasants; but debt is the money of slaves.”There is a reason why gold is being purchased

by central banks and governments around the world. Chinese investors more than doubledtheir purchases of gold in the rst quarter of 2011, the Chinese government increased goldimports in 2010 to 304 metric tons of gold, a240% increase from 2009. According to theGFMS, China in 2011 could import more than400 tons of gold. China by way is the world’snumber-one-gold producer. The World GoldCouncil recently estimated that when you totaall production in 2011, including recycled gold we will have a supply decit. Throughout this

entire bull market in gold, not one major minehas been discovered. In fact, the mines thatare being discovered have fewer deposits andsmaller, lower grade deposits. Gold is money and anyone who wants to protect themselvesfrom Ination must have gold in their portfoli

physical for protection and mining stocks forprot.

When it comes to silver, I don’t know if anyois more bullish on silver than I am. Most goldand silver bugs expect the silver to gold ratioto reach 15:1, its historical average. I actually believe that it will be much closer to 1:1 due tothe lack of above-ground silver supply. Before



you call me crazy, let’s start off with a fact that noone can deny. Today, there is less above-groundilver than there is gold. According to the CME

Group, above-ground available silver is around billion ounces, above ground available gold is

5 billion ounces. That’s right, there is 5 timesmore gold than there is silver. Now when lookingat mine production, it’s about a 10:1 ratio, forevery 10 ounces of silver, one ounce of gold isproduced. So certainly gold is still more rare, butilver, unlike gold, is consumed. New uses forilver are being found every day, from band aidso weapons, silver is being consumed. So mucho that in 1950 above ground available silver was

0 billion ounces, while gold at that time was justover 1 billion. As you can see, gold for the mostpart is being stored in vaults, while silver is beingused up. In my opinion with a rising Asia, silvers going to be consumed at an even faster pace.

Most advisors will recommend 5%–10% inprecious metals—kind of like re insurance. Inmy opinion, that’s probably about right duringnormal periods, but not for debt crisis, money

printing, and peak oil periods.In any event, I think a diversied position of

gold and silver, along with mining stocks is agood idea. Again, like with oil, the junior minershould do much better than the majors.

Newmont Mining, the second largest goldproducer, recently disappointed investors in therst half of 2011 because they had to lower theirproduction forecast. In 2010 Newmont Mining

gold production was 5.4 million ounces. Theirorecast for 2011 is 5.1 million ounces, or a 5%contraction.

I think the gold majors are going to be inhe same position as the large oil companies.

Searching for juniors who are at or nearproduction, rather than spend money onexploration themselves.

Juniors today who are exploring will have hu bargaining power since they know that if a ma wants to add production, they either have tosearch, drill, and spend years before producinone ounce of metal. Or they can acquire a juniminer who has already done all the work. Do your research, the key is nding companies thare in regionally safe areas—preferably ones thare known for precious metals.

Agriculture

Food is number one. We all have to eat.Unfortunately due to ination and natural

disasters, the world is heading towards a foodcrisis.

Recently, the President of the IMF said thatfood prices were reaching dangerous levels.Because of rising prices in food, many farmersare choosing to plant cheaper crops. Forexample, corn farmers need to purchase a highgrade fertilizer, so many are choosing to plantsoy beans instead.

Government incentives have also caused 40%of corn production to be turned into ethanol.Corn is not only in 4,000 grocery store produc but it is the feed for livestock. Heck even dogfood.

Corn is crucial to the overall cost of food pricand will eventually add to all the current food


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price ination we are already seeing. The FDA ecently reported that corn stocks were at a 15-

year low, and that was before the massive oodsand tornadoes in the Mideast. Population growthwill also drive food prices up.

Not only do we have a rising population, but wehave a rising middle class. As Asians and SouthAmericans enter the global middle class, they want to eat better, and more.

Today the world has 7 billion people. Just 12years ago we were at 6 billion. Imagine how many more people we are going to need to feedn the future. Africa alone, according to the UN,s projected to triple this century from 1 billion to

3.6 billion people.

When it comes to investing in agriculture, my trategy starts at home. Use available land you

have to produce food. Forget about the rosegarden. Plant a vegetable garden instead. I don’tive on a large property, but I have 21 trees, and

all of them produce something that I can eat.

When it comes to proting, I personally likeertilizer companies because of the broad nature

of its use. All farmers need fertilizer, whetherhey have a good year, bad year, cheap crop, or

expensive crop—it starts with fertilizer.

Of course, I also like other agriculture stocks,but if I had to just pick one, I would nd acompany that services all crops. I think owningagriculture companies will be huge drivers in any portfolio and something that will also help hedge

your portfolio against ination.

To Whom Much is Given, Much isRequired

The information contained in this reports not only from countless hours of research,

but countless hours of sleepless nights

brainstorming how I am going to protect my family from massive fundamental changes in oeconomy.

This report is not a doom and gloom report. about educating people as to what we face for next 10 years and beyond. What we can do aboto prepare and how we can protect our familieI don’t want to just live my life in fear, I want tfully enjoy every moment I’m alive. I hope thisreport has encouraged you to take action, learmore about the issues I brought up, becomedebt free, live an independent life, and protect your wealth. The best thing you can do is to he

others, the more people who know the truth, t better the world we will have for all of us.

Documents

Inflation Nation 2012