In Jim Cook's Archive


If you do not own silver (or gold) you must without delay come to understand the argument as to why you should.  The world’s monetary system is approaching a boil. In late January the Federal Reserve promised to keep interest rates near zero for 3 years. This highly inflationary measure will surely be followed by QE 3 and 4.  The Fed claims that inflation is low but if we used the inflation measures we used in the past, it would be at a double digit rate.

In Greece, a default appears inevitable (no matter what they call it).  Given the trillions of European debt, we should be quaking in our boots at the possibilities for disaster. This can still threaten major banks, and at the very least will result in unbridled money creation.

Furthermore, China is negotiating with the Mideast to trade oil in local currencies rather than the dollar.  It’s already happened with trade between China and Japan. Sayonara, Uncle Sam. This trend spells the doom of the dollar.

If that isn’t enough consider that the big buyers of US debt, Japan and China have for the first time been net sellers of Treasury debt in recent months. That has to be the US Treasury’s greatest nightmare.
There is no escape from the consequences of runaway government spending and astronomical debt. If the government followed the same accounting principles we must follow, they would confess to a $5 trillion annual deficit. Borrowing and printing have limits.  Savings will go kaput in a runaway inflation. Stocks and bonds won’t protect you.  If you don’t own silver and gold, you have no certain protection against what lies ahead. You risk losing everything.  We have accurately predicted economic events for over a decade. (See my 1999 novel “Full Faith and Credit”.)

Our forecasting ability comes solely from understanding Austrian economics. In 1949 the great Austrian School economist Ludwig Von Mises wrote about the response to his famous and now widely accepted business cycle theory first laid out in 1912. You will never get a more powerful warning of what is to come.

“Endeavors to keep the rate of interest below the height it would attain on a market not sabotaged by credit expansion are doomed to failure in the long run. In the short run they result in an artificial boom which inevitably ends in a crash and slump. The recurrence of periods of economic depression is not a phenomenon inherent in the very course of affairs under laissez-faire capitalism. It is, on the contrary, the outcome of the repeated attempts to “improve” the operation of capitalism by “cheap money” and credit expansion. If one wants to avert depressions, one must abstain from any tampering with the rate of interest. Thus was elaborated the theory which supporters and critics of my ideas very soon began to call the “Austrian theory of the trade cycle.”

“As expected, my theses were furiously vilified by the apologists of the official doctrine. Especially abusive was the response on the part of the German professors, the self-styled “intellectual bodyguard of the House of Hohenzollern.” In exemplifying one point, a hypothetical assumption was made that the purchasing power of the German mark might drop to one-millionth of its previous equivalent. “What a muddle-headed man who dares to introduce-if only hypothetically-such a fantastic assumption!” shouted one of the reviewers. But a few years later the purchasing power of the mark was down not to one-millionth, but to one-billionth of its prewar amount!

“It is a sad fact that people are reluctant to learn from either theory or experience. Neither the disasters manifestly brought about by deficit spending and low interest-rate policies, nor the confirmation of the theories in my Theory of Money and Credit by such eminent thinkers as Friedrich von Hayek, Henry Hazlitt, and the late Benjamin M. Anderson have up to now been able to put an end to popularity of the fiat money frenzy. The monetary and credit policies of all nations are headed for a new catastrophe, probably more disastrous than any of the older slumps.”

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