From there to here.

Tue, May 20, 2014 - 10:44am

On Sunday I took my family out for lunch at a restaurant on the Navajo Reservation near our home in Arizona. Afterwards, we drove to an “informal” location where you can see dinosaur footprints in the sandstone. The Navajo residents nearby have set up awnings and sell jewelry. As a kid, this was always one of my favorite stops. No paved parking, no visitor center, no drinking fountain, just a windswept plain in the high desert. This time, the local entrepreneurs had ratcheted up their operation. Someone stepped out as we drove up and offered to take us on a tour. I had always suspected there were more than footprints here, that one could find dinosaur bones if you knew what to look for. As she led us further away from the parking area, the site came alive with weather-beaten bones and eggs turned to grey sandstone—a different color than the usual tan shade of other fossils I have viewed. I had been stumbling across these bones my whole life focused on the footprints. I just needed a tour guide to point out the rest of what was right in front of my nose. How could I have been so blind for so many years?

The last time I looked at those footprints was in about 2007. If you had asked me back then some simple questions about the Federal Reserve System, I was equally blind and would have bumbled through some uninformed explanation trying to make you think I understood economics. I would have said that the Fed was that benign branch of the government that prints our paper money and sets the prime interest rate for banks to borrow so they can lend to us. I would have insisted that inflation occurs because the economy is complicated and you have unions and suppliers continually pressuring industry for higher wages and higher prices for raw materials.

To be honest, I really didn’t have a clue. But I would have balked if you suggested that the Fed wants inflation, that the Fed was NOT part of the US Government. So how did I get from There to where I am Today? Which tour guide opened my eyes? Can we learn anything useful about that journey that will help us enlighten our friends and relatives?For the next few weeks, I hope to submit a series of articles on practical persuasion, and hopefully hear in the coming months that your friends and relatives are moving from there to here, taking steps to prepare for our new economy.

Today, I hold that the Fed was created by sociopathic, greedy, power-hungry people who want to control this nation and steal its wealth. Just last night I was thinking about the Fed, about how they promised to cut back on the Quantitative Easing and get our economy back to normal, and how what they really did was just give money to a mystery buyer in Belgium to keep up the QE Bond purchases. The Fed has lied to America and the world. The Fed's policies have destroyed our economy. The Fed creates inflation to steal the wealth of our nation, bit by bit. Worst of all, the Fed is not part of the American Government.
But I could not have concluded this in 2007. Why? Because of human nature: cognitive dissonance, normalcy bias, a conservative impulse to resist change, or any number of social-psychological theories that do a darned good job of explaining why I do what I do. But the problem is not in understanding why, but in learning what we can do to help others to get from there to here.

Persuasion begins and ends with your credibility. Aristotle (my fine avatar on the right with his teacher,. Plato) taught that your “character,” is the “controlling factor” in your ability to influence others. Your character is made up of several factors that all work together (or against) one another in the persuasive process.

First is your reputation—all your failures, successes, sins, blunders, brilliance—in fact, everything from your past. People, especially friends and family know you. They must see you as a reasonable person who does not act on impulse or fall for hair-brained schemes.

Your arguments comprise the second portion of your character. People who listen to your (or read your stuff) are evaluating your arguments, and evidence. Are you using “accepted” argument formulas, or using fallacious arguments? Is your evidence outlandish, believable? Take care not to present arguments with shaky evidence that cannot be verified, or is not common knowledge.

The third aspect of character is the way you speak and write. What people are looking for is called “naturalness.” This one is hard to nail down in the same way as the quality of arguments and evidence. At the core, naturalness is forfeited by a “scripted” presentation, like a salesperson following a memorized flowchart, or a motivational speaker telling tried and true stories. Naturalness comes from the heart, not the head. Your passion is involved to the degree that you believe what you are saying or writing. It’s why we love to read “rants” of members here who are fed up with something. It’s why we love to hear a speechmaker lose their composure, just a bit, giving a wedding speech. We see the veneer of social respectability giving way to the heart underneath. And when you hear some slick salesman, Like our good friend Porter Stansbury, you can just tell that something isn’t natural. The words are too scripted, the voice too polished. Beware.

But I don’t believe that “naturalness” is the problem for most of us as we attempt to teach our friends & relatives. Frankly, I believe our biggest challenge in helping others see the poor condition of the economy due to Fed policy, to wake up, and to take steps toward self-sufficiency is that we have been wrong thus far. We have been wrong about the timing of the collapse, and wrong about “metals to the moon.” Our reputation has been damaged.

We have been hollering to anyone who will listen about black swans, bail-ins, liquidity crises that will freeze the banks, bank runs, market collapse, paper wealth to zero, hyperinflation and new currencies. I have withdrawn my funds twice after hearing about bank closings in America. So far, we have been wrong, and we look like idiots.

What makes our reputation look even worse are the charlatans out there calling for $600 silver—the pump & dump hawkers. This leads to bloggers saying we are part of a cult. They have just enough evidence with one or two arguments to make a “superficial case” while preaching to the choir of disillusioned metals investors.

I hang around this blog, I have committed time writing up these posts, because I am convinced, convinced by several strong arguments and a mountain of evidence, that this paper system will collapse … soon. I do not want to be ruined financially, so I continue to invest 95% of my meager increase in a diverse portfolio of commodities, rather than ETFs and other paper instruments. I keep a modest pantry filled, just in case; I stock up on other items that may be needed, just in case; and I am working on building a more remote farm/cabin to live in, just in case. I am also attempting to re-habilitate my reputation with friends and relatives with conservative advice that points the right direction to the degree that they can accept it.

Retreat and regroup
So, how do we repair our reputation? First, we admit we have been wrong and over-reacted. Now, buying $30 silver in early 2011 and encouraging our friends to do the same was not an overreaction. We were wrong on the timing. Mistakes were made in not hedging positions with out-of-the-money option contracts as the spike occurred. I bet many good traders here did not make that mistake and profited nicely in the big silver smackdown.

So admit we were wrong (even though we dodged a bullet, economically), eat your hat, let your friends and relatives gloat a bit. You have to repair your reputation here. It may also involve saying “I’m sorry” if you panicked a friend into selling their paper and buying silver. (For the record, the several friends I persuaded to buy back then are still holding for the same reasons I am). My sense in talking with these friends and relatives today is that they are more concerned for the future than they were in 2008, even though the economy has not derailed. They sense the problems and see the gulf between what is happening in their local economies and with what Washington says is the state of the union.

While your character must be solid in the three ways I describe above, the rationale motivating a decision must be logical and warranted by solid evidence. Also, a good persuasive presentation takes what is far away and brings it near—whether it is presented as a fearful situation or an opportunity that engages ones dreams and desires for the future. But as we bring that far-off situation near to our friends, we must stay on reasonable, solid ground that won’t crack beneath our feet and leave us in the position of Wile E. Coyote here. Metals to the moon, FEMA camps, widespread rioting & looting are all possibilities, but they are not possibilities that most people are ready to consider. If you discuss these much, people will tune you out.

Stay on solid ground. Argue for physical metal ownership on grounds that your friends can accept—grounds like an underpriced asset, metals cheaper than the cost of mining, an insurance policy for the future, insufficient metal to fill contractual claims. Avoid arguments of "silver to 600," "total economic collapse," "mad max world." While this all may come to pass, people just cannot go there … yet.

To help people see the real state of the economy, I suggest discussing that the Fed and other CBs want inflation, pointing out the real inflation rate they see every week in the store. Show people that the CBs are privately owned, yet run our governments and implement policies that produce bubbles and inflation. These are easy positions to support without looking like a whacko.

We have the logical arguments and evidence in support of the wisdom of long-term metal ownership to tip the persuasion scale! If we want to encourage anyone to begin setting themselves up for the new economy, we have to found our efforts on reasonable arguments, solid evidence, delivered at a “speed” that someone can process. Too much too soon typically backfires and will damage your reputation.

For me it was recognizing that the Fed was not who they claimed to be; the chain of logic began with understanding the Fed. The rest fell into place. If you can convince someone that the Fed is working in the interests of others, then a cascading chain of logic will lead a person to be skeptical about many more things at a pace they can accept, eventually opening their eyes, and reaching the same conclusions most of us have. But today, I cannot tell people that he Fed works on behalf of nefarious, greedy sociopaths to enslave people with debt.

What I wish help with from all of you is boiling down why the Fed wants inflation, and why they will lose control of inflation. I want to boil these reasons and evidence into easily understood talking points that I can memorize and explain to neophytes in the five minutes they are willing to discuss the topic.

Many of you readers have a firm grasp on these issues surrounding the Fed and can be Plato to those of us who get it, but cannot quite articulate it. I needed a guide to point out the bones last weekend. And I need to learn a bit more about how the Fed works so I can be that guide to help my friends open their eyes to what is happening out there.

About the Author


Swift Boat Vet
May 20, 2014 - 10:50am

A first?

On the Great Philosopher's post too! WOW

You are a great writer, and I appreciate your thought provoking posts.


Oh Bollocks you old dog! Ya beat me!

May 20, 2014 - 10:52am



May 20, 2014 - 10:57am

I made 3

posts yesterday regarding the deterioration of the fundamentals this market is facing.

A long day at work prevented me from the action in the markets today.Having a look , all i can say is WOW. And now the article.

May 20, 2014 - 11:15am


That diver illustrates how I feel. Not as close to the water as I thought back in 2011, but the water is out there and I won't miss a second time.

May 20, 2014 - 11:20am

Excellent post Dr J

I've found that true character shines in those who are true to themselves and speak only from their own experience.

So there's honesty, regardless if they say something that later turns out to be inaccurate - nevertheless they were true and honest to their convictions at that time and were not swayed by the general consensus.

People who are true to themselves are full of character, in my experience. They really stand out from the herd-mentality.

Mr. Fix
May 20, 2014 - 11:35am

A reply to Green Lantern, from the previous thread: (fourth).

For context, a question from Green Lantern: This time “it is different”.

I will concede that there are many books on the subject that I can read that will explain how and why this is a cycle, and that we are about to move into its next phase. As I'm sure you know, most analysts in the gold and silver sphere have been making such predictions for the last couple of years. As you also know, I've been one of the few saying “I don't think so”.

Now, if you'd like to use as a cycle, and include an extinction event such as Noah's flood, that is global in nature, I'm sure we could draw up a cyclical chart that tells us we are due for another one. Same with “the fall of the Roman Empire”, we may even be able to incorporate the extinction event that wiped out the dinosaurs, since I'm sure these things happen on a cyclical basis.

What I'm talking about we might as well limit to the last couple of hundred years, and the usual boom and bust cycles.

I know that these are cyclical, they are staged by the bankers, whereby first they flood economies with cheap currency, and it doesn't matter whether it is gold backed or Fiat, when there is an abundant supply of cash, an economy will boom.

Then liquidity is always withdrawn, creating scarcity, whereby the bankers can now steal real wealth with worthless notes that they print, or even in past events, considering they had nearly all the gold, they could still buy up properties and businesses for pennies on the dollar. This is cyclical, I know that.

Admittedly, I'm looking outside of the financial markets for some of my predictions, things that aren't often talked of on Main Street, such as toxic vaccines, poisonous food, poisonous water, global radiation, chem- trails, Weather that is being used as a weapon, what I believe to be massive man-made droughts, food scarcity on a level that will have no possible outcome other than mass starvation, a society that has been made dependent on massive quantities of fossil fuels that can't possibly be produced long-term at current levels, quantitative easing to infinity has gone global, and there is no exit plan, and then you have quotes from treasury officials such as Timmy saying “we are just going to crash the dollar”. Everything appears to be gearing up for a colossal and coordinated collapse, with institution of a fascist police state in the West, and then there's the Georgia guide stones which is probably a fairly accurate description of where the elites (at least some of them) are attempting to take humanity. Our education system has left the next generation as dumb as a stump, so don't look for any brilliant ideas to save us coming from them.

We have talk of war, on a daily basis, and that alone could amount to an extinction event. At this point, I think it's just a distraction. Not to say that there won't be mass casualties, but that is already in the cards regardless.

I say “this is not cyclical” in the context that markets as we know them, will not simply bounce back, or return to anything that resembles normalcy compared to recent history. I have concluded that the institution of the Federal Reserve was a carefully construed plan to take down America, resulting in a new world order, and I do not see how a global currency collapse, as the result of more debt and corruption than at any time in human history can be considered cyclical. I tend to view it as an “endgame scenario”, whereby all systems will collapse simultaneously.

Coming up with a definitive source for information is problematic, since there are conflicting opinions that span the full spectrum, between the annihilation of humanity, and everything will be okay.

I tend to fall somewhere in the middle, although I don't consider myself a centrist. I have a fairly good idea of what the general agenda is, but through overconfidence, arrogance and hubris, not to mention, many generations of inbreeding that have effectively made the elite clinically insane, I see some rather large holes in their plan.

I think to a large extent, virtually everything available for our consumption has been massaged to send a message,

on one side, such as the mainstream press “everything is fine”, will keep people from examining what's going on.

On the other side, down here in the rabbit hole, there seems to be a “resistance is futile” propaganda campaign so that people come to believe that they have already been defeated.

It is my belief that if the global fascist dictatorship is stood up to, it won't take much to collapse it.

Yes I did look at the chart, although it was after you mentioned it. Admittedly, I don't spend a lot of time looking at charts. I have said as much on many occasions.

My assertions that all of the numbers are a complete fabrication and that a chart can be painted anyway the bankers wish will not be found in a book. It is my opinion.

If I had to pick a fairly mainstream analyst who comes closest to where I think this is headed, it would be Jim Willie. He is only slightly more optimistic than I, in that I don't think the transition to the “ gold backed global trade settlement system" will go as smoothly as he imagines it will.

Some sources of information I have ignored for a long time, such as anything at King world news, and also, anyone who still posts at Kitco.

Over the past few weeks I've been making assertions on DOTS that even bring into question globally accepted documentation which has always been referred to as “the one and only truth” for thousands of years.

I even enjoyed the picture that you posted “I am skeptical” showing an autographed copy of the book in question.

I tend to evaluate everything and draw my own conclusions, and admittedly, I am far outside the box.

Ultimately, only time will tell. You know as well as I do that my basic assertions as to where the market would head over the last couple of years (particularly gold and silver), have played out fairly predictably.

I think we are in a current holding pattern which approximates the “cost of digging it out of the ground”, and at least long-term, I see no risk in accumulating here.

I think immediately prior to what I would consider “Armageddon”, all of the prices will collapse, as paper representations of wealth become meaningless.

I've also concluded that a “Mad Max” scenario is not outside the realm of possibility, and well worth preparing for.

Anything more devastating than that, preparations would be useless, and anything less devastating, at least my preparations will not go to waste.

I have more or less limited to my intake of “reading material” to spiritual pursuits for the time being, since I find so much of what is “in the news” or “standard model of economics” useless information at this point.

I hope this explains where I'm coming from, I do not necessarily expect many to agree.

For those that do, there's nothing wrong with preparing accordingly.

May 20, 2014 - 11:53am

Great expose of how many have felt or presently feel

I have a question Dr Jerome.

As we are aware, the markets can stay irrational longer than we can stay solvant.

With that in mind, will you have peace in your heart should TEOTWAWKI not come about? I applaud your conviction and tenacity to act. The other side is the what if scenario.

As i posted in your last thread, i did all this in preparation for Y2K . Quite frankly, nothing came about as the prophets of doom prophesied. Computers did not fail, cars did not stop, ATM's did not cease to function, Planes did not fall from the sky(Yes,some suggested this was a real possibility) trains did not shut down. In the grand scheme of things it was a non-event.

As for me and my family, we moved to the country, stocked our food, withdrew our cash, and generally prepped for teh worst to come.

The food went bad(at least some)the cash went back, with interrogation the CIA would blush from,but most of all we were stuck in a country bumpkin town with little hope of selling for many years.No snow removal,constant lights out in winter time, water pump down twice in the dead of winter on a bloody weekend.No theater, the arts become the local Christmas play,hospital and ambulance service could become life threatening if not in close proximity, grocery shopping is the family outing.

Summarizing, if you are content with what you have done no matter what the world does i say bravo.

My sincere hope is you have examined this side of your actions as i have not seen it mentioned in either thread.

There is another side.

Bongo Jim
May 20, 2014 - 12:16pm

You can...

Lead a horse to water, but you can't make him drink.

May 20, 2014 - 12:25pm

Bongo Jim

It's a great point. Problem is, when trouble comes a calling they will suddenly be pulling their horses up to your trough.

Great post Dr. J, I am sure many here share these exact sentiments.

May 20, 2014 - 12:26pm


@ Metals,

At this point, I will not attempt to persuade anyone to go beyond what I have decided to do. They have to make that decision for themselves once they are awakened.

For the sake of argument, let's just say that TPTB will succeed and hold metals near the mining cost for another 20 years.

If that were to happen, I have taken a 37% loss on my "investments." Half of my real estate is currently under water, and that is where the PM funds would have gone had I not been awakened. I am not happy, but I can live with that. I am a better philosopher and teacher than a businessman or investor.

As for the other prep activities, the 6 months worth of food is not that great in financial terms. Some may go bad. We are already rotating our food stocks, eating lots of rice and beans. All other household items in our pantry will be consumed. Inflation will continue to drive up prices of everything I have bought. I noticed that PB for my favorite deer hunting equipment has increased in price 15% at the local supply in the past three months already.

My other endeavors, like organic gardening, chickens, solar power, are enjoyable and will mostly pay for themselves over time.

My second home will be a vacation-retirement house as well as a refuge. I will pay for it as we build--no banks. I intend to retire there in a decade either way. We may move there sooner as the kids leave the nest since the location is only a 45 minute drive into my employer.

These days, I am strategically acquiring items in advance that my family will purchase later anyway, or invest in an environmentally sustaining lifestyle. We are trying not to go overboard like the wife's sister who has buckets of food across one whole living room wall. But I will not be caught unprepared if the economy does keep sliding downhill. I am content.

@Bongo, and if you try to force an animal to drink, they just resist and push back--an appropriate proverb in this case.


Key Economic Events Week of 1/13

1/14 8:30 ET CPI
1/14 9:00 ET Goon Williams
1/15 8:30 ET PPI and Empire Fed
1/16 8:30 ET Retail Sales and Philly Fed
1/17 8:30 ET Housing Starts
1/17 9:15 Et Cap Ute and Ind Prod

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Key Economic Events Week of 1/13

1/14 8:30 ET CPI
1/14 9:00 ET Goon Williams
1/15 8:30 ET PPI and Empire Fed
1/16 8:30 ET Retail Sales and Philly Fed
1/17 8:30 ET Housing Starts
1/17 9:15 Et Cap Ute and Ind Prod

Key Economic Events Week of 1/6

1/7 8:30 ET US trade deficit
1/7 10:00 ET ISM Services PMI
1/7 10:00 ET Factory Orders
1/8 8:15 ET ADP employment
1/9 8:00 ET Goon Chlamydia speech
1/9 1:20 ET Goon Evans 2:00 ET Goon Bullard
1/10 8:30 ET BLSBS
1/10 10:00 ET Wholesale Inventories

Key Economic Events Week of 12/16

12/16 8:30 ET Empire State Manu Idx
12/16 9:45 ET Markit flash PMIs Dec
12/17 8:30 ET Housing Starts and Bldg Perms
12/17 9:15 ET Cap Ute and Ind Prod
12/19 8:30 ET Philly Fed
12/20 8:30 ET Final guess Q3 GDP
12/20 10:00 ET Pers Inc and Spending
12/20 10:00 ET Core Inflation

Key Economic Events Week of 12/9

12/10 8:30 ET Productivity and Unit Labor Costs
12/11 8:30 ET CPI
12/11 2:00 pm ET FOMC fedlines
12/11 2:30 pm ET CGP presser
12/12 8:30 ET PPI
12/13 8:30 ET Retail Sales
12/13 10:00 ET Business Inventories
12/13 11:00 ET Goon Williams speech

Key Economic Events Week of 12/2

12/2 9:45 ET Markit Manu PMI
12/2 10:00 ET ISM Manu PMI
12/2 10:00 ET Construction Spending
12/4 9:45 ET Markit Services PMI
12/4 10:00 ET ISM Services PMI
12/5 8:30 ET Trade Deficit
12/5 10:00 ET Factory Orders
12/6 8:30 ET BLSBS
12/6 10:00 ET Wholesale Inventories

Key Economic Events Week of 11/25

11/25 8:30 ET Chicago Fed Nat'l Idx
11/25 7:00 pm ET CGP speech
11/26 8:30 ET Advance Trade
11/26 9:00 ET Case-Shiller home prices
11/26 10:00 ET New home sales
11/26 10:00 ET Consumer Confidence
11/27 8:30 ET Q3 GDP 2nd guess
11/27 8:30 ET Durable Goods
11/27 9:45 ET Chicago PMI
11/27 10:00 ET Pers Inc & Cons Spndg
11/27 10:00 ET Core inflation
11/27 2:00 pm ET Beige Book

Key Economic Events Week of 11/18

11/19 8:30 ET Housing Starts & Bldg Perms
11/20 2:00 ET October FOMC minutes
11/21 8:30 ET Philly Fed
11/21 10:00 ET Existing Home Sales
11/22 9:45 ET Markit November Flash PMIs

Key Economic Events Week of 11/11

11/12 Three Fed Goon speeches
11/13 8:30 ET CPI
11/13 11:00 ET CGP on Capitol Hill
11/14 8:30 ET PPI
11/14 Four Fed Goon speeches
11/14 10:00 ET CGP on Capitol Hill
11/15 8:30 ET Retail Sales
11/15 8:30 ET Empire State Manu Index
11/15 9:15 ET Cap Ute and Ind Prod
11/15 10:00 ET Business Inventories

Key Economic Events Week of 11/4

11/4 10:00 ET Factory Orders
11/5 9:45 ET Markit Services PMI
11/5 10:00 ET ISM Services PMI
11/6 8:30 ET Productivity & Labor Costs
11/6 Speeches by Goons Williams, Harker and Evans
11/8 10:00 ET Consumer Sentiment
11/8 10:00 ET Wholesale Inventories

Key Economic Events Week of 10/28

10/30 8:30 ET Q3 GDP first guess
10/30 2:00 ET FOMC fedlines
10/30 2:30 ET CGP presser
10/31 8:30 ET Personal Income & Spending
10/31 8:30 ET Core Inflation
10/31 9:45 ET Chicago PMI
11/1 8:30 ET BLSBS
11/1 9:45 ET Markit Manu PMI
1/1 10:00 ET ISM Manu PMI

Forum Discussion

by tonym9, 1 hour 41 min ago
by sierra skier, 4 hours 15 min ago
by NW VIEW, 17 hours 41 min ago
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