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


Green Lantern
May 20, 2014 - 9:30pm

That's fair Mr. Fix.  You

That's fair Mr. Fix. You won't be proven correct until it happens.

Last post goes to flyinkel, I'm sure he is hanging out ready to get another dog treat. Plenty of space for another non-related unthoughtful comment. Go for it.

May 20, 2014 - 9:33pm

OH man oh man

I was once ordered to give "financial guidance" to an underling. He bought a used jeep for $1,000. He then took out a loan and spent the $4,000 on brand new hubcaps; you know the silver kind with the spinny dealies in the middle. There is just no helping a guy like that.

Wow, what a miss! I was trying so hard to post after GL (sarc intended ). Your groupie post yesterday to me actually made me laugh, it reminded me of a two year old in a grocery store having a fit. You constantly misquote me drawing inferences that are not there. I like AMs work, and follow it; to tell others differently on my behalf is deceptive. I could address all the other drivel but it's just not worth my time. Not everything is learned looking in the rear view mirror and quoting other "experts"; this world is moving fast and there is a lot out there you don't know.

So in the vein of "A lie not answered in 24 hrs becomes the truth". I wholly disagree with everything you said and your bully type tactics. If I post on Russia or China or Vietnam in a thread that has nothing to do with the thread theme it is because MSM is not covering them, or is covering them with great deception, or because I have had some firsthand experience in the area, or I just believe something to be true which is normally posted as "I believe" or "I think" to give the reader a clue. You are right I am not into big long circular thinking gobbly gook posts with large words; I did that "sell" for years feeling sort of prostituted out trying to manipulate others on behalf of my very influential masters. I don't have to do that anymore and I won't.

Many other posters also note current interest items in the thread that affect the dollar and by their linked nature naturally affect gold. It has been the flow, and I delight in this as it is typically excellent articles with well thought out comments and reflections and can save time getting a "daily download" so to speak. Long winded personal attacks are diversionary in nature and do little to further this cause. If everyone kept strictly to the title even you often stray significantly from the topic at hand, correct? So your keen desire to call out others is the pot calling the kettle black.

You have tremendous knowledge in many areas, and share willingly. Other times I question the purity of your intent. Are you paid to be here? You put a huge "all about me" post out there that left out your job.

I called out a troll, you mean DPH? Yes, I did call him out, he was one, we both know that; but I didn't call him a troll I simply asked if he worked for NSA based on his posts; lots of MSM information, no intuitive analysis, circular cotton candy type thinking process.

Thread drama is non-productive for others. GL respond with all the vitriol you want, I have already spent more time on this than it is worth. So for the rest of the spewing, I denounce that too, in advance. I can speak for myself; your interpretations leave something to be desired.

Mr. Fix
May 20, 2014 - 9:34pm

Green Lantern, thanks for the reply,

Somehow, my point was missed. I'm not talking about a different cycle, I'm talking about the end of cycles.

A.M. has done extraordinarily well with his predictions and his charts, I don't deny that.

But to draw the conclusion that we are in a “consolidation phase”, and that at some point in the future we will have a “correction”, and the markets will resume to reflect reality, Completely misses my point, particularly as I was addressing an “endgame scenario”.

Let's use your tree ring analogy, because it works. You talk about manipulating the weather, or the sun, or the laws of physics, in order to affect the tree rings, and we can always assume that the tree will grow rings every year.

I am not making that assumption, I am stating quite emphatically that that tree will be cut down, or burned to the ground, blown up with dynamite, or better yet, a thermonuclear warhead.

The following season, you will not find new rings.

Only a crater where there once stood a tree.

There's nothing cyclical about it.

May 20, 2014 - 10:02pm

It all boils down to value(s)

There are so many variables. One thing that interest me is seeing what all of this massive older generation we have will do. I have found that as I grow older my values change. I see a great value assessment in our future.

It is also apparent that even though some are awake to the crisis it seems that there will still be bickering, some nicer than others.

May 20, 2014 - 10:53pm
May 20, 2014 - 11:18pm

Just imagine

... If Russia had toppled the Canadian government

Just imagine if the democratically-elected government of Canada had been toppled in a Russian-financed coup, in which far-right extremists and neo-Nazis played a prominent role.

That the new unelected 'government' in Ottawa cancelled the law giving the French language official status, appointed a billionaire oligarch to run Quebec and signed an association agreement with a Russian-led trade bloc.

Just imagine…

If Russia had spent $5 billion on regime change in Canada and then a leading Canadian energy firm had appointed to its board of directors the son of a top Russian government politician.

Just imagine…

If the Syrian government had hosted a meeting in Damascus of the 'Friends of Britain'- a group of countries who supported the violent overthrow of David Cameron's government.

That the Syrian government and its allies gave the anti-government ‘rebels’ in Britain millions of pounds and other support, and failed to condemn ‘rebel’ groups when they killed British civilians and bombed schools, hospitals and universities.

That the Syrian Foreign Minister dismissed next year’s scheduled general election in the UK as a‘parody of democracy’ and said that Cameron must stand down before any elections are held.

Just imagine…

El Gordo
May 21, 2014 - 12:17am

Dr. J.

Good post. I've not been a big promoter of PM's to others, but I have promoted myself into owning a bit at high prices. I do not necessarily consider a catastrophic disaster imminent, but it should be apparent to anyone with a basic understanding of how economies work that we are on a course that is not sustainable. One breakdown in the system could bring the entire machine grinding to a halt, or create a domino effect that eventually results in the same. I read Mr. Fix quite a bit, but I don't think it's necessary for a catastrophe to muck up the works pretty badly. There is no reason not to be somewhat self-sufficient, whether it be stocking a 1 week food supply or a 1 year supply - that's up to you. Point is, you should have a little on hand at all times - same with cash, water, batteries, ammo, etc. When you really need it, it gets hard to come by. The metal is not here for a quick buck, it's here for insurance. Hopefully, my heirs will take a look at it and wonder if perhaps they should have had me declared NCM for buying them in the first place, but I suspect they will be happy to receive them when the time comes. Of course, they may have to buy diving gear and be able to read a nautical chart to realize on them.

May 21, 2014 - 1:18am

Latin American Debt Crisis starting in the 1980's

sounds really familiar to the present situation minus the interest rate increases...for your perusal:

The Latin American debt crisis was a financial crisis that originated in the early 1980s (and for some countries starting in the 1970s), often known as the "lost decade", when Latin American countries reached a point where their foreign debt exceeded their earning power and they were not able to repay it.

In the 1960s and 1970s many Latin American countries, notably Brazil, Argentina, and Mexico, borrowed huge sums of money from international creditors for industrialization; especially infrastructure programs. These countries had soaring economies at the time so the creditors were happy to continue to provide loans. Initially, developing countries typically garnered loans through public routes like the World Bank. After 1973, private banks had an influx of funds from oil-rich countries and believed that sovereign debt was a safe investment.[1]

Between 1975 and 1982, Latin American debt to commercial banks increased at a cumulative annual rate of 20.4 percent. This heightened borrowing led Latin America to quadruple its external debt from $75 billion in 1975 to more than $315 billion in 1983, or 50 percent of the region's gross domestic product (GDP). Debt service (interest payments and the repayment of principal) grew even faster, reaching $66 billion in 1982, up from $12 billion in 1975.[2]

Massive amounts of debt issued by dictatorships only worsened the situation [3]

Beginning of the debt crisis[edit]

When the world economy went into recession in the 1970s and 80s, and oil prices skyrocketed, it created a breaking point for most countries in the region. Developing countries also found themselves in a desperate liquidity crunch. Petroleum exporting countries – flush with cash after the oil price increases of 1973-74 – invested their money with international banks, which 'recycled' a major portion of the capital as loans to Latin American governments. The sharp increase in oil prices caused many countries to search out more loans to cover the high prices, and even oil producing countries wanted to use the opportunity to develop further. These oil producers believed that the high prices would remain and would allow them to pay off their additional debt.[1]

As interest rates increased in the United States of America and in Europe in 1979, debt payments also increased, making it harder for borrowing countries to pay back their debts.[4] Deterioration in the exchange rate with the US dollar meant that Latin American governments ended up owing tremendous quantities of their national currencies, as well as losing purchasing power.[5] The contraction of world trade in 1981 caused the prices of primary resources (Latin America's largest export) to fall.[5]

While the dangerous accumulation of foreign debt occurred over a number of years, the debt crisis began when the international capital markets became aware that Latin America would not be able to pay back its loans. This occurred in August 1982 when Mexico's Finance Minister, Jesus Silva-Herzog declared that Mexico would no longer be able to service its debt.[6] Mexico declared that it couldn't meet its payment due-dates, and announced unilaterally, a moratorium of 90 days; it also requested a renegotiation of payment periods and new loans in order to fulfill its prior obligations.[5]

In the wake of Mexico's default, most commercial banks reduced significantly or halted new lending to Latin America. As much of Latin America's loans were short-term, a crisis ensued when their refinancing was refused. Billions of dollars of loans that previously would have been refinanced, were now due immediately.

The banks had to somehow restructure the debts to avoid financial panic; this usually involved new loans with very strict conditions, as well as the requirement that the debtor countries accept the intervention of the International Monetary Fund (IMF).[5] There were several stages of strategies to slow and end the crisis. The IMF moved to restructure the payments and reduce consumption in debtor countries. Later it and the World Bank encouraged opened markets.[7][8] Finally, the US and the IMF pushed for debt relief, recognizing that countries would not be able to pay back in full the large sums they owed.[9]

However, some unorthodox economists like Stephen Kanitz attribute the debt crisis not to the high level of indebtedness nor to the disorganization of the continent's economy. They say that the cause of the crisis was leverage limits such as U.S. government banking regulations which forbid its banks from lending over ten times the amount of their capital, a regulation that, when the inflation eroded their lending limits, forced them to cut the access of underdeveloped countries to international savings.

May 21, 2014 - 8:41am

El Gordo

I suspect that those asleep are not able to fathom a total collapse and don't want to hear it much, even though TV shows that depict such a world are very popular. Their subconscious knows! Simply taking steps to be ready for a natural disaster, like a hurricane, tornado, or forest fire is a wise move for anyone. Owning some metal is much better than owning none. If we are able to encourage relative to just do that much, then they will not be knocking our our doors empty-handed if Mr Fix is right.

May 21, 2014 - 2:47pm

Treasury sells USTs to Belgium . . .

Of course, the Fed is tapering $10 or $20B a month--but buying over $30B a month more via secret Belgian account.

May 21, 2014 - 9:39pm


Money Creators is cool. It high lights the fact that we have been fighting this battle for a long time.

May 21, 2014 - 10:00pm

Et al about Mr. Fix.

He is right! I suspect that we (me and Fix are in the same trade (Building and Remodeling) only he his apparently above me in skill. When you think in terms of project management like I have to do you don't have to look very long to see that this is a bad project. Project being the system of things. I deal with DIYers all the time and yes they meet with some success but rarely ever achieve the level of satisfaction that they intended to. Infact they often look at what they have done as amazing. It is still garbage compared to the way it ought to be but the money runs out and they tolerate it. They get busy with the rest of their lives because the weekend ran out. I see this happening in TEOTGKE. They get tired, they get busy, and they forget.


One is none, two is one, then ten is not enough when there are millions who will suffer. Redundancy is Prepping

Spartacus Rex
May 21, 2014 - 10:21pm

@ Undecided...

Good, glad you read it. Now see if you can go back through and point out the errors that Ms. Coogan, even though being highly educated (nevertheless still "indoctrinated") made in her work, like my grandfather made me do if I wanted that Reward he was offering. That is how One learns and thus avoids parroting indoctrinated / ingrained propaganda. (ie Keep what is useful and correct, but for heaven sakes, lose the garbage)

May 21, 2014 - 10:39pm

S Rex

Havent read it all but I know that the mayor was obviously working for the strong room keeper. Ill get back to you.

May 22, 2014 - 6:29am

Very late to the party

Focus people's attention on inflation first. Keep 2 silver dimes in your wallet.

When discussions get to rising prices on groceries, pull out the dimes.

"This is now worth $1.40 (or current value). This has been done on purpose and not by accident."

Leave it to them to ask the next question.

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