To Peter:
I am a Euro-Pac client from the Los Angeles, CA area. I have Perth Mint gold and silver accounts, and your Newport Beach people have invested some of my money in one of your mutual funds as well as a few energy and food stocks.
I have been following you on You Tube including Schiff Report and Schiff For Senate campaign. I have finished reading “How An Economy Grows…” and I am halfway into “Little Book…”
What I want to tell you at this time are three political things:
1 California voters want global warming laws. They’re going to vote down Proposition 23, which would delay Arnold Schw’s Global Warming Solutions until unemployment falls to 5.5%. I am going nuts because my career is in aerospace mechanical parts! I have told liberal friends that if Al Gore were 100% correct, Cap And Trade would still be an abomination because it doesn’t really limit carbon dioxide emissions, it just licenses it. Some of these friends think that they are getting tough with “greedy” corporations, but a few corporations are 10 steps ahead of them, having gamed the system to become carbon credit vendors. The corporations pushing Prop 23 are ones that failed to get on the gravy train. Global Warming Laws will not lessen carbon dioxide, much less regular air pollution, but it may create some monopolies! Of course, I don’t actually think Al Gore is right! Carbon dioxide is not a pollutant, it is what comes out of our noses. It is only 0.03% of air, so the idea that it dominants the radiative properties of air is absurd, yet no scientist ever discusses this fact.
2 When a government agency suffers budget cutting, the agency always maximizes the loss of benefits so that the public outcry is the loudest. The politician who pushed for the budget cut is then vilified on TV news by an angry mob led by his opponent.
3 Price cutting by the universities in the event of government subsidy termination is not so easy to accomplish. The excess money from the presently high tuitions is in the pockets of highly paid administrators, people who don’t teach anybody anything. In some cases, these people are protected by unions. If you fire the administrator, you would be legally obligated to keep paying him/her. The universities thus cannot reduce their costs.
I don’t think the crash that you predict is avoidable because too many people believe in Keynesianism; too many people receive gov’t benefits; too many Republicans are more like George W. Bush than they are like Ron Paul. One liberal acquaintance says he’d give Austrian Economics the benefit of doubt if we could name just one country that has ever used it successfully.
My vision of a Schiff/Paul type of currency crisis is one where Ben Bernanke resigns and forces that lady who is his understudy to be the one who tightens the money supply. She’ll say to Obama, “I’m sorry, Mr. President. I cannot monetize your debt any longer.” I don’t think gasoline and milk need to cost $100/gal. I think $10/gal and rising will tell Bernanke that his ideas aren’t going to make it. Next, an emergency tax surcharge on corporations and rich people fails to produce anywhere near the needed revenue. Businesses don’t have time to flee. The owners just throw up their hands and plead hardship, but most of them don’t pay up. China, instead of agreeing to a massive purchase of Treasuries, starts buying up crude oil and raw materials. They buy up anything expensive in the world that can be bought with U.S. dollars – hotels, factories, maybe even sports stadiums! Meanwhile, the federal government cannot be fully funded, so civil servants are sent home.
At this point, the biggest danger is that many Americans will want full socialism to fix the problem. However, anti-communism is still very strong in the U.S. These are the people with privately owned high-powered rifles. An all out push for socialism will cause civil war.
I think that it would take a crash in 2011 or 2012 to put Ron Paul in the White House. He is already so old that he could only serve one term. It will be truly tragic if Ron dies without ever being allowed to save the United States. Ron has a lot of details figured out already, such as the ramping down of Medicare and the use of competing currencies of gold and silver. The crisis needs to hit by mid-2012, though.
—Regards, Albert W.
