NIA's Top 10 Predictions for 2011

 

 

The National Inflation Association is pleased to announce its top 10 predictions for 2011.

 

1) The Dow/Gold and Gold/Silver ratios will continue to decline.

 

In NIA's top 10 predictions for 2010, we predicted major declines in the Dow/Gold and Gold/Silver ratios. The Dow/Gold ratio was 9.3 at the time and finished 2010 down 15% to 8.1. The Gold/Silver ratio was 64 at the time and finished 2010 down 28% to 46. We expect to see the Dow/Gold ratio decline to 6.5 and the Gold/Silver ratio decline to 38 in 2011. Later this decade, we expect to see the Dow/Gold ratio bottom at 1 and the Gold/Silver ratio decline to below 16 and possibly as low as 10.

 

2) Colleges will begin to go bankrupt and close their doors.

 

We have a college education bubble in America that was made possible by the U.S. government's willingness to give out cheap and easy student loans. With all of the technological advances that have been taking place worldwide, the cost for a college education in America should be getting cheaper. Instead, private four-year colleges have averaged 5.6% tuition inflation over the past six years.

College tuitions are the one thing in America that never declined in price during the panic of 2008. Despite collapsing stock market and Real Estate prices, college tuition costs surged to new highs as Americans instinctively sought to become better educated in order to better ride out and survive the economic crisis. Unfortunately, American students who overpaid for college educations are graduating and finding out that their degrees are worthless and no jobs are available for them. They would have been better off going straight into the work force and investing their money into gold and silver. That way, they would have real wealth today instead of debt and would already have valuable work place experience, which is much more important than any piece of paper.
Colleges and universities took on ambitious construction projects and built new libraries, gyms, and sporting venues, that added no value to the education of students. These projects were intended for the sole purpose of impressing students and their families. The administrators of these colleges knew that no matter how high tuitions rose, students would be able to simply borrow more from the government in order to pay them.

Americans today can purchase just about any type of good on Amazon.com, cheaper than they can find it in retail stores. This is because Amazon.com is a lot more efficient and doesn't have the overhead costs of brick and mortar retailers. NIA expects to see a new trend of Americans seeking to become educated cheaply over the Internet. There will be a huge drop off in demand for traditional college degrees. NIA expects to see many colleges default on their debts in 2011. These colleges will be forced to either downsize and educate students more cost effectively or close their doors for good.

 

3) U.S. retailers will report declines in profit margins and their stocks will decline.

 

Although most analysts on Wall Street believe retailers will report a major increase in holiday season sales over a year ago, NIA believes any top line growth retailers report will come at the expense of dismal bottom line profits. NIA expects many retailers to report large declines in their profit margins for the 4Q of 2010 and first half of 2011. Retailers have been selling goods at bargain basement prices in order to generate demand. Americans, being flush with newly printed dollars from the Federal Reserve, have been eager to buy up supplies of goods at artificially low prices. However, shareholders will likely sell off their retail stocks on this news. As share prices of retail stocks decline, retailers will begin to rapidly increase their prices by mid-2011.

 

4) The mainstream public will begin to buy gold.

 

Although the mainstream media continues to proclaim we have a gold bubble, it is impossible to have a gold bubble when mainstream America isn't buying gold. The average American is more likely to be a seller of gold through companies like Cash4Gold, in order to raise enough dollars to put food on their table. Most Americans today don't even know the price of gold. During the next 12 months, we expect to see a huge ramping up in the public's knowledge about gold. More Americans than ever will know the current price of gold and understand that it is real money. By the end of 2011, we expect the general public to begin looking at gold as an investment, just like they began looking at Real Estate as an investment in 2003. Sometime during the next six months, we believe you will overhear a stranger at a restaurant talking about investing into gold. We believe the price of gold could surge to as high as $2,000 per ounce in 2011.

 

5) We will see a huge surge in municipal debt defaults.

 

In the closing months of 2010, we saw yields on municipal bonds rise to their highest levels since early 2009. After 29 consecutive weeks of inflows into municipal bond funds, investors are now pulling money out of municipal bond funds by record amounts, with $9 billion exiting municipal bond funds in the five weeks leading up to Christmas. NIA believes there could be a small dip in municipal bond yields over the next couple of months as investors realize that municipal debt defaults might not be imminent, but we expect municipal bond yields to begin rising again by mid-2011 with a huge surge in municipal debt defaults coming in the second half of 2011. Although the Federal Government has a printing press that it uses in order to pay its debts, cities and municipalities do not.

 

6) We will see a large decline in the crude oil/natural gas ratio.

 

When we released our top 10 predictions for 2010, crude oil was $73 per barrel and we predicted that oil prices would rise to $100 per barrel in 2010. Crude oil ended up rising by 26% in 2010 to $92 per barrel, coming short of our outlook. However, it is possible our $100 per barrel oil forecast might be off by just a month or two. We wouldn't be surprised to see $100 per barrel oil within the first two months of 2011 and if so, we expect to see a huge movement in America this year towards natural gas.

The crude oil/natural gas ratio currently stands at 20. Historically, the crude oil/natural gas ratio has averaged 10 and based on an energy equivalent basis, crude oil and natural gas prices should have a 6 to 1 ratio. Brand new fracking technology has caused natural gas supplies in the U.S. to rise to record levels. Although our country might be flooded with natural gas, the natural gas fracking boom that is taking place across the U.S. today is causing ground water in the U.S. to become contaminated. Americans living near natural gas wells that use fracking, are finding that they can now light the water coming out of their faucets on fire. New government regulations are likely to crack down on natural gas fracking and this will come at the same time as American individuals and businesses begin to convert their automobiles and machinery to run off of natural gas. A large decline in the crude oil/natural gas ratio in 2011 is likely, possibly down to as low as 15.

7) The median U.S. home will decline sharply priced in silver.

 

For the past couple of years, being able to make ones mortgage payment has been the primary concern for the average American. In an attempt to support housing prices and keep mortgage interest rates at artificially low levels, the Federal Reserve has been implementing massive quantitative easing and buying mortgage backed securities. NIA believes the Federal Reserve will be successful at putting a nominal floor under Real Estate prices. NIA also believes that the Federal Reserve's actions will cause a massive decline in the value of the U.S. dollar, which will allow Americans to more easily pay back their mortgages with depreciated U.S. dollars.

However, the Federal Reserve will not be successful at reinflating the Real Estate bubble. In fact, in terms of real money (gold and silver), NIA believes Real Estate prices will decline to record lows. The median U.S. home is currently priced at $170,600 or 5,500 ounces of silver. Priced in silver, the median U.S. home price is down 16% from one month ago and 45% from one year ago. After the inflationary crisis of the 1970s, silver rose to a high in 1980 of $49.45 per ounce. The median U.S. home price in 1980 was $47,200, which means the median U.S. home/silver ratio declined to a low of 954.

With the Federal Reserve printing money at an unprecedented rate and record amounts of new homes built during the recent Real Estate bubble, NIA believes it is inevitable that the median U.S. home will decline to a price of 1,000 ounces of silver this decade and possibly as low as 500 ounces of silver. In 2011, we believe a decline in the median U.S. home price to 4,000 ounces of silver is possible.

 

8) Food inflation will become America's top crisis.

 

Starting a few decades ago and accelerating in recent years, America has seen a boom in non-productive service jobs, mainly in the financial sector. Most of these jobs were made possible by inflation. Without inflation, which steals from the purchasing power of the incomes and savings of goods producing workers, the majority of the jobs on Wall Street would not exist today and our country would be in much better financial shape because of it.

With most Americans in recent decades seeking non-productive jobs in the financial services sector because that is where they could access the Fed's cheap and easy money, very few Americans sought jobs in the farming and agriculture sector. In the 1930s, approximately 28% of the population was employed in the agriculture sector, but today this number is less than 2%. Agriculture currently makes up only 1.2% of U.S. GDP, compared to the services sector, which makes up 76.9% of U.S. GDP.
There is currently a major shortage of farmers in the U.S. and a lot of land that was previously used for farming has now been developed with Real Estate. To make matters worse, agricultural products now trade on the international market and Americans must now compete against citizens of emerging nations like China and India for the purchasing of food.
Prices of goods and services do not rise equally when governments create monetary inflation. Inflation gravitates most towards the items that Americans need the most and there is nothing that Americans need more to survive than food and agriculture. As the U.S. government prints money, the first thing Americans will spend it on is food. Americans can cut back on energy use by moving into a smaller home and carpooling to work. They can cut back on entertainment, travel, and other discretionary spending. However, Americans can never stop spending money on food.

The days of cheap food in America are coming to an end. The recent unprecedented rise that we have seen in agricultural commodity prices is showing no signs of letting up. In the past few days, sugar futures reached a new 30-year high, coffee futures reached a new 13-year high, orange juice futures reached a new 3-year high, corn futures reached a new 29-month high, soybean futures reached a new 27-month high, and palm oil futures reached a new 33-month high.

 

We estimate that it takes as long as six months for rising agricultural commodity prices to be felt by U.S. consumers in their local supermarket. Even if food producers and retailers accept substantially lower profit margins in 2011, we are still guaranteed to see double-digit across the board U.S. food inflation in the first half of the year. That is correct, let us repeat, NIA guarantees that Americans will see double-digit food inflation in the first half of 2011.

 

Shockingly, except for Glenn Beck (who was kind enough to feature our food inflation report), absolutely nobody in the mainstream media is doing anything to warn Americans about the food inflation crisis that is ahead. In fact, left-wing groups like Media Matters (funded by George Soros) have been working tirelessly to try and discredit NIA's research while reassuring Americans that they need not worry about food inflation. The truth is, when Americans realize that they can no longer take food for granted, we will likely see the outbreak of an all out food price panic with everybody rushing to the supermarket to stock up on goods before prices rise even further. The end result will likely be government price controls and empty store shelves, but NIA doesn't project this to occur until later this decade.

 

9) QE2 will disappoint and the Federal Reserve will prepare QE3.

 

The Dow Jones is now back up to 11,670, which is where it was in mid-2008 before the crash. NIA believes that most of QE2 has already been priced into the market, before the Federal Reserve even prints the $600 billion. At some point, we expect it to become apparent to all that the U.S. economic recovery is phony and stock prices are rising solely due to inflation. In our opinion, we will see some sort of catalyst that causes the stock market to sell off at some point and the consensus on Wall Street will be that QE2 will not be enough to save the U.S. economy. By the end of 2011, we expect the Federal Reserve to begin planning QE3. QE3 might be the final dose of inflation that causes the U.S. economy to overdose into hyperinflation.

 

10) Sarah Palin will announce she is running for President as a Republican.

 

NIA believes that Sarah Palin has been setup perfectly to run for President in 2012 and that she will announce her candidacy for the Republican nomination with great fanfare from tea party supporters in 2011. We give Sarah Palin credit for recently speaking out against the Federal Reserve's QE2 and warning Americans about the food inflation crisis that is ahead. Unfortunately, we believe Sarah Palin is not a true independent and is being controlled by the Republican establishment, which is just as responsible as the Democrats are for the financial crisis we have today. As President, Palin would be unlikely to implement the measures that are necessary to prevent hyperinflation. In our opinion, we need to elect a true libertarian candidate as President who will cut government spending, balance the budget, and restore sound money. NIA intends to support Ron Paul, if he decides to run for President.

JP Morgan Covering Silver Short Position

 

JP Morgan Covering Silver Short Position

 

There were reports out today that JP Morgan has now admitted to having their massive naked short position in silver and is taking steps to reduce it. According to the Financial Times in London, "JPMorgan has quietly reduced a large position in the US silver futures market which had been at the centre of a controversy about its impact on global prices for the precious metal." According to a person familiar with the matter, "The decision by JPMorgan was an attempt to deflect public criticism of the bank’s dealings in silver." JP Morgan said in a statement, "It is absolutely incorrect to say or imply that the Nymex, CFTC or any other exchange or regulator has instructed or asked us to reduce our position."

 

NIA, along with the Gold Anti-Trust Action Committee (GATA), has been at the forefront of helping expose JP Morgan's silver price suppression scheme. Over a year ago on December 11th, 2009, NIA declared silver the best investment for the next decade at $17.40 per ounce. NIA said in its December 11th article, "It's not a coincidence that the day silver reached its multi-decade high of over $21 per ounce in March of 2008, was the same day Bear Stearns failed. Bear Stearns was a holder of a massive short position in silver."

 

NIA went on to say, "The reason why we believe the Federal Reserve was so eager to orchestrate a bailout of Bear Stearns, is because Bear Stearns was on the verge of being forced to cover their silver short position." NIA then said, "JP Morgan still holds the silver short position they inherited from Bear Stearns" and "JP Morgan will have to cover this short position or it could jeopardize their existence."

 

On February 5th, 2010, JP Morgan was successful at manipulating the price of silver down to below $15 per ounce. On February 7th, NIA wrote an article entitled, "NIA Bets Big on Silver Price Recovery" in which it said, "NIA is betting big that this past week's short-term decline in the paper price of silver was just a temporary wash out, before a huge surge in silver prices later in 2010. One of NIA's co-founders purchased on Friday, 1,300 January 2011 $20 SLV call options at a price of $0.89." These call options that NIA suggested went on to rise as much as 1,024% to a high this month of $10.

 

On March 25th, 2010, the CFTC held a hearing on position limits in precious metals. Bill Murphy of GATA (see NIA's video page for an interview we conducted with Mr. Murphy on Thursday) was allowed to speak (within a five-minute time constraint). Right at the beginning of Murphy's speech, there was a technical failure of the live television broadcast, which was mysteriously fixed as soon as he was done speaking. This did not stop Murphy, who was brave enough to present the evidence of Andrew Maguire, a former Goldman Sachs precious metals trader who on February 3rd became a whistleblower when he wrote to Eliud Ramirez, a senior investigator for the CFTC's Enforcement Division, giving him the "heads up" for a "manipulative event" signaled for February 5th. Maguire described to the CFTC in February 3rd emails, exactly what would happen on February 5th (which did occur exactly like predicted), yet the CFTC refused to take any action against JP Morgan or the other conspirators.

 

Murphy was scheduled for several mainstream media television interviews after the CFTC hearings, but they were all abruptly cancelled at once. In the weeks that followed, Murphy's car was stolen, his web site was hacked, and he was punched with brass knuckles and knocked out cold less than two blocks from his house. As for Maguire, a couple of days after the CFTC hearings, he and his wife were involved in a bizarre hit-and-run car accident in London where a second car coming out of a side street struck their vehicle. The hit-and-run suspect then hit two more vehicles when he desperately attempted to flee, which resulted in a police chase with helicopters. The suspect was nabbed, yet surprisingly, his name was never released and it was never made known if charges were filed.

 

On April 3rd, 2010, with silver at $17.89 per ounce, NIA wrote an article entitled, "Silver Short Squeeze Could Be Imminent". In this article, NIA said, "With the spotlight now on JP Morgan, NIA believes they will be less likely to naked short silver at these levels and manipulate the price down like in February. With the mainstream media blackout, it is important for NIA members to work harder than ever to spread the word and help expose what could be the largest fraud in the history of the world."

 

On May 13th, 2010, NIA released its critically acclaimed documentary 'Meltup', which featured our in-depth research on JP Morgan's silver price suppression scheme. Thanks to the help of tens of thousands of NIA members who worked tirelessly to spread the word about 'Meltup', nearly 1 million people saw the documentary and became educated to the truth about JP Morgan's silver manipulation. Without the hard work of NIA members, JP Morgan would have went on naked shorting silver for years and the topic would have never become mainstream.

 

In 'Meltup', NIA's President Gerard Adams stated, "The current gold/silver ratio of 64 wouldn't be possible unless silver prices were being held artificially low through manipulation. I don't believe it is possible for the silver that JP Morgan is short to be backed by physical silver. Most likely, JP Morgan has been naked shorting silver, by selling paper silver that doesn't physically exist." Since the release of 'Meltup', the gold/silver ratio has fallen by a shocking 27% down to 47. Within the next few years, NIA expects the gold/silver ratio to at least fall to 16, which will mean another three times increase in the purchasing power of those who own silver. In fact, because silver prices have been held artificially low for so long by JP Morgan's manipulation, there is a chance the gold/silver ratio will over swing to the downside and decline to 10 or lower this decade.

 

Throughout world history, there have been 46 billion ounces of silver produced compared to 5 billion ounces of gold. Although gold gets all of the headlines in the mainstream media, silver shares all of the same monetary qualities as gold. Based on historical production ratios, a gold/silver ratio of 10 down the road could certainly be realistic. In fact, considering that most of the silver ever produced has been consumed by manufacturing, a gold/silver ratio of much less than 10 is possible. Worldwide inventories of silver have declined 90% since 1940 from 10 billion ounces down to approximately 1 billion ounces today. NIA believes that a major shortage of physical silver is in the process of developing.

 

On September 9th, 2010, NIA released an article entitled, "Is JP Morgan's Silver Manipulation Over?". In this article, we discussed how JP Morgan was winding down their proprietary trading desks, which we felt were responsible for the silver manipulation. We stated that we were "hopeful but skeptical that the manipulation is coming to an end" and "cautiously optimistic at this time". Since September 9th, the price of silver has gained over 50% and is holding strong near $30 per ounce. There have been no noticeable manipulative takedown attempts by JP Morgan.

 

NIA estimates that over the past 30 days, JP Morgan has covered approximately 4,000 silver contracts, which has corresponded with about a $4 per ounce upward move in the price of silver. We estimate JP Morgan to still be short approximately 26,000 silver contracts or 130 million ounces of silver, which equals about 18% of worldwide annual silver production from mining of 709.6 million ounces. If JP Morgan covers their entire silver short position and the price of silver was to continue rising by $1 for every 1,000 silver contracts that JP Morgan covers, silver would rise to $56 per ounce.

 

JP Morgan appears to be covering its shorts in a very managed and orderly way. We are not yet seeing anything that resembles a short squeeze, although one could occur at any time. If we see a major silver shortage and a real short squeeze, silver could literally rise to hundreds of dollars per ounce overnight. Silver's all time high of $49.45 per ounce adjusted to the CPI equals $139 per ounce in today's dollars. As all NIA members know, the CPI understates inflation through geometric weighting and hedonics. The real inflation adjusted all time high for silver is over $400 per ounce.

 

With almost everybody who has ever purchased silver being up on silver in terms of dollars, it is possible we could see silver prices take a breather in the short-term. NIA is hoping for a short-term pullback, but with so many investors waiting to buy on dips, there is a chance that a large short-term pullback will never occur. NIA is very pleased that for the first time in many years, silver prices appear to be trading based on free market forces and not the manipulation of JP Morgan.

Federal Reserve

The following is a very good read as to what has been going on at the Federal Reserve.
http://ampedstatus.com/the-wall-street-pentagon-papers-biggest-scam-in-world-history-exposed-are-the-federal-reserves-crimes-too-big-to-comprehend

Wikileaks Data Scam

Wikileaks Reveals Even China Says Not To Believe Its Economic Data

Economic Data

WikiLeaks

The following is another person's viewpoint on the recent WikiLeak happening. This is taken from Larry Levin.

Wikileaks

In a recent post I mentioned the now viral speech that Nigel Farage gave to the Eurocrats in Brussels. “But look at your response to them (Ireland): what they are being told as their government is collapsing is that it would be inappropriate for them to have a general election. In fact commissioner Rehn here said they (Ireland) had to agree to a budget first before they are allowed to have a general election. Just who the hell do you think you people are? You are very, very dangerous people indeed: your obsession with creating this European state means that you are happy to destroy democracy, you appear to be happy with millions and millions of people to be unemployed and to be poor.”   Although Mr. Farage wasn’t speaking to a cabal of banksters, he could have been.  Instead, he was speaking to the muscle of the banksters: politicians that allow them to do whatever they choose.  Moreover, when he said “dangerous;” I wonder if any of you thought in the very literal term of the word?   For Mr. Julian Assange, owner of Wikileaks, life has gotten very serious…but not until he said his website would release information on a mega-BANK in the USA! There was no problem with multiple war leaks over Afghanistan. There was no problem with multiple war leaks over Iraq. There was no problem with Israel/flotilla leaks & video. However, as soon as a bank may be exposed – all hell breaks loose! Within 2-days.. Interpol issues a global manhunt for founder Assange. Professor Tom Flanagan, a senior advisor and strategist to the Canadian Prime Minister Stephen Harper, called for the assassination of Wikileaks founder Assange - a fatwa if you like. http://www.youtube.com/watch?v=bqtIafdoH_g&feature=player_embedded Senator Lieberman trashes freedom of speech – gets website shut down. The timing of when Wikileaks said it would announce a “data dump” of a mega-bank in the US (believed to be BAC) and the sudden escalation of angst and anger – including murder - on the part of those who protect the banksters simply can NOT be ignored and it is simply sickening. These banksters apparently CAN get away with murder; it’s no longer a simple statement.  “You are dangerous people, indeed!” I think a few more appropriate nuggets from Nigel Farage are in order… "This whole project, this whole dream, this whole modern Marxism, has been imposed upon the people of Europe (and creeping into the USA), without their view being sought, and in the case of France and the Netherlands, when they did give their opinion, they simply ignored them and continued." …"Complete madness has overcome the European Union (and US bankers): on the broader point there are those here who do see the European project a staging post to one world government." My thoughts for summing up this disgraceful turn of events couldn’t have been done better, so I bring you Mish’s last word… Fools like Lieberman think we can stop leaks by legislation. We can't. We can only stop leaks by fostering an attitude from the top that will prosecute fraud and corruption instead of looking for scapegoats, and instead of pursuing policeman policies that "the end justifies the means" President Obama is a blatant liar. He promised to release details of US torture of prisoners. He failed to do so. I praise WikiLeaks or anyone else who is willing to disclose the hypocrisy of this president and this administration. I am not a Republican. I am an independent. I praise WikiLeaks or anyone else who is willing to disclose the hypocrisy of Republicans as well. I fear for our country and the path it is taking. We need to elect someone willing to stand up TO the banks, stand up TO our bloated military, stand up TO public unions, and stand FOR less government spending, stand FOR prosecuting fraud wherever it takes, stand FOR smaller government. President Obama is not that person, nor was President Bush. We need a Ron Paul, or someone like him, willing to do what is needed before we destroy ourselves. Trade well and follow the trend, not the so-called “experts.” Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banksters.

EU at Weekly Control MM

EU is at the weekly MM that hasn't been filled. Levels shown in pic.

EU Weekly Target

EU weekly target to look for within current trend.

EU hits 100 DMM

EU hits daily 100% MM projected from the current day's high. This is also confluence with the 61.8 daily fib pivot projected from the open. Larger targets are also shown at the 100 fib pivot. Eu has now hit the weekly 50% and daily 100% MMs. The current day has also fallen within the weekly 38.2 MM projected from today's high. Very high probability that EU has extended to its maximum for todays range.

EU hits 50% WMM

EU hits the weekly 50% MM

EU Setup Short

Zone for trend continuation.

EU hits Monthly Control 61.8 MM

EU today extended its bearish run to hit the Monthly Control 61.8% measured move for Nov.

EU hits Weekly 100% MM

Euro hits 100% of the previous weeks measured move. Shown in the gray box.

EU Monthly Measured Move Realized

The Oct 100% MM from Nov high to today's low.

Food Inflation

 

 

NIA Projects Future U.S. Food Price Increases

 

The National Inflation Association today announced the release of its report about NIA's projections of future U.S. food price increases due to the massive monetary inflation being created by the Federal Reserve's $600 billion quantitative easing. This report was written by NIA's President Gerard Adams, who believes food inflation will take over in 2011 as America's greatest crisis. According to Mr. Adams, making mortgage payments will soon be the last thing on the minds of all Americans. We currently have a currency crisis that could soon turn into hyperinflation and a complete societal collapse.

 

"For every economic problem the U.S. government tries to solve, it always creates two or three much larger catastrophes in the process," said Adams. "Just like we predicted this past December, the U.S. dollar index bounced in early 2010 and has been in free-fall ever since. Bernanke's QE2 will likely accelerate this free-fall into a complete U.S. dollar rout," warned Adams.

 

NIA projects that at the average U.S. grocery store it will soon cost $11.43 for one ear of corn, $23.05 for a 24 oz loaf of wheat bread, $62.21 for a 32 oz package of Domino Granulated Sugar, $24.31 for a 32 fl oz container of soy milk, $77.71 for a 11.30 oz container of Folgers Classic Roast Coffee, $45.71 for a 64 fl oz container of Minute Maid Orange Juice, and $15.50 for a Hershey's Milk Chocolate 1.55 oz candy bar. NIA also projects that by the end of this decade, a plain white men's cotton t-shirt at Wal-Mart will cost $55.57.

 

NIA's special U.S. food price projection report is now available to download for free at: http://inflation.us/foodpriceprojections.pdf

 

The report highlights how despite cotton rising by 54%, corn rising by 29%, soybeans rising by 22%, orange juice rising by 17%, and sugar rising by 51% during the months of September and October alone, these huge commodity price increases have yet to make their way into America's grocery stores because corporations have been reluctant to pass these price increases along to the consumer. In today's dismal economy, no retailer wants to be the first to dramatically raise food prices. However, NIA expects all retailers to soon substantially raise food prices at the same time, which will ensure that this Holiday shopping season will be the worst in recorded American history.

Silver Short Position Could Cost JP Morgan Billions in Losses

The following is an article from The National Inflation Association. To register for reports and other similar information that may affect you, go here. http://inflation.us/

Silver Short Position Could Cost JP Morgan Billions in Losses

 

It was just announced late Wednesday that two lawsuits have been filed in Manhattan federal court against JP Morgan and HSBC Holdings Inc. accusing them of manipulating the price of silver by "amassing enormous short positions". The suits were filed by Brian Beatty and Peter Laskaris, who each claim they lost money trading COMEX silver futures and options contracts as a result of JP Morgan's alleged manipulation.

 

In NIA's latest documentary 'Meltup' that was released on May 13th, 2010, and has now been viewed by over 855,000 people, NIA's President Gerard Adams exposed the manipulation of silver that has been taking place by JP Morgan. Mr. Adams discussed in detail in 'Meltup' how on March 14th, 2008, the very day Bear Stearns failed was the same day silver reached a multidecade high of about $21 per ounce. According to Mr. Adams, Bear Stearns was on the verge of being forced to cover their naked short position in silver, which could have quickly sent silver as high as $50 per ounce. This would have caused a loss of confidence in the U.S. dollar and a possible currency crisis. Instead of allowing this to happen, the Federal Reserve orchestrated a bailout of Bear Stearns and JP Morgan acquired their assets with the backing of the Fed. Shortly after taking over Bear Stearn's silver short position, JP Morgan was able to manipulate the price of silver down to below $9 per ounce.

 

NIA exposed in 'Meltup' that JP Morgan was short 30,000 silver contracts representing 150 million ounces of silver. This is one of the largest concentrated short positions in the history of all commodities, representing 31% of all open COMEX silver contracts. NIA found it shocking for this type of a concentrated naked short position to exist in the very metal that the U.S. constitution defined as real money. What NIA found especially frightening is how almost everybody in the mainstream media has ignored and continues to ignore this issue. Not one article in any major financial publication has even questioned why JP Morgan is allowed to hold such a large short position in our nation's single most important commodity.

 

On February 5th of 2010, when the price of silver was manipulated by JP Morgan down to below $15 per ounce, NIA said, "this is a once in a lifetime entry point for those wishing to go long silver at a bargain basement price". On that day, NIA's President Mr. Adams purchased 1,300 January 2011 $20 call options in the silver ETF at $0.89 per contract and on February 8th, NIA announced his purchase and said to NIA members, "NIA is betting big that this past week's short-term decline in the paper price of silver was just a temporary wash out, before a huge surge in silver prices later in 2010."

 

On July 28th with the price of silver at $17.63 per ounce, NIA released an article entitled "Gold and Silver Capitulation is Near" in which it said, "The sentiment on gold and silver has abruptly changed to the negative like nothing we have ever seen before and to us this means the big move to the upside is right around the corner." Since NIA's July 28th article predicting silver's big move to the upside was right around the corner, silver has rallied as much as 41% to a high on October 14th of $24.92 per ounce. On October 14th, the very day silver reached its high, Mr. Adams sold his silver ETF call options at $4.25 per contract making a gross profit of $436,800.

 

Silver, at its current price of $23.69 per ounce, is trading for only 1.78% the price of gold. We have a gold/silver ratio of 56, despite the fact that only ten times more silver has been produced in world history than gold. On December 11th, 2009, NIA declared silver the best investment for the next decade. On December 21st, 2009, in NIA's top 10 predictions for 2010, NIA predicted a sharp decline in the gold/silver ratio, which was 64 at the time. NIA was right, the gold/silver ratio has declined by 12.5% so far this year.

 

Silver possesses all of the same monetary qualities as gold, but silver is also used for countless industrial applications. 95% of all silver produced in world history has been consumed. World silver inventories have declined from 10 billion ounces in 1940 down to only 1 billion ounces today. Meanwhile, almost all of the gold mined in world history remains in the form of bullion bars stored in vaults. The world has approximately 2 billion ounces of gold inventories today. The total value of the world's gold inventories is currently $2.656 trillion compared to the total value of the world's silver inventories of $23.68 billion. This means the value of the world's gold inventories today is worth an unbelievable 112 times more than its silver inventories.

 

China has been rapidly diversifying their foreign exchange reserves into gold in an attempt to position the yuan to be the world's next reserve currency. Despite China increasing its gold reserves by 76% in recent years to 1,054 metric tons, the value of China's gold reserves still only account for about 1.5% of its total foreign exchange reserves compared to the average nation of 10%. China needs to rapidly increase its gold reserves this decade, which NIA believes will send gold not just to new nominal highs, but also to new all time highs adjusted to the CPI and the real rate of inflation.

 

No central banks in the world currently own silver. Imagine if just one central bank of any major country announces a large silver purchase. The world is only producing 709.6 million ounces of silver per year worth a measly $16.8 billion. Total annual silver demand for industrial applications alone is 352.2 million ounces. Once you include photography, jewelry, silverware, and coins & medals, total annual silver demand is already 729.8 million ounces, which is greater than silver production. If a central bank decides to purchase silver, the market is so tight that silver prices could literally rise to $50 per ounce overnight. NIA estimates that $50 per ounce silver would mean approximately $4 billion in losses to JP Morgan.

 

NIA applauds CFTC Commissioner Bart Chilton for taking the time to publicly comment on Tuesday about the precious metals markets and in particular the silver markets and acknowledging that the public deserves some answers to their concerns that silver markets are being, and have been, manipulated. Mr. Chilton said in a statement, "I believe that there have been repeated attempts to influence prices in the silver markets. There have been fraudulent efforts to persuade and deviously control that price. Based on what I have been told by members of the public, and reviewed in publicly available documents, I believe violations to the Commodity Exchange Act (CEA) have taken place in silver markets and that any such violation of the law in this regard should be prosecuted."

 

On September 9th, after JP Morgan announced that they would be winding down their proprietary trading operations and laying off their 20 proprietary commodities traders, who NIA believes could be responsible for the current manipulation in silver, NIA released an article entitled, "Is JP Morgan's Silver Manipulation Over?". NIA said in this article that it was "hopeful but skeptical that the manipulation is coming to an end" and "We remain cautiously optimistic at this time." Since this article, it appears as though silver has been trading based on free market forces for the first time in many years. There have been no noticeable attempts to drive down the price of silver through manipulation.

 

NIA's most recent silver stock suggestion from September 20th gained 111% in just 17 trading days and its previous silver stock suggestion from July 28th gained 111% in 47 trading days. We are very happy that investors who have for years been suffering due to JP Morgan's manipulation, are now finally seeing the value of their silver investments rise to where the free market wants them to be. The efforts of all NIA members to expose JP Morgan's illegal activities are now paying off big for all Americans.

 

NIA members should be proud of themselves, but the fight is not over yet. Although most NIA members have been prospering and are now positioned to not only survive but thrive during U.S. hyperinflation, we still need to work together to prevent a complete societal collapse so that our country is still worth living in after the U.S. dollar becomes worthless. We hope to release our new documentary 'End of Liberty' this Sunday on Halloween. After you watch 'End of Liberty', it is important for you to not only spread the word to your family members and friends, but we strongly urge you to contact all relevant web sites, blogs, newspapers, magazines, and television and radio shows, telling them about the movie. 'End of Liberty' is quite simply the most important firm ever produced in world history.

A Planned Market

The following is from a trader , Larry Levin. It speaks great truths as to what is happening in our economy. What is happening is not a good thing and will be what further causes the economy to decline. That is my opinion and not that of those in political power. 

A Planned Market

Most people have head of the phrase "A planned Economy," which according to Wikipedia is "Planned economy (or command economy) is an economic system in which the state directs the economy.[1] It is an economic system in which the central government controls industry such that it makes all decisions regarding the production and distribution of goods and services.[2]Its most extensive form is referred to as a command economy,[3] centrally planned economy, or command and control economy.[4]" The USA doesn't have a planned economy yet, but it sure has a "planned market." In addition to "planned market" I would accept names of; Corporatism, economic-Socialism, or perhaps the best: Kleptocracy. After all, the middle class is being looted by the White House, Congress, and the Federal Reserve, for the benefit of Fraud Street banksters and its bondholders. One thing is now as clear as glass to all of those who are not in a cave somewhere - the "free market" is dead in the United States of Amerika. As you know the U.S. Politburo is now in control of, or wanting control of the following... A very large section of manufacturing: Automakers. Although GM will soon have an IPO don't let that fool you - the government will still own the majority of the car maker. The government would not be made whole unless the new stock price reached $113.78. Since that will not happen, Amerika will be in a "planned economy/market" for a long time, at least a decade. Housing: Freddie Mac, Fannie Mae, and FHA. These three government agencies underwrote 90% of all mortgages in Q1 of 2009. That jumped to 96.5% of all mortgages in Q1 of 2010. Yes sir, that's a "planned market"...Amerikan housing market...alright. The government wants to take over healthcare too. Oh sure, the Politburo hasn't done it yet but a single payer system is coming to a "planned health care market." Inside the healthcare legislation Big Brother wants you to report ALL business transactions over $600. A "planned economy" indeed! Social Security Medicare The Federal Reserve has always "planned" the economy by price fixing interest rates, with the approval of the Politburo in DC, but it is now out of control. When the market fell hard in 2008, the Federal Reserve came in to save its buddies: bankers. The Federal Reserve cut its interest rates to nearly zero. YOU may not borrow at 0.25%, but the biggest banks can. With this free money from the Fed, banks bought Treasuries. Buying these Treasuries was a GUARANTEED profitable investment because the Fed cut its lending rates to near zero for the banksters. But there was a small "truth" problem in the status of the bankster's mortgage portfolio since they had to tell the truth about the falling home prices, thus the falling value of their mortgage portfolios. To fix this the Politburo forced the FASB to change its accounting standards for the banksters, which allowed them to legally lie about the value of the mortgages on the books. Instead of marking down the value of the homes in the portfolios, the banks just made up (and continue to make up) pretend numbers for what the home may be worth in 20-years. Magically, these guesstimates are the full value of the loans. When this happened, the low of the stock market was put it place. "Controlled market" anyone? If you went into one of these very same banks to get a personal or business loan and used your home as collateral...then told the loan officer it should be valued at the PEAK of 2007's price, WHICH IS EXACTLY WHERE THEY HAVE IT VALUED ON THEIR OWN BOOKS; what do you think would happen? Yes, you would get thrown out on your fanny. It is good for them, but nobody else! The FASB rule helped the banks a lot and certainly rigged the stock market, but the Fed and the banksters still knew the real score: the RMBS, CDS, etc loans on the books were rotting like dead fish. The Federal Reserve then announced "Quantitative Easing" (QE), which should have been called TARP-all-over-again as it was aimed at shoveling more money into the pockets of the banksters. The Fed bought over $1 TRILLION of these fetid, decaying mortgage "assets" at par or nearly par, when many weren't even worth 20-cents on the dollar! What did the banksters do with this newly printed money? The only thing that made sense: buy more Treasury Bills, Bonds, and now stocks and commodities. It wasn't just free money, but a loss-made-good, type of free money. The banksters knew now that no matter how bad or how often they %$#*ed up, Backstop-Ben Bernanke would be there with more free money. Again, GUARANTEED profits for the banksters with YOUR money. Now the Fed is regularly engaging in its POMO purchases, which are its Permanent Open Market Operations. The Fed is once AGAIN flooding the very banksters who brought down the economy with free money --- so they can make even more money (ah hem, at your expense of course). You see, now that the Fraud Street banksters have already bought hundreds of billions worth of Treasuries with the aforementioned free money at guaranteed profit, they're a little tight right now. But the Politburo has more borrowing & spending to do therefore the Treasury needs to sell more IOUs. How can the "managed market" Kleptocracy keep this shell game going? By the POMO purchases of course. The FRBNY (Federal Reserve Bank of N.Y.) buys billions of the Treasuries back from the banksters, thus flooding them with more capital, which can then be used to buy AMZN, AAPL, SPY, ES futures, commodities, and of course -- more Treasuries. By the way, since the banksters bought the bonds that the FRBNY is buying right now...many months ago...the Fed is once again GUARANTEEING these scumbag banksters yet another risk-free profit. Treasuries have been on a huge rally so the banksters bought low (with your money), are getting out at the high with insanely large profits (no more duration risk either!), at your expense. Once purchased, the Fed disposes the debt. A "planned market" indeed! This is what POMO purchases are all about - getting more money to banksters and monetizing the debt. A financial circle jerk of epic proportions. Oohhhhh but it is not over. QE2 is coming. Everyone on Fraud Street believes it, and sadly, when those banksters say "JUMP" - the Fed responds with "How high?" Therefore, QE2 will be like QE1 + POMO + steriods + your money = BONUSES on Fraud Street, as well as huge campaign "donations" for the Politburo in Washington DC. The most recent POMO purchases were made by the FRBNY last Friday. Since the banksters do not know in advance which CUSIP number (bond identification) will be purchased, they cannot all buy stocks and commodities beforehand. Some of the Treasuries on the banksters books may not be purchased by the FRBNY. Because of this, the banksters have to wait until the very moment their lottery number is called before they can run the stock & commodity markets up again & again on pathetic volume. By the way, as soon as POMO ended last Friday, the rally in equities ended. A "planned market" indeed! The next time someone would like to discuss Amerika's "free market," I do not know if I will scornfully laugh at him, or weep for him.

Chrysler's Railroad

The following was sent to me by another trader that I greatly respect. Have a read, it may open your eyes to what is and has been going on.

Chrysler dealerships
which were forced to close...

Chrysler's Railroad

This could be a scandal of epic proportions and one that makes Nixon's Watergate or Clinton's Monica
Lewinsky affair pale by comparison. Why was there neither rhyme nor reason as to
which dealerships of the Chrysler Corporation were to be closed?

Roll the clock back to the weeks just before Chrysler declared bankruptcy. Chrysler, like GM, was in
dire financial straits and federal government "graciously" offered to
"buy the company" and keep them out of bankruptcy and "save jobs."
Chrysler was, in the words of Obama and his administration, "Too big to fail," same
story with GM.

The feds organized their "Automotive Task Force" to fix Chrysler and GM. Obama, in an act that
is 100% unconstitutional, appointed a guy named Steve Rattner to be the White House's
official Car Czar - literally, that's what his title is. Rattner is the liaison
among Obama, Chrysler, and GM. Initially, the national
media reported that Chrysler 'had made this list of dealerships.' Not true! The
Washington Examiner, Newsmax, Fox New and a host of other news agencies discovered
that the list of dealerships was put together by the "Automotive Task Force"
headed by no one other than Mr. Steve Rattner.

Now the plot thickens.  Remember earlier we said that there was neither rhyme nor reason why

certain dealerships were closed?  Actually there's a very >interesting pattern as to who was

closed down. Again, on May 27, 2009, The Washington >Examiner and Newsmax exposed

the connection. Amazingly, of the 789 dealerships
closed by the federal government, 788 had donated money, exclusively to Republican
political causes, while contributing nothing to Democratic political causes. The
only "Democratic" dealership on the list was found to have donated $7,700 to
Hillary's campaign, and a bit over $2,000 to John Edwards. This same dealership,
reportedly, also gave $200.00 to Obama's campaign. Does that seem a little odd
to you? Steve Rattner is the guy who put the list together.

Well, he happens to be married to a Maureen White.  Maureen happens to be
the former national finance chairman of the Democratic National Committee. As such,
she has access to campaign donation records from everyone in the nation- Republican
or Democrat. But of course, this is just a wacky "coincidence," we're certain.

Then comes another really wacky "coincidence." On that list of dealerships being closed down,

a weird thing happened in Arkansas , North Louisiana and Southern Missouri.
It seems that Bill Clinton's former White House Chief of Staff, Mack McClarty,
owns a chain of dealerships in that region, partnered with a fellow by the name
of Robert Johnson. Johnson happens to be founder of Black Entertainment Television
and was a huge Obama supporter and financier. These guys own a half
dozen Chrysler stores under the company title of RLJ-McClarty-Landers. Interestingly,
none of their dealerships were ordered closed - not one!

While all of their competing Chrysler/Dodge and Jeep dealership were! Eight dealerships

located near the dealerships owned by McClarty and Johnson were ordered shut down.

Thus by pure luck, these two major Obama supporters now have virtual monopoly on

Chrysler sales in their zone. Isn't that amazing?

Go look in The Washington Examiner, the story's there, and it's in a dozen or so other

web-based news organizations; this isn't being made up. Now if you thought Chrysler
was owned by Fiat, you are mistaken. Under the federal court ruling, 65% of Chrysler
is now owned by the federal government and the United Auto Workers union! Fiat
owns 20%. The other 15% is still privately owned and presumably will be traded
on the stock market. Obama smiles and says he doesn't want to run the auto industry.

As horrifying as this is to comprehend, and being as how this used to be the United States of

America, it would appear that the president has the power to destroy private businesses
and eliminate upwards of 100,000 jobs just because they don't agree with his political
agenda.

This is Nazi Germany stuff, and it's happening right here, right now, in our back yard.

There are voices in Washington demanding an explanation, but the "Automotive Task Force"
has released no information to the public or to any of the senators demanding answers
for what has been done. Keep your ear to the ground for more on this story. If you've

ever wanted to make a difference about anything in your life, get on the phone to your

national senator or representative in the House and demand an investigation into this.

Benjamin Franklin had it right when he said, "All that's necessary for evil to triumph is for good
men to do nothing." Car Czar No More An amazing thing happened
as this story was going to press. Obama's Car Czar, Steve Rattner, resigned on
July 13 and was promptly replaced by former steel workers union boss Ron Bloom.

According to CBS News, Rattner left "to return to private life and spend time with his family."

Treasury Secretary Tim Geithner said, "I hope that he takes another opportunity to bring his unique
skills to government service in the future." By the way, Rattner is under investigation for a

multi-million dollar pay-to-play investment bank scandal in New York .... Uh-oh! But, we're certain

that had nothing to do with his resignation. And, according to several news sources out there, there

are rumors he's being investigated for what could be pay-to-play scandal involving the closing of

Chrysler and GM dealerships. Really? Again, that couldn't have anything to with his resignation
-- that's ridiculous! Like CBS said, this guy just wants to "spend more quality
time with his family."

Obama has 32 personally appointed "czars" who answer to no one but him, all of whom are acting
without any Constitutional authority. But hey, we're sure they all have "unique
skills,"......as Tim Geithner likes to say! SOOOOO. HOW'S THE HOPE/CHANGE
WORKING FOR YOU?..

Check it out at the
following websites.....Copy and Paste:

http://gatewaypundit.blogspot..com/2009/05/hope-change-car-czar-behind-chrysler.html

http://www.washingtonexaminer.com/politics/Obamas-auto-policy-All-in-the-Democratic-family-44414452.html -

This goes beyond corruption
in high places - to gross criminal actions on the part of our government! I hope
you will spread this far and wide, and hopefully the taxpaying public will demand
some of that transparency we were promised ... followed by criminal prosecution
of the perpetrators!

What a crooked government we have!!!!! Vote 'em all out ...November 2010

A TALE OF TWO HOUSES

This was sent to me and does a lot to show how one that talks about the environment and how he acts versus a person who really believes in the environment and what he does to protect it. 

A Tale of Two Houses
House #1
A 20 room mansion (not including 8 bathrooms) heated by natural gas. Add on a pool (and a pool house) and a separate guest house, all heated by gas. In one month this residence consumes more energy than the average American household does in a year. The average bill for electricity and natural gas runs over $2400 per month. In natural gas alone, this property consumes more than 20 times the national average for an American home. This house is not situated in a Northern or Midwestern 'snow belt' area. It's in the South.

House #2

Designed by an architecture professor at a leading national university. This house incorporates every 'green' feature current home construction can provide. The house is 4,000 square feet (4 bedrooms) and is nestled on a high prairie in the American southwest. A central closet in the house holds geothermal heat-pumps drawing ground water through pipes sunk 300 feet into the ground.

The water (usually 67 degrees F) heats the house in the winter and cools it in the summer. The system uses no fossil fuels such as oil or natural gas and it consumes one-quarter electricity required for a conventional heating/cooling system. Rainwater from the roof is collected and funneled into a 25,000 gallon underground cistern. Wastewater from showers, sinks and toilets goes into underground purifying tanks and then into the cistern. The collected water then irrigates the land surrounding the house. Surrounding flowers and shrubs native to the area enable the property to blend into the surrounding rural landscape.


* * * * *

HOUSE #1 is outside of Nashville, Tennessee; it is the home of the 'Environmentalist'  Al Gore.

HOUSE #2 is on a ranch near Crawford, Texas; it is the residence of the ex-President of the United States, George W. Bush.

THIS is the definition of an "inconvenient truth"!!

I sure hope this gets passed to everyone!
And, yes ... I DID check Snopes prior to forwarding it.


You can verify this it at:   http://www.snopes.com/politics/bush/house.asp

Saving Our Financial System

The following is from a trader that often has many excellent reviews. His name is Larry Levin and is a floor trader at the CBOE and an often contributor on several money shows.

"I read an interesting piece on the financial crisis and what it could lead to on ZeroHedge. The whole article can be found here

Sometimes, when chasing the bouncing ball of fraud and corruption on a daily basis, it is easy to lose sight of the forest for the millions of trees (all of which have a 150% LTV fourth-lien on them, underwritten by Goldman Sachs, which is short the shrubbery tranche). Luckily, Charles Hugh Smith, of oftwominds.com has taken the time to put it all into such simple and compelling terms, even corrupt North Carolina congressmen will not have the chance to plead stupidity after reading this.

Of course, to those familiar with the work of Austrian economists, none of this will come as a surprise.

1. Enable trillions of dollars in mortgages guaranteed to default by packaging unlimited quantities of them into mortgage-backed securities (MBS), creating umlimited demand for fraudulently originated loans.

2. Sell these MBS as "safe" to credulous investors, institutions, town councils in Norway, etc., i.e. "the bezzle" on a global scale.

3. Make huge "side bets" against these doomed mortgages so when they default then the short-side bets generate billions in profits.

4. Leverage each $1 of actual capital into $100 of high-risk bets.

5. Hide the utterly fraudulent bets offshore and/or off-balance sheet (not that the regulators you had muzzled would have noticed anyway).

6. When the longside bets go bad, transfer hundreds of billions of dollars in Federal guarantees, bailouts and backstops into the private hands which made the risky bets, either via direct payments or via proxies like AIG. Enable these private Power Elites to borrow hundreds of billions more from the Treasury/Fed at zero interest.

7. Deposit these funds at the Federal Reserve, where they earn 3-4%. Reap billions in guaranteed income by borrowing Federal money for free and getting paid interest by the Fed.

8. As profits pile up, start buying boatloads of short-term U.S. Treasuries. Now the taxpayers who absorbed the trillions in private losses and who transferred trillions in subsidies, backstops, guarantees, bailouts and loans to private banks and corporations, are now paying interest on the Treasuries their own money purchased for the banks/corporations.

9. Slowly acquire trillions of dollars in Treasuries--not difficult to do as the Federal government is borrowing $1.5 trillion a year.

10. Stop buying Treasuries and dump a boatload onto the market, forcing interest rates to rise as supply of new T-Bills exceeds demand (at least temporarily). Repeat as necessary to double and then triple interest rates paid on Treasuries.

11. Buy hundreds of billions in long-term Treasuries at high rates of interest. As interest rates rise, interest payments dwarf all other Federal spending, forcing extreme cuts in all other government spending.

12. Enjoy the hundreds of billions of dollars in interest payments being paid by taxpayers on Treasuries that were purchased with their money but which are safely in private hands.

Charles' conclusion does not need further commentary as it is absolutely spot on:

Since the Federal government could potentially inflate away these trillions in Treasuries, buy enough elected officials to force austerity so inflation remains tame. In essence, these private banks and corporations now own the revenue stream of the Federal government and its taxpayers. Neat con, and the marks will never understand how "saving our financial system" led to their servitude to the very interests they bailed out.

The circle is now complete: in "saving our financial system," the public borrowed trillions and transferred the money to private Power Elites, who then buy the public debt with the money swindled out of the taxpayer. Then the taxpayers transfer more wealth every year to the Power Elites/Plutocracy in the form of interest on the Treasury debt. The Power Elites will own the debt that was taken on to bail them out of bad private bets: this is the culmination of privatized gains, socialized risk.

In effect, it's a Third World/colonial scam on a gigantic scale: plunder the public treasury, then buy the debt which was borrowed and transferred to your pockets. You are buying the country with money you borrowed from its taxpayers. No despot could do better."