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Q: I have a question for your Q&A day on Wednesday. I am an Canadian and have been following Miles Franklin as well as many others ever since 2008. My question is; are the typical American citizens that clueless as to what is going on? Love or hate America, it still used to be the shining light for democracy and capitalism. As an ‘outsider’ it is sad to see what your country has become. And I have a real hard time believing more Americans are not aware of what’s going on. I realize Americans are known for not knowing much of anything outside their own back yards but this is right in your back yard!!!

Cheers,

Pat Rose

David Schectman’s Answer:

Pat,

I love your question. You are cutting to the heart of the matter. Yes, Americans, by and large, are as clueless as you suspect. If you think it is sad for you, as an outsider, to see what is happening, imagine what it is like for someone like me who fully understands how we have devolved over the last few decades.

A clear example of the decay is the way most Americans embrace the Patriot Act. The vast majority is willing to sacrifice personal liberty for security – and it is questionable if we are even getting that.

Check out the following article by Zero Hedge. What are the benefits we get from TSA body searches, removing shoes, long lines and more? I fly a lot and most of the TSA agents seem bored, disinterested and not the brightest lights on the tree…

TSA Agents Failed To Catch 95% Of Mock Bombs And Weapons

Submitted by Tyler Durden 

The reason why “investing” in the economy in the form of government spending always, without fail, leads to adverse results and negative returns, is because unlike the private sector, there are neither checks and balances, nor punishment if one fails at their job. Case in point, the much maligned Transportation Security Administration, aka the TSA, best known for groping women and infants at airport checkpoints is about to be even more maligned because according to an exclusive report from ABC, TSA screeners failed ailed to detect mock explosives and weapons in 95% of tests carried out by undercover agents.

As far as I can see, a majority of Americans are content to watch the Kardashians on reality TV, gossip about Bruce Jenner’s sex change and shop at Walmart. A majority of those with money and a college education blindly follow the advice of their Wall Street broker and believe everything that President Obama and Hilary have to say.

Dissent is ridiculed. People like Andy Hoffman, Bill Holter and myself are looked at, by the majority, as being wingnuts.

That’s probably a compliment, considering who is making the statement. I have never followed the crowd. I have always been an independent thinker. My college education in philosophy and 20th Century European and American history served me well. It honed my ability to see around corners and think for myself. I may not always be right but that’s because I am usually “early,” and given time, my analysis is usually right on. Dealing in markets (all financial markets) that are locked down and manipulated, the truth can be suppressed, but not altered.

I’m not big on “I told you so” and will take no pleasure in being proved right. I am trying to open some eyes out there (and have been quite successful in that endeavor) and provide for my immediate family. People who take our advice will be way ahead of those who don’t. It may not be immediately visible, but give it a few years and you will understand.

I was reading a Stansbury article today. In most ways, he is on the same page that we are. He believes that by 2020 (or earlier) the stock market will have crashed, the dollar will crash, the economy will be in Depression, taxes will go through the roof, even including a “wealth tax.” I agree. His suggestions include physical gold and silver (his favorite investment, and mine too), and he urges people to get their assets (or a large portion of them) off shore. That is exactly what we have been advocating for a few years now.

You have Brinks, in Montreal as a great place to store your gold and silver. It is a better choice for Americans because the wealth is in another country, but still it is something you may wish to consider.

Thank you for your question. You are right on the money – unfortunately!

Best,

David

Q: Hello, Guys…     I have a premise that says, “If I cannot teach what I have read, then I have not fully understand what I have read.”  This paragraph from David Stockman is a prime example.    While I certainly understand the concept here, the specifics are, well, not clear.  Therefore, I cannot teach them.

“And this gets us to today’s report on the April CPI. Normally, Fed heads prefer the PCE deflator less food and energy on the grounds that the later elements are too volatile to properly measure the actual inflation trend.  Alrighty then.

The April index for people who prefer to starve and shiver in the dark came in at a 3.6% rate for the month and was 1.8% higher than last April.”   {{Is this saying that April was 3.6% higher than the preceding month, yet only 1.8% higher than year-ago April?   I don’t think so.  So to what does the figure relate?}}

Thank you,

Charles Abar

Andy Hoffman’s Answer:

Charles,

He is referring to the Fed’s comical insistence on, from an “inflation” perspective, focusing not on the CPI itself, but the so-called “core” rate excluding food and energy.  Their eternal excuse for this idiocy – of pretending food (so you don’t starve) and energy (so you don’t shiver) should not be included in the inflation discussions that ultimately yield monetary policy is that it is “too volatile” – as if they’re the only volatile components of the CPI; or more importantly, as if inflation can be selectively measured.

Of course, once food and energy go in the direction they want, you can bet they’ll emphasize them more.  And if they don’t, they’ll simply have the BLS (Bureau of Labor Statistics, which produces the CPI and NFP employment reports) change the calculation for the umpteenth time.

Andy