What happens to stocks after the dollar crash?

Dear Bob,
A question that I’ve found difficult for finding an answer is this: What happens to stocks after the dollar crash, even stocks in precious metal? Are they 100 percent lost? Do they retain any value?

Thank You,

Dear Anthony,

While companies that actually produce something of value—say mining companies, oil producing companies, etc.—may still have value as companies, if you were to cash out of your stock holdings you would be paid in fiat currency that has no value. So it’s the currency, and any holding that uses fiat currency as its basis—that would have no value.

Best Wishes,


Why do people see things differently? A quick answer is, “they are not on the same page.”

How do we get on the same page? Assume that we measure the all-knowing among us at 100 and everybody else is somewhere between 100 and zero. One caveat: Your number has nothing to do with your, “education.” In fact your number of somewhere between zero and 100 has nothing to do with anything.

You may have heard that old saying, “He has his ear to the ground.” Your number is something that comes with birth. But don’t give up if yours is low, you can catch up, or mostly so. I admit that you can get a jumpstart if you come into the world with the right genes. Never fear, you can learn.

This I know is true because I have seen many backwoods-type people who sounded completely dumb in conversation but who had more perception than many or most people with high degrees of formal education.

So here’s the deal: I can get us on the same page if I can get as many definitions as possible in print. Here goes:

Agent Provocateur: A very old trick of government to foment wars and revolutions with phony fronts and propaganda.

Ages of History: Silver and gold; iron and steel; paper and finally electronic symbols; then back to silver and gold again.

Bureaucrats: Government employees, and everything they do is for the government; nothing for the people.

Conventional Medicine: American system of medical care as prescribed by medical schools and financed and controlled by pharmaceutical houses.

Democracy: The buzzword at all levels in our society when referring to human liberty. The truth is, they use the word democracy for any chicanery the government wants to put on the people, from fascism to communism.

Education: Formal education in the U.S. is the same as a government education. The goal of formal education is to control the public mind by controlling our parameters of thought.

Escape the System: Buy gold and silver.

Famine in the Land: Can you visual a famine coming to modern America while the grocery store shelves are still fully stocked? What’s the best thing that can happen to you right now? Recognize that you are ignorant. Flush everything you know and start over! Ignorant people are those who don’t know that they don’t know. Intelligent people are those who know not and know that they know not. Information becomes wisdom to those with an inquiring mind.

Food Stamps: One sign of a collapsing system. Forty million Americans are now on food stamps because of the collapsing system.

Gold and Silver: Real money that 90+ percent of the people don’t want, don’t value and don’t know anything about.

Government: Organized crime that flourishes on the wealth and the production of its citizens. The system gives them life and protects their “profession,” but you pay. The system protects itself, not the people.

Government, Bankers and Insurance Companies: They all love fiat money (paper money).

Government Bonds: A huge disguised system of theft, as bonds are certificates of guaranteed confiscation of wealth.

Inflation: It is an increase of the money supply by the money creators. Fiat is a monetary drug addiction. It destroys everything, including morality.

Lawyers and Accountants: Both work for the government (the system) but you pay them. They have a vested interest in pleasing the system at your expense.

Love: Impossible unless you can walk in your loved one’s shoes. If you can’t, don’t get married.

Mania: Economic chaos created by paper money.

Media: Is used to spread the propaganda of the system. They tell the people only what they want them to know.

Monetizing Debt: “Paying” debt with non-substance paper money.

Monsanto GMO Foods: Genetically modified foods and hybrid seeds that won’t regenerate, which makes the people dependent on big business for food.

Most Certain Thing in the World: Most Americans in the middle class are being impoverished because they don’t understand money.

Organized Medicine: Funded by the pharmaceuticals and it is a system of symptomology. They only address symptoms and have no cures. They use drugs to mask symptoms.

Paper Money: Forced fiat by the government banking system on the people. It serves to steal wealth from the people without payment.

Paper Profits: Are an illusion because there are two kinds of dollars: The real dollar, or gold, and the paper dollar, or nominal dollar. Example: The great Warren Buffett, investor, and his famous Berkshire Hathaway Fund is down in 2010 by 70 percent measured in real dollars (gold). We live in the last stages of the “paper money syndrome” where greed takes over with people trying desperately to survive. Greed destroys morality and, with it, law and order.  The vultures swarm.

Politicians: Whores of the system. They pretend to be for the people but in fact work for and are paid by the government.

Ponzi Scheme: So-called government debt and Social Security. What it really means is there is never any intention to pay.

QE1, QE2, QE3: Cover terms called monetary stimulus which really means just printing money. These are euphemisms for wild printing of money by the Federal government and the banking system.

Reality is strong medicine. It makes most people sick. So I hit you with the strong first so as to get you in recovery before you give up the ghost. Not meant as a joke!

Savings: We are taught to save from the cradle to the grave. There is no such thing as savings in a depreciating currency like the U.S. Dollar. Savings and fiat (paper money) are mutually contradictory. All savings should be in gold and silver if we understand money and government.

Symptomology: Using drugs to mask symptoms and calling it medicine.

Trust the Government and get certain deception.

U.S. Constitution: Historical memorabilia of human freedom, now passed away to the money changers.

Vaccines/Inoculations: These are products of the pharmaceuticals who, in league with the government, force poisons into the bodies of the people.

When did it Become Noticeable that government was entering a new phase of squeezing the middle class? Zero interest ratio and they stopped indexing Social Security. People surviving on pensions and investments can no longer exist on the interest income.

Who Loves Paper Money? Bankers, government and politicians. Why? Because they can steal from the people and transfer wealth to themselves.

World War: Debasing the currency of the world with not a shot being fired, kills more people indirectly.

Gold And Silver In A Bubble?

At this writing, silver is $39.57 and gold is $1,459.86. Silver and gold are not in a bubble and should be bought. Before this market is topped out, precious metals will be much higher.

Paper money and all fiat currencies are in a bubble. The people who are saying that silver and gold are in a bubble are talking their book.

They are betting against gold and silver by shorting the market, or either not buying it.

As we have cautioned many times, do not invest in any kind of proxy for gold and silver, meaning any kind of scheme, exchange traded fund (ETF) or any type of “storage or security” system. Keep your metals in your possession at all times, the same as you would your firearm.

In my wide reading of the metals market I am reading about silver being in backwardation.
This means that many forms of silver are not available at the retail price.

The U.S. Commodity Futures Trading Commission (CFTC) is considering rule changes that would set limits on the amount of shorts that can be bought. This would limit the manipulation of the gold and silver market by the big bullion banks like J.P. Morgan and Goldman Sachs. Many writers believe that this will make the price of silver and gold explosive.

Normally speaking, silver and gold are due for a correction and I believe it will substantially correct. Just always keep in mind how much and how fast it has gone up.

Rollback: Repealing Big Government Before The Coming Fiscal Collapse by Thomas E. Woods, Jr.

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Longtime followers of Personal Liberty Digest™ know that I am a fan of Thomas E. Woods, Jr. His arguments in defense of the Constitution are always sound and he presents them in a manner that is reasoned, inoffensive and nonpartisan. And the arguments he makes in Rollback: Repealing Big Government Before The Coming Fiscal Collapse are no exception.

Agreeing with former White House Chief of Staff Rahm Emanuel, who said that a crisis should never be allowed to go to waste, Woods believes that the coming fiscal crisis is an opportunity to take a careful second look at government, its claims and promises and see how they hold up under scrutiny. Once you finish Rollback, you’ll realize they don’t hold up at all.

Most Americans have been conditioned—either through their education at the hands of the State propaganda machine Federal education monopoly or through the endless ravings of the corporate media—to believe that the government always acts on behalf of the public good. After all, the government keeps us safe, protects us against abuse from all-powerful monopolies, has enacted policies that lead to an increase in the standard of living and in all ways is a benevolent benefactor.

Additionally, thanks to government education, Americans are no longer a bunch of illiterate half-wits. And because we have an all-loving government watching out for us, we don’t have to worry about quack medicine, dangerous products coming to market and evil corporations working us in slave labor conditions.

Try debating with someone about the need for limited government and see if these arguments aren’t front and center. And another boogieman that crops up in any such discussion is the dreaded “D-word”: Deregulation. If only government had sufficient regulations on industry X, Y and Z, then the oil well wouldn’t have exploded, Bernie Madoff wouldn’t have ripped people off, the economy wouldn’t have gone sour, the housing bubble wouldn’t have burst and America would be paradise with no one going hungry, living on the streets or existing in poverty.

Woods takes these arguments and tosses them aside like the garbage they are. Citing facts and figures from over a number of years, Woods shows how government intervention creates far more problems than it solves. And the new problems are always met with the circular argument that more government intervention would solve the problems that government intervention helped create.

In a chapter on the Federal Reserve, Woods notes that although the Fed was once an entity wrapped in mystery and cloaked in silence as far as political discussion was concerned, popular awareness of, and opposition to, the Fed is now at its highest level in American history. And while most Americans still don’t understand how it works, more and more people are now aware that what was supposed to be a source of economic stability is, in fact, causing instability.

He explains how the Fed has created inflation and how this process enriches the privileged classes of the politically well-connected at the expense of everyone else. He shows how it’s a means to insidiously siphon resources away from the citizenry without having to raise taxes or borrow money.

Woods spends a great deal of time on the impact the U.S. military has on our economy, and how that influence has grown greater over the years as members of Congress  have used various Pentagon programs to enrich their districts to ensure votes—even when some of the Pentagon programs and weapons system weren’t needed, wanted or even feasible.

He also covers in great deal the hidden costs that government spending has had on our economy through its programs that encouraged private government contractors to ramp up for production on military projects. He explains how those projects have distorted the free market by tying up resources and imposing unrealistic profit margins which drove up prices in the private sector.

Finally, he presents a plan that would roll back government to its Constitutional limits—while acknowledging that the likelihood that any of the plan’s ideas would be adopted short of a major financial crisis are about nil. But he holds out the hope that, should the predicted financial catastrophe occur, enough minds would be opened to the ideas that some of them might take hold.

For the Leftists who are quick to jump up and say that Woods is only writing his books as a means of bashing Democrats in general and President Barack Obama in particular, understand that nothing could be further from the truth. Woods holds both parties responsible for the policies that have brought us to this point.

This is an unbiased look at the behemoth that the U.S. government has become, how it got here, and what it would take to get us back to fiscal sanity.

The Good Slaughter And The Bad Slaughter

The United States corporate media and political elite warmongers—champions, they would have you believe, of the little people in Libya being slaughtered by troops loyal to Moammar Gadhafi—have been strangely silent about the slaughter of civilians in Bahrain and Syria.

Now we know why. President Barack Obama made a deal with the House of Saud: We take out Gadhafi and you can have free reign to quash pro-democracy protests in Bahrain (Syria is another story we’ll deal with shortly).

Two foreign diplomats—one from a European country and another from the BRIC (Brazil, Russia, India and China) group—told Asia Times Online about the deal.

According to the article, one of the diplomats said, "This is the reason why we could not support resolution 1973. We were arguing that Libya, Bahrain and Yemen were similar cases, and calling for a fact-finding mission. We maintain our official position that the resolution is not clear, and may be interpreted in a belligerent manner."

So the U.S. stuck its nose in another country’s civil war and unleashed its air power and dropped bombs on Tripoli—killing countless civilians in the process—in order to halt the killing of a group of rebels who were learning that it takes more than a good idea to make a rebellion. Never mind the fact that the “nice rebels” the U.S. is so keen to protect includes al-Qaida terrorists who have shot at American troops.

Meanwhile, Saudi enforcers entered Bahrain—home to the U.S. Fifth Fleet—and shot peaceful protestors seeking reforms in their government. And according to reports coming across Twitter, more than 400 people who had blogged or Tweeted in favor of the protests are now either missing or in custody, many of them grabbed on the streets by masked thugs imported from other Arab and Asian countries.

To Obama, Senator John McCain (R-Ariz.), Senator Lindsey Graham (R-S.C.), Senator John Kerry (D-Mass.), Senator Joseph Lieberman (I-Conn.) and other lovers of the military-industrial complex, that’s acting humanely.

For Saudi Arabia, it’s a win-win. They see their hated enemy Gadhafi humiliated—if not eliminated—and are allowed to squelch any popular uprisings before they spread into Saudi Arabia. And to put a cherry on it, Saudi Arabia cements itself as “the” player in the Arab League.

For the U.S.-led coalition, eastern Libya is the prize because of its oil fields. Already the rebels are making oil deals with European nations. And let’s not forget that Libya would make a great location for another NATO base, giving the U.S. a foothold it needs on the African continent.

As for Syria, the Obama administration can’t seem to make up its mind whether that country is friend or foe. On March 27, Secretary of State Hillary Clinton told Bob Schieffer on CBS’ Face The Nation that Syrian President Bashar al-Assad was a reformer, even as dozens of pro-democracy protesters were being gunned down and more activists were disappearing by the day.

But Clinton forgot to tell Secretary of Defense Robert Gates, who labeled Syria as one of only three repressive regimes in the whole of the Middle East, along with Iran and Libya.

Make no mistake: The assault on Libya is a shot across the bow of both Iran and Syria. “Play with us or feel our wrath.” NATO is the new police force and it’s going to rule the Mediterranean.

Throw Away Those Drugs While Your Memory’s Still Intact

Reports that previously indicated non-steroidal anti-inflammatory drugs (NSAIDs) could help with the symptoms of dementia have been proven inaccurate. In fact… these pills could cause you to LOSE your mind!

Patients who use NSAIDs did not have lower rates of cognitive decline or dementia, but actually had a 66 percent higher risk toward developing the memory-robbing condition. The Group Health patients were studied for 12 years.

Based on these results, researchers continue to evaluate the effect of inflammation in the development of Alzheimer’s, and look into alternative early detection methods and improved biomarkers.

When Will The People Of Walmart Wake Up To Inflation?

Serious price inflation will come this summer.

Although I have warned readers for some time that hyperinflation is coming, this is not me saying it, but Walmart CEO Bill Simon. Last week he told USA Today that inflation is “going to be serious” in the coming months.

“We’re seeing cost increases starting to come through at a pretty rapid rate,” he said.

Of course, back in October 2010, Federal Reserve Chairman Ben Bernanke promised that inflation was his goal. “For the first time in many decades, [the Fed] had to take seriously the possibility that inflation can be too low as well as too high,” he said.

“Every single retailer has and is paying more for the items they sell, and retailers will be passing some of these costs along,” John Long, retail strategist at Kurt Salmon told USA Today. Along with steep increases in raw material costs, labor costs in China and fuel costs for transportation are weighing heavily on retailers, he said.

The National Inflation Association reported in February that commodity prices have risen significantly since the fall. Wheat is up 52 percent, cotton is up 177 percent, corn is up 72 percent, soybeans are up 49 percent, coffee is up 86 percent, orange juice is up 37 percent and sugar is up 86 percent—all since Oct. 30, 2010. The price of oil is at a 30-month high—the highest price ever in the month of March.  Gas prices have doubled since President Barack Obama took office.

Higher fuel prices only compound the inflation problem. Factor in the result of the earthquake and tsunami in Japan and the subsequent radiological contamination of food around the globe and you can see we are in Red Alert territory as far as inflation is concerned.

The elites and Keynesians love inflation because it allows the government to steal the wealth of its subjects without the subjects realizing it. As Alan Greenspan said a 1966 essay, inflation is a “scheme for the hidden confiscation of wealth.”

As Peter Schiff wrote in his book, Crash Proof, inflation makes the national debt more manageable because it can be repaid in cheaper dollars, it allows for easier financing of social programs without raising taxes, can be confused with economic growth and causes nominal asset prices to rise (like stocks and real estate) which creates the illusion of wealth creation.

But rising prices makes it more difficult for people to buy the products they need and want.

Conversely, the elites and Keynesians don’t like lower prices, which they mistakenly—or nefariously—term deflation. But falling prices is not deflation. Just as inflation is an increase in the money supply, deflation is a decrease in the money supply. A decrease in the money supply makes the green slips of paper the public holds more valuable. Deflation benefits the saver and hurts the borrower.

Keynesians make the fallacious argument that when prices are falling, consumers will not buy because they will instead wait for the prices to fall further. Of course, that has not happened in the case of personal computers, flat screen televisions and other electronics that have seen prices fall as more competitors enter the market with comparable—or superior—products.

As I wrote in U.S. Exporting Runaway Inflation Across The Entire World With Its Reckless Money Printing, the unrest in the Middle East began as riots over the high cost and shortage of food.

The United States has thus far avoided such riots by paying off the masses. How so, you ask? More than 44 million Americans are now on food stamps. That’s 14 percent of the U.S. population. Unemployment benefits last for 99 weeks. These factors have prevented American streets from looking like the streets in Algeria, Tunisia, Egypt, Saudi Arabia, Bahrain, Iran, Syria and Libya.

In Wisconsin, the government cut back on its gifts to the public employee unions and riots ensued. In Ohio, the same thing happened.

People don’t like to have things taken away, though they have allowed the government to steal their wealth for 100 years. It seems they’re becoming tired of it. Many of them just aren’t yet sure where to vent their anger.

Those protesting in Wisconsin and Ohio are venting at their governors and legislators, claiming they just want to break the unions. But States, unlike the Federal government, must balance their budgets. So cuts have to be made somewhere. States can’t unleash another round of quantitative easing (money printing) as the Fed can.

Unfortunately, the people who shop at Walmart are too busy watching “American Idol” and gossiping about Charlie Sheen through their Twitter accounts to understand what’s happening. They will see higher prices and they’ll blame the nameless and faceless “they,” sure that the store manager or his boss or his boss is responsible. But most, if not all, will not know what’s happening until it is too late for them. They are headed for rough times.

If the Federal government had to live within its means, many so-called entitlements would have to go away. But the government is a Ponzi scheme. Bernie Madoff was sent to jail forever for his Ponzi scheme, which pales in comparison to the Feds’.

But it doesn’t. When it needs money, the Fed prints more and distributes it to Wall Street and the banksters who get to use it first, before it’s diluted. The rest of us get it later, when it’s worth less—or worthless.

To understand, imagine a glass of milk. The Fed, Wall Street and the banksters get to drink the fresh milk. Then imagine pouring water into the milk. We get to drink after more and more water is poured into the milk, after it is more water than milk.

For those millions on Social Security and other entitlement programs, the money won’t go away. But the dollars you get from them will not buy a loaf of bread. Your checks will remain the same while it takes wheelbarrow loads of cash just to buy bread, as it did in Weimar Germany in the early 1920s.

That’s why we have encouraged you to buy silver and gold. If you have silver and gold in your possession you will still be able to buy food and necessities while others paper their walls with their worthless dollar bills.

And it is time, and almost past time, to store food and water. They will only get more expensive from here.

There is still time buy gold and silver. As the Fed destroys the dollar, you will look back at how cheap gold and silver are now.

How long do we have? It appears to me that we are very close to economic and social collapse. But times can yet wobble along for months or even a few years. It is a certainty that it will get visibly worse in many ways, especially now that the endgame is here.