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Some insight on the economy

Hi Folks,

(Some of what follows has been covered in past messages. For this I apologize but the importance of the information is such that the redundancy is worth it.)

As those of you who have hung in with me know, over the past five or so years I have dedicated myself to the study of recent world history and the implications thereof. Through this newsletter I have occasionally tried to share with you some of the insights that have resulted from this study. My film-in-progress, Water Time; Surf Travel Diary of a MadMan is likewise partially an attempt to impart to you not only what I consider important historical information, but also to instill the sort of analytical way of seeing the world that I have gradually developed. (That I am doing this in the context of an extended down south surf excursion is the unique challenge of the project.)

Over the past couple years I have also suggested ways of protecting yourself and your loved ones from the coming economic catastrophe.

This current message is meant as a rationale for your taking seriously an investment offer related to that catastrophe. Yes, I'm selling something, so interested parties should fact check any relevant claims I might make.

That an economic catastrophe is coming (and soon) might be a good place to start in this fact checking. The subject is so big and unnerving that for our purposes here I must severely simplify. I'll use an analogy, which can be misleading; but I believe that this one is valid. In fact, the analogy was recently born out by a character who knows whereof he speaks: none other than uber financial-crook Bernie Madoff, who defined the U.S. economy as a 'Ponzi scheme.' He was not referring to aspects of the economy (the Nasdaq Exchange, say, which he himself invented) or to his own fraudulent antics, but to the economy itself, how it works at the base, bottom line level.

Costa Rica Land for Sale

Now I'm the first to admit that I'm no economist. 'Buy low, sell high' about sums up my knowledge of finances prior to my dive down the rabbit hole in search of the answer to the riddle of how the world works, which was around the end of 2005. (Since then I have figured some things out.) Still, I recall that in my own simple-minded way I was ahead of Bernie and, come to think of it, ahead of myself and my quest to understand why things are the way they are. I recall that just after Oliver Stone's Wall Street came out I was grilling a 'real' economist acquaintance (whom I had the hots for) on the veracity of the film's scenario. When she explained that the U.S. economic system depends for its existence on an ever-increasing GNP, I opined that that sounded like a Ponzi scheme.

The woman found my observation amusing and somewhat patronizingly (I thought) explained that I was oversimplifying based on my ignorance of the complexities of the system. I don't recall much about how the discussion went from there except that I pointed out that the planet we live on is of a certain and limited size and therefore the GNP could not increase forever, so the economic system was by definition going to fail at some point, in the same way a Ponzi scheme fails. To me, it seemed as simple as that, and as it turns out, I was right.

Now that I'm not as ignorant of 'the complexities' as I was in those days, I can clearly see that the 'at some point' of my prediction is pretty much now. (Whether the failure of the system is by design or by some combination of greed, ignorance, and denial is irrelevant for our purposes here, but – in case you're curious -- I'm quite certain it's by design.)

By the way, in case you're not aware of what I'm referring to in my use of terminology: A classic Ponzi scheme (named for the guy who was first busted for pulling it) is the old 'chain letter' scam, which, like the economy, is based on an ever-increasing number of participants adding money to the system. The problem, of course, is that eventually you run out of participants (analogous to the earth's limited size) and the scheme collapses.

Point being: the U.S. economy is like a chain letter in that sense. The reason it has not collapsed by now is because more and more money is being pumped into the system via the privately owned banking cartel known as the Federal Reserve. They can do this because our monetary system is based on 'fiat' currency – meaning it's not backed by anything (like gold or silver). They can (and do) 'print up' as much as they want. (Most of it is actually digital, but the principle is the same.) Staying with the chain letter comparison: the people who are 'owed money' by the scheme are analogous to the 'national debt.' If they are not paid, the system, the Ponzi scheme, has 'failed.'

The Federal Reserve's creation of money to pay 'the participants' who are owed is called 'monetizing the debt' (sounds better than 'counterfeiting,' right?). This of course does not solve the problem, it only postpones it. (I'll drop the chain letter analogy here, because the economic system is in fact more complex. However, the complexities all have one thing in common: they are ways of postponing the collapse of the Ponzi scheme itself via the creation of still more and more and more money – the 'bail out' of the fall of 2008 is an extreme example of that.)

Meanwhile, however, the effect of an ever-increasing money supply upon the system is to make the already-existing currency (your savings, say) worth less. Right: Inflation. If folks really understood how the creation of more and more and more (etc.) money quite literally amounts to the economic system stealing your hard-earned cash, there would be bankers hanging by their necks until dead from trees everywhere. I kid you not. (The bankers at the top of the banking pyramid are outright criminals.)

As if it isn't bad enough that a gang of private banker criminals can create all the money they want (thereby stealing our money via inflation), the insult to injury is that we pay them interest on the money they create.

As if THAT isn't bad enough: The gang of private banker criminals takes the money they create (thereby stealing your money via inflation plus charging you interest which you pay via income tax),and lend multiples of that money to their cronies (and via the corporate shell game, even back to themselves ). This subsystem of theft is called 'fractional reserve banking': Say they create a million dollars and give it to themselves (charging you interest to do so). Via their possession of that million they can lend anywhere from 10 to who-knows-how-much times that amount to whomever they want (as mentioned, even to themselves). I can't come up with an upper limit number because there does not appear to be one, although B.O. (Before Obama) there was a limit to how much could be 'leveraged.'

Every dollar lent in this way is in fact 'created' — it did not exist before it was lent. Therefore, every dollar created by fractional reserve lending amounts to further theft of the money you have in your pocket or bank account. (A side note: All money comes into existence via debt creation. Every last buck. If somehow, all debts – your credit card balance, your buddy's mortgage, the national debt — could somehow be repaid, there would be no money in existence. Not a cent. It would all disappear. The implication of this astounding fact is that it is impossible in principal to collectively rid ourselves of the burden of debt to the banking system. This also means that the system is rigged so that 'balancing the (national) budget' would result in catastrophic deflation, since the amount of money taken out of the system would destroy the system. A quick question: Why is it that most P.H.ds in economics — let alone you --- don't know this? Answer: Because it's a secret.)

Another reason the Ponzi scheme has lasted this long is that the U.S. dollar is the world's 'reserve currency'. Meaning that when a country buys, say, oil, it does so in dollars. So international banks need a lot of U.S. dollars on hand to do business.

The main reason the price of oil is rising so rapidly is not that oil is becoming more valuable – although 'supply and demand' is to an extentinvolved – it's that the dollar is worth less and less almost daily, as The Fed keeps creating more and more of it, thus diluting its value. So when gas hits eight bucks at the pump go ahead and blame the Saudis if you want, but the main culprit is the gang at The Fed.

Given all this, what's the next major thing (internationally) that is likely to happen?

Right: The dollar will get dumped as the world reserve currency. It may be a couple years or a couple months (or a couple hours), but when this officially happens (it's 'unofficially' happening now, as some countries are doing international business in other currencies), the dollar will be devalued BIG TIME, which will equal still another huge theft of your reserves. But one way or another it will soon be severely devalued, possibly 'overnight', via an edict from the Treasury Department/Federal Reserve.

The price of gas will go to six, seven, eight bucks a gallon, food prices will double or triple or worse, et-fucking-cetera. Worst case is that the credit system itself will implode, making normal business impossible; you'll go to the supermarket and find empty shelves. This is the 'Mad Max' scenario.

zbigHyper-inflation coupled with massive unemployment could have the same dystopian effect, even absent total collapse. Listen to Obama's trusted advisor Zbigniew Brzezinski in a moment of candor

'Zbig', in case you don't know, has been atop the elite power structure since before the Carter administration; as I say, he is one of Obama's most trusted advisors. The latter fact makes his above public comment particularly interesting. I mean, doesn't it? Sure it does: Obama knows very well that his policies are taking us to economic oblivion. Which is why he created NORTHCOM, the hundreds of thousands of Iraq-battle-hardened troops now based in the U.S. to deal with the 'civil unrest' Brzezinski refers to.

This begs the question: Why would Brzezinski say this stuff publicly, thereby exposing the Obama administration's knowledge of the coming catastrophe? The answer is this simple: The psychopaths running the U.S. government do not care what you know. Like most psychopaths, they are on such a power trip that they revel in their own omnipotence.

Zbig: 'There is this public awareness that there was this extraordinary wealth that was transferred to just a few individuals…'

A remarkable statement considering that Brzezinski himself is one of the 'few individuals' to which the extraordinary wealth was transferred.

Part of that 'transferred' wealth was yours, you know. Stolen.

What this psychopath is really saying is, 'I stole your money and I don't care that you know it.'

I have to admit that we are living in interesting times.

Those of you who have seen the first seven minutes of Water Time might remember that it took a week for Chase Bank to come up with the money I needed to withdraw for my trip south; I then told Honey that we better travel with some 'real' money, i.e., gold and silver. I bought the gold from those scenes at seven hundred and change per ounce, the silver at the equivalent of less than $20 per ounce. This was in the fall of 2007. Gold is now worth over $1,500, more than double that. The silver I bought did even better. (To those of you who wrote me insulting emails I might ask: How did your investments do over the past few years?)

I also bought $2,000 in storable food (mostly vacuum-sealed freeze dried). This was not only a 'worst case' precaution but an investment: Every aspect of food production, from the planting of crops (fertilizers, pesticides, fuel for farm machinery, etc., etc.) to getting them onto the store shelf involves petroleum products, so hyper-inflation will hit food hardest.

In any case – and now I'm inching towards my financial proposal -- the absolute worst place to have your long term assets is in U.S. dollars, especially in a savings account, where not only do you get almost zero interest and where money is in effect stolen from you almost daily, but your money is at actual risk; watch the opening of my film again and consider the implications of the Chase Bank being too 'short right now' (to quote the bank manager) to come up with $30,000 in less than a week. You are much better off having your cash money stashed in a coffee can in the backyard. (The FDIC, which supposedly insures your savings, is virtually bankrupt, by the way, for the same reason Chase was 'low right now'.)

bank scenes

I've strung together the bank scenes from Water Time so you can more easily re-look at how it went -- this was a major branch of Chase, by the way, not some backwater station.

Here's what happened after I turned off the camera: I got a bit rowdy, reminding Louis that when I opened my savings account by giving Chase cash money, included in the contract with Chase was the guarantee that I could withdraw that money on demand. If you're really low, I said, send someone over to another branch (we were in Santa Cruz, where there are several Chase branches) and get my money, like today.

Louis conferred with the blonde woman who demanded I turn the camera off, came back and changed his story: Now it wasn't that he was 'low' but that Chase had a new rule that limited cash withdrawals to $10,000 per day.

You mean I have to make three trips to this bank to get my money? I wanted to know.

You can order the $30,000 in one batch but it will take a week, Louis said.

This was a Thursday. I withdrew $10,000 and came back the next day. I whipped out my tape recorder and asked Louis to repeat what he had told me the day before, especially about the $10,000 'rule'.

Louis immediately had to re-confer with Blondie.

Louis returned, visibly nervous now. There is no $10,000 per day rule, he said. That was a 'mistake.'

I wanted to know how he could make a mistake of that magnitude. How he could change his story twice in two days.

Louis apologized, although he did not explain the provenance of the 'mistake'. If I would just be patient and come back on Monday they'd give me the rest of my money.

I came back on Monday and got the money. When I asked if I could talk to Louis they said he was 'unavailable'.

Okay. Implications. The above was over a paltry $30,000. I want you to imagine the sorts and magnitude of the lies that will be (already have been) slung our way when the amount is in the trillions. (A trillion being a thousand billion.)

But back to my situation, and my proposal. (Is my timing off here? I mean is it dumb to expose crookedness the likes of which has never been seen before on this planet and then suggest you and I do business together? Probably is… but fuck it.)

As I've mentioned before (again, sorry for the redundancies in this, but this stuff is all important), aside from precious metals (plus food) as assets, the other decision I made (in 2006) was to buy high end land in Costa Rica – 2.2 eminently buildable acres at a place where 'food falls on your head' and there are three growing seasons; but mainly, it features classic surf nearby.

I am not sure what will be the state of things once the economic shit has finished hitting the fan (and there has been a reorganization of the economic system), but no matter what, the two commodities that will hold their value are precious metals and high-end land.

Back to my situation: My error in all my study and research and brilliant thinking was that I would finish my film in a year or so. That was four years ago. (I actually don't regret the delay, since I believe my film will be the better for the extra time spent making it.) This miscalculation has put me in an emergency situation. Notwithstanding my negatives about the dollar, one does need a certain amount of the stuff to make a film.

allan's land for sale

My parcel is in northern Costa Rica about 40 minutes south of Tamarindo at a pueblito appropriately named Paraiso (Paradise), and is legally divided into two buildable 1.1 acre lots with easy access to water and electricity. I'll put myself on the street with a tin cup before selling all of it, but I really need some cash now to finish my film. Plus I don't need 2.2 acres to build a nice little house and grow things on it. One acre plus is fine.

In 2006 I paid $160,000 for the 10,000 sq meter parcel, which is $16 a sq meter. So for 1.1 acres I paid $80,000. I will sell for half that, i.e., $40,000 (I want the $40k net, which means the buyer absorbs taxes and fees and travel expenses, which I'll limit to $5,000 – if it's more than that, I'll get it). If this deal sounds nuts, it sort of is; if it sounds too good to be true, it's not. (I'll supply the paperwork proving how much I paid for the parcel.) So you'd be paying $8 per sq meter. I'll let you do your own research on how much buildable semi-ocean view land goes for in that area, but it's about 3 times that amount. (Yes, sales are slow right now, hence my offer.)

I've made a little film about the land (which some of you have already seen):

Check it out!

If you're not fairly flush this deal isn't for you. At least an equal amount of your resources should be in precious metals (I think silver is a better deal than gold right now). And of course you should have a certain amount of cash money on hand, at least for the foreseeable future.

Buy some store-able food! Even if the worst doesn't happen, it's as good a hedge against inflation as you'll find. ( is a good company for freeze-dried stuff; it's tasty too.)

If you think gold and silver are too high right now to be a good investment, all I can suggest is that you do your own research. In my view, gold/silver's biggest percentage jump is still in the offing. (If I have anything left over after finishing my film, it will go into 'junk silver' -- old coins with a defined silver content. If you're eBay-literate, that's a good place to make a purchase.)

Hey, thanks for hanging in. Hope you learned something.

I'll be in touch.


Some links:

Listen to economist Porter Stansberry on buying land overseas.

If you're looking for a great surf vacation, here's Lourdes's Saladita website.

Here's a review of my essay 'On the Deep State, Self-Reflection, 9/11, and the Legend of 'Maverick' FBI Agent John O'Neill'.

I highly recommend the video made by the above reviewer, Craig Ranke. It's called 'National Security Alert' and is on the Net. (Consider supporting the filmmakers by buying a DVD at I bought 40 to hand out.) The film proves beyond any reasonable doubt that no large aircraft hit the Pentagon.

If you're curiosity about the economic system has been piqued, try a little film called 'Money as Debt' (which I've recommended before and got many emails thanking me). Google the title and you'll find it. A great book on the Federal Reserve is The Creature from Jekyll Island by G. Edward Griffin.

One last thing: To those of you who contributed to the making of Water Time, I again thank you. Big Time. On those days when I get discouraged, I think of you and your faith that I will produce something worthwhile, and then get back to work.


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