Kerry Lutz's--Financial Survival Network

Andy Hoffman's weekly rant on the Financial Survival Network has become a regular feature. We got so much positive feedback and so many emails that we had to respond. Today we discuss the The Three Card Monty Economy, where every publicly traded market is rigged by central banks and governments around the world. Whether its stocks, bonds, pork bellies or gold and silver, you can be sure the heavy hand of government is attempting to tilt the scales in someone else's favor. That doesn't leave much for the little guy, other than gold and silver.

The Federal Reserve shelled out over $16 trillion to keep the economy a float during the 2008 Crash. How much more will it take this time? Andy comments that new entities are being created almost daily and virtually no one knows who they are and what they do. Now they're talking about a new government for Europe. What's next? What we do know is that the fundamental problems are not being resolved and they won't be so long as the system remains as it is now. The system is the problem and kicking the can down road, only works for so long. Evenutally the debts come due and no one has the cash to pay them.

Please send your questions to kl@kerrylutz.com or call us at 347-460-LUTZ.

The United States has run up a cumulative $7.5 trillion Trade Deficit. The last time the country ran a trade surplus was in 1976. Nixon closed the Gold Window in 1971. Do you believe it's just a coincidence that the rise of an un-backed Fiat Dollar and the rise of the Trade Deficit haapened so close in time? The Country has been in a pronounced economic decline since the 1970's and when the Gold Window was closed. Since then the money supply has increased many times as has inflation.

While living standards have declined, so  has domestic energy production. This has exacerbated the Trade Deficit and has cost consumers countless billions. The ability to print up currency and dump it on a willing world, in exchange for their production, has enabled the Government to present the illusion that things are alright. But look at the dying industrial cities in America. Detroit, once a paragon of industrial success, has fallen upon hard times. The average Detroit home is going for $6,000, only 25 percent of students graduate from high school and unemployment among men has reached nearly half of the work force.

Such trade imbalances were much less likely to occur under a Gold Standard. Countries were not likely to allow complete depletion of their gold reserves. Fiat currencies can keep being produced regardless how bad the imbalance becomes. Then it is up to the trading partners to decide whether or not to accept the currency. At some point enough will be enough and it will be game over.

Please send your questions to kl@kerrylutz.com or call us at 347-460-LUTZ.