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Don Stott

I do not want to panic anyone, nor do I want to be an extremist, or a Chicken Little, but I honestly think the sky is falling at times. Consider a few facts:

(1) The national debt now is up to $52 TRILLION, counting all the long term commitments, an amount totally impossible to pay, other than with paper scrip, which means it will become valueless eventually.

(2) On yesterday's news it was said that in order to make Social Security and Medicare solvent, right now, without considering retiring Baby Boomers, the rates for Social Security and Medicare would have to be increased by 126%, which is more than double. It was added that Congress would never pass such an increase.

(3) The Bear Stearns bailout saved the US economy from total collapse. Instead, Bear Stearns huge derivatives and liabilities were transferred to Goldman Sachs, who now has over $90 TRILLION worth of derivatives. Lehman's books, if the actualities were examined, is already bankrupt.

(4) When LTCM went bust, because of huge derivatives exposure, it would have taken the economy with it if the Fed hadn't bailed it out. That's two close calls, which saved the US economy by a hair, and if ours went, the world's might have gone too.

(5) It is obvious to me that since there are huge numbers of bankruptcies and near ones, that the IRS is going to collect a lot less than in years past, and this will cause much more scrip to be printed to pay the ever-increasing bills.

(6) I don't think there is much doubt that McCain will be elected, and by his own admission he knows little about economics. He also is one of Bush's closest allies, and thinks war is just wonderful. In other words, the military budget will continue to escalate, causing ever more scrip to be printed.

You just can't imagine how shaky the big investment banks are...literally! You just can't imagine how much scrip is being placed into circulation every hour, minute and second! Those big investment banks are borrowing $32.9 billion a DAY from the Fed to stay afloat. Know what they are using for collateral? Bad mortgages, which is what caused the whole thing to come down in the first place. In other words, these banks are borrowing $32.9 billion a day to stay afloat, and are using basically worthless collateral. Collateral no loan officer in any bank would accept. The Fed takes it because it is frantically trying to keep the US economy, literally, in existence.

No, you don't have to worry about your dollars being safe in your bank. Your worry is about your safe dollars being worth anything. If you think that the estimated $4 a gallon for gas by Memorial Day is correct, guess what it could be by Labor Day?

"THE MORE OF ANYTHING THERE IS, THE LESS THEY WILL BE WORTH" - Stott's law.

THIS INCLUDES DOLLARS! The Fed printed huge bucks to bail out LTCM and Bear Stearns. How much more will it have to print to bail out Goldman or Lehman, or Citibank? How much will a head of lettuce cost in six months? A local farmer says that fertilizer has gone from $260 to $1,000 a ton, and wheat from $6 to $18. Hyper-inflation is at the door I am afraid, and your savings accounts and CD's at 3%, aren't going to do anything other than de-capitalize you. If we get into hyper-inflation, as we will, will there be a mass revolt? Violence? Mass tax revolt? Massive robberies and burglaries? If one can't afford bread or gas any more, and credit cards are maxed out, what else is there to do? I am glad I'm not in a big city. My town has grown 3.7% in the last year alone, most coming from Denver and the front range big cities.

This will not be a 1929 situation. In 1929, there was no inflation. There was no inflation, nor had there been any since the War of Northern Aggression, when the presses for both the North and South went crazy, and there was hyper-inflation, Zimbabwe style.

In 1929, the dollar was stable, because it was backed by gold, and could not be printed unless there was gold to back it. Now, there are absolutely no restrictions, and "Helicopter Ben" may indeed drop hundred dollar bills from the sky, except they might not buy much by then. I get really worried when I see so many things closing in on our economic system. I know the Fed buys stocks like crazy via the Plunge Protection Team (PPT) to keep the market going. I know that the COMEX has but a fraction of the silver on deposit that they allow futures trades on, which is against their own rules, and highly immoral to boot. Suppose millions of ounces of silver are on sudden demand, because of fear or inflation, and there isn't any? I don't think there is an ounce of silver or gold in the ETF's. It's all paper gold and silver, I'd be willing to bet. Even if there is, why would anyone owning gold and silver want it stored overseas?

The lies promulgated by CNBC, the media in general, (except Glenn Beck) and the DC Gang in its entirety, just to try to keep this thing afloat until at least the November elections, is so obvious and frightening, as to give one nightmares. What happens after the elections and either of the three now running is elected? They're all three total disasters! The dollars will continue to flow, and if Goldman or Lehman or Citibank go down, they will be be bailed out by the Fed, and hundreds of billions more will be printed. There's only one true money, and which have been for thousands of years, and that is gold and silver, which cannot be printed at the whim of a government.

www.coloradogold.com