An Urgent Warning from The Dines Letter
Last month I introduced you to Mr. James Dines. He is in many ways the father of the financial newsletter industry. And he's out with an urgent new warning that he's disseminating via the Outsider Club.
As you know, Americans have been unrelentingly assured by the Washington Economic Establishment that the economy is still recovering from the 2008 “Great Recession.”
But Mr. Dines has never accepted that there has been a recovery, even the government-described “fragile recovery.”
All that’s happened since — including the “rebound” in stock prices — has simply been the result of printing breathtakingly large amounts of money and debt.
Now America is saddled with nearly $20 TRILLION of debt. You could literally spend a million dollars a day, every single day, back to the day when Julius Caesar was born (12 July 100 BC) and still not even spend $1 trillion!
That figure doesn’t even take into account our “unfunded liabilities” like Medicare, Medicaid, Social Security, and student loans.
The debt is huge and growing (by nearly a trillion dollars a year). And there’s no possible way to pay it down. World trade is such that we could not earn that much money exporting to other nations, particularly since they are more interested in exporting into our market.
Before long, payments on the debt will become the third largest item in the federal budget. Something is going to break...
Mr. Dines has long warned that cutting the dollar’s link to gold wouldn’t just lead to chaos... it would be the dollar’s eventual death knell.
Currencies not backed by anything tangible, like gold or silver, have always left debt and destruction in their wakes.
There isn’t a paper currency on Earth worth trusting as much as gold and silver. And he’s been pounding the table on them for many years now.
Mr. Dines and his readers have made a lot of money on physical gold and silver. (As much as 5,314% on gold and 5,305% on silver. In fact, he first recommended silver when it traded at 92.5 cents an ounce!)
But he’s also helped make them a killing in gold and silver stocks too. In fact, he recommended stocks before being permitted to recommend buying gold and silver bullion.
We’re talking big triple- and quadruple-digit gains, including stocks currently on our Supervised Lists.
- 4,237% on ASA
- 2,168% on Agnico Eagle
- 2,618% on Industrias Peñoles
- 1,553% on Anglogold Ashanti
- 1,485% on Silver Standard
- 978% on Pan American Silver
- 794% on Anglo American
- And many more!
There’s no stopping this gold bull market that began at $35 an ounce and got launched when Nixon closed the gold window, a decision that will be looked back on as a colossal, epic blunder.
Gold is sure to rise for as long as printing money out of thin air exists. And silver will go along for the ride.
Debt bubbles are not a new invention. Historically, humans have too often chosen to print too much paper money, something that always ended in misery.
In Germany, for instance, they used up all their gold to pay for World War I, but were still deeply in debt. So the government tried printing its way out of its debts after World War I, destroying the Weimar Currency. Citizens used the worthless money as wallpaper. The turmoil and chaos spawned a second world war, World War II.
Zimbabwe tried doing the same thing with its currency in the year 2000. The “$750,000 bearer cheque” (the country’s highest note at the time) couldn’t even buy you a loaf of bread.
That’s like not being able to swap a house for a loaf of bread!
This is what happens to money backed by nothing but the faith of the people who use it. Every fiat paper currency has failed... even going all the way back to the Romans.
Mr. Dines has described all paper currencies as “a bunch of staggering drunks holding each other up.”
It has been his adamant position since 1960 that nothing would stabilize currencies other than a return of a link to a gold standard.
Bailouts don’t work. They are only temporary, whereas fundamental restructuring is needed.
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Currency crises will keep happening with increasing frequency, each worse than the previous one, until gold is restored as the primary monetary asset.
The Fed thinks it can simply print and borrow money forever. But it can’t. It is no more immune than any other central bank.
The quick “remedies” by the Washington Economic Establishment to stimulate growth are failing.
They have kept interest rates around zero for eight years, which allowed the U.S. government to borrow more money at historically cheap rates.
They tried pumping cash into the banking system in exchange for bonds and securities.
In 2007, the Fed’s balance sheet was just $890 billion.
Now it’s $4.5 trillion and they’ve got nothing to show for it but a pile of their own lousy bonds.
They tried to stoke inflation.
But last year, the Consumer Price Index (CPI) grew by only around 1% and producer prices actually fell by 1% at one point — ushering in a new era of deflation.
Deflation means that instead of prices rising, they are actually falling.
That’s something we haven’t seen in the United States since... you guessed it, the 1930s.
The same thing happened in Japan. Japan’s stock market, real estate, and economy declined for 14 years... just as Mr. Dines predicted they would when he issued his “sell” on Japan back in 1989.
Unfortunately for America, our backs are up against the wall. The Federal Reserve has printed us into a corner and we’re out of ammo.
Mr. Dines has long warned that cutting the dollar’s link to gold would lead to a crash... followed by a deflation (which is where we are now)... followed by an inflation (possibly a hyperinflation.)
This is typically the cycle of destruction that unbacked currencies follow... one that’s playing out right before our very eyes.
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“The Greatest Transfer of
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We saw a crash happen with the credit crisis and the stock market collapse of 2008.
Of course, the government did what it thought it had to do. It intervened, pumping trillions into the economy... and after getting addicted to free money, the markets aren’t going to be happy when longer-term interest rates start rising as Mr. Dines predicts.
But the government's stimulus effort hasn’t worked.
Corporate debt has grown by $3 trillion since the crisis began. The U.S. government has added $7.6 trillion to its debt. And households owe $1.2 trillion more, too... not including mortgage debt.
The time will come when the Fed will raise interest rates significantly, and the payments on the debt will jump precipitously as old debts come due.
U.S. consumer debt rose twice as fast over the last 12 months as consumer spending... and infinitely faster than earnings, which were flat.
The economy has slowed. Wages for 95% of the population are stagnant.
No doubt, the government will continue to create trillions out of thin air until rates rise. President Trump has already indicated he will do so with big spending on infrastructure, roads, and walls.
The “Free Money” will continue to flow and the debt will rise.
And this time the cash will flow into the consumer economy... with rising prices not far behind.
A novel cause of a leap in prices toward hyperinflation might be something innocuous, such as a leap in the minimum hourly wage in several parts of America — not negotiated, just declared.
To pay higher wages, companies will pass the costs on to the consumer (you) through higher prices. Or businesses that can’t raise prices will have to lay off workers, potentially leading to social unrest.
At the first whiff of a hyperinflation, people who mistrust their paper currency tend to become desperate to retain the value of their wealth and buy gold just to preserve their capital.
When the U.S. dollar ultimately begins its free fall, our bond market will come apart at the seams. (This is why Mr. Dines recommends that you not buy any government bonds or bond funds.)
Mass panic will trigger a stampede into precious metals on a scale never seen before, what he calls “the greatest transfer of wealth in recorded human history.”
And gold and silver will once again make every other investment pale in comparison.
Mr. Dines believes that gold could hit $5,000 an ounce.
And he says that silver could go over $300 an ounce. (It currently trades for $17 an ounce).
Next week, we'll start brining you solutions that Mr. Dines is avoiding to help protect yourself and even profit through the volatile financial times ahead.
Call it like you see it,
Nick is the founder and president of the Outsider Club, and the investment director of the thousands-strong stock advisories, Early Advantage and Wall Street Underground. He also heads Nick’s Notebook, a private placement and alert service that has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world. For more on Nick, take a look at his editor's page.