Archive for April, 2012

Why Bernake’s Inflation Targets Are Good For Metals In A Self Directed IRA

Sunday, April 29th, 2012

We know that what the Government tells us in regards to economic data is wrong or inaccurate, at best, and purposefully misleading at worst. History suggests that the latter is the case as these false, misleading numbers supports a narrative that the government wants to put forth.

This is where our friend Ben Bernake comes in. The Fed is using and relying on much of the data that is being reported by various government agencies (e.g. unemployment, inflation, spending, etc.). The Fed has told us that they would be very happy to continue to maintain inflation at the 2 to 2.5% range. So, that would be based upon an inaccurate, and artificially low values.  If you go to www.shadowstats.com and look at how they compare current numbers or inflation vs. how we used to do it (Pre 1990 and 1980), you will see that inflation is really in the 6-10% range vs. the current, published 2.5%. This is a huge difference and clear case that shows how out of touch the Fed is with the economic realities on the ground.

So, how does this help your precious metals portfolio? To start with we know that inflation is higher than reported. This means that your annual pay increases or your average earnings on your investments is being outstripped by inflation. Secondly, we know that this inflation will have impacts in consumption. This will lead the Fed to another round of money printing. The bottom line is that you are losing purchasing power quickly, and the only way to protect against it is with precious metals.

So, despite what the talking heads on CNBC tell us, we know that we are not out of the woods with a recovery. One of the best things that you can do is hedge your self through your self directed IRA by holding physical, precious metals.

False Government numbers and Your Self Directed IRA

Saturday, April 21st, 2012

This week the US Census Bureau put out their monthly numbers for retail sales. Their figures show that March 2012 sales rose by 0.8%.

The non-thinking, media picked up these numbers and put their own spin as to why the numbers were up. The AP reported that the numbers were up because of increased employment. The Wall Street Journal reported that much of this increase was the result of increased auto sales.

However, when you dig down to see how the Census Bureau actually gets their data it raises a big question. In this day and age of technology and readily available data, we find out that the Census Bureau gets their data by sending out hard copy, surveys, via the US Mail, to a sample size of 5000 companies. Now these respondents are suppose to send back their best guess and input on how their retail sales will change. Also keep in mind that a small percentage of these mailers will actually come back.

So, from these relatively small sample that basically has no actual hard numbers, the Government is able to calculate a 0.8% net change in retail sales across all retailers in the US. Really? As noted on the Trim Tabs Money Blog, only 10% of all transactions involve currency. Why would the government not just pay the credit card companies for their transaction data to get a good read on 90% of the retail transactions in the US economy? Seems accurate and logical.

In addition to this, if you look at auto sales over the same period, you actually find that the annualized rate of sales was actually down 6% as reported by industry analysts, but the Census Bureau states that they were up 1.1%. How can this be?

Bottom line is that the Government has and does provide grossly inaccurate data on the economy as evidenced by the employment numbers. So, how can the markets and investors be claiming that we are turning a corner economically, when we know the underlying data is inaccurate.

Its because of these bad facts, bad data, that we know that we have not recovered, yet we are already hearing the market pundits proclaim that precious metals are dead, and people that invest in them are misguided, etc. This sure sounds like a good case for why your continued investing in precious metals with your self directed IRA is a sound and safe bet.

So, you have to ask yourself: Would I rather place my faith in a system of printing money and a government that uses bad data, or go against the Wall Street geniuses and hold metals in my self directed IRA?