URGENT MESSAGE FROM THE CHAIRMAN
In thirty years of overseeing Swiss America I have never before
sensed the urgent need to communicate recent events with our 40,000
clients as I do today. This is the first urgent warning I have ever
Ominous data about conditions in the U.S. and Europe increased my
concerns. Yesterday's events proved all my concerns to be warranted and
and to demand immediate response.
Our nation awoke Friday to news that unemployment rose to 8.2% ,with an
anemic 69,000 jobs created. The U.S. bond market, the clearest indicator
of economic strength or weakness, skyrocketed as yields on the ten year
note dropped to an all-time record low of 1.45%. Revised GDP numbers
lowered growth to a stall speed 1.9% in 2012 Q1, accompanied by
significant drops in ISM and Consumer Confidence. We are, in my opinion,
at the start of another summer like 2008, pre the Lehman Brothers
Clearly the Fed is using financial repression to cover government
The White House and Wall Street would have you believe that all is
well, yet nothing could be further from the truth. Don't take my word for
it. Just look at what the markets are saying:
Yet in America interest rates are dropping. Putting your money into the
safe¬Ě U.S. Dollar gets you a negative return. The official government
inflation rate is 3.2%, outpacing the paltry 1.45% interest rates. You are
guaranteed a loss. Are negative returns the price of staying safe¬Ě?
- Yesterday the DOW dropped 275 points after a horrific May and is
now negative on the year.
- Interest rates over the entire Eurozone are increasing, excluding
- Gold prices increased $62/oz., the biggest one-day jump in 3 years.
Back to well above $1,600 to settle at $1625.
It is all but official that the Fed, in coordination with other central
banks, will be pressured into money creation - the likes of which we have
never before seen. Q.E. 1 and Q.E. 2 did little to pull the economy back
from the brink. More Q.E.s, perhaps as far as the eye can see. are on
their way. If $2.5 Trillion conjured out of thin air didn't work, they
next might try $3, $4, $5 or even $10 Trillion?
Smart money knows all this and is rapidly moving into gold for
The move into Treasuries and gold confirm that we are going to see
worldwide inflation created to prevent the dreaded deflationary cycle the
Fed sees as the end of the world. It would not surprise me to see the Fed
expand its balance sheet by another 100%.
A PIMCO executive told CNBC that this printing of money will be like a
shot of morphine. It will make us feel better and support the stock
market, but its hallucination of momentary well-being and resulting
dependency will do nothing to heal the underlying sickness in the world
So why this urgent warning?
I firmly believe we are on the edge of another Lehman-type meltdown in
the financial industry. Nothing has fundamentally changed that brought on
the 2008 crisis. J.P. Morgan announced a $2 billion loss from risky
trading practices. Major banks, bigger than ever, are being forced to soak
customers with massive fees in order to lend money to our bankrupt
I want to remind our clients that in 1929, when we experienced a total
loss of confidence, the markets and the economy appeared to repair
themselves somewhat by 1932. Then in 1933, President Roosevelt declared a
Banking holiday¬Ě shutting down the nation's banks to avoid bank runs. He
then devalued our dollar. By 1938 America had a total collapse of the
industrial base, and not until WWII did we recover.
2008 exposed serious problems in America's and the world's financial
structure. Who could forget how we allegedly hung on the edge of a total
meltdown of the world system. Four years have passed, yet nothing has been
done to correct the deep problems in wasteful government spending or
heads-we-win, tails-you-lose speculation on Wall Street. Dodd-Frank
regulation is a joke. We have lost trust in the American Dream of home
ownership as well as in stocks, banks, government and the U.S. Dollar
itself, and with waning trust and the loss of sound money we have lost
much of the optimistic animal spirits needed to revive genuine prosperity.
In my opinion we are clearly headed into a double-dip recession at
best, or into a depression at worst. But unlike 1929, this next depression
will be hyper-inflationary.
In 1929 U.S. citizens were producers and savers. Today we are borrowers
and consumers. The government, therefore, through the central bank will
print trillions attempting to inflate its way back to prosperity with
paper money unsupported by real productivity.
Inflation rewards borrowers (government being the largest borrower of
all) and punishes savers...you and every American by bleeding the
purchasing power out of what we earn and save.
I firmly believe this may be the last chance to acquire Gold below
$2,000 an ounce.
Simply adjust gold for inflation and it would need to be well above
$2,400 just to reach the same $850 price peak we witnessed back in 1980.
Todays level near $1,600 is a tremendous value.
I can't encourage you enough to contact your broker right away at
800-289-2646. While certain areas of the gold coins have yet to respond,
we could see that happen rather quickly, leaving this brief golden window
of opportunity untapped unless action is taken now.
I personally assure you that every call will be returned promptly, and
that I will make sure you have all the facts to make educated decisions.
We can send you special reports, CDs, books and other materials we offer
to assist our clients in getting the facts.
You may choose to just sit back and believe all is well, as the powers
that be would like you to believe. However, I have learned that when
Americans have all the facts, and not just Wall Street spin, they make
Please don't allow your hard-earned money to be confiscated through
inflation by a government that is hooked on borrowing money. The federal
government now needs over $5 trillion beyond its tax revenue each year -
just to stay afloat. That makes you, me and our money a target. Our
government now borrows $58,000 per second, 24 hours every day, to finance
deficit spending to buy votes. There is an election in 5 months. This
borrowing, spending and debasing of our dollar will keep increasing.
Thank you for your valuable time.
Craig R. Smith
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