World’s Highest Paid Investment Adviser: U.S. Faces Hyperinflation Or Depression
I don’t think I’ve ever mentioned this, but I am extremely grateful to Peter Brimelow over at MarketWatch. Without his column, I wouldn’t have access to the insights of Harry Schultz, the highest paid investment consultant in the world. For those readers not familiar with Mr. Schultz, I talked about him back on December 13. From that post:
Have you ever heard of Harry Schultz? I sure have, and to this day I am still in absolute awe of the money this man earns. Mr. Schultz, publisher of the International Harry Schultz Letter, is the highest paid investment consultant in the world at $3,500 an hour (or $4,900 an hour if you require his services during the weekend).
Brimelow talked about Schultz’ latest U.S. economic forecast this past Monday on MarketWatch. He wrote:
Harry Schultz’ The International Harry Schultz Letter was posted last night right about the time the Fannie Mae-Freddie Mac bailout was reported. But Schultz anticipated it, writing sarcastically:
“Flash: As we go to press, the US Government reveals plan to take over Freddie Mac and Fannie Mae, the biggest bail-out by taxpayers in history. It also wipes out the shareholders! Sunday selected to avoid stock market action same day, just as bank closures are told after market close Friday. That tells you what shape markets are in when government and CEOs hide behind holidays.”
Schultz had earlier made his overview clear (I’m translating slightly from of his text-message style):
“Fed maneuver room approximately gone. Any $US injection big enough to avert a depression triggers runaway inflation. If not big enough: depression. US on knife-edge. Gold helps you either way.”
This apocalyptic vision is consistent with his earlier predictions, such as one I discussed in a February 18 post. Brimelow stated back then:
Schultz writes: “It’s a derivative crisis, stupid!… 9,000 U.S. banks failed in 1929-1932; look for new records… Hyper-inflation is a distinct possibility; stay awake!”
Among his more colorful recommendations: “Buy a few local non-rare gold coins of whatever country you are in for emergency/barter use, smallest denominations… Keep 6-12 months cash at home/office/ lawyer-doctor office. Pretend an emergency is coming, because it may be.”
…and from that December 13 post:
Among other interesting ideas raised by Schultz in his intense, somewhat terrifying introduction: recession, possibly depression; bank failures; exchange controls; housing prices down by 50%; credit card company failures; money market fund dangers; tripling of U.S. jobless numbers; federal bail-outs for Fannie Mae.
Note the bailout prediction for Fannie Mae.
Fast forward to Schultz’s latest forecast. Brimelow wrote:
Schultz suggests just two alternative scenarios, both equally appalling:
“If Bush bails them all out, the die would be cast for inflation unseen in the West since 1923 Germany. If no bail: Hello, 1929.”
Gee, thanks.
Brimelow talked about what Schultz thought was going to happen next, and what those hoping to be one step ahead of the herd should do about it. He wrote:
In his latest issue, Schultz summarizes:
“Widespread stagflation will probably now build more inflation than stagnation, then gradually morph into more stagnation than inflation. Then, deflation takes over, and ultimately, depression. All this over next 9 years.”
“For the moment, seal off major wipe-out risks. Exit all money funds and currency time deposits, step up gold & oil positions, move into 1-2 year government bonds (non-US $) in First World nations. Swiss first choice. Think not of yield; think of an ark’s life preserver around your neck.”
Schultz, notes Brimelow, is currently negative on the U.S. stock market. But, the Swiss-based investment adviser predicts an upside target of $1,600 an ounce for gold as he believes its recent plummet in price is merely a correction.
Source:
“Unraveling according to schedule”
Peter Brimelow
MarketWatch, September 8, 2008
September 10th, 2008 at 2:59 pm
“Among his more colorful recommendations: “Buy a few local non-rare gold coins of whatever country you are in for emergency/barter use, smallest denominations… Keep 6-12 months cash at home/office/ lawyer-doctor office. Pretend an emergency is coming, because it may be.”
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Mammoth’s advice: Learn how to provide some food for yourself. Plant a garden. Plant fruit trees. Learn how to preserve food.
Got Seeds?
September 10th, 2008 at 5:25 pm
great article,I like the no B.S. approach of this blog.
will you post any articles as to how can one benefit financially from a economic collapse since so many fortunes were made during the depression?
September 12th, 2008 at 7:32 am
Thanks for the comment and compliment George L.
“will you post any articles as to how can one benefit financially from a economic collapse since so many fortunes were made during the depression?”
Something is in the works…
September 12th, 2008 at 7:42 am
Thanks for sharing the advice Mammoth. If our situation gets as bad as I think it will, a self-sufficient lifestyle may save the practitioner a lot of pain and hardship.
September 16th, 2008 at 10:26 pm
Hey - Let’s get back to basics, take off the blinkers and look around a bit. Just how much real wealth have all these financial companies (banks, financial advisors, insurance companies etc) ever created? Quick answer - absolutely none. Everything, and I mean everything in this world that we judge our wealth by is made by the Producers. Yes, the guys who build the cars, the buildings, every electronic gadget on the planet, planes, clothes, grow and process food etc, etc. So ask yourself this; why is it that all the people who actually produce all the real wealth have to borrow from the banks in order to buy back the very things they produced in the first place. The banks don’t produce any real wealth, none, so where did they get all their money from that allows them to lend so much back to the very gullible public? Google ‘Fractional Reserve Banking’, the key to the world’s financial woes are clear for anyone to research. The little investor? well he just represents around 25% of all investment, the rest is owned by the financial institutions of the world who spend their days playing around with the wealth originally created by the Producers. And since the all other financial institutions in the world have never created any real wealth, where did they get their money from? The financial markets around the world have gotten just a bit too big and the Producers of the real wealth just can’t keep up - result, the so called Credit Crunch (and every other financial crises there has ever been for that matter). In reality the Producers should not need to borrow money to buy things, the credit society has been created by the banks, for the banks. It’s time to reorganize the whole corrupt scene. The chances of it happening any time soon - Zero. The bankers have too strong a hold now, they control all the major Governments in the world and the others will follow soon. Beware of the bankers; remember you read it here. Just one other thing, you can’t deny that it makes for really great television, the continuous stream of red teletype along the bottom of the Bloomberg Television screen and scenes of Lehman employees exiting their ex-workplaces with their cardboard boxes is way better than anything Comedymax is screening right now.
September 17th, 2008 at 8:37 am
Thanks for the insight Cliff.
“The bankers have too strong a hold now, they control all the major Governments in the world and the others will follow soon. Beware of the bankers; remember you read it here.”
Reminds me of something FDR wrote on November 21, 1933, to presidential adviser Colonel E. Mandell House: