http://www.kitco.com/ind/Ruff/ruff_sep162008.html

(Excerpted
from Chapter 12 of How
to Prosper During the Coming Bad Years in the 21st Century.)

Wall
Street ignored gold and silver during most of the 1970’s
hyper-profitable bull market. They were either outright hostile, or
acted as though the metals didn’t even exist. I got no respect,
even though the first edition of my book sold 2.6-million copies and
was near or at the top of The New York Times best-seller list in both
hard and soft cover for two years, and I was all over the media; Wall
street Week, Oprah twice, Regis and Kathy Lee three times, etc, etc.
They were usually hostile also. Wall Street paid little attention to
gold until it reached about $650, far too late for them to have much
of a chance for their clients to make money.

Why
the hostility? Partly because they believed their own rhetoric!
Historically, because rising gold always means falling stocks or a
troubled world, and they made most of their commissions in the stock
market, they had to remain bullish on stocks, and bearish on gold.
Their bullish stock-market recommendation was necessary because
investors wouldn’t buy stocks if their advisors were dubious about
the market’s future. They sneered at the inflation fears of us gold
and silver fans, and derisively called gold investors “gold bugs.”
Most of the young whippersnappers who now control Wall Street were in
diapers 25 to 30 years ago during the last gold bull market so they
haven’t experienced rising gold and inflation. Consequently,
another gold bull market is inconceivable to them.

Studying
Psycho-ceramics

One
of the funniest things that ever happened to me illustrates the
skepticism of mainstream media types regarding gold and silver. In
1978 I was on a national promotion tour for the first edition of my
book when I found myself in Detroit, rushing to a TV station for a
scheduled interview on a big morning show. I barely got there in time
when the host turned to the camera and said, “Today we’re going
to study psycho-ceramics,
and with us today is a crackpot from California.” And the interview
went downhill from there; with his biggest argument being that silver
was an impractical investment for most people, unless you were very
rich.

One
year later I found myself in the same studio, same host, promoting
the mass paperback of my book. But this time, when the light went on,
he said, “Today we have with us one of America’s most brilliant
financial advisors,” and the interview was terrific from then.

After
the show, I reminded him of what he had said before, and asked him
what had changed his mind. He very sheepishly said, “I read your
book and bought silver from a local coin dealer, and tripled my money
since you were here last.” So the media is not always infallible,
even though they are usually wrong.

Inside
Wall Street

Wall
Street is a culture, as well as a financial institution.

Most
of the young brokers who are the big producers on Wall Street are
human beings, subject to all the errors of habit and behavior and
peer pressure that plague all of us. They are surrounded by
“group-think.” They make tons of money on the status quo. I have
visited firms on Wall Street with big trading rooms full of
twenty-something men and women whose annual income is measured in the
millions – all on commissions on stock sales.

Few
big Wall Street firms sell bullion (right off hand I can’t think of
any) so it is only money out of their pockets if hot-shot brokers
tell their clients to sell some stock and put the money into bullion
or coins. Maturity and client concern are scarce commodities on Wall
Street.

They
are congenitally bullish on stocks, because that’s where their
bread is buttered.

Financial
Shows

Many
of you listen to or watch financial shows, populated with people who
are typical examples of main-stream Wall Street financial thinking.

If
your broker’s opinion is important to you, you may be uncomfortable
here. If you aren’t a maverick, you had better become one, and be
quiet about it. You will have to leave the herd, and for a while,
Merrill Lynch’s herd is all on Wall Street.

Terrorism
and Other Things 

Let’s
consider just a few possible scenarios.

Panama
and the Dollar 

When
we negotiated away the Panama Canal to Torrijos, the Panamanian
Dictator, our chief negotiator was Sol Linowitz, a member of the
board of Chemical Bank in New York. He was appointed for one day less
than six months, so his appointment would not be subject to
Congressional approval, and sure enough, the giveaway deal was signed
one day before Linowitz’s term was up.

One
key part of Linowitz’s banker-inspired mission was that the Canal
Zone would be a “Free-banking Zone,” not subject to regulations
or oversight. Even before the deal was signed, bank buildings were
going up all over the Zone. Every multi-national bank was there, and
it appears that they moved many of their international money systems
there, with no oversight or regulation. Who determines their safety
or vulnerability? No one!

If
terrorist hackers were to hack into those computers and infect them
with a destructive virus, the entire dollar-based monetary system
would disappear in a nanosecond. In that case, for all practical
purposes, the only spendable money left would be gold or silver coins
or barter.

And
what if they were able to sneak a nuke onto a ship and detonate it in
the canal? It’s already bad enough that the Chinese are in control
of the ports on both ends of the canal. Imagine the chaos with the
banks obliterated and commerce fatally crippled.

These
and innumerable other scenarios may seem beyond the edges of
credibility, but I dare you to say they are not possible.

This
is not a forecast, only a speculation about a possible worst-case,
we-hope-not scenario.

The
Hyperinflation Scenario

What
if monetary inflation rose as a result of soaring demands on
government with the soaring deficits, and the subsequent inevitable
consumer inflation broke out into a real hyperinflation, with the
modern money machine running night and day, like Germany during the
1920s. This would make money increasingly worthless and the precious
metals increasingly precious. History tells us that this has happened
over and over again, and we are repeating most of the same deadly
mistakes.

Let’s
pretend we are transported into a future where America is devastated
by hyperinflation, and see what it looks like

The
world will be in terrible trouble, and the prosperity and comfort
that now surround you will be in tatters. You will be surrounded by
people struggling to survive, let alone to prosper, as in the 1930s.
That’s what happened in Germany after the hyperinflation of the
deutschmark, and the general suffering was the fertile ground which
gave birth to Adolph Hitler, dictator. If you have prospered by
holding gold and silver, you can buy a lot of safety and security.

These
are only a few of the possibilities. 

The
Best Case 

Even
if we wipe out or neutralize al Qaeda and the currency system hangs
together, monetary inflation has already been cooked into the
economic cake by the Federal Reserve and industry, and so is the
silver supply/demand situation. Even in this “best-case”
situation, you will make a bundle on this
monetary-inflation-sensitive investment, even in a still-orderly
world.

If
all else fails, you still can count on Social
Security,
Medicare
and the
prescription-drug program
to trigger a flood of trillions of dollars of “money printing”
and the subsequent monetary inflation, followed as night follows day
with soaring price inflation. As it becomes obvious to the public
that these programs are plummeting into insolvency, the consumer
inflation rate and gold and silver will soar.

When
the dire facts become obvious, Congress will start desperately
searching for solutions, but which ones?

Will
they raise taxes and watch FICA soar and taxpayers revolt? Very
little, if any! Will they cut benefits or raise the Social Security
retirement age? Maybe a little bit, but not much. Will they dig in
their heels and memorialize the current dysfunctional system by
simply printing money? You bet! This will lay the groundwork for more
ruinous inflation, and soaring gold and silver.

In
this best case (the most likely – I think, I hope?), we will at
least see rising inflation and an inflationary recession (which is
already written in cement), and gold and silver and the metals and
their mining stocks will go up – perhaps five to ten times, perhaps
a lot more.

There
is no best-case – or worst-case – scenario in which I can
conceive of gold and silver being losers. You can mortgage the kids
and bet the farm!

By
Howard Ruff
The Ruff Times

1. Personally, I
   didn't get wiped out in this financial crisis. This global banking
   meltdown did not affect my fortune at all. Why? It is not because I
   am smart, but because I am well-informed and most importantly I
   realize what those crooks and lemmings inside the investment banks,
   brokerage houses, and mainstream media really are, what they can do
   and what they will do to hurt the investors.

   
   

2. If you want to
   make money in investment world, the first thing you need to do is
   stop doing what the mainstream media wants you to do. When the
   talk show hosts and the talking heads invited to participate in
   their shows on CNBC, Bloomberg, or “FUCKS”..., behave like stock
   market's cheerleaders, you should know there is something wrong.
   The mainstream newspapers and television stations are supposed to be
   fair and balanced and totally unbiased. Unfortunately, they have
   not met our expectations. Instead, they have become the
   mouthpieces of the people who own these business which obviously
   have their own “agenda”.
   

   
   

3. When the price of
   gold dropped to US$260 per ounce, they continued to talk trash on
   gold, telling the investors how stupid it is to put your money in
   gold-related investment. Therefore, the news reporters and
   journalists working with the media organizations from all over the
   world including those in Taiwan immediately copied and translated
   what the American Anal-ysts said about gold, officially “announcing”
   to the investment public that inflation is dead and gold, as an
   inflation hedge, is dead as a result. They
   claimed that inflation will no longer be an issue because more and
   more innovative technologies will lead to higher and higher
   productivity which will keep the consumers price low and benefit all
   of us. The news reporters and journalists working outside
   the U.S. were very lazy and very superficial. They followed what
   the u.s. “experts” said and licked American crooks and lemmings
   shit and did not do an independent research to dig up the truth.
   
   

   
   

4. Now
   with the governments from all over the world printing paper money
   like there is no tomorrow to bail this out and bail that out,
   inflation will once again be a serious issue and the price of gold
   will be going to the moon.