Political Metals

- See Updated Video Responses at the bottom of the post -
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Peter Schiff’s May 20 video blog was a hard hitting attack on the credibility of the National Inflation Association (NIA), whose work has been cited in this website and one of their educational video is posted in the Calm Before the Storm section. He claimed that NIA used his words (work) to defraud people, referring specifically to NIA’s recent Mega Precious Metals Inc stock suggestion as a “Pump & Dump” scam.

Before going into NIA’s alleged “Pump & Dump” scam, I have to get this off my chest. I’ve written about how I spent lots of time years ago researching the gold & silver market before I exchanged my first unit of fiat currency for these metals. What I had omitted mention was the fact that I had to endure this frustration, which some of you may be facing now, in the light of this Schiff Vs NIA debate - and that is the tendency of market/trend analysts in general and precious metals newsletter writers in particular, to claim that that they were the first to “predict this” or “write about this years/months before it happened”. Besides being annoying having to sieve through these egoistic rants while looking for the truth, these egoistic claims tend to cast doubt on the credibility of the analysts once I discovered that many were just recycling works available in the public domain while claiming them to be proprietary and charging subscribers a fee to read them. Bottom line is, do your own due diligence before swallowing anything hook, line, and sinker .

Now on to the debate.

“In general, the NIA puts out a lot of videos… exposing the dangers of inflation, writing a lot obout hyperinflation… much of their rhetoric I agree with, in fact much of it I said, in fact it comes from me…You know a lot of times I  do my video blog , do my radio show, writing commentary, and then a day or two later, in my inbox I see all of my words repeated back to me by the NIA… they don’t quote me at all, they just use my words without attributing to me…But what I don’t like is that my words are used to defraud people…” Watch the rest of this video and read Andy Hoffman’s take on this.

After my long rant last night, I intended to take the weekend off from writing.

However, something I saw last night angered me AS MUCH AS the Gold Cartel, AS MUCH AS the corrupt Washington politicians and New York bankers combined, and ASM MUCH AS anything I have dealt with in the business world. And it ties in perfectly with my topics of the past two weeks, namely TRAITOROUS attacks by so-called “good guys” in the gold army. Sometimes these people have ulterior motives for betraying the trust of their readers and subscribers (nearly always PROFIT), some are self-righteous jerks just looking for PUBLICITY (and consequently, PROFIT), and some people are just mean-spirited, selfish phonies.

Believe me, in my nine years of following Precious Metals, I have heard and read from EVERYONE even remotely associated with the sector, be they executives, analysts, newsletter writers, blog posters, and bankers. I KNOW who the good guys are, and I KNOW the bad ones. And frankly, it doesn’t take too long to spot which team someone is on.

I like to believe my greatest assets are compassion for others, willingness to hear both sides of the story, and insistence on reserving judgment until all evidence is presented. I make no bones about why I write these commentaries (for five years running now), and that is to HELP people to help themselves. I am not trying to sell anyone anything, and never will. I simply aim to present the FACTS regarding my topics, and let readers draw their own conclusions. My only goal, thus, is to EDUCATE Americans about the horrific economic situation we are facing, and subsequently the alternatives they have to PROTECT THEMSELVES from the lies, the propaganda, and ultimately the hyperinflation that is INEVITABLE thanks to the evil, self-serving monsters in Washington and on Wall Street that want to steal everything you have while there is still something left to steal.

As I discussed in last week’s rant, “Unity in Common Sense”, there is NOTHING that angers me more than TURNCOATS within our own camp, which is why I am enraged at the vile, despicable video released yesterday by Peter Schiff about the NIA, or National Inflation Association. In today’s America, invective like this usually gets ignored, or more likely, in this case picked up by mainstream media in their efforts to disparage any group that speaks the TRUTH about what is going on in America. But Peter Schiff has been on my radar for a long time, and I am not going to let him get away with what he did.

First, a few words on the NIA, whose website is www.inflation.us. About a year ago, I came across one of their wonderful videos, “Debt Slave”, describing how America is drowning in debt and unable to escape it. I found it to be one of the best produced, most informative pieces of work in the sector in many years. The NIA, which costs absolutely ZERO to join, has since released some of the best work I have ever come across, which can be found chronologically at http://inflation.us/videos.html. Very few people in the REAL MONEY camp consistently put out informative, non-biased information to HELP people, and even fewer do it for free. Jim Sinclair is the only one I can think of that does it for free, although frankly Bill Murphy’s GATA site is so inexpensive that in my mind, it is essentially free.

I even got to know one of the people within the NIA organization, whom in my mind is as solid a citizen as you will find, one of us, whose primary goal, too, is to HELP people to help themselves. His work within the organization further supported my view that the NIA is one of the good guys, possibly too good given how large and supportive its subscriber base has become. And what I mean by this is that people listen to what they say, perhaps even some people that know little about financial markets.

Here’s what I’m saying:

Since its inception in 2009, the NIA has given out free stock recommendations to its subscriber base, mostly in Precious Metals but also other commodities it expects to perform strongly during hyperinflation, in accordance with the organization’s Mission Statement. When I first saw one of these recommendations (for a junior mining stock), I was a bit leery, as I didn’t like mixing the public service nature of the website with the promotion of speculative stocks, particularly as so many subscribers are not keen to the dangers of such investments. It appears they made the proper disclaimers about these recommendations, and anyone (like myself) with a background in small and micro-cap stocks would certainly know what they were getting into if they chose to invest. Not to mention, as noted earlier the NIA has a vast audience, so most of the recommendations they give, such as last week’s recommendation of Mega Precious Metals, immediately gap up at the open of trading the next day, making it a dicey investment proposition unless you have a long-term time horizon.

Additionally, from time to time the NIA will do special stock recommendations, which subscribers can only access for a fee. The same caveats go out for these investments, but since subscribers pay a hefty sum for them (usually $1,000), they presumably are more sophisticated about such investments than the average NIA subscriber. Thus, it is hard to fault the NIA in any way for this practice, especially as it obviously needs to generate revenues to pay its staff and continue producing high quality content, such as the BRILLIANT piece “College Conspiracy” that was released last week (http://www.youtube.com/watch?feature=player_embedded&v=VpZtX32sKVE).

When I initially received one of the NIA’s free recommendations a year ago, I immediately sent an email to their general mailbox saying I thought the practice of giving stock recommendations, even for free, could cause negative ramifications for the organization’s reputation. People listening to the NIA’s advice about preparing for hyperinflation, such as buying PHYSICAL gold, silver, and food will UNDOUBTEDLY benefit during times of hyperinflation. But they could just as easily lose money in these stocks, negating some of the aforementioned benefits and creating a reputation as a penny stock promoter (fairly or unfairly), with the inevitable accusations of “pump and dump” even if equally untrue.

Moreover, it doesn’t help the NIA’s case that one of their top executives is Jonathan Lebed, a man whom I’ve never met but who has, in the past, been accused of pump and dump activities on chat rooms. In 2001, Lebed settled with the SEC for $285,000 regarding such charges, although he did not admit wrongdoing. I don’t know what actually happened, but given that he was a minor at the time, and it doesn’t sound like he was being paid for advice, most likely it was just some sour grapes unsophisticated “investors” that were dumb enough to buy internet stocks or the like from anonymous chat room posters like Lebed. This was probably more the rule of the time than the exception, and frankly I have no strong opinions about Mr. Lebed either way, other than that giving stock recommendations of any kind could open him up to criticism and accusation, which is exactly what has happened here.

By the way, of the 27 free recommendations the NIA has given in the past two years (21 of which are Precious Metals stocks), 22 are currently higher than the recommendation price, in many cases by large percentages, while just three have been big losers (ALL NON-PRECIOUS METALS stocks). And according to a rebuttal email they published today, the NIA’s President, Gerard Adams (a man I have tremendous respect for), has NEVER sold a stock recommended by the NIA.

Now, a few words on Peter Schiff, whom I have been following for many years. Schiff, the founder and CEO of Euro Pacific capital, is an extremely talented businessman, who has essentially built a small fortune in the brokerage business. He has consistently been right in his economic predictions, and consequently has a very large following. He is also a master of promotion, posting free articles and video blogs on his website, of which I have read and listened to many. Heck, I even subscribed to his Schiff Radio service last fall when it debuted, although frankly I stopped listening months ago as I find his broadcasts to be repetitive, not to mention biased too much to the Republican side of the aisle (I am independent, and thus have no interest in listening to either a Democratic or Republican agenda). In fact, he is so good at personal promotion that he actually put in a reasonably strong bid in last year’s Connecticut Republican primary, despite being a major underdog from the get go (who wants someone in favor of fiscal responsibility, and who could compete with Linda McMahon’s money?). And finally, he not only has been publically bullish about Precious Metals for many years, but even started his own Precious Metals business within Euro Pacific Capital.

OK, that’s the GOOD side of the ledger for Peter Schiff. This article is about how despicable I believe he is, but I had to first give him props for the things he has done RIGHT.

But now for the BAD things, which FAR OUTWEIGH the good.

As most of you are painfully aware, I believe….no, I KNOW, that the most important variable in the gold and silver markets is the SUPPRESSION and FRAUD committed every second of every trading day by the Gold Cartel, a secretive collaboration of the most powerful politicians in Washington and bankers in New York and London. Their only purpose in life is to maintain the dollar’s status as reserve currency, in order to rob America blind, keep the dollar from collapsing (since they get so many free dollars via bailouts and insider trading), and consequently stay in power. Organizations like GATA are the Cartel’s mortal enemy, charged solely with exposing this fraud and helping innocent investors to act accordingly, in other words to invest, without fear, into Precious Metals to PROTECT THEMSELVES from hyperinflation. On that measure, by the way, the NIA is not much different than GATA.

I’ll get back to that topic in a second, but first…

I just called Peter Schiff a master promoter, but unlike GATA and the NIA, whom promote themselves to HELP people, I have always suspected that Schiff’s promotions are aimed principally at helping HIMSELF. In essence, I find him to be one of the most selfish and pompous people I have ever listened to, constantly pretending that HE ALONE predicted the housing crash, the economic implosion, the bull market in gold, and essentially everything else on earth except the winner of today’s Preakness Stakes! Guess what Peter, I MADE ALL THOSE SAME PREDICTIONS, AS DID MANY OTHER PEOPLE I KNOW, but I don’t PROMOTE my accomplishments in the quest for PROFIT (Euro Pacific Capital, with its exorbitant commissions) and FAME (the Connecticut Senate seat, and consequently more PROFITS).

In fact, after listening to him pontificate in the run up to the Republican primary last fall, I became convinced that his rhetoric about bringing responsibility to Washington was a complete and utter sham, as he is clearly too smart to believe he could make a difference. In fact, I believe the reason he ran for Senate (aside from his MONSTROUS EGO) was to access its financial perks, both for his business and personally. Moreover, in the case of a U.S. economic and/or currency collapse, the elite assholes in Washington will clearly be shown to the “bomb shelter”, while the rest of us peons are left to fend for our own. And no doubt Peter Schiff believes he’s entitled to that treatment!

As to my above assertions (sorry, 100% GUARANTEED FACT) that MANIPULATION is the most important aspect of the Precious Metals market, you would think that Schiff would be at least open to speaking to GATA’s team, if only to make introductions and assure them of their mutual goals.

But no, of course not. Not only will he not respond to them, but mocks their assertions, the ultimate Benedict Arnold traitor to the cause. Of course he knows that GATA is right, but believes his political (and ultimately, economic) aspirations will not be served by acknowledging this aspect of the market. No Senator could ever accuse the government of fraud (or the beloved banks, which are the leading funders of campaign contributions), and in Schiff’s case he actually has decided to deride the good guys instead. GATA has tried to reach out to him on numerous occasions, as have I personally, but the almighty Peter Schiff won’t even respond, as he is obviously too elite, and too smart for them. And on the topic of his radio program, I almost feinted when I found out last fall that he was going to have Adrian Douglas of GATA as a guest, which gave me cause to doubt my prior judgments. But when I heard that broadcast, I was SICKENED beyond belief, as he essentially spent the entire program belittling Mr. Douglas, one of the brightest and most well-intentioned people I know, in the most despicable manner imaginable. In fact, it was on that day that I started HATING Peter Schiff!

As you can see by the amount I have written so far, without having even gotten to the point of this RANT, I have very strong opinions about gold manipulation, the NIA, and Peter Schiff. He may not fear peons like me, but he has prompted the writing of this invective, which certainly won’t help him in the public opinion polls, which obviously are all that he cares about (as long as he can translate those opinions to PROFIT). That is why I am amazed at what he did this weekend….

OK, so here it is…

Read full article originally posted at Lemetropolecafe (subscription required) or the version reposted at BullionBullsCanada, and NIA’s rebuttal below:

NIA would like to take this opportunity to make it perfectly clear that neither our organization, anybody who works for our organization, or anybody affiliated with our organization owns a single share of Mega Precious Metals (TSX Venture: MGP) or has ever owned a single share of MGP. We are shocked that this traditional old-fashioned stock broker who we used to have so much respect for would outright lie and say that NIA “pumped and dumped” this stock without presenting a shred of evidence.

It is impossible for someone to “pump and dump” a stock if they never bought or sold a share of it. Even somebody with no stock market experience can look at a chart of MGP and see that it has been falling straight down for months on almost no volume. It would have been impossible for anybody to have accumulated even a modest sized position in the company before NIA’s profile. NIA profiled it right at the bottom.

NIA has the most intelligent membership base in the world. This old-fashioned broker is obviously extremely jealous of the success of NIA members who no longer have to pay brokers like him 7% per round-trip trade, more than the commission to sell a house. Yes, some of NIA’s stock suggestions like MGP are risky and speculative. NIA made it very clear that MGP‘s gold resource base is an inferred resource and not a proven reserve.

The truth is, if you want to outperform the rest of the market, you sometimes need to take risks. The best performing mining stocks will be companies with inferred resource bases that turn them into proven reserves. If you invest solely into companies that already have proven reserves, their stocks are most likely fully valued with limited upside potential. NIA hopes that the rest of this old-fashioned broker’s remaining clients soon wake up and realize they are paying 7% round-trip commissions for no reason at all.

NIA’s track record speaks for itself. Let’s see where MGP is trading at the end of 2011. NIA is extremely confident it will become a huge winner. In fact, we bet our reputation that it will become a huge winner from its current price of $0.47 over the long-term. Although NIA hasn’t purchased a position in MGP yet, it is possible that NIA’s President will begin accumulating a position soon.

If any investor wants exposure to many different well-known established mining companies with proven reserves that have already been discovered by the investment community, all one has to do is purchase the ETF Market Vectors Gold Miners ETF (GDX). With any online brokerage account for only a single $10 trade, you can purchase GDX, which is well-diversified into many of the largest most established miners. There is absolutely no point for anybody to have a brokerage account with a brokerage firm that provides no value for the large commissions that they charge.

Since NIA was formed in February of 2009, NIA has released 28 public stock suggestions. Only on 1 occasion has NIA ever owned a stock suggestion in advance before profiling the company to the public. That company was Garibaldi Resources Corp (TSX Venture: GGI). Not only did NIA’s President Gerard Adams fully disclose his ownership of 183,000 shares, but he agreed to hold his shares for 90 days so that in no way would he benefit from any attention NIA’s profile generated for the company. Our original profile of GGI was released on December 28th, 2010, and still to this day, Mr. Adams holds his entire position.

All other positions held by Mr. Adams in NIA’s stock suggestions were purchased well after our profiles were made public. This means, except for GGI, NIA members always had the opportunity to purchase NIA’s stock suggestions before NIA’s management did. All positions held by Mr. Adams are fully disclosed at the bottom of our profiles on Inflation.us. Mr. Adams is a long-term investor and has never once sold a single share purchased in any of NIA’s stock suggestions. Besides Mr. Adams, nobody else who works for NIA or has any affiliation with NIA has ever bought or sold a single share in any of NIA’s stock suggestions.

Read the full rebuttal here. While NIA went to great lengths highlighting that they were not front running their stocks suggestions, what is conspicuously missing in the rebuttal is Schiff’s allegation that NIA may have been paid to run this “Pump & Dump” operation. I wish they would address this allegation, instead of just more personal attacks.

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George Hemminger (a.k.a. George4Title) responds to Peter Schiff’s allegations.

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Updated: May 25

The debate continues.. As noted above, and also highlighted in Peter Schiff’s response to NIA’s rebuttal, NIA has avoided answering the key question in this debate - Was this a genuine effort to “help” members or a paid “pump & Dump” operation.

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Updated: May 25

The same George4Title who slammed Peter Schiff 2 days ago, made a U turn today in the interview with Peter Schiff below. Now, which George4Title is telling the truth??

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Updated: May 26

Cliff Notes: G4T - NOT a scammer and is a person who is making videos to support his family. He has clearly been mistreated by some on the YouTube community. Peter Schiff is a good man whom I trust. NIA - I worked for them and will not speculate. The message that I passed onto G4T was that if he said anything not true/anything he couldn’t prove that NIA would sue him.

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Updated: Jul 22

Peter Schiff warned of another alleged Pump & Dump operation by NIA, this time on Agria Corporation NYSE:GRO. He revealed the name of the stock before NIA members who paid $1,000 to receive the stock pick did.

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