By Jim Sheridan.

Welcome back, and the votes are in from last week when I asked you to vote for how you wanted the newsletter to end. The more astute readers may have guessed that one ending appealed to your WANTS, and the other to your NEEDS.

To make progress in life and get ahead, we often have to act on what we NEED more than what we WANT, but if you can think longer term, doing what we NEED will truly get us what we WANT. Pursuing WANTS will not achieve this!

And certainly if you’re in business, focusing on what your customer WANTS, not what they NEED, is the path to profits.

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Fortunately (?) for you, my job here each week is to give you what you NEED, because you’ve charged me with the mission of empowering you to be free of slavery to The Man, not to be your childhood comfort blanket. If you need one of those, call The Samaritans.

The first thing I must say about the vote was how few people actually voted. Interesting, isn’t it? We demand that everyone vote for a presidential election and get upset with anyone who doesn’t vote or have an opinion. It’s easy to judge others and make an opinion on them, isn’t it? But when it comes down to having an opinion about yourself, we evidently aren’t so keen to do something! Funny that…

Anyway, here’s the vote:

87% for Ending 1.

13% for Ending 2.

If you voted for Ending 2, with the greatest respect, you will NEVER become financially free. Sorry, it’s just the truth. You can still change your answer though…

Thanks if you participated, this was a valuable experiment and I think we’ve proven some very useful points here.

Now on to this week’s investigation of the insanity of the world and how we can profit by it…

Brothers and Sisters, we are on the eve of The Great Inflation. If the markets knew anything at all, they would be pricing things accordingly. But no, it’s just the opposite. On the eve of The Great Inflation, the markets are handing you a golden opportunity to load up on cheap assets and ride the wave to strike it rich. Go figure.

And that’s because, contrary to certain theories, financial markets know JACK. The markets know jack, because its prices are only as good as human beings, and humans know jack regarding the future. Humans are governed by greed and fear, and this is why the market swings, sometimes violently.

You could study economics at Harvard for years, but this is the equation it all boils down to:

Financial market prices = greed + fear.

But this is GREAT news because it creates constant wealth-building opportunities.

By the way, at Harvard and Yale they teach what’s called ‘The Efficient Markets Theory’, which states that the market knows it all, and that on any given day the price of anything is fair because all knowledge is known to the market. If that was true, nobody would make any money! Back in 2007, the market fully knew about the toxic property debts, but it sailed to record highs, regardless. Efficient Markets Theory, my *%@

It’s easier if I explain this opportunity in the form of some questions that I sometimes receive…

“Jim, I keep hearing about Greece’s problems and other European problems. Why should I care?

The Eurozone experiment that Britain wisely stayed out of is in danger of exploding. Those empire-building European politicians are finding out that trying to merge extremely different economies and cultures into one was impractical, but now they’re too down the path to turn around. It was actually born out of fear: a desire to unite and never have a repeat of World War II. But, if you focus on fear, you can often end up at the exact situation you’re frightened of…

If the Eurozone breaks up, it will be catastrophic because American banks have vast exposure to that debt (more than you’re told). And we now know that the government will step in before they let banks go bust- this precedent was made in the last financial crisis of 2008.

Both in America and Europe, the problems that caused the 2008 meltdown were never fixed. They just put a band aid on it and kicked the can down the road. We are at that part of the road that they kicked the can down.

The money the government uses doesn’t come out of thin air, it comes from YOUR pockets, either in the form of tax, or, if you don’t pay tax, in the form of creeping inflation that makes food and gas more expensive. Either way, you will pay for the European mess if it gets out of control. In the 1930s, Americans thought Europe’s troubles were all too distant to worry about. A few years later, over half a million American lives were lost. Let’s not make that same mistake now.

It’s this worry about Europe that’s giving markets the jitters and pushing the price of gold down. In short, the market (the market = the sum of peoples’ greed and fear) is fearing a DEFLATION currently, not an inflation.

Now, if the European governments decide not to act and just let their Frankenstein creation die, Europe would fall into a depression of the like we haven’t seen since the 1930s, and we all know what the result of that was.

Their ONLY solution is to print money like crazy, and that will cause world inflation.

So why the delay? The European leaders are currently the proverbial rabbit staring at an oncoming car’s headlights- those headlights are a devastating deflation. Trouble is, especially with Germans, their memories of hyper-inflation are in their psyche, and they’ve been reluctant to print money.

But both in the US and Europe, it’s a very simple matter: PRINT OR DIE.

So the market is currently setting prices based on politicians choosing “DIE”. Right… like that’s going to happen!

And that’s why the markets are giving you a golden opportunity to load up before The Great Inflation really begins. The time to buy is when the greatest number of people are doing the OPPOSITE thing. You can never time this exactly right, but the market is fickle and decidedly INefficient.

I’m calling it officially: this is your very last chance to load up on cheap assets before money-printing sends prices to the moon.

“Jim, what’s going on with gold? Is it still the investment you thought?”

Good question. Firstly, we pleaded with you to buy gold as far back as 2008. Back in March of this year I stated that gold had risen far and fast and I cautioned both against buying and selling at those levels. Since then, my suspicions have proven correct in that gold has slid down to the $1500’s, and it could fall further as this fear of deflation persists.

But in March I also stated that the gold miners represented excellent value and that if you wanted to get into gold, you still had a chance in that way. Since then, gold miners have slid down with gold even further, and now they are simply at silly prices, in some cases selling for less than break-up value.

Seabridge Gold, for example, isn’t even a miner- it’s a gold royalty company. No risk, all gold profit. And it’s selling for less than the gold it has.

For a safer bet, the GDX is a basket of miners in the form of a fund (an ETF: Exchange Traded Fund) and is close to two year lows.

Nothing has fundamentally changed with the gold situation since 2002 when governments embarked on their cheap-money programs.

I’ve said it before, and I’ll say it again:

A bear tries to act like a bull to entice as MANY people down with him as possible.

A bull tries to act like a bear to entice as FEW people up with him as possible.

“Jim, what’s the fastest and easiest money I can make today?”

This has never been easier to answer…

If you don’t have credit, you need to get some immediately. Once you do, banks are willing to lend you money for 30 years at 3.7% (mortgage or remortgage).

My friend, any idiot willing to do that for you on the eve of The Great Inflation needs committing to a lunatic asylum, but there it is.

Tell them to back up the truck and pour as much of that cheap money on your driveway as possible. In an inflation, debt gets wiped out. If you take their cheap money and invest it in a stock that pays more in dividends than the interest rate, that’s FREE MONEY. Also, that asset will zoom up with inflation, but the debt on it will stay the same.

For example, if you invested that cheap money at 4% in a stock that paid 6%, that’s 2% free money, and the loan has cost you nothing. If you bought that stock for $100,000, and it doubles in value from inflation to $200,000, you can pay off the debt and still own half the stock.

You’re at the brink of opportunity. What you NEED is to capitalize on this. If you focus on your need, you will get what you want!

To close, an interesting and genuine map I came across, and I wondered what your thoughts were. I wonder what it would look like if you overlaid this on a map of electoral votes? It gets awfully dark in Mississippi, doesn’t it…?

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Until next time,

Jim Sheridan.