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Sovereign Man Notes from the Field Date: April 29, 2011 Reporting From: Lago Ypacarai, Paraguay

In Business, Business/Political Trends Worldwide, Government, Money and Finances, personal and business, Political, Travel on April 29, 2011 at 4:00 pm

Sovereign Man
Notes from the Field
Date: April 29, 2011
Reporting From: Lago Ypacarai, Paraguay

Greetings from paradise (check out the website for photos). We have a lot to cover today, so I want to get right down to it.

First, long-time readers know that I don’t really do public speaking gigs or interviews. We get a lot of requests for these but usually turn them down with few exceptions. Chris Martenson is one of those exceptions.

If you don’t know about Chris, you should– he’s one of the sharpest financial minds out there, and we look at the markets with a similar perspective. Chris speaks routinely with folks like Jim Rogers and Marc Faber, and as we share a similar worldview, I happily sat down with him recently for an interview.

We discussed how the best opportunities now are outside the western world– greater reward, greater freedom, greater adventure. If you have 30-minutes, you can listen to the interview on Chris’s website.

Next, Monte writes, “Simon, I worked for Bolivian president Evo Morales and had first-hand experience with the issues you discussed. Bolivia is taking a dangerous rode to both socialism and hate; our leaders want to improve things by telling us that we have to chase bad guys, i.e. anyone with a dissenting opinion.”

It’s the old ‘us vs. them’ approach: define a clear enemy (them) and people will gravitate towards the side of ‘right’ (us). This is a core principle of psychological warfare; human nature wants to divide the world into two sides and then be on the ‘right’ one, often without fully understanding the issues.

Politicians know that this is an effective tool to rally support for a cause, and history provides many examples. Hitler painted first the Communists, and then the Jews, as enemies of the state in order to build support for his dictatorial control.

The US government applied the same tactic 10-years ago, defining ‘evil terrorists’ as the enemy in order to build support for the erosion of civil liberties in the United States.

Anger and hate may be effective tools to rally popular support, but such polarization rarely leads to solutions… just witness how governments are now defining ‘evil oil speculators’ as the enemy. It’s easy to side with the politicians on this one– after all, everyone hates paying more for fuel.

But will breeding such negativity bring down gas prices? No chance. In the same way, democrats and republicans painting each other as the enemy does nothing to bring down the US debt.

It’s all just a silly charade, one of the primary reasons why things continue to get worse. Policymakers, whether in Bolivia or the developed world, focus on rallying popular support for their agenda rather than on credible solutions that work.

On that note, Chris asks, “Simon, did you see Chairman Bernanke’s press conference this week? You didn’t comment on it, I’m curious about your take.”

The good chairman is a classic example of policymakers relying on poor tools that don’t work. This man has conjured more money than anyone in the history of the world, and it’s not working. His only solution is to keep doing more of the same.

I know a lot of people in the markets who hang on to his every word, looking for some sign that he’s going to change his tune. This is total nonsense. Bernanke has one play, and it’s devaluation. There may be short-term market fluctuations, but his long-term policy of destroying the currency is very clear. Plan on it.

As such, the US dollar has hit record lows against other currencies like the Swiss franc and Aussie dollar which are rightfully viewed as ‘better’ and more stable. Ultimately, though, all fiat currencies will follow the dollar down its road to perdition.

Precious metals are among the few asset classes that can go to the moon without feeling the political heat. Oil will not see $300 without first undergoing coordinated intervention by world governments… but silver can go to $300 without so much as a yawn from politicians.

That’s all for this week; Sovereign Man Confidential members are reminded of today’s teleconference at 2pm Eastern. I’ll be taking your questions and giving you a few personal updates, including what I’ve found here in Paraguay.

Have a great weekend.

Simon Black
Senior Editor, SovereignMan.com
This article appears courtesy of SovereignMan.com: Notes From The
Field
, a free newsletter dedicated to individual freedom,
internationalization, asset protection and global finance. For a
complimentary subscription, visit http://www.SovereignMan.com

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