Is Stansberry’s “End of America” Video Right?

Right at the beginning of this year, there was a video going around that stirred a bit of controversy.  A financial analyst named Porter Stansberry made an hour long lecture-style video called “The End of America,” by which he meant that we would lose our financial dominance and quality of life, not that the country would cease to exist. 

Many people pointed out that Stansberry has been investigated and sued before, and that the video is ultimately an ad for his products.  But neither of those things proves that he’s wrong.  In fact, I already knew most of the information in his video, but I did learn quite a bit.  What most impressed me is the way he collated the facts and used them to present his case–the logical order of the argument’s arrangement is very well done. 

It’s a long video, and slow paced, but if you’re interested in the economy, it’s worth it.  Still, here’s a spoiler: ultimately, Stansberry’s specific prediction is that our economy will be ruined when the American dollar is replaced as the world’s reserve currency, and panic results in runaway inflation and government confiscation of private wealth. 

I was thinking about this video again during the recent debt ceiling debate, which proved to my mind that virtually nobody in Washington is even pretending to be serious about ever restraining our spending and paying off our debts, and the subsequent first ever lowering of our credit rating by Standard and Poor’s.  Since that, though, Chinese officials have started calling more openly for a new world reserve currency, just as Stansberry predicted. 

Is the rest far behind?

Incidentally, one good segment near the end of the video addresses the coming “higher education” bubble that’s about to pop.  Law professor Glenn Reynolds over at Instapundit has been harping on this for a long time, and my own understanding of the state of American higher education makes me agree with them: so many people have so much student loan debt that can never realistically be paid off (and in this climate, won’t be a priority), that massive defaults are only a matter of time.  When it starts happening, it will be just as destructive as the massive defaulting we saw in real estate a few years ago. 

At the end of his video, Stansberry gives some generic “be prepared” advice, and then hawks some new materials that he wants to sell.  Sadly for him, nothing in the video makes me believe that he has some secret that people need to know.  Any of us can be safe by being responsible and educated in our finances, I’m sure.  And frankly, the introduction to and tone of the whole video is pretty corny and manipulative, but again, none of that means he’s wrong.  His case is strong. 

Since both political parties are responsible for this mess, I hope this presentation transcends partisanship. 

If none of Stansberry’s facts or predictions are compelling to you, though, consider a couple of old sayings: “Better safe than sorry” and “Hope for the best, prepare for the worst.”

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7 comments on “Is Stansberry’s “End of America” Video Right?

  1. 1. FRANK PORTER STANSBERRY was successfully sued by FTC. He had to pay a 1.5 million dollar fine for making misrepresentations and defrauding investors. See: http://www.sec.gov/litigation/complaints/comp18090.htm

    2. Stansberry claims a weak dollar is a bad thing that will destroy the US. If that was true why would China and every other country fight to keep their currencies artificially low? A weak dollar would attract tourists from S. America, Europe and Asia, which would bring influx of foreign capital. It would make US products more attractive. It would lead to Americans throwing away less food, and throwing away less money on goods they really don’t need. A weak dollar would revitalize American industry, and improve our trade imbalance. A weak dollar would be good for the American worker. A weak dollar would attract foreign investment in American companies and real estate.

    3. In a kingdom of the blind, the one-eyed man is king. The US may be having econonmic problems, but most other countries are in much worst shape.

    4. Printing money and monetizing a debt can lead to inflation, if not hyper-inflation. That part is true. But in a recession or a depression “cash is king,” money goes up in value, commodities and real estate go down in a value. You can print money and monetize a debt during a recession, because recessions are deflationary. Ben Bernacke is a pretty smart guy. He did his PhD on the 1929 depression. The job of the Fed is partly to prevent inflation, and to avoid deflation. In bad economic times, no one has money, and credit is hard to get. There is a liquidity crisis. QE-1 and QE-2 were just what the doctored ordered, because recession-deflation are more a threat now than an overheated economy and inflation. Homees and real estate losing value, and a falling stock market are recessionary-deflationary. Helipcopter Ben has come to our rescue pulling us out of a downward spiraling vortex with his helicopter, with his printing money and easing credit in a time where money is a scarce commodity.

    5. Who are the big losers if the US monetizes its debt? China, Saudi Arabia, Kuwait, and Japan. They are the biggest holders of US debt. Will you shed a tear?

    6. When you owe a creditor a lot of money, your creditors have a stake in your success. If the US dollar sinks who loses more than the US? I am thinking of a five-letter word that starts with a captical “C.”

    7. The FED has powerful weapons in its aresonal to curtail inflation. Ben correctly believes the greater danger now is recession-deflation, not inflation. Should inflation really become an issue, he can stop it in a millisecond. Ben follows US inflation closer than any other American. Ben is a sharp guy.

    8. If the US Stock market collapses, that is recessionary-deflationary. The more the US stock market goes down, the more Ben can pump money into the economy without creating inflation.

    9. Ben looks at every part of the US economy for signs of inflation to keep it in check if necessary.

    10. Congress can do many things to raise revenue. The US has one of the lowest tax rates of any country in the world, not one of the highest. My father was in the 90% tax bracket. That did not disincentivize him. He continued to work hard to make money. So did every other entrepreneur. We can lower our military spending. We can close many loopholes, and stop giving so many tax credits. One of the biggest loop-holes is allowing wealthy individuals to use charitable foundations as tax shelters. Charitable foundations do not have to spend much money on charitable causes. Charitable foundations can invest their capital. They can pay huge salaries to their founders, and to friends and family members of their founders. That is why Howard Hughes and Bill Gates created their charitable foundations. They did so to avoid paying taxes, not because they are such caring individuals.

    11. Social Security can easily be fixed by raising the age of retirement, and means-testing those who get benefits. It should be insurance to care for people who are too old to work, who do not have savings to care for themselves to live a decent life. Social Security should be a safety net, it should pay benefits on a sliding scale, giving more to those who need it most. Today, Social Security pays wealthy people money who do not need benefits. Means-testing would save the system a lot of money.

    12. Yes, a small percent of the population pay a large percent of taxes. That is because a small percent of the US population earns and controls most US wealth. Wealthy American have the most disposable income. They can afford to pay more taxes without lowering their standard of living.

    13. The rich do not create wealth. This is a fallacy. Creative people, innovators, entreprenerus and inventors create wealth. Most creative people, innovators, entrepreneurs and inventors are not wealthy. They start their businesses with borrowed money. Amazon.com, Google, Microsoft, Apple all started with borrowed money.

    12. Money flows up, trickles down. When the poor and middle class have money they spend it on consumer goods and services that create jobs and wealth for everyone. When wealthy people get more money, they save it, not spend it. They buy frivilous, luxury items like dresses that cost tens of thousands of dollars, diamonds, $20,000 watches, mansions, yachts, jets, homes, and high priced cooks that relatively speaking employ much fewer people. It is the spending of the lower and middle classes that drive the economy of any nation, not the spending of the upper class. Which helps a nation’s economy more. One rich guy doing a huge remodeling job on his home, or 10,000 middle-class home owners remodeling their homes?

    13. Ronald Reagan tripled the national debt, and nearly drove the US into bankruptcy. Ronald Reagan was the greatest deficit spending president of all time. Little wonder the US economy grew in his time. All knowleable parties agree, Ronald Reagan had no effect on the fall of the Soviet Union.

    14. Al Gore never said he invented the internet. Al Gore did create the internet we use today, by sponsoring legislation that allowed the public to use it. Prior to Al Gore, the internet was just a tool of the US military and US universities. By the left-wing, liberal biased-media kept the truth a secret from the US public.

    14. There is no real argument amoung climatologists that global warming is taking place. Out of 20,000+ climatologists, less than 10 claim global warming is not taking place. Less than 50 claim man is not the cause. The evidence for global warming is overwhelming. The evidence man is causing global warming is overwhelming. Man is having a profound effect on his enviroment. There are much fewer fish in the ocean. Fish are becoming smaller, because small fish are able to swim through the nets of trawlers who fish with nets that are miles long. Man has fished many species of ocean fish to verge of extinction. Mankind did create an observable hole in the ozone. Most people who don’t believe in global warming, do not understand the principle of a green house. They don’t understand how green houses trap heat. Glass allows sunlight to pass through it, but blocks infrared heat energy from escaping. Certain gases like CO2 have the same effect as glass. CO2 allows sunlight to pass through, but blocks infrared energy. Venus is an example of a planet suffering from the “green house” effect. It would be hotter than earth even if its orbit was further from the sun because its atomosphere traps the suns energy. Forrests remove CO2 from the air. By deforesting the Earth to make room for civilization, and by burning fossil fuels we create CO2. Before the colonists came the US, the US was almost completely forrested. We destroyed over 80% of forrests on American soil.

  2. I know a sales pitch when I see one. Classic bait and switch. Stansberry hooks his audience with facts and theories and then tries to sell you his product. Smart on his part…dumb if you buy it.

  3. Deirdreda, I said as much in the OP. What matters is if his facts are true and his predictions pan out. It’s not perfect, but there’s surely value here–the general message is “be prepared.”

  4. Idiot drivel, left wing looney. To paraphrase, the rich are evil and should be punished by those who didn’t make it big by taking all of their money and giving it away to those who didn’t work for it. Reagan was bad, Al Gore is nearly God (HA!). The rich don’t create wealth??????? Ugh, beyond stupid. BTW, when some “rich” guy buys a $10,000 dress or an expensive car, someone ELSE gets that money. See how it works?

    Worthless “op ed,” if you can even call it that. Go back to CNN/NPR school and learn some more talking points little sheep. Baaaaa baaaa

  5. For Frank;
    There are a few more than 10 scientists who claim global warming is not occurring. There are more forests now in the United States than in the last 150 years. Did you just graduate Indoctrination University? You professors live in an ivory tower, time to wake up and think for yourself.

  6. Why does everyone unconditionally subscribe to this ridiculous notion that the US dollar’s status as a reserve is essential. There are a lot of successful wealthy nations that do not have this status. They all have fiat currencies, they all have some degree of debt, they all employed monetary easing and stimulus spending in the face of the recent recession.
    Whatsmore the assumption that the dollar is held up in value by this status is both very anti-American (suggesting that the US and the US alone requires this status to survive should be a far bigger concern than the possibility of this status being removed) and completely devoid of any basis. If the argument is that there is excess demand for US dollars as a result of needing them to buy oil etc – this completely misses the fact that there is excess supply of them too – from the very people who sold the US dollars. Moving both supply and demand curves for the US dollar will not do much to change its value.
    The bottom line is the US dollar is the global reserve because it is strong and stable and representative of the largest economy in the world – not the other way around.

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