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Ben: It's All Part of My Master Plan

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It's all under control -- my control.

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Editor's Note: See Ron Coby's first "letter" to Ben Bernanke here. And his "thank you note" to Ben here. This is for illustrative purposes only and isn't an offer to buy or sell securities. Past performance is no guarantee of future performance. The response from Dr. Ben Bernanke, global savior, is fictional.


Dear Ben,

I hope you had a chance to read a few chapters of my book, Discover the Upside of Down. I thought the chapters on booming gold and the crashing US dollar might be of particular interest to you.

As you know, gold hit new all-time highs crossing $1150 an ounce and looks to be on a runaway break-out. At the same time, the US dollar hit 14-month lows and now everyone, everywhere, hates the dollar. (See also, The Dollar is Burying Non-US Investors)

As we both know, Ben, gold is a leading defender for investors against the enemy of coming inflation and a US dollar crash. It would appear investors and central banks from around the globe are piling into to gold for just that protection.

At the same time, hedge funds are aggressively shorting the dollar. (Now you can see why chapter 5 of my book is titled "Why Gold? The proliferation of paper money creation and inflation"). Who can blame the investors and institutions for their reaction as you so proudly live up to your nickname: "Helicopter Ben".

Anyway, I just wanted to drop off another note of thanks for doing exactly what I wrote about in my book. I'm wondering if you'll continue to do as I predict and monetize the country into a new era of stagflation.

Sincerely,
Ron Coby

***

Dear Ron,

I read some of your book and see you refer to yourself as the "Short Side Strategist". Of course, that brings a big smile to my face because I just created the greatest short squeeze in world history.

You make it sound like I should be alarmed about the rising stock market decoupling from dire economic realities. What you don't realize is that all of this was clearly by design.

You see, I was able to kill two birds with one stone by pumping liquidity and propping up markets worldwide. In fact -- I was able to squeeze the very life out of the short-side speculators and simultaneously generate a nice bid for investors to hit by selling stocks. This way investors can raise needed cash and pay off that "global margin call" you spoke about in your book. As far as I'm concerned, I just saved the world from an economic collapse.

Being a busy man, I confess I merely skimmed chapter three: "Today's dollar is worth less, tomorrow's dollar could be worthless". Again, you brought a smile on my face.

You act as if I should be concerned about the falling dollar and rising gold when, in fact, I welcome both! Whose foot do you think was lifted off the neck of gold? I needed a sign that my war on deflation is being won and what better way than to let gold rise.

The reason I'm not worried about rising gold prices or the falling dollar is because I know how to easily reverse those markets. Right now, the falling dollar is helping me keep that bid out there for investors to lighten up their stocks and pay off strangling mortgage and credit card debts.

Also by design, I've crushed the dollar by cutting interest rates to zero. This way I can get those aggressive speculators to pile on the short side of the dollar.
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No positions in stocks mentioned.
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