Saturday, May 21, 2011

National Inflation Association Attacks Peter Schiff

Peter Schiff has attacked the methods used by the National Inflation Association in promoting various stocks (see this post). NIA has in response come out swinging with a vicious attack on Schiff. I will be reaching out to NIA to see if I can get a few questions answered, so that a more light can be shed on what is really going on. In the meantime, here is the NIA response to Schiff:
For the past two years, NIA has built one of the world's most impressive track records of free stock suggestions. Not including NIA's latest stock suggestion Mega Precious Metals, NIA has released 27 stock suggestions and they have made an average gain at their highs of 196% from NIA's profile prices.

NIA has always made it very clear that we are not investment advisors and our stock suggestions have been just that, suggestions. NIA has never recommended to its members that they buy or sell any stock. NIA's stock suggestions have been 100% completely unbiased. NIA has NEVER once sold a single share in any of its stock suggestions. Let us repeat, NIA has NEVER once sold a single share in any of its stock suggestions.

There is a certain well-known traditional old-fashioned stock broker who has recently been losing a lot of his business and believes NIA is partially responsible for his company's decline. NIA used to have a lot of respect for this person and we still agree with many of his economic viewpoints. Unfortunately, his brokerage firm will most likely no longer exist in a few years and it has nothing to do with the success of NIA.

We are not going to mention this person's name and give his brokerage firm any publicity. The truth is, this firm charges very large commissions of approximately 3.5% every time one of its clients buy or sell any stock. NIA for the past two years has been suggesting to its members that they open up online brokerage accounts with firms such as Etrade, Ameritrade, and Scottrade, where they can buy or sell any stock for approximately $10 per trade.

There is no reason why any investor should have to see a 7% gain in a stock that they purchase before making a profit. With an online brokerage account, if you invest $25,000 into a stock and it rises 5%, you would make $1,230 if you sold it. If you invested $25,000 into that same stock using a traditional old-fashioned broker and you sold it after it gained 5%, you would lose $543.75.

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 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.

There is a reason why Glenn Beck calls NIA a very credible organization, yet no longer invites this stock broker on the air. There is a reason why NIA's membership base is growing by leaps and bounds and far exceeds this stock broker. NIA's President spends 12 hours per day studying the economy and researching stocks. His number one goal in life is not making money for himself, but is preparing Americans for hyperinflation and helping as many Americans as possible survive and prosper during the currency crisis that is ahead.

Here is a list of all of NIA's past public stock suggestions along with their percentage gains at their highs:

Newmont Mining (NEM)

Suggested on February 26th, 2009, at: $40.68

High on September 22nd, 2010, of $65.50 +61%

Barrick Gold (ABX)

Suggested on February 26th, 2009, at: $31.34

High on April 21st, 2011, of $55.74 +78%

Silver Wheaton Corp (SLW)

Suggested on February 26th, 2009, at: $6.74

High on April 8th, 2011, of $47.60 +606%

Potash Corp of Saskatchewan (POT)

Suggested on March 4th, 2009, at: $24.88

High on February 14th, 2011, of $63.97 +157%

GoldCorp Inc (GG)

Suggested on March 11th, 2009, at: $28.05

High on April 28th, 2011, of $56.20 +100%

Royal Gold Inc (RGLD)

Suggested on March 18th, 2009, at: $42.21

High on April 28th, 2011, of $62.01 +47%

Eldorado Gold Corp (EGO)

Suggested on April 1st, 2009, at: $9.14

High on September 15th, 2010, of $20.23 +121%

Zhongpin Inc (HOGS)

Suggested on April 1st, 2009, at: $9.16

High on November 5th, 2010, of $25 +173%

Yamana Gold Inc (AUY)

Suggested on April 8th, 2009, at: $8.17

High on December 2nd, 2009, of $14:37 +76%

Ivanhoe Mines Ltd (IVN)

Suggested on April 15th, 2009, at: $5.84

High on December 7th, 2010, of $30.03 +414%

Hecla Mining Co (HL)

Suggested on April 30th, 2009, at: $2.47

High on January 3rd, 2011, of $11.56 +368%

First Majestic Silver Corp (TSX: FR)

Suggested on June 2nd, 2009, at: $2.72

High on April 6th, 2011, of $25.79 +847%

Endeavour Silver Corp (EXK)

Suggested on June 17th, 2009, at: $1.66

High on April 8th, 2011, of $12.75 +668%

Entrée Gold Inc (EGI)

Suggested on July 9th, 2009, at: $1.39

High on January 3rd, 2011, of $3.52 +153%

Capital Gold Corp (CGC)

Suggested on August 5th, 2009, at: $2.48

High on April 8th, 2011, of $6.57 +165%


Suggested on October 18th, 2009, at: $7.20

High on January 15th, 2010, of $7.90 +10%

AgFeed Industries, Inc. (FEED)

Suggested on November 3rd, 2009, at: $4.60

High on January 7th, 2010, of $5.69 +24%

China Sun Group High-Tech Co. (CSGH)

Suggested on December 14th, 2009, at: $1.61

High on January 8th, 2010, of $2.35 +44%

NGAS Resources Inc. (NGAS)

Suggested on February 11th, 2010, at: $1.38

High in 2010, of $2.14 +55%

Revett Minerals Inc. (RVM)

Suggested on March 22nd, 2010, at: $1.9975

High on April 6th, 2011, of $6.32 +216%

Coeur d'Alene Mines Corporation (CDE)

Suggested on May 3rd, 2010, at: $17.92

High on April 6th, 2011, of $37.59 +110%

Pyramid Oil Company (PDO)

Suggested on June 15th, 2010, at: $4.39

High on February 24th, 2011, of $9.40 +114%

Canadian Zinc Corp (TSX: CZN)

Suggested on July 28th, 2010, at: $0.37

High on February 22nd, 2011, of $1.56 +322%

U.S. Silver Corporation (TSX Venture: USA)

Suggested on September 20th, 2010, at: $0.28

High on November 9th, 2010, of $0.83 +196%

Garibaldi Resources Corp (TSX Venture: GGI)

Suggested on December 28th, 2010, at: $0.295

High on February 23rd, 2011, of $0.56 +90%

PC Gold (TSX: PKL)

Suggested on March 7th, 2011, at: $0.83

High on March 7th, 2011, of $1.16 +40%

Nautilus Minerals Inc. (TSX: NUS)

Suggested on April 13th, 2011, at: $2.59

High on April 14th, 2011, of $3.51 +36%

NIA's President owns 183,000 shares of GGI, 3,500 shares of CDE, 10,000 shares of RVM, 20,000 shares of CSGH, 7,400 shares of DROOY, 36,500 shares of EGI, 5,950 shares of EXK, 10,000 shares of HL, 2,700 shares of IVN, 2,300 shares of AUY, and 600 shares of NEM, and could sell any of these shares at any time. The exact gains above may have been difficult or impossible to achieve. Past performance is no indication of future returns. Our Legal Disclaimer:
UPDATE: Peter Schiff responds to NIA, here.


  1. NIA responded to my video by raising a straw man. They claimed they did not "pump and dump" the stock since they did not personally sell any shares. However i never accused them of that. I alleged that a third party paid them to pump up the stock so the third party could sell their shares. The fact that they never addressed this allegation is pretty compelling evidence that it's true. They also claimed that they warned their members that Mega's gold ounces were merely "inferred." That is my point --they did not warn them!. They did not define "inferred", and they counted on the fact that their members would wrongfully assume that "inferred" meant they actually had gold. That is why they fraudulently calculated the value of their "inferred" ounces based on today's gold price. They also included a list of legitimate gold recommendation. But they only make those "suggestions" to lay the foundation for future pump and dump schemes.

    In addition, they accused me of running a failing brokerage firm that will soon be out of business despite the fact that my business has never been better. We have more clients, more revenue, and more profits than ever. We also generally charge much lower commissions than what they claim.

  2. If you look at a great deal of their stock recommendations, you will find that almost all of them peak within a month or so of the NIA recommending them, and then fall off. This is not a fluke, and it certainly isn't normal stock behavior. Seeing that Jonathan Lebed is involved, and has been called out numerous times on national TV, I just do not see how they can say that Peter is being disingenuous. In fact, they even said that he will be out of business in a few years, even though he has been expanding for the past 5 years (even after the dollar rally scare).

    Look at their stock calls, and then watch every one of them peak and then fall. To be honest, this NIA scam has been known for quite a while and I am more surprised that Peter took this LONG to address it, rather than the fact that he DID address it.

    Peter made a good call here. And, he put his reputation on the line to back it up.

  3. Well I gotta ask... if the NIA is so good at picking stocks - why don't they trade them all by themselves? Why even share all that information with the rest of us? If I would be dead accurate on picking stocks and finding correct entry/exit levels... guess what? I'd be trading my a** of from my yacht in Monaco, without sharing any of my views and ideas. I'd be making money for myself.

  4. Peter Schiff has responded to the NIA "response" on the comments section of his video blog at

    Posting the full "response" from NIA leaves a tar on EconomicPolicyJournal, so I bid farewell on your chosen path.

  5. I have to say ive followed NIA and peter schiff for a while and enjoy them both. Although i never bought a single stock NIA recommended ive always followed there picks. Their stock picks have been excellent as shown above. even if they had engaged in pump and dumping I doubt any one would complain since the returns have been good. Furthermore I can accuse anyone who is selling something they have an agenda. Peter Schiff makes video blogs to advance his brokerage firm. Robert Wenzel post on this forums to get people to sign up to his EPJ daily alert. I can go on and on. All of you guys produce informative information. Either way i think that video post of "george" EPJ put up is pretty discrediting.

  6. 'Seeing that Jonathan Lebed is involved, and has been called out numerous times on national TV, I just do not see how they can say that Peter is being disingenuous.'

    Talk about understatement! Lebed has even been called out on Fox News. He was accused by the SEC for stock fraud (classic pump and dumper) in 2001, *AT THE AGE OF 15*. He settled by giving back his some of his profits, $285,000 to avoid prosecution (He made over $800,000).

    NIA is his 'new' front. He uses the cover of legitimate economic principles (rising inflation, government spending, etc) to push penny stocks. He's already been called out on the NIA, let alone on public news channels. If you want to research more about him, just do a google search on 'Jonathan Lebed' and 'NIA scam'. Check out the youtube videos on George4title to see what is going on with this guy.

    The NIA is a KNOWN bad apple now. If you guys want to waste more time on this creep, by all means, have at it. But don't expect people like me to read future articles on him. I only post this as a warning to others.

  7. If you visit the NIA website there is zero information about who they are. If you click on the "About NIA" link you are taken to a page where they refer to "the organization" and the "NIA president." Nowhere is there an actual name of a real person working for them.

    If I founded a charitable organization with the sole purpose of disseminating information for free that I believed would help people, I would probably not hide my identity and relentlessly refer to myself only as "we here at NIA."

    That was enough for me to become extremely suspicious of their nature.

  8. I like how they "examine" their picks by taking the highs of each stock over the last could of years and comparing it to where they picked it. Clearly these guys are scammers that just got called out be Schiff.

  9. Anonymous said...
    I like how they "examine" their picks by taking the highs of each stock over the last could of years and comparing it to where they picked it. Clearly these guys are scammers that just got called out be Schiff.
    May 21, 2011 1:55 PM


    That's an excellent point. It's one thing to see how much you would have made if you had entered at the high... but it's another thing to actually get out. Who knows when the stock has made its high or not... anybody who calculates his/her profits using the 'what if I exited on high' is clearly an idiot.

  10. I too have followed Peter Schiff and NIA for a long time now. I have always had a lot of respect for Peter, but I've always been suspect of NIA.

    One example that no one else has commented on, is that they will provide stock suggestions in a private report for their members who donate $5000 to their organization! This is in addittion to the free suggestions that they send out periodically. They will typically hype this "report" for a number of weeks or days before they release it.

    And then at the end of their newest documentary (which actually I agree with almost all of it), their president makes a sales pitch to viewers, to become NIA members. I didn't feel it was the right venue to solicit members, but that is purely subjective. It definitely raised flags though, at least for me.

    After watching Peter's warning about NIA, I looked into Lebed and his involvement with them. The fact that he is behind this organization, as well as the obvious fraud George4Title on YouTube... I am no longer a member of NIA. I didn't give them a cent, but I sure hope that no one else gets suckered into their scam.

  11. NIA is a scam. Of course they didn't trade any shares of Mega Precious Metals, Inc. They got paid to pump up the stock and the other individual/group sold its shares.

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