Saturday, May 21, 2011

Peter Schiff Responds to NIA

In the comments section of my post, which reproduced NIA's attack on Peter Schiff, Schiff has responded. I reproduce in full Peter's response:
Peter Schiff said...

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.
I also note that another commenter wrote this:
Posting the full "response" from NIA leaves a tar on EconomicPolicyJournal, so I bid farewell on your chosen path.
To this second commenter, I note that I originally posted a negative video (written by "George") about NIA in November of last year, along the same lines as Peter. That said, if someone issues a response to something I have posted at EPJ, they are going to get the chance to respond. But this doesn't preclude me from further commenting on that response. As indicated in my posting of  NIA's response to Peter, I also wrote:
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.

Which is my way of signalling that I did not consider the situation closed. Further, anyone who has followed EPJ for any length of time knows that if I am going to be making a second or third comment, it is generally not going to be pleasant for the person I am responding to.

Since Peter has already brought it up in his comment, I will address one point that NIA made, now. They said that Peter was running a failed brokerage firm, I found this to be a suspicious claim and planned to ask them how they knew Peter's firm was losing assets and failing. I suspected that wasn't the case and that NIA was making the charge up. Peter's response, "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,"  backs up my suspicion. But there are many, many other questions I have about the NIA response and the way they run their operation, so lets see if they will give me the opportunity to question them on a number of points, which as I initially said would make things much clearer.


  1. one thing I thought was funny about the NIA response was that they mentioned Glenn Beck endorses them but doesn't invite Schiff on the show. Well that's probably because Schiff warned about Beck endorsed Goldline ripping people off.

  2. Yes GLenn Beck endorses gold line. I called gold line once just to confirm they rip people off. first off they offer numismatic coins which onto itself is not necessarily bad. Some people have made a lot of money with them over the years. However the mark up they charge for some of these numismatic coins are excessive. By excessive i mean a 35% mark up on numismatic coins that should have a mark up of about 13%. On top of that even buying regular gold they charge excessive premiums and also charge a "restocking fee" of about 1%. What a rip off!!

  3. Indeed, Peter said they:

    1) Do legitimate things to build a list they can later exploit
    2) Probably don't have any shares because they don't need to - it's the MPG owners who are paying NIA that need to unload
    3) Use the word inferred in the knowledge that neophytes won't understand what it means
    4) Compared this POS to GoldCorp, which is an absurd comparison meant to further solidify the impression that they "have" the gold.

    ...all of which NIA explicitly avoided or merely... restated... in their rebuttal.

    They use the straw-man of responding to Peter's accusation of them being payed by MPG to do this by denying that the NIA owns any shares (which Peter never claimed.)

    Here's how their rhetorical style works:

    Say they agreed to do this in exchange for a sum of money in a month. They could say "We haven't received any money in exchange for this".

    Say the owner of the NIA agrees to be payed directly or through some third party for this. The NIA could say "The NIA has not received any money in exchange for this."

    It's the same way they refute the notion that they are scamming when they mention something is "inferred" once, never explain what it means, proceed to speak of the stock as though they were speaking of a stock with probable or proven reserves, dupe any novice reading their letter, and then brazenly claim "we _said_ it was only inferred".

    The NIA is so slippery and sleazy it's absurd.

    The point about Peter's 3.5% (which is overstated) commission is especially hilarious in combination with the point about Glenn Beck, since the reason Glenn Beck is avoiding Peter is that he pointed out that Beck advertises Goldline, which makes a 70% commission on sales. That's 20x (TWENTY TIMES) the commission rate.

    Peter is doing a public service by taking his time to expose the NIA. Peter has long maintained that the free-market is a good mechanism for ferreting-out fraud. And here he is backing that up with action.

  4. thank you for covering this, i have been reading this site for a while now and find it VERY imformative! i follow peter religiously and i also have been following NIA because so much of what they say sounds just like peter, but when it comes to trust, i put my money on peter anyday! i put him on par with Ron paul! but not to say that NIA isnt doing some good with their info, but i wont blindly be following their stock picks!

  5. I have ~$300k in a Europacific account that grew from a low of $60k three years ago. Mr. Schiff can have the 3.5% commission.

  6. Well, keep in mind that whenever NIA says anything sensible, they are actually just parroting something that was said before them by Peter Schiff, Jim Rogers, Marc Faber or Doug Casey. They have piggy-backed onto the following established by Schiff, et al. So their attack on Schiff is like that of a dog biting the hand that feeds it.

    I used to receive NIA's emails until they started soliciting big money "donations" in exchange for their most coveted stock picks. That action alone flies in the face of their claims of purely altruistic motives.

    But even before that, NIA smelled fishy to me. They didn't list the names of the people behind the organization on their website. When their "leader," Gerard Adams, appeared on Fox News to talk about NIA's food price predictions, he looked like a deer in headlights. He could not back up NIA's predictions with any sort of methodological explanation. Just, "we think this is what will happen." Right.

    And NIA's videos and press releases make the most sensationalized claims, often without citing any sources to back them up. The end of the world is always right around the corner. Even for someone who knows we are in for some serious economic turmoil, NIA's doomsday routine grows tiresome. They are clearly playing upon people's fears for their pump-and-dump scheme.

    Peter Schiff has proven himself to be an honest and upstanding commentator and businessman. Remember when he was getting laughed at on television, but persisted in telling the truth as he saw it? That took backbone and integrity. I will take Schiff over these NIA phonies any day of the week.

  7. Gary North obliterated 9 of the 10 'reasons for hyperinflation' by the NIA a couple of weeks back. That did it for me. You know how North does his thing - airtight analysis.

    That was the final nail.

  8. I just watched the interview with Gerard Adams on Fox just to see what he said when asked about his methodology. What he said is that he took the price changes that were found in the 1970s inflation, and then superimposed them onto today's market, and calculated for current "real" money supply. What the heck kind of methodology is that?

    Those price changes only apply to that time and that economy in the 1970s, you can't just superimpose them on today and call that science. Did he ever even consider that demand schedules for goods aren't constant over time, that the demand to hold money is not constant over time, that there are probably billions of other factors that will be different between today's economy and that of the 1970s?

    Sure, I watched a few of their films, and I knew that they were merely repeating the work of others. But, I had no idea how entirely lost they were when it actually came time for them to produce their own economic insights. I feel sorry for anybody that actually took/takes them seriously as some sort of objective voice on economic matters. Mind you, I agree that inflation may be a problem in the future, especially if the Fed implements QE3. But, I don't pretend that I can predict what those prices will actually be. That's junk science....