Lear Capital Releases “The Shell Game 2013”-- A Quantitative Easing Story

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Consider Quantitative Easing defined as Lear Capital launches "The Shell Game 2013" (http://www.theshellgame2013.com) and offers a fresh perspective on Quantitative Easing! The Shell Game 2013 breaks down Federal Stimulus practices in light of America’s growing debt, risk of inflation and weakening dollar.

The Shell Game 2013

The Shell Game’s final takeaway is an important one: Gold prices and US Debt have been 98% correlated over the past 15 years!

In its “money morality tale” called The Shell Game 2013 (http://www.theshellgame2013.com), Lear Capital takes the rather complex topic of quantitative easing and drops it on an island in a broad-reaching metaphor about the manipulation of the US money supply. It could be Fiji, Bali or Tahiti but one thing is for certain-- it is not Fantasy Island. The US government’s monetary policy of creating excess electronic money to boost bank lending, liquidity, and cash deposits is very real.

The unit of currency in “The Shell Game” is none other than the shell, a type of cockleshell, and the presumed former home of the famed island mollusk. In Lear Capital’s animated Shell Game video, (http://www.theshellgame2013.com), the castaway is charged with coming up with a successful island business idea and when he does, the bank agrees to lend out all of the island’s 10 shells at 10% interest to help the business grow. The “start-up” ultimately goes “Island Viral,” but when our new island entrepreneur attempts to pay back the “Central Bank” with interest, there are no more shells left in circulation. So, where does the “Island Fed” get the 11th shell for interest? As art imitates life, another shell is simply made “out of thin air” and all the other shells on the island get a little bit smaller and little less valuable.

The implication of The Shell Game 2013 (http://www.theshellgame2013.com) is that the island economy demonstrates the risk of loose monetary policy. While the Island’s Central Bank solved a short-term problem by creating an extra shell (money), it also manipulated the value of all the other shells (money supply). Likewise, as current US monetary policy continues to stimulate the economy through increased money printing, bond buying, and lower interest rates, we are facing a weakened dollar, looming inflation, and soaring public debt. What’s perhaps more concerning is that all of this Federal intervention is making America’s already tepid economic recovery seem increasingly fleeting, more and more temporary, and exceedingly short-lived.

The Shell Game contrasts all of this with gold, the world’s paper money insurance. With the onset of “shell-flation”, the video explains that “real money like gold that you can’t print should continue to rise.” That’s because gold does not derive its value from any government or monetary system. It is a value standard unto itself. And, with US Debt soaring toward the $17 Trillion mark, an ongoing Euro money crisis, continuing Mideast unrest, and the steady threat of global terrorism, smart investors are actively diversifying their retirement and savings accounts with something solid like gold.

The Shell Game’s final takeaway is an important one: Gold prices and US Debt have been 98% correlated over the past 15 years. So, the rise in the value of gold has nearly matched the rate at which America has accrued debt since 2002. With our current addiction to Quantitative Easing and ongoing federal efforts to promote lending and prop up fiscal assets, America’s monetary policy is unlikely to change anytime soon. According to Lear Capital, this bodes well for gold, since those holding paper-only assets have clearly been losing wealth for decades. The enduring lesson of The Shell Game 2013 (http://www.theshellgame2013.com) and its deserted island setting is that gold is perhaps the final frontier for the world’s money.

Lear Capital (http://www.learcapital.com) has been America's Precious Metals leader since 1997, helping customers diversify their portfolios with bullion, premium rare coins, and IRA eligible gold, silver, platinum or palladium. For investors looking to realign their asset allocation, maintain an aggressive hedge against global volatility, or secure tangible retirement protection, Lear Capital has a plan. The company can be reached online at: http://www.learcapital.com or by phone at 1-800-576-9355.

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Katie Josephson
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