The Financial Pearl Harbor Scam

Sometimes I get advertising emails from Newsmax, a conservative organization that is generally too dogmatic for my tastes. Last week I got one warning me about a “financial Pearl Harbor” that was going to come within “60 days” and that I needed to hurry up and click on this link to watch a video to learn how to protect me and my family.

I’ve seen this kind of imminent warning floating around the Internet for awhile, but I was pretty sure I’d been seeing it for more than 60 days. So the fact that they were still peddling it made me decide to click on it and watch the entire 40-minute video just to see how full of crap it was – and what they were trying to sell.

Well, they were trying to sell something, though it wasn’t completely full of crap. It’s largely based around the book Currency Wars by James Rickards, although to stop you from just checking that book out from the library for free, you conveniently have to buy Newsmax’s special package that gets you the extra “unpublished” “controversial” chapter. Naturally the video is pretty bullish on gold, although to stop you from just buying your own gold you have to get this package to learn about five specific countries to invest in because their currencies or markets are heavily tied to gold or something.

The video is basically high fructose corn syrup for gullible, paranoid, hard-money conservatives, carefully manufactured sugar designed to hit the sweet spot that opens their wallets. It gives them just enough Turkish Delight to convince them there’s a whole castle filled with it for a couple hundred bucks.

But even the persuasive mechanisms have contradictions for anyone who stops to think about it for even a minute. The video combines public knowledge with supposed secretive insider information (a standard conspiratist tactic). But it claims Rickards is leaking classified info that no one in the government wants anybody to know, while simultaneously claiming that some of Rickard’s info was so top-secret that he had to get it cleared before publishing it in the available materials! Both claims are meant to lend credibility to the authenticity and importance of the material, but together they are contradictory… is the government OK with the info being released or isn’t it?

Now the Rickards book may not be complete hogwash, although I suspect the economic events that have unfolded since its publishing are already undermining its arguments, which according to the video have something to do with QE3 being the straw that breaks the economy’s back. But the wallet-prying urgency that Newsmax attaches to the book is definitely complete hogwash!

As I said, I felt like I had seen these sorts of urgent warnings floating around longer than the supposed period of urgency. Thanks to Google’s time-filtering search tools, I was able to confirm this. In fact, it was worse than I thought – Newsmax/MoneyNews has been peddling the Rickards-based “financial Pearl Harbor” since at least last August. But that didn’t stop them from regurgitating that they were “recently tipped off regarding a ‘financial Pearl Harbor’ that will strike America in the next 60 days.”

Apparently the Federal Reserve is manipulating the calendar, too.

Incidentally, this email came from National Review, with the preface “Please find this special message from our sponsoring advertiser Moneynews.com.” I’m on this list because I subscribe to Jonah Goldberg’s G-File, which I find interesting and humorous. In general I consider National Review a pretty respectable conservative organization that I agree with more than half the time. I expect this kind of peddled nonsense from the Townhall email list I somehow got on, but not from them. I hope National Review realizes how they are risking their reputation by aligning themselves with such crap from their “sponsoring advertiser.”

2 thoughts on “The Financial Pearl Harbor Scam”

  1. Understanding how financial markets work really is a panacea against this sort of nonsense. I don’t know if it qualifies as Econ 101, but I think the EMH, or at least some idea about how arbitrage works, should be a part of everyone’s mental toolkit.

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