Hyperinflation for sale: Newsmax and Dick Morris cash in on anti-Obama rhetoric


Since President Obama's inauguration, right-wing website Newsmax has repeatedly used inflammatory anti-Obama rhetoric and stoked readers' fears of hyperinflation and economic collapse to drive sales of the financial-services products it offers, including newsletters and investment programs. Fox News analyst Dick Morris and Steve Forbes have played key roles in promoting Newsmax's financial products and economic rhetoric.

In this report:

  • Newsmax uses anti-Obama rhetoric and stokes fear of hyperinflation to drive sales of the financial-services products it offers.
  • Newsmax promotions entice participants to spend $1,295 or more on investment schemes that promise a "Potential Reward" of thousands in return.
  • Newsmax's investment schemes center on stock tips from Newsmax's "chief financial adviser," or advice on entering foreign currency trading markets.
  • Morris was paid to tout one Newsmax promotion to his mailing list, and Newsmax rented Morris' mailing list to promote another scheme.
  • Morris and Forbes have appeared in the videos and webcasts Newsmax uses to promote the website's financial products.

Aftershock: Newsmax's scheme

Initial offer included Aftershock book, trial newsletter subscriptions. On January 26, Newsmax Media CEO Christopher Ruddy sent an email to Newsmax's mailing list announcing Newsmax's Aftershock offer, which included a "free" (after spending $4.95 for "shipping and handling") copy of the book Aftershock: Protect Yourself and Profit in the Next Global Financial Meltdown by David Wiedemer, Robert A. Wiedemer, and Cindy Spitzer (John Wiley & Sons, 2010). The offer also included free trial subscriptions to three Newsmax financial newsletters: a two-month trial to The Franklin Prosperity Report, a three-month trial to the Gold Stock Adviser, and a four-month trial to the Financial Intelligence Report. Each newsletter must be individually canceled during their respective trial periods to avoid being charged a full year's subscription to them -- $99 each for the Financial Intelligence Report and the Gold Stock Adviser, and $49 for the Franklin Prosperity Report.

Newsmax book offer also included access to "exclusive Internet broadcast" with Morris. In his email, Ruddy wrote that responding to his email would put the responder on a "VIP Waiting List" in order to "claim your copy of this book and reserve a spot to view an exclusive Internet broadcast I'm filming with Fox News analyst Dick Morris along with an esteemed panel of experts." In a Feburary 10 email to his own list, Morris wrote that "Newsmax has asked me to team up with them in a financial webinar to elaborate my views" and stated that "[t]o view this important internet broadcast all you need to do is secure one of the copies of Aftershock that my friend, Christopher Ruddy, the CEO and Editor in Chief of Newsmax, has secured."

Book predicts popping of dollar, government debt "bubbles," and "enormous amounts of money to be made" during subsequent hyperinflation. The book jacket of Aftershock says that in 2006 the authors "accurately predicted the popping of the housing bubble, the collapse of the private debt bubble, the fall of the stock market bubble, the decline of consumer spending, and the widespread pain all of this was about to inflict on the rest of the economy." The book goes on to predict the imminent bursting of "the dollar bubble and the government debt bubble" [Page 60] and "movement toward what we call the 'triple double-digit ' economy" -- double-digit unemployment, double-digit inflation, and double-digit interest rates [Page 81]. The authors state, "There are enormous amounts of money to be made during the Bubblequake and Aftershock. In fact, we predict that more real (non-bubble) money will be made in the Bubblequake and Aftershock than in the last three decades combined" [Page 127]. "Good investments" include those "that take advantage of a falling stock market" and those "that take advantage of a falling dollar" [Page 130].

Newsmax launched website to push Aftershock webcast. Newsmax created a special, password-protected website, AftershockProfits.com, which contained articles and videos pertaining to the economy, some of which attacked the Obama administration and federal officials. For example, in a video posted on the website, James Dale Davidson claimed that "supposed improvements" to the economy were a "hoax" that was "faked by the government," adding that "the whole administration is based upon one lie after another." On February 25, the site featured a webcast hosted by 2008 Libertarian Party vice presidential candidate Wayne Allyn Root and featuring Ruddy, Morris, "International Currency Expert" Sean Hyman, and Robert Wiedemer.

Ruddy said he "put $1.5 million of his company's money 'on the line' " to give readers access to "Money Matrix Insider." The ultimate goal of the webcast was to promote what it called the "Money Matrix Insider" -- a method of investing in foreign currency exchange markets. Newsmax provided further details on the offer in a web page (PDF) carrying Hyman's byline, which stated that "Christopher Ruddy is so confident in the rewards to be had from this legal caper, that he put $1.5 million of his company's money 'on the line' to make this opportunity available to you." Newsmax is charging $1,495 for the "Money Matrix Insider" package -- described as a $1,000 discount off the regular "membership price" -- apparently operated by Hyman, which includes instructional DVDs, tips and alerts, and access to a "vast, password-protected Web site [where] you will be delivered members-only articles, weekly videos and audio commentary, the track record, and the ability to ask [Hyman] questions or suggest topics to be discussed in weekly commentaries." The web page touted the importance of being "one of the first 1,000 to order today" at the discounted price. The page touted a "Potential Reward" of "$137,000 (or more) Legally in Your Pocket in the Next Year Alone!"

Aftershock: Newsmax's rhetoric

Ruddy: Aftershock authors "foresee a very dangerous future for your wealth and our nation." In his January 26 email, Ruddy announced that "I'm going to give 5,000 fortunate Americans an incredible (and 100% free) gift. I want to make sure you are one of them. I've secured 5,000 copies of a powerful book I recently finished reading. The book is from a trio of authors who accurately predicted, in the beginning of 2006, the four financial bubbles that have since crippled our nation. Now they've penned the follow-up. The revelations in their new book are nothing short of shocking. ... The authors foresee a very dangerous future for your wealth and our nation. The authors not only document the catastrophic threats but also -- and more importantly -- they offer actionable solutions you can take now to defend your money and multiply it many times over. "

Co-author Wiedemer suggested "outright manipulation" in jobless numbers. Robert Wiedemer suggested in a February 10 article (PDF) posted on the AftershockProfits.com website that government officials were using "outright manipulation" in the unemployment statistics it publicized (bolding and underline in original):

So, is the government trying to mislead us?

It certainly isn't trying as hard as it could to emphasize statistics that show the real situation. It's also not clear it is trying hard to be more accurate.

Is there outright manipulation?

I don't know for sure, but certainly anyone who works in the production of government economic statistics knows which way to swing bias if there are any judgment calls or efforts to improve the statistical methodology.

The old saying may apply -- figures never lie, but liars always figure.

Hyman: "Personally, I think they [sic] numbers were majorly fudged!" Hyman wrote in a February 12 article (PDF) regarding a recently announced increase in gross domestic product, "Personally, I think they [sic] numbers were majorly fudged!" Hyman added: "In the stock market, they used to have a saying for CEOs and CFOs that played with the numbers on their books. They'd say that they 'cooked the books.' I think our own government may be guiltier of this right now than many of these corporations that got hammered for doing the very same thing. But hey, when you 'are' the law...who's going to prosecute you?"

Davidson claimed "supposed improvements" to economy were "faked by the government," a "hoax." In a February 16 video posted on the AftershockProfits.com website, James Dale Davidson, a Financial Intelligence Report columnist and an original investor in Newsmax who has been on the Newsmax board of directors, disparaged the government's economic as "statistical falsies":

I think what we have seen in the last -- 2009 and so far the few days into 2010 is a simulated recovery which has been generated by the government faking it in a lot of different ways, putting out what I call statistical falsies on the economic numbers to make it seem like the economy's stronger than it is."


I think a lot of the supposed improvements have been faked by the government. I think they did a very effective job of raising stock prices, and I believe that they used the quantitative easing as a way of funneling money into the market. And it's not a coincidence that the market started to rally in March of 2009 at the same time they announced that they were going to do the quantitative easing. So in my view, it's all created by the government as a hoax.

Davidson went on to say of the Obama administration's report of "jobs saved" due to the stimulus package: "It's a lie. It's a lie. That's the basic thing. You remember Congressman Wilson, in a speech in September when Obama was talking to Congress, jumped up and said, 'you lie.' Now, Miss Manners thought that this was probably worse than if Wilson had basically mooned him. ... But what I think is that it comes closer to revealing state secrets, that the whole administration is based upon one lie after another."

Davidson: Buy gold because "the dollar is cooked," warns of Wiemar-style hyperinflation. In a February 16 video posted on the AftershockProfits.com website, Davidson said:

I think gold is basically an investment that you have to have in your portfolio, unfortunately, because I think the dollar is cooked. I mean, we have gone through a policy in this country that puts our fiscal ratios worse than the Weimar Republic was before they had hyperinflation. Much worse than Brazil was 15 years ago when they had hyperinfation. I have a Brazilian wife, so I have a little bit of insight into Brazil, and from 1980 to 1997, they had a trillion-fold increase in the price level in Brazil -- a trillion-fold, according to the IMF. They never had once a deficit worse than a third as bad as our current deficit in terms of percentage of GDP. The highest deficit they ever had was 5.4 percent of GDP; we had 12.9 percent last year.

Precious-metal brokers advertise at Newsmax, other conservative outlets. The precious-metal investment firm Goldline, for example, sponsors the commodities price ticker on Newsmax's Moneynews.com page. Goldline and other similar investment firms regularly advertise on conservative media outlets, including Glenn Beck's radio and TV shows. Politico reported that the relationship between such investment firms and conservative commentators has "become an increasingly profitable synergy for everyone involved -- the retailers, the networks and an array of hosts including [Bill] O'Reilly and Beck, as well as radio talkers Mark Levin, Michael Savage, Laura Ingraham, Dennis Miller, Fred Thompson and G. Gordon Liddy."

Aftershock: Morris' role

Ruddy: "Dick Morris agrees that every American investor should read this book to secure their financial freedom." In his original January 26 email, Ruddy wrote in large, bold type: "Dick Morris agrees that every American investor should read this book to secure their financial freedom." Ruddy's email also highlighted the participation of "Fox News analyst Dick Morris" in Newsmax's webcast.

Morris urged email list to sign up for Newsmax's Aftershock book promotion in order to access webcast. In a Feburary 10 email to his list, after suggesting that "major inflation" was likely, Morris wrote:

Newsmax has asked me to team up with them in a financial webinar to elaborate my views and answer questions concerning the serious issues presented in Aftershock.

To view this important internet broadcast all you need to do is secure one of the copies of Aftershock that my friend, Christopher Ruddy, the CEO and Editor in Chief of Newsmax, has secured.

He believes this book is so important to your financial well-being that he is giving it away for free. I suggest you claim one of these quickly fleeting copies - you can do so by clicking here.

Newsmax promoted scheme on Morris' mailing list. Subscribers to Morris' mailing list received emails from Newsmax about the Aftershock promotion, including on March 4 and March 11. Newsmax was described as a "paid sponsor."

TV ad for promotion highlights Morris blurb. In April, Newsmax began offering the initial promotion -- a copy of Aftershock, plus the trial newsletter subscriptions -- in TV ads airing on Fox Business. Among the blurbs for the book included in the ad is one from Morris: "Aftershock ... is a must read!":

Morris bashed Obama in Money Matrix video: "[T]he cancer's dead, now we're suffering from the chemotherapy." In the February 25 webcast, Root introduced Morris as "the man Time magazine once called the most influential private citizen in America" -- a claim that came from a September 1996 Time article published shortly before Morris resigned in disgrace from Bill Clinton's re-election campaign. During the webcast, Morris plugged Aftershock and attacked President Obama as promoting economic policies that would result in "more inflation" and "huge increases in interest rates." From the video:

ROOT: Well, you know, I just finished interviewing Robert Wiedemer, the co-author of Aftershock. I'm sure you've read Aftershock. What did you think about its bold predictions?

MORRIS: Well, I thought it was a very good book. I thought that he really makes the point that the events that we've experienced over the last year are not going to be isolated occurrences. They stemmed from something and they will lead to something. And you can't go through the kind of disruption we've had in the financial system and, much more importantly, the kind of ill-conceived remedies for dealing with it of the Obama administration without having tremendous consequences. And that's why the concept of the word "aftershock" I think is a particularly good one because we had the shock of the financial crisis, but then we're going to have the aftershock.

ROOT: Interestingly enough, you mentioned shock and aftershock, and of course, your famous book is called Catastrophe. What comes after the aftershock? Catastrophe.

MORRIS: Well, I think that the aftershock will be a catastrophe. We have to understand that the disease we had, which was the financial collapse and the recession which it caused, is basically coming to an end. And what we are entering now is the results of the cure, not the results of the disease. You know, the cancer's dead, now we're suffering from the chemotherapy. And the therapy that we've had of huge budget deficits, massive increases in government spending, soon to be big increases in taxes, and then huge increases in interest rates, all of which are now inevitable, you're dealing with a situation where the cure will be many times worse than the disease ever was. In fact, it reminds me of the old medieval doctors who used to bleed their patients, you know, to get rid of the evil spirits in their veins. And that would cure them, and when it didn't and they were worse and worse, they said, ah, we know the solution -- take out more blood, get rid of more evil spirits. So finally the poor son of a gun died. And that's kind of what Obama's like. He's saying, well, he's sick, let's spend more money and increase the deficit. Ah, he is not recovering. Well, let's spend more money and increase the deficit even more. And that is going inevitably to lead to inflation.

Morris warned that Obama will raise taxes in an effort to "make things work." In a March 5 video posted to the AftershockProfits.com website, Morris claimed that in the 1990s, "the only way we balanced the budget, the only way we eliminated the deficit, was to cut the capital gains tax from 28 to 20 [percent], and eliminate it on homeowners who sell their homes for [$]250[,000] or less." By contrast, he said, "Obama is heading in exactly the opposite direction. He's going to raise the capital gains tax, raise the income tax, raise the dividend tax, raise the inheritance tax, maybe add a value-added tax on top of it, all of which are designed to make things worse, not better."

Morris: Obama "elbowing aside the small businesses" to borrow money. In a March 15 video posted on the AftershockProfits.com website, Morris said that because the Obama administration is financing the recently passed job-creation package out of deficit spending rather than out of tax revenue, Obama is "going to the loan window, elbowing aside the small businesses, borrowing the money himself, and then lending a piece of it to the small businesses and saying: 'Now go create jobs.' Whereas if he simply got out of the way and let the small business directly borrow the money, you could create many, many more jobs."

Aftershock: Forbes' role

Forbes in Aftershock video: Return to gold standard. Forbes magazine CEO and editor in chief Steve Forbes appeared in a February 16 video posted on the AftershockProfits.com website. Asked why the U.S. should return to a gold standard for its currency, Forbes responded:

Well, precisely because the dollar is weak. Why are interest rates short-term low? The default position. People are afraid to move their money anywhere else, so they dump it. They just want something safe because of the uncertain environment. Like the depression in the 1930s -- we had low rates then. Boy, a lot of good that did us. So that's a sign that the system is not functioning when you get zero percent interest rates. Look at Japan in the 1990s -- a decade of stagnation. So in terms of gold, what it would do is you would -- businesses would be able to borrow money again, so you'd get real economic growth again. And you would also have lower long-term interest rates. Not the Fed trying to artificially keep them low, but natural low, which means they would last and people would be able to buy mortgages again.

"Emergency Dollar Summit": Newsmax's scheme

Promotion apparently also tied to foreign exchange trading. An October 2009 email from Ruddy touted a November 5, 2009, "Emergency Dollar Summit" webcast with Steve Forbes. An email by Ruddy sent after the webcast references the prospect of a $137,000 "payout" in the next year; a similar claim also appears in the Aftershock promotions. Ruddy's email urges readers to click on a link "now" in order to view the webcast; the link now goes to promotional materials for the "Money Matrix Insider."

"Emergency Dollar Summit": Newsmax's rhetoric

Promoting summit, Ruddy attacked Obama's "dangerous policies" and accused him of turning economy into a "calamitous situation." In his October 2009 email, carrying the subject line "Robbed: Join Steve Forbes in Defending Your Wealth from Obama Policies," Ruddy wrote:

I believe Sir Walter Scott said it best. . .

Oh what a tangled web we weave, when first we practice to deceive.

And I believe this perfectly sums up the calamitous situation the Obama administration has gotten our national economy, and more importantly your personal wealth into.

Unfortunately, the real threat to your money isn't getting anywhere near the attention it deserves.

I'm speaking of President Obama's dangerous policies that have caused the value of the dollar to plummet to historically low levels.

This has catastrophic consequences for your investments and every penny you've worked so hard to earn.

Promotional materials: Summit discussed possibility of "1930s Level Depression in the Very Near Future," suggested "Currency Investing" as "Smartest Play." According to promotional materials for the summit, the following topics were discussed:

  • The Dangers of a Weak Dollar for America and You!
  • The Real and Perilous Threat of Inflation
  • The Risk Facing 401(k)s and Your Retirement Savings
  • Could the Fed's Policy Lead America on the Path to Another Devastating Crash?
  • Could We Possibly Suffer a 1930s-Level Depression in the Very Near Future?
  • Could Currency Investing Actually Be the Smartest Play For Protecting Your Wealth in the Face of a Devalued Dollar?

"Emergency Dollar Summit": Forbes' role

"Join Steve Forbes for the Emergency Dollar Summit!" Promotional materials for the webcast urged readers to "Join Steve Forbes for the Emergency Dollar Summit!" Forbes was identified as "CEO and editor of Forbes magazine" and as "one of the top financial experts in the country."

"A Call to Arms": Newsmax's scheme

Newsmax offers package including stock tips from Ruddy's "private financial weapon" for $1,295. On May 7, 2009, Newsmax hosted "A Call to Arms," a "national internet webcast" in which Ruddy invited viewers to pay $1,295 for a package including a year's worth of stock tips from Ruddy's "chief financial adviser." Ruddy wrote (PDF) that the "Million Dollar Secret Code" he promoted in the "Call to Arms" webcast is based on the stock-picking of analyst David Frazier, whom Ruddy called his "private financial weapon." Ruddy stated that he was investing $1 million of Newsmax's money in the promotion, adding, "David believes he can bring a 50% to 70%-plus return over the next 12 months to this $1 million." The promotion would provide "About 36 Massive Profit/Minimum Risk Plays," in which "[y]ou will be given guidance about exactly what to buy, at what price, and how much. David Frazier will provide you with all of the research and analysis behind each recommendation. And you will get a 48-hour head start on me, before I can buy the exact same stock recommendations."

The promotion also included access to a special website for "members-only videos, podcasts, and articles that you will find nowhere else," a one-year subscription to Newsmax's Financial Intelligence Report, and two books, including Milton Friedman's "absolutely prophetic" Money Mischief, which "details exactly what Barack Obama is doing to inflate the currency and the dangers that lay ahead." Ruddy claimed that the package is actually a "$6,818" value but offered it to readers for $1,295.

"A Call to Arms": Newsmax's rhetoric

Ruddy: "[P]rotect your wealth from Wall Street and the Obama administration's outreached hands." In promoting its investment scheme in his April 20, 2009, email, Ruddy billed the webcast as an opportunity to "Speak Up Against Obama's Socialist Spending" as a way to "protect your finances and investments from the far-reaching hands of President Obama"; and as the next step following the "Tax Day Tea Parties."

In webcast, Ruddy slams "the President of the United States actually telling GM who they should have as their CEO." During the May 7, 2009, webcast, the event's host, former CNN Headline News anchor Bob Losure, had the following exchange with Ruddy:

RUDDY: It used to be that the old view about the America stock market -- the Warren Buffett view -- was you buy and hold a stock forever. You just sit on it. If you bought Pepsico stock in the 1950s and held it, just a few hundred dollars, you'd be a millionaire 50 years later. It was the American century. You didn't have to anything. The country was growing. They used to have a saying: "What was good for GM was good for the country."

LOSURE: Well, you know, it's interesting how the rules have changed. Now here you have President Obama running General Motors.

RUDDY: It's really incredible, isn't it? You have the President of the United States actually telling GM who they should have as their CEO, what types of cars they should be building at GM. Meanwhile, the whole country has been going through what I call economic whiplash. You've had the Federal Reserve over the past 10 years just keep on gyrating interesting rates. Meanwhile, the Washington policy-makers and the Federal Reserve are spending trillions of dollars, and with a snap of their fingers, they're creating trillions of dollars. And this is going to have a huge impact on the federal economy and everybody's wealth.

"A Call to Arms": Morris' role

In paid email to Morris' list, Ruddy highlights Morris' appearance in webcast touting "Million Dollar Secret Code." In a May 20, 2009, paid email to Morris' email list, Ruddy stated that "Just 2 weeks ago, we held the 'Call to Arms' webcast program with Dick Morris. In the webcast, Newsmax revealed its Million Dollar Secret Code." Ruddy also wrote: "As you loyal readers know, Dick Morris has repeatedly warned of President Obama's socialist plans for the U.S. economy. The 'Secret Code' will help protect your wealth against such plans. Dick Morris knows David Frazier, the guru behind this remarkable program."

In webcast, Morris attacks Obama for "leading America into socialism," endorses "Secret Code." During his appearance on the "Call to Arms" webcast, Morris stated, "I think that Obama definitely is leading America into socialism." He also commented that "of course" Obama's policies will lead to "huge inflation," adding, "I don't see how any expert could disagree with that." He concluded that "we're looking here really at the recession prolonged by Obama's reckless spending and borrowing, which raises interest rates, then a period of inflation when we come out of the recession, and then probably a second recession."

Later in the interview, Losure asked Morris, "David Frazier is heading 'Your Secret Million Dollar Code, and I think you know Chris Ruddy. He's investing a million dollars in his portfolio to track this code. Now is this something you'd recommend to people?" Morris replied, "Well, I'm not putting in a million, but I sure am putting my own money into it." He also suggested that the "Million Dollar Code" was "a strategy" people could use to "keep yourself safe" from "the kind of offensive Obama is launching against the American economy."

In identifying Morris, Losure noted that "you've seen appear regularly on Fox." During Morris' appearance, on screen text identified him as a Fox News analyst:

Morris a call to arms

Morris was paid to tout webcast on his mailing list. In a May 4, 2009, "Urgent Message" to his email list, Morris warned that Obama is leading the country toward "socialism," "rocketing inflation," and a possible second recession. Morris advised his readers to sign up for the webcast in order to "protect your wealth and investments from the far-reaching hands of Barack Obama and the Democrats in Washington."

Morris explained that "[e]ven though they are paying me to send you this e mail; I have, in fact, invested my own money with them because I think they are onto something":

I have been warning that President Barack Obama is leading America down a dangerous path to socialism. But, en route, he will take us through an even longer recession than we need to have; rocketing inflation, and perhaps a second downturn to cure the inflation.

All this will have grave implications each of our personal assets and stock portfolios.

Many people are worried -- and they have good reason to worry.

I believe it's extremely important for Americans to take steps now to protect their money and their financial freedom.

So I agreed to participate in a special seminar online called "The Call To Arms" hosted by my friend Christopher Ruddy, CEO of Newsmax as well as famed former CNN anchor Bob Losure -- scheduled for Thursday, May 7th.


Even though they are paying me to send you this e mail; I have, in fact, invested my own money with them because I think they are onto something. We expect upwards of 250,000 people to participate.

I want to encourage you to sign up for this "Call to Arms" online meeting. There is no charge to attend. After you sign up, they will give you FREE access to a members-only website. This site will help you protect your wealth and investments from the far-reaching hands of Barack Obama and the Democrats in Washington.

Ruddy, Morris also teamed up on financial seminars before 2008 election

Ruddy and Morris were featured in a series of Newsmax seminars in January 2008. Ruddy and Morris were also prominently featured as part of a series of Newsmax seminars (PDF) in California in January 2008 titled "Grow Your Wealth In Turbulent Times." According to the promotion for the seminars, "famed political guru Dick Morris will be joining us to offer his take on how the '08 elections will affect your portfolio. Dick is predicting a Democratic takeover with enormous changes for capital gains, taxes, budget priorities and other areas, with broad-based economic consequences." The seminar cost $75 per person to attend.

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    Dick Morris, Steve Forbes, Newsmax
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