|Inflation Index Manipulation: Theft By Statistics
by Daniel Amerman
If the United States government was an individual or corporation, and we looked at the obligations it has entered into for the decades ahead – it would be bankrupt. However, the federal government is not an individual or corporation, and has powers that make these bankruptcy analogies quite dangerous for investors who take them to heart. Thinking the United States may go bankrupt means focusing on a danger that isn’t real, while missing the dangers that are real – which are the methods the government can use to avoid bankruptcy, and the devastating impact of those methods upon retirees, salaried workers and many investment strategies.
The government’s effective immunity from bankruptcy can be found in two separate but related governmental powers: 1) the government controls the money supply, meaning it controls the degree of inflation (in broad terms); and 2) the government also controls the official inflation indexes. Many people are aware that there will likely be a major squeeze coming up that means future beneficiaries will receive much less than current beneficiaries in purchasing power terms. The contribution of this article is to flesh out how the specifics can work, and demonstrate how through steady and somewhat hidden pressure, the value of promises can be gradually stripped away even as a generation of retirees is impoverished. We will use a fairly simple example based on two widely known current inflation figures, to illustrate how through the manipulation of both inflation and inflation indexes, the government can simultaneously repay existing government obligations at 15 cents on the dollar, while repaying inflation-protected promises (in full) at a mere 27 cents on the dollar.
Official & Real Inflation Rates
To explore how this process can work – and just how powerful the government’s incentives are for manipulating inflation indexes – we need to pick assumptions for index inflation and actual inflation. For the index, we will use current official government statistics, and compare the Consumer Price Indexes for October 2006 and October 2007. The twelve month increase in price levels was almost exactly 3.0% (120.7 / 117.2 = 1.0299, interim numbers as of 12/07).
When we look at what has happened to the prices for food, energy, housing prices and medical insurance over the last several years, there are many Americans who are having trouble believing the government story of an official 2%-3% per year. Therefore, for exploration and illustration purposes, we will use a nice, round 10% assumption as the true rate of inflation. John Williams of ShadowStats.com has made a case for this figure being the true rate of inflation, when inflation is calculated using the same methodologies that were used by the government in the 70s and 80s.
A belief that the government does or would systematically deceive its citizens to serve political interests is incidental to this article. It is up to the reader to decide whether we talking about what is happening now – or what could be happening in the future. The numbers work the same way whether the inflation and index-manipulation is openly admitted, fraudulently hidden, obfuscated behind layers of statistical complexity and technical jargon – or some combination thereof.
Slashing The Value Of A Dollar
When we combine the assumptions of an official index that grows at 3% per year, while real inflation grows at a rate of 10% per year, then we get the chart below.
A sovereign nation dealing with excessive promises denominated in it’s own currency does not face an impossible problem, and the solution is not even a mystery – “print the money” as needed, which slashes the value of the currency, and the magnitude of the problem is slashed along with it (along with the value of the life savings of the nation’s citizens, unfortunately, but such is the true nature of currency). This government power to pay promises through inflation is illustrated in the “Ending Real Value of a Dollar” (column 3). As would be expected with a 10% rate of inflation, the value of a dollar plunges. It is only worth 75 cents after three years, 50 cents within 7 years, and is down to only 15 cents by the end of 20 years. This destruction of the value of the dollar is an entirely legal means of reneging on the government’s debts, and effectively allows it to walk away from ever paying for past deficit spending, both domestically and internationally. Those massive trade deficits which were covered by other nations buying US Treasury bonds will never likely be repaid, in other words.
The “Impossible” Part Of The Problem
The “problem” from the government’s perspective with simply slashing the value of the currency, is that it has been slashed before, the citizens are aware this can happen, and many (though not all) retiree benefits are inflation-indexed, along with (effectively) the incomes of many millions of employees whose contracts are tied to the CPI. Making the real value of a dollar worth a dime doesn’t help if all the wages and benefits rise from a dollar to ten dollars in response.
The government has a loophole when it comes to making inflation indexed payments, however, and it is a massive loophole: there is no such thing as a general inflation rate for a nation, it’s more of a theoretical construct. An enormously complex theoretical construct that is highly subjective, and even well-intentioned economists may vary substantially in their estimate of what the effective rate of inflation is for a nation. So much is dependent on the “basket” of goods and services chosen to track, as well as the particular methodologies and assumptions that go into the index itself. What we call the “inflation rate ” then is therefore both quite subjective and subject to political manipulation. Which is another way of saying that the true definition of the inflation rate for government promises, is not about complex economic calculations at all, rather, the index is whatever the government says it is.
In the chart above, we follow what happens when the government chooses to interpret complex economic data in such a way that the official inflation rate is 3%. When we look at the “Ending Government Index Value Of A Dollar” (column 4), then we can see that the government says that a dollar is worth 91 cents after three years, 81 cents after 7 years, and 55 cent at the end of 20 years. There is obviously quite a difference between our real rate of inflation, and the official government version, and that difference is shown in percentage terms in column 5, “Benefit & Salary Reduction Via Index Manipulation”.
When we look at year 1, we can see that the ending real value of a dollar is 90.9 cents – but the official government index says that a dollar is worth 97.1 cents. The difference between the two is 6%, and that represents the savings to the government from manipulating the inflation index. Just to use round numbers, if the government owes $1,000 billion ($1 trillion) in inflation-indexed wages and Social Security payments, when expressed in 2007 dollars, and the official government inflation index for 2008 is 103, then the government pays $1,030 billion. However, a dollar is actually only worth 90.9 cents (column 3), so what the government pays out is only $936 billion in real (inflation-adjusted) dollars ($1,030 X 90.9%), which is $64 billion less than what was promised. In other words, the combination of using both inflation and a manipulated inflation index allows the government to pay out what looks like $30 billion more than the year before – and will appear to be $30 billion more in the newspapers, the budget and the checks disbursed – but will actually be $64 billion less.
This difference between the façade and the realthen grows with each year. Sticking with our example $1 trillion in 2007 dollars, by 2012 the façade will be that the government is paying out $1,159 billion [$1 trillion X (1 + column 2)], as reflected in retiree and employee paychecks, government budgets and newspaper reports. However, in purchasing power terms, by 2012 a dollar will only buy what 62 cents did in 2007 (column 3). So the real dollar cost of what the government is paying out is in fact down to only $720 billion ($1,159 X 62.1%). In five years, despite the appearance of paying out $159 billion in increased benefits, the government can use its combined powers over both inflation and inflation indexes to reduce real benefits by 28% (column 5), or $280 billion. (If we compare what the public will see ($1,159 billion) compared to what is really being paid ($720 billion) then the difference is an even more dramatic $439 billion.)
The above could be considered mildly complex, and my apologies if the specifics were a little difficult to track. The mild complexity is a necessity, however. For in this mild complexity lies both the heart of the opportunity for the government – and your main defense as an individual. Because this powerful one-two combination of controlling inflation and controlling inflation-indexing is about mathematics and economics – it isn’t easily reducible to a sound bite. The higher the percentage of the population that doesn’t fully understand what is going on – the better the strategy works from a political perspective. Conversely, if you are to defend your lifestyle and savings (and you do have strong defenses available, as we will discuss below), then knowledge is your first and irreplaceable line of defense.
The vital nature of understanding this complexity becomes even more clear when we look ahead to the crucial years of 2017 and 2027. The year 2017 is the year when the government projects that Social Security payments will exceed Social Security taxes. A very big problem – that may not be such a problem after all, if the government is effectively paying out only half in real terms of what has been promised to Social Security beneficiaries. As shown in column 5, the combination of 10% inflation and 3% inflation indexes would indeed produce a 48% savings for the government by 2017.
The year 2017 is a problem, but it is by 2027 when things truly become impossible from a governmental perspective – if a dollar is worth a dollar. For the years 2027-2029 are the crest of the Baby Boom’s retirement, representing the time when the greatest numbers of Boomers have retired, but before expected mortality has brought the total number of retirees down. This is the time when we reach the central problem of only two adults of working age for each person of retirement age. An unaffordable impossibility for our current Social Security and Medicare structure – unless we have both inflation and inflation index manipulation. In that case, as shown in column 5, the real cost of meeting promises will have been reduced by 73% — making the impossible into the possible.
The Cost Of Meeting Impossible Promises
There is a cost to the government’s need to turn the impossible into the possible: a steady impoverishment of the people who are owed the inflation-indexed payments. This impoverishment is illustrated in the graph below:
What the chart illustrates is the composition of inflation-indexed payments to workers and retirees. The light blue represents purchasing power, and the red represents loss of purchasing power. If the inflation index were to keep up with inflation – as promised – then there would be no red, the entire chart would be light blue. However, when indexes don’t keep up with actual inflation, the government’s gain is directly paid for out of retiree and worker pockets. This theft by index management starts at 6% (the red equals column 5 from the chart), and steadily builds. A little more than a quarter of the purchasing power of benefits and salaries has been taken in 5 years, about half in ten years, and three quarters is gone in 20 years. For the inflation-indexed retiree or worker, the red zone is the steady loss of purchasing power, and therefore loss of lifestyle, as real income steadily declines even while giving the semblance of increasing in exact step with inflation.
It is a steady breaking of promises, in year by year increments, that systematically impoverishes the elderly, as well as all workers whose salary increases are tied to the inflation index (which includes almost all government employees). In their hearts, many Boomers already know that they won’t be collecting anywhere close to the benefits that their parents received, as do the generations behind them. What the graph above illustrates is the precise and steady, year by year method, in which most of the purchasing power of retiree promises (including inflation-indexed pensions as well as Social Security) can be destroyed before most of the promises are paid.
Will This Really Happen?
Will what is shown above really work for 20 years? Probably not entirely by itself, or without the population at large becoming at least partially aware of what is going on. However, the options are limited for closing impossible gaps. Taxes can only be raised so high, and then it comes down to benefit cuts. The more above board and open the cuts in benefits and salary – the greater the political damage. The harder the changes will be to enact, and the more politicians voted out of office. On the other hand, inflation and inflation indexing are subtle and difficult to understand, relative to openly raising taxes or openly slashing benefits. Complex and subtle helps politicians stay in office, and assuming politicians want to stay in office – do you think they will refrain from trying the subtler approach again and again? Repeatedly making the choice to stay in office until the end results are anything but subtle?
Notice that this indexing “management” strategy has some quite beneficial side effects as well. Incomes are always rising, so there is no excuse for the population not to go out and spend — even if they have been feeling a bit mysteriously strapped for funds lately, and need to put it on the plastic. The stock indexes are always setting new records, even in the unlikely case that the newspapers start adjusting for inflation. Of course, most importantly of all, the unending supply of good news helps keep politicians in office. What do you think the politicians will choose? Is your portfolio and retirement protected against that choice? If you are relying on an inflation-indexed salary or pension – do you have an investment plan for covering the red zone in the graph, during a time when high inflation is shredding the value of conventional financial assets?
How Many People Can You Fool & For How Long?
Can you really fool all the people with a combination of inflation and inflation index manipulation? Some might say “No way! People are way too smart for that, and the professors and media would quickly expose the fraud.” Interesting thing though… 40 years ago, one working adult earned enough to support a middle class household of five or six, including a stay-at-home spouse and three or four kids. Today, normal seems to be defined more like 2 working adults for every middle class household with 1-2 children. True, the houses are bigger, the color TVs are bigger, there are two cars, they are better cars, people eat out more and travel more, etc, etc. But, as we’ve gone from one worker to support 5-6 people, to one worker to support 1.5 to 2 people… did you ever wonder how accurate that indexing has been in practice?
It isn’t reported as such, but arguably the inflation index is one of the most important political statistics. It determines everything from the economic growth that is reported, to the benefits that are paid out, to budget deficits and surpluses, and whether taxes need to be raised. Indeed, the difference between prosperity and recession – as reported in the papers – can be no more than 2-3% in the inflation index, as economic growth is net of inflation indexes. Such complex calculations as well, not understood by either reporters or the public, performed in obscurity – but watched with keen attention by the political appointees, who know exactly what it will take to win the next election.
There is not even a need for a “conspiracy”, or a group of politicians meeting in secret and deciding to defraud the public. Human nature, time and overwhelming incentives are enough to gradually make real what we have illustrated in this article. Political appointees know how to reward those government employees who can find a way to rationalize dropping the rate of growth of the index by 0.2% here, and 0.02% there. If as an employee you want to get promoted – that is what you do. Which creates an environment of decades of incentives leading to decades of incremental changes, steadily moving the standard as the changes add up. Human nature being what it is, what do you think happens? Has already happened? Will happen when the political motivations reach all new levels?
The problem for retirees, inflation-indexed workers and general investors is that the above strategy works like a charm from a governmental perspective. Indeed it works better than any other alternative from a political perspective, as it allows much of the damage to be hidden behind statistics and economists, even as promises are legally kept, while being broken in substance. The façade of making inflation-adjusted payments in full just won’t work, the government would have to go bankrupt – and the government has no intention of going bankrupt. It is therefore incumbent upon thoughtful investors invest in such a way that they protect themselves from the actions the government will take in avoiding bankruptcy. This means preparing not only for a likely environment of high and sustained inflation that destroys the value of financial assets – but for a real inflation rate that may be substantively higher than what you will be reading about in the paper.
It also means that if you have substantial future income that is inflation-indexed – you are likely not fully protected from inflation. That there is a good chance you will get your inflation-indexed future payments in full as promised, but those rising payments will steadily buy less with each passing year. Which means that if you want to maintain your planned standard of living – you will need to find a way to offset the steady spread of the red in the preceding graph. What you need most is a targeted financial strategy that focuses on profiting from inflation.
Whether you are a general investor or inflation-indexed beneficiary, the first and most obvious step is to choose to invest in the reality of tangible assets rather than symbols. These tangible assets could be gold, silver, real estate, energy or farmland, to name some of the most prominent examples.
In combination with the tangible asset step, there is a second step to take as well, whether you are a Boomer, or older or younger – and that is to gain the knowledge you need to protect yourself, and even turn adversity into opportunity. This will mean looking inflation straight in the eye and saying: “Inflation, you are likely to play a big role in my personal future, and instead of ignoring you or thoughtlessly flailing away at you – I will study you and your ways. I will learn the deeply unfair ways in which you redistribute wealth, and the counterintuitive lessons about how some investors will be destroyed by inflation and repeatedly pay taxes for the privilege, even while other investors are claiming real wealth on a tax-free basis. I will learn to position myself so that you redistribute wealth to me, and the worse the financial devastation you wreak – the more my personal real net worth grows. I will examine the official blindness to inflation within government tax policy that creates the Inflation Tax, and instead of raging or despairing, I will understand that a blind opponent is a weak opponent, and I will take advantage your blindness and use tax policy to multiply my real wealth.”
It truly does boil down to common sense. The impossible is approaching fast, and we each have the choice of positioning ourselves so that our financial well-being depends on impossible promises being kept – or positioning ourselves so that we will profit from those impossible promises being broken. As you decide, do keep in mind that some of the most lucrative long-term and tax-advantaged opportunities to profit from inflation that have been available for decades can be found right now, but, by the time resurgent inflation dominates the headlines – the easy arbitrage opportunities will be long gone.
Do you know how to Turn Inflation Into Wealth? To position yourself so that inflation will redistribute real wealth to you, and the higher the rate of inflation – the more your after-inflation net worth grows? Do you know how to achieve these gains on a long-term and tax-advantaged basis? Do you know how to potentially triple your after-tax and after-inflation returns through Reversing The Inflation Tax? So that instead of paying real taxes on illusionary income, you are paying illusionary taxes on real increases in net worth? These are among the many topics covered in the free “Turning Inflation Into Wealth” Mini-Course. Starting simple, this course delivers a series of 10-15 minute readings, with each reading building on the knowledge and information contained in previous readings. More information on the course is available at InflationIntoWealth.com.
|Daniel R. Amerman, CFA
Daniel R. Amerman is a financial futurist, author, speaker, and consultant with over 20 years of financial industry experience. He is a Chartered Financial Analyst (CFA), and holds MBA and BSBA degrees in Finance from the University of Missouri. He has spent seven years developing a large, unique and intertwined body of work, that is devoted to using the foundation principles of economics and finance to try to understand the retirement of the Baby Boom from the perspective of the people who will be paying for it.
Since 1990, Mr. Amerman has provided specialized quantitative consulting services to financial institutions, with a particular emphasis on structured finance. Previously, Mr. Amerman was vice president of an institutional investment bank, with responsibilities including research, synthetic securities, and capital market originations.
Two of Mr. Amerman’s previous books on finance were published by major business publishers. “COLLATERALIZED MORTGAGE OBLIGATIONS, Unlock The Secrets Of Mortgage Derivatives”, was published by McGraw-Hill in 1995. Mr. Amerman is also the author of “MORTGAGE SECURITIES: The High-Yield Alternative To CDs, The Low-Risk Alternative To Stocks”, which was published by Probus Publishing (now a McGraw-Hill subsidiary) in 1993. Advertised by the publisher as a professional “bestseller” for four quarters, an Asian edition was sold as well.
Mr. Amerman has spoken at numerous professional seminars and conferences nationwide, for a variety of sponsors including New York University, the Institute for International Research, and many others. After the publication of his prior books, he acted as keynote speaker at a number of banking related conferences over the next several years.
This article contains the ideas and opinions of the author. It is a conceptual exploration of general economic principles, and how people may – or may not – interact in the future. As with any discussion of the future, there cannot be any absolute certainty. What this article does not contain is specific investment, legal or any other form of professional advice. If specific advice is needed, it should be sought from an appropriate professional. Any liability, responsibility or warranty for the results of the application of principles contained in the website, pamphlets, videos, books and other products, either directly or indirectly, are expressly disclaimed by the author.
Copyright © 2006-2007 Daniel R. Amerman, CFA
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Toshiba Builds 100x Smaller Micro Nuclear Reactor
Toshiba has developed a new class of micro size Nuclear Reactors that is designed to power individual apartment buildings or city blocks. The new reactor, which is only 20 feet by 6 feet, could change everything for small remote communities, small businesses or even a group of neighbors who are fed up with the power companies and want more control over their energy needs.
The 200 kilowatt Toshiba designed reactor is engineered to be fail-safe and totally automatic and will not overheat. Unlike traditional nuclear reactors the new micro reactor uses no control rods to initiate the reaction. The new revolutionary technology uses reservoirs of liquid lithium-6, an isotope that is effective at absorbing neutrons. The Lithium-6 reservoirs are connected to a vertical tube that fits into the reactor core. The whole whole process is self sustaining and can last for up to 40 years, producing electricity for only 5 cents per kilowatt hour, about half the cost of grid energy.
Toshiba expects to install the first reactor in Japan in 2008 and to begin marketing the new system in Europe and America in 2009.
Testing for Optimal Wellness
Four Tests Lay the Foundation for An Effective Supplement Regimen
Individuals who want to make a stronger commitment to enhancing their health in 2008 as well as newcomers to the healthy aging supplement field, can dramatically improve the success of their regimen by first taking a series of tests. Beginning a supplement regimen without taking the tests mentioned below is a little like trying to navigate the streets of an unfamiliar city without a road map. I always tell my patients “Tests Don’t Guess.”
In this article, I will explain the different testing options available and how individuals can use the results to either build a new supplement program or refine an existing supplement regimen to enhance overall health.
Organic Acid Testing
One of the most underutilized tests, organic acid testing is a crucial step in determining exactly which vitamins and minerals a person’s body needs. Perhaps the reason why this test has been underutilized is simply because its relevance to personal health is not understood. Yet, it is one of the easiest ways to determine which supplements are right for each individual. It truly takes the guesswork out of creating the foundation for a personal customized supplement program. I tell my patients it provides a glimpse of their “own biochemical thumbprint.” Anyone who asks the questions “Where do I begin?” or “Now that I’m taking the basic supplements, what other nutrients do I need to improve my overall health?” will find the answers they’re looking for in the results of the organic acid testing.
We are all unique biochemical creatures. Therefore, each of us has different supplement needs. Some individuals may be deficient in vitamin E while others need extra coenzyme Q10, regardless of apparent cardiac issues or concerns. Everyone has inherent strengths and weaknesses within their personal biochemistry that determines how much of a particular nutrient—or even if that particular nutrient—will be of benefit to their bodies. Organic acid testing can help pinpoint the vitamin, mineral, and amino acid deficiencies present in each patient. The lack of proper nutritional sufficiency relative to your own “biochemical individuality” will play a pivotal role when it comes to expressing genetic strengths or weaknesses.
Organic acid tests are important for both those seeking to fine tune or increase a supplement program’s effectiveness and anyone beginning a supplement regimen. The clinical benefits seen when the body’s unique needs are addressed can be the difference between modest clinical results versus a significant metamorphosis.
Organic acids are key compounds of many biochemical pathways. Organic acid testing provides critical insights into the functioning of the Krebs cycle in the mitochondria. The Krebs cycle is comprised of nine organic acids and eight enzymes and is the main way that all dietary fuel sources—including carbohydrates, proteins, and fats—are metabolized (Figure 1). Because the Krebs cycle provides the energy required for the body to function, any disruption in its flow can be disastrous to health.
Abnormal organic acid metabolism, therefore, can indicate that an individual is deficient in a number of nutrients or is simply not using those nutrients effectively.
Supplementation of specific vitamins and nutrients can help balance altered and imbalanced metabolic pathways, but it’s impossible to know which nutrients to give which patients unless an organic acid test is completed
Organic acid tests can now be done in the convenience of your home. Easily collected urine samples are sent to an internationally recognized and nationally certified laboratory. By taking this test, you can have a better understanding of your own unique health needs.1-5
Salivary Hormone Testing
Another important way to get serious about building a supplement regimen tailored to an individual’s own needs is salivary hormone testing.
There are several ways to test hormones (saliva, serum and urine), but the state-of-the-art testing is through saliva. This is because it measures only the active portions of hormones and it is these portions that determine how a patient feels.
The five hormones monitored through saliva testing are testosterone, progesterone, estrogen (estradiol), cortisol and DHEA. As we age, levels of these hormones often become imbalanced. Using a saliva test as a blueprint for proper supplementation with these hormones can make a dramatic difference in patients’ health.
Testosterone is important for both men and women. In males, the decline in testosterone commonly referred to as andropause often begins in the early 30s and eventually hits a crescendo when symptoms are unmistakable in the 50s and 60s. A progressive decline in testosterone in men starting at age 30 is well documented with a free testosterone decline of 1 percent per year. After age 60, 25 percent of men are clinically overtly hypogonadal (low in testosterone). Overt testosterone deficiency occurs in about 24 percent of men aged 50-60 years and 40 percent in men aged 60-80.6 Yet, subclinically, low testosterone levels are likely prevalent in nearly double these very conservative estimates. Furthermore, SHBG (sex hormone binding globulin) increases with age, binding up more free testosterone.
Low testosterone levels in men are linked to low energy, decreased libido, decreased concentration, insomnia, night sweats, depression, infertility and, surprisingly, even hot flashes.
Balanced testosterone levels are important in females as well, with lower than normal levels associated with a reduced sex drive.7 Testosterone is considered the “desire hormone” due to its ability to enhance libido. Women, however, often tend to have an excess of prolactin, the “anti-desire” hormone.8 In addition, with age, and especially after menopause, testosterone levels in women decline.7
Salivary hormone tests also are used to measure levels of estradiol, one of the main forms of estrogen found in the female body. Levels of this hormone drop dramatically during perimenopause and menopause and its deficiency is associated with vaginal dryness, hot flashes, and the many other symptoms of menopause. It is also thought that when estrogen levels plummet during menopause, it increases the risk of cardiovascular disease and high cholesterol. Excessively high estrogen levels, on the other hand, have been associated with an increased risk of breast cancer.
In males, estrogen levels are important to monitor since testosterone often can be converted into excess amounts of estrogen. Estrogen also tends to decrease testosterone production, creating a vicious circle.
Progesterone is another important hormone to have tested. During premenopause and menopause, the drop in progesterone levels is associated with estrogen dominance. Even before premenopause a progesterone deficiency can cause PMS, breast tenderness, and a host of other symptoms. Furthermore, groundbreaking work by Dr. John Lee noted that prostate problems in men can be associated with low progesterone levels.9
Cortisol and DHEA are important because of their role in adrenal health. Cortisol levels that are too low or too high can be a sign that a patient is suffering from adrenal exhaustion, a common cause of fatigue, weight gain and many other health problems. Imbalanced DHEA levels also can be a sign of exhausted adrenals. Like many other hormones, DHEA, which is associated with skin elasticity, well being, and cardiovascular health, drops dramatically with age. In some cases, however, individuals with impaired adrenals can produce excessive amounts.
Salivary testing can help a patient determine which hormonal supplements are needed to counteract any detected imbalances. Progesterone cream can be used in both females and males who test low for this important hormone. BioDIM® and Extension Resveratrol can be used in males who are converting testosterone into excess estrogen. Adaptogens and special cortisol-lowering herbs known as Relora® and Sensoril™ can be used in individuals with adrenal dysfunction while DHEA supplementation can be used to replenish the body’s low supplies of this hormone. Women who have lower than normal testosterone levels can use DHEA to raise testosterone levels, since women very efficiently convert DHEA to testosterone. Many males with low testosterone find it helpful to either increase their levels pharmaceutically or use a combination of the botanicals Eurycoma longifolia jack extract, stinging nettle, and Luteolin. Finally, women with low estrogen levels can seek out bio-identical hormone replacement (BHRT).
Retesting after initiating a hormonal support regimen ensures that individuals have achieved the proper hormonal balance and that excess estrogen levels are not created as a result of therapy.
Food Allergy Testing
Clinically, one of the most important tools I use to unearth hidden factors affecting patients’ health is Food Allergy Testing. This approach ensures that individuals can understand how their daily diet may be harming their health.
Food allergens can be broken down into two categories: immediate and delayed. It is the delayed or hidden food allergens that silently erode away ones health, frequently going undetected since the response is not immediate but rather delayed up to 72 hours, long after the offending food(s) were ingested. Thus, identifying and controlling food sensitivities is essential.
Hippocrates “The Father of Western Medicine” stated in 400 BC, “May Food be your Medicine and Medicine be your Food.” The problem that I discover with my patients is that even supposedly healthy foods such as garlic, broccoli, grapes, and fish can be sources of extremely detrimental health signs and symptoms.
ELISA immunoassay testing for delayed food allergies helps identify delayed IgG immunoglobulin allergens. This technology is used worldwide and has now been applied to home test kits that can identify 96 different food reactions ranging from dairy, wheat, corn, fish, vegetables, fruits, sugar cane, numerous nuts, eggs and other commonly consumed foods. A simple fingerstick done at home, much like that done by diabetics, makes gaining insight into ones own personal delayed food allergies both affordable and convenient. Once collected, the sample is sent from the home to a CLIA (nationally licensed) laboratory. Within a couple of weeks, results are sent back directly to the patient’s home. These results indicate low, moderate or high reactions to different foods.
The food allergy test will help individuals avoid the foods they are allergic to and will produce dramatic results in improving overall health. After understanding ones food sensitivities, Digestive Enzymes, a good probiotic supplement that includes Lactobacillus GG and Lectin Lock™ can be added to a supplement regimen to compensate for those times when people are exposed to their most common food allergens.
Anyone who is on immunosuppressant drugs, such as corticosteroids, should be aware that these drugs can alter the results of food allergy testing.
Iodine Sufficiency Test
Thyroid disorders are becoming almost epidemic in this country. Hypothyroidism is one of the most common disorders I see in my patients, who often don’t realize that their weight gain, moodiness, thinning hair and other symptoms are caused by hypothyroidism.
Noted iodine expert Dr. Guy Abraham has established a link between iodine deficiency and both hypothyroidism and hyperthyroidism. Because so many dietary components—such as the bromide found in bread and baked goods and fluoride in drinking water—compete with iodine absorption, iodine deficiency has become all too common.10
A user-friendly, oral loading test can detect iodine deficiencies. Testing involves collecting urine immediately upon arising in the morning to use in what’s called a spot test. Then, 50 mg. of potassium iodide and iodine (included in the test kit) is ingested. Urine is collected throughout the day until the first urine of the next morning. The samples, including the baseline spot test, are shipped to the lab.
If the body has sufficient iodine, at least 90 percent will be excreted in the urine. In iodine deficiency, however, the body will hold on to some of the iodine to compensate for the deficiency. The more iodine that remains in the body, the more a person is iodine deficient and needs to begin supplementation.
If the tests indicate an iodine deficiency, patients often begin supplementing with iodine, such as found in Iodoral®, a combination of iodide and iodine. Testing should be repeated every three to four months to monitor proper iodine doses. Working closely with your personal healthcare provider is always an important part of refining your health program.
Organic acid, salivary hormone, food allergy, and iodine sufficiency testing are the best way to build a supplement program that is specific for an individual’s needs. In my practice, I have noted dramatic improvement in the overall quality of my patients’ health after they have begun a supplement regimen based on these tests. Not using this important tool is like stumbling around in the dark when all one needs to do is turn on the flashlight that’s already in his or her hand. For individuals who want to get serious about overall wellness in 2008, taking each of these tests is a crucial step toward good health.
1. Fu X, Iga M, Kimura M, Yamaguchi S. Simplified screening for organic academia using GC/MS and dried urine filter paper: a study on neonatal mass screening. Early Human Development. 2000;58:41-55.
2. Fu X, Kimura A, Iga M, Yamaguchi S. Gas chromatographicmass spectrometric screening for organic acidemias using dried filter paper: determination of alpha-ketoacids. J Chromatography B Biomed Science Applications. 2001;758:87-94.
3. Greter J, Jacobson C. Urinary organic acids: isolation and quantification for routine metabolic screening. Clin. Chem. 1987;33:473-480.
4. Sweetman L. Organic acid analysis. Techniques in diagnostic human biochemical genetics. A laboratory manual. Wiley- Liss, New York, 1991.
5. Tanaka K, et al. Gas chromatographic method of analysis for urinary organic acids. I. retention indices of 155 metabolically important compounds. Clin. Chem. 1980;26:1839-1846.
6. Morgentaler A, Bruning CO 3rd, DeWolf WC. Occult prostate cancer in men with low serum testosterone levels. JAMA. 1996 Dec 18;276(23):1904-1906.
7. Kingsberg S, Shifren J, Wekselman K, Rodenberg C, Koochaki P, Derogatis L. Evaluation of the clinical relevance of benefits associated with transdermal testosterone treatment in postmenopausal women with hypoactive sexual desire disorder. J Sex Med. 2007 Jul;4(4 Pt 1):1001-8.
8. Hirch E. [Libido disorders] [Article in French]. Rev Med Brux. 2007 Sep;28(4):368-73.
9. Lee, J. Prostate disease and hormones. The John R. Lee, M.D. Medical Letter Feb. 2002.
10. Abraham G. Iodine: The Universal Nutrient. Vitamin Research News. October 2005.
Selective immunodeficiency, exposure to broad-spectrum antibiotics, and consumption of sugars, individually or in combination, can stimulate an overgrowth of intestinal yeast or bacteria, normally present in much lower quantities. Once any abnormalities are detected there are a variety of treatment options. Improvements that have been reported to us during and after treatment include better eye contact, improved language, less self-abusive behavior, less hyperactivity, better sleeping habits and less stimming. These organisms and their metabolites can produce or exacerbate symptoms in many conditions.
The organic acid test evaluates all of the well-defined inborn errors of metabolism that can be detected with this technology (called GC/MS) such as PKU, maple-syrup urine disease, and many others. In addition, we check for many other abnormalities such as vitamin deficiencies and abnormal metabolism of catecholamines, dopamine, and serotonin. We currently quantitate 65 substances, but also evaluate other substances that are not quantitated. Some of the other biochemical abnormalities common in autism include elevated uracil and elevated glutaric acid.
- Yeast metabolites
- Bacteria metabolites
- Nutritional deficiencies
- Antioxidant deficiencies
- Inborn errors of metabolism
- Amino acid abnormalities
- Fatty acid abnormalities
- Exposure to solvent toxins
- Deficiencies of B vitamins or vitamin C
- Indications of diabetic conditions
- Krebs cycle metabolites
- Clostridia overgrowth
- 65 important compounds
In which conditions is the test useful?
|AD(H)D||Chronic Fatigue Syndrome||Endometriosis|
The test kit is free; please see our price list for current processing charges including courier charges (for US residents) and a full report, along with professional consultation concerning test results.
Depending on test results, suggestions can include:
- Diet modification
- Diet supplementation, primarily with nutrients which increase the quantity of beneficial bacteria (e.g. lactobaccilli) in the GI tract
- Oral antifungal or antibacterial (anaerobic) medications
- Vitamins and Antioxidants
- Reduction of exposure to toxic chemicals
- Measures 65 important compounds for overall health
- Focuses on detecting yeast and bacteria byproducts that have been implicated in many disorders
- Requires a first morning urine sample only
- Consultation on results is included with each test from The Great Plains Laboratory
- Test with the experts – The Great Plains Laboratory holds one patent (*) on this test and two others pending.
* Certain uses of the compounds arabinose, citramalic, tartaric, 3-oxoglutaric, carboxycitric, 3,4-dihydroxyphenylpropionic acid, and 3-(3-hydroxyphenyl)-3-hydroxypropionic acid in their application to autism in the organic acid test and microbial organic acid test are protected by USA patent 5,686,311 granted November 11, 1997.
What is the organic acid test for, and how can it help?
In Dr. Shaw’s work, he noticed that people with autism and other conditions (such as attention deficit disorder and fibromyalgia) frequently had overgrowths of yeast and bacteria in the gastrointestinal tract, due to a high-sugar diet and antibiotic overuse. This led Dr. Shaw, now Director of The Great Plains laboratory, to devise a urine test to detect such disorders–an organic acid test which measures nearly 70 different biochemical compounds.
Both children and adults who have taken the test and sought appropriate treatments have enjoyed marked improvements in condition as a result.
Do I have to obtain a physician’s approval to get the urine sample tested?
Yes. A medical practitioner who is licensed to order urine testing in your state must approve the test order. Regulations vary from state to state so an approved medical practitioner could be a medical doctor (MD), osteopath (DO), nurse practitioner, chiropractor (DC) or naturopath (ND).
Why should I get the organic acid test? Why don’t I just start the antifungal treatment?
Some children with autism don’t have the yeast problem, but have an overgrowth of the Clostridia. Treating these children with an antifungal could make the bacteria problem even worse. Also, if your child has the yeast problem, it will likely require major changes in diet (for the child and the family) along with drug therapy for six months or longer. It will be very difficult to make this type of commitment if you are nor even sure if your child has the yeast problem.
Also, your child could have a yeast overgrowth with a drug-resistant yeast and if you don’t do the testing beforehand, it would be difficult to know what was happening. If the problem is severe, the yeast die-off reaction may be more severe and you may want to take additional steps to control the yeast before using antifungals. Additionally, it may be very difficult to get your doctor’s cooperation for the prescriptions and insurance reimbursement if there is no evidence that the yeast problem even exists.
How often should I get my child retested?
As a general rule, every three months is satisfactory. However, retesting should be done sooner if the child does not respond favorably by the end of one month of antifungal therapy, since the yeast or bacteria might be resistant to the drugs used for treatment.
My child is currently taking antibiotics now. Should I wait until after antibiotics treatment until I get tested?
An assumption is frequently made that if the child has a significant yeast overgrowth of the intestine while on antibiotics, the yeast overgrowth will disappear when the antibiotics are stopped.
However, this is not necessarily the case and the yeast overgrowth may even become worse–especially if the person is on a high-sugar, high carbohydrate diet. There is no evidence that the yeast overgrowth will spontaneously disappear. Furthermore, the yeast overgrowth may be suppressing the immune system, preventing your child from recovering from the infection.
The sooner the yeast problem is controlled, the sooner the vicious cycle of antibiotics and frequent infections will be broken.
Will drugs or nutritional supplements interfere in the organic acid test?
No, there is no interference from any known drug or supplement. However, if antifungal supplements or drugs are taken before the test, you will probably get a lower value for the yeast byproducts. We advise you to get the test first so that you will know what the starting point is.
I already had the urine organic acid test done earlier by another lab. Can’t I get the information from the earlier test?
No. No other laboratory routinely analyzes the same compounds as this laboratory. Most test for the inborn errors of metabolism and nothing more.
I have an HMO and they have to send the test to a certain lab. Is that OK?
No. No other laboratory routinely analyzes the same compounds as this laboratory (including Labcorp, SmithKline, or Mayo Medical laboratories).
If you do not specify our laboratory, your child’s urine will be sent to one of the large reference labs which cannot accurately evaluate your child’s condition. Most test for the inborn errors of metabolism and that’s all.
Are there any other reasons that I should choose the Great Plains Lab to do the organic acid testing?
Dr. William Shaw, Director of the Great Plains Laboratory, is a recognized expert in the identification of practical, biomedical treatments for autism (as well as many other disorders). His work and the testing procedure that he developed have helped many children and adults with autism and other conditions see dramatic improvements and experience an enhanced quality of life–all based on seeking appropriate therapies using the information gained from the test.
Dr. Shaw has also authored many books and provided other materials to help you better understand the medical treatments and how to use this information to help people with autism and other conditions.
FDA: 28 Miscarriages No Reason to Reexamine Gardasil
By Fred Lucas
CNSNews.com Staff Writer
December 06, 2007
(CNSNews.com) – Since June 2006, when the HPV vaccine Gardasil was approved by the Food and Drug Administration, there have been 28 reported cases in which pregnant women miscarried after receiving the vaccine.
Nonetheless, based on the clinical trials done prior to approval of the drug – which indicated that miscarriages among pregnant women given Gardasil were statistically consistent with miscarriages among women given placebos and in the general population – the FDA remains convinced the vaccine is safe and is not further investigating its effect on pregnant women.
In May, a 24-year-old woman suffered a miscarriage, which an investigator in a report issued to the federal government said, “may have been caused by Gardasil because the patient received the injection within 30 days of the pregnancy.”
In July, a 17-year-old girl from Texas was unaware she was pregnant when she got her second dose of Gardasil. She miscarried, but the cause of the miscarriage hasn’t been determined, according to a report.
The reasons for two other miscarriages this year in Florida – one by a 16-year-old and another by a 24-year-old both – are undetermined, according to reports. But it is known that both women had Gardasil vaccinations shortly before the miscarriages.
Gardasil is the vaccine to prevent the Human Papillomavirus (HPV), a sexually transmitted disease and the leading cause of cervical cancer in women. The package insert for Gardasil states there is “no evidence” the vaccine will cause “impaired female fertility or harm the fetus.”
Most of the 28 reports of miscarriage, which were drawn from the Vaccine Adverse Event Reporting System (VAERS), were attributed to “other medical event.” VAERS reports contain raw, unanalyzed data sent by concerned parties to the FDA and the U.S. Centers for Disease Control and Prevention.
The only Gardasil side effect the FDA has expressed concern about is dizziness immediately after the shot, FDA spokeswoman Karen Riley said. “We’ve not seen signals” of a disproportionate problem with Gardasil and pregnant women, she said.
“If you’re pregnant, then it means you’ve been sexually active,” Riley said. “So it would be somewhat dubious to get a vaccine you’re supposed to have before you’re sexually active.”
While there is no conclusive evidence that any health problems have been caused by the vaccine, Judicial Watch, the conservative government watchdog group that obtained the VAERS reports through a lawsuit, is concerned that the FDA is not scrutinizing the vaccine more closely.
Judicial Watch President Tom Fitton said his group wants to know more about the FDA’s approval of Gardasil and monitoring of potential problems with the vaccine, which some states either have or are considering mandating for school girls.
“Merck lobbied for these mandates,” Fitton told Cybercast News Service . “There are moral issues here. But the primary issue is public health and safety. It’s interesting why our government downplays the apparent adverse reactions of Gardasil. Why are drugs with a distinct social agenda getting less scrutiny in the approval process?”
Riley stressed that the numbers concerning the pregnancies must be placed in context.
“Have they (Judicial Watch) compared that to a similar group of young pregnant women of the same age group who haven’t had Gardasil?” Riley said. “There is always a certain percentage of children born with abnormalities among any sampling. The only way to say if there is a causality relationship is to compare one group to see if they have a higher rate than another group.”
A total of 3,461 adverse reactions, including eight deaths, were reported to the government through the VAERS system since the FDA approved the drug.
Reproduction studies were conducted on female rats at doses up to 300 times the human dose, according to Merck. The tests on the lab rats showed no adverse effect on reproduction or pregnancy. However, the company literature on Gardasil said, “It is not known whether Gardasil should be given to pregnant women.”
During Merck’s clinical trials of 2,226 women, half got the Gardasil vaccine, and the other half got a placebo or empty vaccine. In that group, 40 on Gardasil and 41 on the placebo had an adverse event in their pregnancy.
The most common adverse events were conditions that can result in cesarean section or premature labor. The portions between the Gardasil and placebo were comparable, Merck said.
Merck spokeswoman Jennifer Allen said 2 to 3 percent of the women who became pregnant during the clinical trials had children with problems, and roughly 15 percent of those had miscarriages. This, she said, mirrors the general public of pregnant women, regardless of whether they had the vaccine.
Pointing to the fact that VAERS reports are raw data, she said there was little reason to believe a causal relationship existed.
“It’s what you see in the database of the general population,” Allen told Cybercast News Service . “VAERS are passive reports. It’s plausible someone would get the vaccine, leave the doctor’s office and walk into a pole. You could report that and VAERS would accept it.”
Much of the controversy surrounding Gardasil pertains to the fact that three states – Massachusetts, New Jersey, and Virginia – are mandating sixth-grade girls get the vaccine, and other states are considering such a mandate.
The three states included an opt-out provision, which would let parents choose not to have the vaccine administered to their child for religious or other reasons.
Meanwhile, 38 other states this year passed or considered some type of legislation either mandating, funding, or educating the public about the vaccine, according to the National Council of State Legislatures. New Hampshire and Alaska adopted a voluntary program that supplies the vaccine for free to girls between ages 11 and 18 who want it.
Meanwhile, abroad, the British Department of Health approved a national mandate for school girls to get the vaccine.
After the FDA approved Gardasil, the Advisory Committee on Immunization Practices recommended routine vaccinations for girls ages 11 and 12. HPV infects 20 million people in the United States, with about 6.2 million new cases each year, according to the Centers for Disease Control and Prevention. HPV is responsible for nearly 70 percent of cervical cancer cases.
The American College of Pediatrics and the New England Journal of Medicine have voiced opposition to mandating the vaccine.
by Scott Tips, JD
December 2, 2007
I was recently struck by a thought that in this new “Age of Terrorism” we – you and I – have been subjected to a form of terrorism that can best be described as “scientific terrorism.”
Of course, if a terrorist pulls a gun on innocent people and shoots them, or blows himself up in a crowded area and takes innocent lives, then he has clearly committed a terrorist act. The definition of terrorism itself is, I know, at once vaguer and more involved than that; however, it is enough for my purpose here to describe it in this way because such terrorists will have, if successful, deprived those individuals of their health and even lives.
With Diplomas, Not Guns
Consider, then, those persons who don’t use guns but instead diplomas, impressive titles, and computers to deprive us of our health and even our lives. For most people, these kinds of terrorists are hard to spot. They often wear suits and ties, sport enough degrees after their names to choke an elephant, and speak in serious and seemingly knowledgeable tones about science and health. And they can kill you just as dead as any trigger-happy terrorist hefting a box-cutter or an AK-47.
So where do we find these scientific terrorists? Unfortunately, they usually occupy positions of power and authority – in the medical community, in universities, and in government circles. And from these lofty bastions of dominion, they issue pronouncements that they expect most people to believe and act upon, starry-eyed and without looking beyond the superficial credentials and appearances. Regrettably, most people do.
For years, these Scientific Terrorists have been telling you:
To take drugs when they are either unnecessary or contraindicated;
To undergo surgery when either unnecessary or contraindicated;
To undergo radiation treatment when either unnecessary or contraindicated;
To undergo hospitalization when either unnecessary or contraindicated;
That pesticide and herbicide residues in your foods will not hurt you or your children;
That vitamin-and-mineral supplements are a waste of money and result in nothing more than expensive urine;
That organic and whole foods are unnecessary and a waste of money;
That expensive and costly regulations are necessary to protect your health; and
That you are incapable of making “complicated” health and safety decisions affecting you and your family’s health, which decisions are better left in the hands of the educated elite.
The Butcher’s Bill
But, as we know, these experts – who are supposedly so smart and capable – almost always get “it” wrong. And, worse, when they get it wrong, they do a spectacular job of it too. Although the data varies depending upon the source, just look at what the butcher’s bill comes to:
106,000 deaths annually, at a cost of $12 billion, from adverse drug reactions;
98,000 deaths annually, at a cost of $2 billion, from medical errors;
115,000 deaths annually, at a cost of $55 billion, from bedsores;
88,000 deaths annually from infections, at a cost of $5 billion, caused by medical intervention;
37,000 deaths annually, at a cost of $122 billion, from unnecessary medical procedures;
32,000 deaths annually, at a cost of $9 billion, from surgery-related medical intervention
The above figures do not include those outpatient deaths from medical intervention (some 199,000 annually at a cost of $77 billion), or the astounding figures from Dr. Lucien Leape’s 1997 study of medical and drug-error rates (3 million deaths annually, he reports!) (Leape LL, “Error in Medicine,” JAMA, 1994 Dec 21;272(23):1851-7).
On the more conservative end of the spectrum, even an expert panel from the Institute of Medicine (of the National Academy of Sciences) found that medical errors kill from 44,000 to 98,000 Americans each year. (British Medical Journal, 1999 December 11; 319(7224): 1519.
Medical errors in the United States alone cause more deaths annually than car crashes, AIDS, or breast and prostate cancer. This is equal to a 300-person jumbo jet crashing every single day of the year, day after day after day.
And They Are Still At It
These terrorists, though, are not just content with subjecting us to their brand of medieval medicine. They also seemingly want to make sure that we are vulnerable to diseases and medical problems, which in turn will require increased use of their medicines and hospitals. Why do I say this? Because every time that any of us use effective preventative measures to protect ourselves, they try to suppress them – through the media, through doctors, and, above all, through their coercive enforcement tool – the government.
And what are examples of this? Just consider the attempts of some “institutions” to limit the potency of dietary supplements, which are scientifically-proven disease preventatives. At the Codex level and in the European Union, the German Risk Assessment Institute (BfR) has put forth what it considers to be the maximum permitted upper levels of safe consumption of vitamin-and-mineral supplements. They caution, for instance, that no niacin supplements above 17 milligrams should be sold to consumers. Nor should Vitamin C tablets exceed 225 milligrams. For mineral supplements the BfR is equally strict: zinc tablets should not exceed 10 milligrams, nor should selenium capsules go above 70 milligrams each.
Given the overwhelming amount of evidence that exists showing not only the safety of such supplements but their efficacy, there can only be two reasons why they are trying to suppress these alternative means: Either they are (1) completely clueless, or (2) they are trying to keep us sick, or worse, kill us.
Of course, there are well-intentioned individuals in every such group. But for those who are engaging in these activities knowingly and with, as they say in law school, deliberate aforethought, these persons are terrorists in every sense of the word. And there is a very special place in hell reserved for them, I’m sure.
Fortunately, there are many of us working together to stop this form of scientific terrorism. The National Health Federation has been on its own anti-terrorist mission for years now throughout the World, but especially in the United States and at Codex. They may have the advantage of more money, but we have the advantage of something more important: We actually fight for Freedom, and for Life itself.
To better understand the Codex Alimentarius Commission and the global food standards and guidelines that it is creating, you must read Codex Alimentarius – Global Food Imperialism. This book is a collection of articles by those few health-freedom activists with first-hand knowledge of Codex and the dangers that it poses to our health and health freedom. Compiled by Scott Tips, this easy-to-read book can be purchased here.
© 2007 – Scott Tips – All Rights Reserved
E-Mails are used strictly for NWVs alerts, not for sale
Scott Tips received his Bachelor of Arts degree, magna cum laude, from the University of California at Los Angeles in 1976, studied at the Sorbonne (Paris I) from 1976-1977, and obtained his Juris Doctorate degree from the University of California, Berkeley School of Law (Boalt Hall) in 1980, where he was the Managing Editor of the California Law Review. A California-licensed attorney, he has specialized in food-and-drug law and trademark law, but also engages in business litigation, general business law, and nonprofit organizations, with an international clientele.
Since 1989, Mr. Tips has been the General Counsel for the National Health Federation, the World’s oldest health-freedom organization for consumers, and is now its president. He also writes a regular column for NewsWithViews.com and Whole Foods Magazine called Legal Tips, a column he started in 1984. Currently, Mr. Tips is occupying much of his time with health-freedom issues involving the Codex Alimentarius Commission and its and other attempts to limit individual freedom of choice in health matters.
To understand better the Codex Alimentarius Commission and the global food standards and guidelines that it is creating, you must read Codex Alimentarius – Global Food Imperialism. This book is a collection of articles by those few health-freedom activists with first-hand knowledge of Codex and the dangers that it poses to our health and health freedom. Compiled by Scott Tips, this easy-to-read book can be purchased here.
Website: National Health Federation