You might remember Porter Stansberry as the WorldNetDaily financial adviser who is ready to flee the country at a moment's notice -- which is understandable given that his company has faced a $1.5 million sanction from the Securities & Exchange Commission over aggressive sales tactics. Stansberry's firm is also behind all those scary, Alex Jones-narrated "End of America" commercials on cable news channels, which use fearmongering to peddle his financial services.
Well, Stansberry is back, peddling more dubious advice.
The headline of WND's Dec. 23 article on Stansberry reads, "Money guru: Nation in decline if not outright collapse." Cue the fearmongering:
The man who predicted the bankruptcy of General Motors says the government's financial data isn't giving an accurate picture of the state of the U.S. economy, and the real numbers show things are much worse than is commonly believed.
The numbers tell us America is in decline, if not outright collapse, writes investment expert Porter Stansberry in the December 2011 issue of Stansberry's Investment Advisory.
Stansberry uses questionable analysis to back up this fearmongering. For example:
He uses the sale of cars as an example of evidence that shows real per-capita wealth peaked in the late 1960s.
The lowest median age of the U.S. fleet was in 1969, at only 5.1 years, he points out. Even as recently as 1990, the median age was only 6.5 years. But in 2009, the median age of a registered vehicle in the U.S. was almost 10 years.
"Rich people buy new cars," he argues. "Poor people do not."
First, Stansberry gets his numbers wrong. According to the U.S. Department of Transportation, the average age of an automobile in use in 1970, the earliest number DOT has, was approximately 5.6 years. And in 1990, the average age was more than 7.5 years -- not the 6.5 years Stansberry claims. The 2009 number is 9.4 years, which Stansberry stretches into "almost 10."
Second, Stansberry overlooks the fact that cars last longer than they used to. From a Motor Authority article featuring automotive consulting firm R.L. Polk & Co.:
Dave Goebel, from R.L. Polk, told reporters from MSNBC the increasing durability, not the economy, is the main driver of rising vehicle age. There are more vehicles per household than in the past, he said, indicating that people buy cars and then hang on to them because they last longer."Each new model year the technology continues to get better and there are fewer components that fail, so we expect to see these trends continue," he said.
If Stansberry is manipulating numbers to back up his claims, one has to wonder about the rest of his analysis.