As I sit down to write on this “President’s Day,” I can’t help but consider how diluted the stature – and goodness – of the Presidential Office has become. And this has nothing to do with Donald Trump personally, but the fact that essentially everything the post- Financial Crisis government has done has been detrimental to the public, causing the office to lose the admiration – and cache – it had when America was indeed “great.”
Unfortunately, a combination of unfettered global population growth; inexorable industrial competition; “bad trade deals”; unfavorable demographic trends; and abuse of the “reserve currency” has doomed America to fall back to at least the middle of the pack, which in many aspects it already has. However, the largest part of this “plunge to mediocrity” – in which the purchasing power of its historically overvalued fiat toilet paper dramatically declines; yielding a material reduction in an already falling standard of living; is what will really shock the hundreds of millions of dumbed-down Americans that didn’t realize it was coming – yielding political, economic, and social changes unlike any in the nation’s history.
Before I get to the rare numismatic opportunity noted above, let’s go over some of the “exploding reasons to own Precious Metals” from this “quiet” weekend alone; starting with the exploding debt I noted last week, when we learned that U.S. household debt rose by $460 billion in 2016 alone, to $12.7 trillion. I.e., less than 1% from the all-time high in the third quarter of 2008, just before the biggest financial crisis in generations. As it turns out, the nearly $1 trillion of mortgage debt wiped out by the historic real estate crash has been replaced by…drum roll please…automobile and student loan debt; i.e., two of the biggest debt bubbles in U.S. history; both of which, are already starting to default at accelerating rates. The former, amidst the highest inventory-to-sales ratio since the height of the Financial Crisis – yielding the potential for annihilation of the automakers; the unions that are suffocating them; and the tens of billions of pensions promised to past and current employees. And the latter, setting up the U.S. taxpayer for a massive write-off, as the government owns essentially all of the massive $1.4 trillion tsunami of unpayable student loans, up from less than $0.5 trillion in the last decade alone!
Consider the “shocking new world order” I have harped on for the past few months – of wholesale societal changes that will ultimately destroy millions of jobs, but benefit society at large over the “long term.” As even I was blown away reading this article, of just how fatal the death spiral has become for the majority of soon-to-be-lifelong-debt-serf college students. In which, it notes that the class of 2017 is twice as likely to spend student loan funds on non-educational purposes, as the class of 2016 before it.
This, from a group of shamefully exploited “millennials,” entering the worst post-graduate labor market in U.S. history with average student loan debt – to the hideous government that promoted it – of $37,000. Putting this horror into perspective, the average post-graduate salary has declined by 7% since the turn of the century, whilst the cost of textbooks – at $1,200/year – has doubled, to the point that students are not even buying them anymore; and/or making class choices solely based on how expensive the required textbooks are!
Sadly, the “American Dream” has all but died, due to the aforementioned confluence of deleterious secular trends – yielding exploding debt growth, whilst (upwardly “cooked”) GDP growth plunges to record lows.
This, whilst the “Bubble Finance” economy, in which money printing and market manipulation has made the rich significantly richer, at the expense of “the 99%,” has sowed the seeds of political and social revolution. In large part, at the hands of the monsters known as Alan Greenspan, Ben Bernanke, and Janet Yellen.
Of course, the “exploding reasons to own Precious Metals” aren’t just limited to America – even if the upside potential here is the greatest, given that “dollar-priced gold” is the world’s cheapest, due to the fact that the price suppression that has been the biggest contributor to the world’s financial ills is focused here. As no matter which corner of the world one looks, the same issues exist – of exploding debt, collapsing currencies, and the burgeoning unrest that is catalyzing historic political change.
Just today, as a “Troika” meeting about Greece’s fate is expected to generate not a shred of progress toward resolving the massive, unfunded principal payments the dying nation owes in July, we got a taste of the political revolution Europe is likely to endure in 2017, when the violently anti-EU Geert Wilders, who currently is being given 90%-plus odds to win the Dutch Prime Ministerial election next month, urged citizens to crack down on “Moroccan scum” and “regain their country.” Not to mention, Matteo Renzi’s “surprise” resignation as the head of Italy’s (for now) ruling party, given the complete lack of support it has received following the devastating referendum defeat it was handed in November. Which, in turn, opens the doors for “snap elections” to be held sooner rather than later; which, according to current polls, suggest the equally violently anti-EU Five Star Movement would be victorious.
Oh, and did I mention that on Friday (and today), French bonds tumbled when it was learned that two of Marine Le Pen’s top competitors in April’s upcoming Presidential election, realizing they cannot beat her, are discussing an LOL, “merger” of their candidacies – in a last ditch effort to put off their inevitable defeats; and with them, the equally inevitable “FrExit.” Not to mention, as Angela Merkel herself agreed with Donald Trump that the Euro is unnaturally undervalued; like her Finance Minister Wolfgang Schauble before her, placing the blame solely on the soon-to-be-overthrown Mario Draghi. This, as UK “rate hike odds” for the entire year of 2017 – in a nation whose own currency has plummeted, for all intents and purposes, to an all-time low – plunged from 45% to 17%, following a third straight month of collapsing retail sales.
Meanwhile, on the Pacific Rim, the PBOC responded to Friday’s modest dollar rise – predicated principally on the rising odds of a European implosion – with its largest overnight Yuan devaluation in six weeks. A “cataclysmic” process which may well explode in the coming weeks; which I assure you, will only be accelerated by this weekend’s “rumor” that the U.S. government will alter, rightfully so, the method in which it calculates its trade deficit. Which, when completed, will depict a trade imbalance vastly worse than the already record high levels it’s at today – providing the Trump Administration with fodder to step up the catastrophic trade and currency wars that will ultimately destroy what’s left of the global economy. Which in turn, will only embolden the burgeoning anti-Trump forces “circling the wagon” – as evidenced by this weekend’s preliminary Congressional discussions about invoking esoteric 25th amendment language regarding the possibility of removing the President from office, if it can be proven his “mental health” is unsound.
In other words, the “walls are closing in” on the monsters trying to hold together history’s largest, most destructive fiat Ponzi scheme like those in the garbage compactor in Star Wars – as espoused beautifully in this must read article from Chris Martenson; and this one from David Stockman, perhaps his best ever. Which is why the time to buy physical Precious Metals is NOW, particularly when afforded the type of rare “numismatic” opportunity like the one Miles Franklin is offering today, in extremely limited quantities.
Per the special promotion we emailed on Friday, “Miles Franklin recently acquired a limited collection of pre-1933 gold coins from an estate. In appreciation for your past business with us, we are excited to offer you a special deal to add these historical gold coins to your portfolio. These vintage coins are a great investment having circulated in the U.S. more than 100 years ago. Currently offered at 14-year low premiums over the spot price of Gold, these coins are a must have.”
As you know, Miles Franklin only promotes numismatics to the general public when premiums fall to levels essentially on a par with melt value; which, per the above notation, have fallen to 14-year lows. In other words, you have an opportunity to purchase nearly 100-year-old numismatic gold coins, for essentially the same price as brand new American Eagles!
Of course, there’s no guarantee of what numismatic premiums will do in the future. However, when buying at the current premium levels, it’s like getting free “option value,” atop that of anticipated gold price appreciation; as espoused by Miles Franklin’s President and Co-Founder, Andy Schectman, the last time such an opportunity arose for our clients – in the “once in a lifetime numismatic opportunity” article he wrote in January 2014, when we came into a small cache of “Bank of Canada Hoard” numismatic gold coins. Which, I might add, have since significantly increased in value.
We last week noted that the Royal Canadian Mint’s latest “numismatic” offerings were released, in the form of the .99999 fine “Gold Bugling Elk” and limited edition Silver Predator Lynx coin issues. I wrote of their investment merits here, of how essentially all of the RCM’s previous “Call of the Wild”; “Wildlife Series”; “Birds of Prey”; and “Predator” limited edition gold and silver Maple Leaf series’ have experienced premium expansion since their releases over the past five years, relative to generic gold and silver Maples.
Putting it all together, the reasons to own Precious Metals today are exploding; and in my view, the rare numismatic opportunity we have been given access to, provides an excellent entry point.