Why should one own Precious Metals, you ask? Pure and simple, to protect wealth from the inevitability of financial crises; destructive governments; and based on hundreds, if not thousands, of instances throughout history – the destruction of fiat currencies that are continually re-introduced into naïve, compliant societies. Naïve and compliant, until these Ponzi schemes inevitably crash – leaving 99% of the population destitute, and the 1% that protected themselves wealthier.
The reasons to protect one’s assets are as powerful as at any time in the Post-War era – as that history’s largest, most destructive fiat Ponzi is collapsing, amidst the greatest, most obviously unpayable debt load ever accumulated; the most invasive, destructive, and universally inflationary monetary policy; historically ominous secular trends related to demographics; the potential loss of tens of millions of jobs to technological advancements; and political and geo-political tensions unlike any in the post-war era.
Frankly, it’s never been more difficult keeping up with such “PM-bullish, everything-else-bearish” headlines – as they are coming hot and heavy from all corners of the globe; representing all aspects of society. To that end, the Miles Franklin Blog does its best to keep you apprised of it all; and trust me, it’s a 24/7 job. Today, I’ll go over a handful of such issues, and conclude by discussing why who you listen to is as important as what they actually say.
Starting with the issue that has me, as an American, more worried than any other. Which is, the dramatic polarization of what many consider the world’s most stable nation. Not to mention, the issuer of the world’s “reserve currency” – by a handful of Keystone Kop Central bankers, with not a whit of loyalty to the public, nor a clue what they’re doing.
My opinion that a Trump victory would have the impact of a “BrExit times ten” is turning out to be the understatement of the century. I can only wonder what America would be like if Hillary Clinton had won – as clearly, the nation’s outlook would be equally dire, but for entirely different reasons. No one has a crystal ball, but America – and the world – unquestionably changed on November 8th; and likely, will change equally powerfully with the Dutch, French, Italian, and German elections later this year.
But here in America, said polarization has me terrified. I mean, a petition for California to actually secede from the union is gaining traction – even if it would mean economic suicide for California, and genocide for America. And watching the all-out WAR going on between Trump and everyone from the media, to major corporations, celebrities, judges, and Congressman is a site to behold. Again, as discussed in last week’s “clarification of my Donald Trump thesis,” this has nothing to do with politics – as for all intents and purposes, I am a true independent. To the contrary, it is entirely due to an objective view of the post-Trump world; which like a post-Hillary world surely would have been, is as ominous for the future of the what has been the world’s most powerful country, as at any time in its 240-year history.
Anti-Hillary sentiment was far more “silent”; principally, a protest against the status quo that didn’t show up until Election Day. However, the vitriol against Donald Trump is like nothing witnessed in any post-War civilized society; let alone, the world’s lone superpower. Partly due to the dramatic changes he proposes; and partly, the forceful; unyielding; and more often than not, antagonistic way in which he does it.
And then there’s the international forum; where in just a few short weeks, we have turned key allies like Mexico, Japan, and Germany – to name but a few – into, at least from an economic standpoint, enemies. Not to mention, the diplomatically delicate relationship we have with our greatest economic and geopolitical competitor; not to mention, our largest creditor and the principal benefactor of America’s globally low consumer price inflation; China. And we haven’t even gotten to the discussion of, and attempts to implement, the key issues of his platform – like the tax cuts and fiscal stimulus I believe to be politically and economically unviable; and the “repeal and replace” of Obamacare – which politically, economically, and socially, may be more complex than all other issues combined. Let alone, building a wall across our Southern border; engaging in politically and economically destabilizing trade wars; and taking the global currency wars “thermonuclear” – which he decidedly did last week; when for all intents and purposes, he permanently ended America’s two-decade old “strong dollar policy” ruse. In a nutshell, America has never been more insolvent; resulting in the same type of dramatic political change that has lurched dozens of previously declining empires into chaos; which would inevitably have occurred under Hillary Clinton as well – or whoever took the oath of office on January 20th.
The same goes for the entire world – sadly, with the same root cause. Which is, the cause that has appeared, with equally devastating consequences, hundreds of times throughout history; i.e., the massive political, economic, financial, and societal distortions caused by fiat currency Ponzi schemes. Only this time, for the first time ever, all nations are stuck in the same trap, having all committed financial suicide via the massive debt accumulation that only fiat Ponzi schemes can enable. Let alone, in a technologically advanced age, when financial markets and the media can be manipulated so efficiently, and forcefully, it has enabled this scheme to grow dramatically larger, and more dangerous, than any before it.
Driving this point home, in spades, of what we can expect in a year of potentially historic money printing, draconian government actions, and monetary revolution, is yesterday’s blatant “currency war” salvo by the Governor of the Bank of New Zealand, that the Kiwi dollar is “ overvalued…and a decline in the exchange rate is needed.” Compare and contrast to Trump claiming “our companies can’t compete (with China, Japan, and Germany) because the dollar is too strong,” and it becomes crystal clear what’s coming next.
Which brings me to today’s principal topic – of how it’s up to you to do due diligence into your investments; particularly in light of how powerful the efforts to separate you from your money have become, from the “evil Troika” of Washington, Wall Street, and the Mainstream Media.
In yesterday’s must listen Audioblog, I highlighted Michael Kosares’ five rules of Precious Metal investing; the fifth of which, was “don’t allow naysayers to divert your interest. But instead, allow yourself the right to protect your interests as you see fit.” This, on the heels of the prior days’ article, “fear dissemination, FUD, and reality”; in which I discussed the exact same phenomenon – of those in positions of power, attempting to either steal your money, or prevent you from protecting it.
Just look at today’s Bitcoin news – of the Chinese government’s third attempt in the past month alone, to prevent the future of day-to-day, transactional money from gaining traction, when it was again about to achieve a new all-time high. Today, under the guise of requiring the Chinese exchanges to more properly implement anti-money laundering rules (i.e., supporting investments only in state approved asset classes), the PBOC ordered a temporary ban on Bitcoin withdrawals from Chinese Bitcoin exchanges.
I cannot emphasize more how Bitcoin will continue to be one of the world’s most volatile asset classes, as it emerges as Central banks’ principal monetary threat. Which, I might add, was central to the thesis of December’s “why Bitcoin will make gold and silver go up”; as at a time when the physical supply of gold and silver required to hold prices down is running “on fumes,” Bitcoin is clearly diverting a lot of attention from the monetary authorities. Which inevitably, in my view, will enable to Precious Metals to “gracefully” back out of the generationally monetary war Bitcoin has stepped up into; and “quietly” settle into the role they have always been best suited for; and likely, always will be. Which is, the best storage of value asset class the world has ever known, at a time when the suppression of gold and silver prices – to prevent them from being perceived as the primary monetary alternative to fiat currency – has made them more undervalued than at any time in modern history.
If you want to know just how intense the powers that be’s’ efforts to postpone the inevitable have become; by not only “influencing” perception with outright market manipulation; and relentless, manipulation-supported propaganda – like the fallacious “Trump-flation” meme that must inevitably crash and burn – consider just how dangerous, and fundamentally flawed, “traders”’ positions are. To start, in equities; where, despite the ugliest “hard data” imaginable – in both the U.S. and overseas; and objectively speaking, the highest-ever valuations, based on the lowest-ever earnings quality; investors have NEVER been more bullish in the post-financial crisis era.
“Trump-flation” purports an imminent inflation surge (which will likely occur irrespective of Trump’s policy; which somehow, against all historical precedent – and common sense – is being spun as great for stocks, and terrible for Precious Metals. Which is quite ironic, as until election eve, the equivalent of “Hillary-flation” was also purported to be great for stocks, and terrible for Precious Metals. To that end, despite rates having fallen significantly since the election – in line with my “2.5%, Nuff said” prediction – traders have NEVER been shorter the Treasury market in the post-financial crisis era. This, by roughly twice as much as the previous high!
And last but not least, the only market as close to my heart as Precious Metals; i.e., crude oil, having spent ten years of a previous life as a Wall Street oilfield service, equipment, and drilling analyst. To wit, despite relentless evidence that December’s OPEC/NOPEC “production cut” is either not working, being cheated upon, or both; and the fact that oil has been largely range-bound since; traders have NEVER been more bullish in the post-financial crisis era.
This, whilst the COMEX “Commercials” – i.e., the U.S. government-led gold Cartel – continue their unprecedented streak of being short a raging bull market for more than 15 years (particularly in the world’s 180 non-reserve currencies; ostensibly all of which, are either near, at, or above previous all-time highs).
Again, only you can determine your personal due diligence process; most importantly, who to listen to, and what makes sense. If you want to go long stocks – at their objectively most overvalued levels ever; short Treasury bonds, at a time when essentially every Central bank is monetizing everything; long crude oil, amidst the greatest energy glut in history; and short Precious Metals, amidst the lowest-ever valuations, and most bullish political, economic, and monetary fundamentals in modern times, that is of course your prerogative. However, I’ll stick to the lessons of history, and laws of “Economic Mother Nature.”