Back in April 2000, whilst still working at Salomon Smith Barney as an oilfield service and drilling analyst, I sold my last internet stock – Caprock Communications; which, aside from the Precious Metal miners I held from 2002-2011, turned out to be the last stock I’ve ever owned. At the time, I was too “green” to fully understand the state of the global economy and markets; and frankly, it wasn’t until Alan Greenspan turned on the monetary spigots in January 2001 – taking the Fed Funds rate from 6.5% to 1.0%, where it was held from June 2003 through July 2004 – that I realized something was terribly wrong. When I sold Caprock on that fateful day in early 2000, I turned violently negative on stocks; but simply because I felt they were wildly overvalued, which of course they were. By the time 9/11 occurred a year later, the dollar had already started falling from its all-time high; and less than a year later, in May 2002, I went “all-in” the Precious Metals sector. Although, at the time, it was 100% in the form of mining stocks. People had laughed at, and shunned me for being “bearish” from 2000 through 2002; and didn’t even listen when I told them that gold and silver – then trading at $300/oz and $6/oz, respectively – were heavily undervalued.
As the post-tech wreck era passed, and markets recovered care of Greenspan’s psychotic monetary gambit, I became more and more fearful that the simple stock market overvaluation I worried about in prior years was just the tip of the iceberg. More worrisome was the dollar’s perceived “overvaluation” – given the massive debts America was building up, and the significant damage a rising dollar would cause on what was already a dying manufacturing sector. You know, the businesses that support a nation’s growth – providing expanding GDP, high-paying jobs, and corporate price leverage. whilst this was occurring, the ill effects of “Maestro” Greenspan’s monetary easing created an historic real estate bubble, fostered by horribly irresponsible “mortgage easing” by the government itself – highlighted by George Bush’s American Dream Down payment Act of December 2003; and, of course, the wonders of derivatives – such as the proliferation of mortgage-backed bonds, which in turn spawned a generation of historic subprime lending activity (which incredibly, is MUCH worse today).
Living in Long Island, New York – and working at Salomon Smith Barney until 2005 – I remember my “friends, family and colleagues” chastising me from 2003-07; first, for owning gold and silver despite them being the best performing asset classes since the turn of the century; and second, for not buying a house amidst what I believed to be the biggest real estate bubble of our lifetimes (which sadly, is MUCH worse today). Friends were investing in existing homes and un-built condos in Florida; and if I had a nickel for everyone that told me about the tax destructibility of interest and property tax payments…
You know, like – believe it or not – CNBC, this morning (Monday), as global stock and commodity markets crash – highlighting which oil stocks have the highest dividend yields. Then again, CNBC also scrolled “majority of economists anticipate a rate hike this year” this morning; blamed the whole market crash on China; and LOL, actually didn’t post Treasury yields all morning – on orders from the Fed, of course, which is terrified as to how close the “Yellen Reversal” I predicted last year has come; or heck, last week, in “the ultimate Central Bank End Game – i.e., the “Yellen Reversal” – rapidly approaches.”
As it turns out I was right about the real estate bubble, too, in spades. However, when the 2008 financial crisis hit, PM mining stocks accounted for the vast majority of my net worth, with just a sprinkling of closed-end bullion funds (which I have since shed as well, having realized 2½ years ago they were barely less risky than mining stocks). And thus, despite being DEAD ON correct in my economic predictions, I was getting slaughtered just like everyone else. The Cartel was hell bent on “proving” PMs were not safe havens; and thus, whilst they “supported” the herd’s instinct to flood into Treasury bonds – taking the benchmark 10-year yield from 4% to 2% in the last four months of 2008, they viciously attacked paper gold and silver, and mining shares even more so – which, I might add, are dramatically lower today than at the 2008 bottom; erasing all of my 2002-07 mining share gains. Thankfully, mining shares were “allowed” to rebound when the Central banks manically re-inflated all markets; as frankly, the last thing they were worried about at the time was suppressing miners. And thus, whilst I never approached the peak of my net worth – achieved circa 2006 or 2007 – I did recoup enough to “remain in the game.” And once 2008 smashed the world – and me – in the face like a lead two-by-four, I realized two very important things. One, that all I had feared in the past was NOTHING compared to the all-out, complete collapse of the global monetary system I knew was coming; and two, that when it arrives, I will no longer have any money in the banking system or financial markets; but instead, my entire net worth in items of real value – such as a debt-free home, and as much physical gold and silver as I could acquire.
As the post-2008 era passed, and Central banks not only amped up money printing and asset monetization – both overtly and covertly – to unprecedented levels; but went all-in on 24/7 market manipulation, particularly after their cumulative “point of no return” was reached in 2011, the pain, angst, and misery I endured was of a whole different caliber. Sure, I was theoretically “safer” – in having cashed out my IRAs; converted 90% of my liquid savings to physical gold and silver; and joined one of the nation’s leading bullion dealers as Director of Marketing. However, said “point of no return” tactics have become so intense, not a second goes by that gold and silver are not being either capped or attacked. No one’s “laughing” at me anymore, having lost their shirts in the dotcom bubble and/or housing bust – and frankly, struggling to revive past days of financial glory. However, a financial establishment that still doesn’t realize its recent gains were entirely due to unprecedented money printing and market manipulation certainly laughed – with everyone from the CNBC’s of the world to PM newsletter writers piling on with bearish PM commentary despite the reasons for owning gold and silver being much more dramatically so. Not to mention, record high demand – and record low, rapidly vanishing inventories. And of course, the fact that my ability to earn a living was being put in jeopardy; as ironically, despite said record PM demand, it was essentially all emanating from the Eastern Hemisphere.
Still, with each passing day, I have become more and more comfortable in my views; not just believing, but knowing the end game of global economic and currency collapse was mathematically certain. And not in “a few years,” but very, very soon. To that end, in my pursuit of not only “protecting my investment”; but helping others to do so as well (which I had been doing since my first of hundreds of FREE missives on the GATA website circa 2004); I have not taken a day off in more than two years, working 24/7 compiling data, analyzing it, and communicating it to the public. Which, thanks to the fantastic, global platform the Miles Franklin Blog provides, has made a significant impact. To wit, in the worst of times over the past few years, I’ve received essentially zero negative feedback; and now that “the big one” has clearly arrived, I believe my work – as well as David Schectman’s, of course – is being validated in spades.
Yes, as markets the world round melt down – from stocks, to high yield bonds, commodities, and currencies – the Cartel is still working in “hyper drive” to prevent PMs from being viewed as safe havens (such as last night’s 111th “Sunday Night Sentiment” raid of the past 114 weeks, and 495th “2:15 AM” EST attack of the past 567 trading sessions), in lieu of the beloved Treasury bonds the so desperately need the public to flee into. Which they will, of course, based on the misguided belief “QE” and “ZIRP” (or NIRP) can hold rates down indefinitely – which will destroy them just as thoroughly as prior beliefs in the “Bernanke and Yellen puts” under stocks; and of course, that real estate prices can only go up.” I mean, geez, what part of the total loss of control of the aforementioned markets – let alone, after seven years of maniacal ZIRP, QE, and other lunatic Central bank monetary schemes have decidedly failed, and in fact made things much worse – could possibly engender confidence that “this time will be different?” To wit, as I wrote last week, we are rapidly approaching the “end of belief that Central banks can save us” – or more appropriately, the ‘beginning of the belief Central banks are destroying us.’
Which is why, with the world amidst its unequivocally worst economic condition since the Great Depression; its most threatening social and geopolitical environment since World War II; and by far, its most debt-ridden, broadly insolvent financial situation ever, we are about to experience something so financially and economically horrible, it will make 2008 appear to be the “good old days,” on all imaginable levels. Last month, I wrote the “only difference between late 2008 and today” was maniacally PPT-supported stock markets – particularly ones of “national security” importance like the “Dow Jones Propaganda Average.” And now that this “seal has been broken,” we have clearly regressed back to the hell that was 2008. Of course, we’re still in the early stages; and care of the aforementioned political, economic, financial, and social horrors, I believe this time will not only be “much, much worse” – but entirely irreversible. That is, until the entire global fiat monetary system collapses, and all the world’s unpayable debt repudiated.
As I finish writing, the U.S. markets are minutes from opening on Monday morning. The global carnage thus far has been horrific – starting with an 8.5% plunge in the Shanghai Exchange; to the all-out collapse of nearly all currencies (except ironically, the Euro and Yen, which are exploding higher against the dollar, prompting guaranteed QE explosions as the “final currency war” I warned of nearly three years ago turns nuclear); freefalling commodities – including sub-$39 WTI oil; a 10-year Treasury yield well below 2%; and Dow futures down 650 points, atop last week’s 1,100 point plunge. As on Thursday and Friday, the only asset class up on the day is gold (albeit, amidst massive Cartel paper capping); whilst silver is, just like in 2008, being attacked by the same paper algorithms the Cartel used then to prevent its inherent tightness from being exposed. Which irrespective, it ultimately was. And HOLY COW, NASDAQ FUTURES WERE JUST HALTED, AFTER HITTING THEIR 5% LIMIT DOWN CIRCUIT BREAKER!
Of course, in the Precious Metals realm, the biggest difference between 2008 and today is that supply is dramatically tighter, whilst demand is dramatically higher and inventories dramatically diminished. To wit, when every major mint in the world sold out of physical silver in late 2008 – for months on end, yielding physical premiums (over the fraudulent, Cartel suppressed paper market) of nearly 100% – U.S. Mint silver Eagle demand, and Royal Canadian Mint silver Maple Leaf demand, was less than half what it is today. Let alone, Chinese and Indian PM demand; in gold’s case, expected to be more than the entirety of global production this year, just as demand starts to really explode (as the “big one” commences) – and supply starts to really plummet (as years of price suppression have destroyed the PM mining industry, and historic industrial oversupply guarantees many of the base metal mines (that produce silver as byproduct) are shut down.
In other words, I could not be more comfortable with my position of holding only my home; my physical gold and silver (at Miles Franklin’s Brink’s facility in Montreal); a small amount of cash (held in a non-marginable Charles Schwab brokerage accounts), and my personal possessions. There is not a doubt the “Big One” has arrived; or that mathematically, it not only must be much, much worse than 2008, but cannot be reversed until the entire global economy collapses – as well as the historic fiat Ponzi scheme that supports it.
Hopefully, you have already protected yourself – not just monetarily, but in all conceivable aspects. And if not, WHAT ON EARTH ARE YOU WAITING FOR? To wit, if physical silver supply (IGNORE THE PAPER PRICE) was a “1.5 or 2.0 out of ten” two weeks ago; what do you think it will be now that the BIG ONE has arrived? To that end, particularly amidst the historically illiquid condition of today’s financial markets, we encourage you to do your due diligence before selecting a bullion dealer to work with. As discussed in the MUST HEAR podcast I taped with Miles Franklin’s President and co-founder, Andy Schectman, last month, never has it been more imperative to “choose wisely.” And to that end, we hope that if you are interested in buying, selling, or storing Precious Metals, you’ll give us a call at 800-822-8080, and give us a chance to earn your business.