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Gary Christenson wrote this article for Miles Franklin.

The Pareto Principle states that results often follow an 80—20 distribution. It is not a mathematical fact, but an observation.

Examples:
  • 20% of people do 80% of the productive work.
  • 20% of politicians create 80% of the trouble.
  • 20% of your investments create 80% of your returns.
  • 80% of silver and gold profits occur in 20% of the time.
SPECULATIONS:

Most adults—say 80%—“go with the flow” and live paycheck to paycheck. The other 20% manage their financial lives, reduce debt and interest payments, and save for retirement.

But of the adults who manage their finances, save for retirement and decrease debt, perhaps 20% of the 20%, or 4% of the adult population, understand the reality of currency unit devaluations.

Repeat: Only 4% appreciate the inevitability of a dollar reset, the destructiveness of unpayable debt and vulnerabilities in our current debt-based financial system.

I suspect that many of those 4% stay invested in over-valued stocks and supposedly safe bonds because the Wall Street narrative pushes investors into investments which are profitable for Wall Street.

Perhaps (more speculation) only 20% of that subset of 4% (less than 1% of adults) have exited the Wall Street casino and converted paper and digital assets into physical gold and silver bullion that will protect them when casino stocks and bonds suffer another harsh correction or crash.

REVIEW OF SPECULATIONS:
  • Eighty percent of people live paycheck to paycheck with minimal management.
  • Twenty percent manage their finances but only four percent understand the extreme dangers in current financial counter-party risks.
  • Less than one percent of adults have protected their savings and retirement with gold and silver bullion.
  • In which group do you live? Are you in the 80% group, the 20% group, the 4% group, or the 1% who are more likely to survive the coming reset?

NOPE! NOT BUYING THIS STORY! THINGS ARE WONDERFUL AND CNN AGREES! STAY INVESTED IN STOCKS AND RUN WITH THE HERD FOR THE LONG TERM! (Sarcasm…)

It is comforting to run with the herd. Our DNA and survival instincts encourage us to stay in a group. We are told: The standing nail is pounded. Don’t fight the Fed. Trust authority and believe the experts. Go along to get along. They won’t lie and they’ll take care of us. In other words, run with the herd.

But the point is this:  Government and Wall Street encourage us to buy their narratives. It’s easy and comfortable. But the results of running with the Wall Street herd can be catastrophic.

Remember the 1999 narrative promoting Internet stocks. The NASDAQ 100 subsequently fell 84%.

Bitcoin fell from almost $20,000 to under $7,000 from mid-December 2017 to early 2018.

The herd of investors suffered through the crash of 2008, the credit crunch, real estate foreclosures, bankruptcies and resulting traumas. The Fed created $16 trillion in loans and swaps to support the financial system. How much will be conjured from “thin air” during the next crash and what collateral damage will result?

Crude oil fell from $147 in 2008 to $36 a few months later.

Running with the herd is comforting but often dangerous!

Others astute individuals see danger ahead.

From David Stockman:

“The house of cards is so shaky and so fragile right now that there is the risk of the proverbial black swan event.”

“Gold and silver are the only safe investments to have… you can’t be safe in the stock market, and you can’t be safe in the bond market.”

From “MISH” on potential problems.

  • “The dollar could collapse.
  • Defaults can wipe out junk bonds.
  • Funds carry selloff and liquidation risks.
  • Gold is gold but it can fall in price.
  • Inflation can kill long-term bonds.
  • Deflation may kill equities.
  • Stocks and bonds may fall for years, even if there is no recession, simply because of valuation and sentiment changes.”

“I am mostly in gold, miners, and cash.”

From John Rubino:

“War and pensions are conceptually about as different as it’s possible to be. But—in a measure of how far into Crazy Town we’ve wandered—they’re both taking the world in the same direction.”

“What happens next is also predictable. A growing number of pension plans will blow up as states and cities run out of cash, and the resulting chaos will lead the federal government to bail them out with another five-or-so trillion dollars of taxpayer money. Only this time around – with debt at every level of society twice or more as high as when the banks got their bailout – the result, especially in the currency markets, might be a lot less reassuring.” [In other words—expect a dollar collapse and precious metals spike higher.]

From Bill Holter:

“… what if trading partners do not trust each other or are even angered to the point of only accepting their own currency or … gold as settlement?”

“The result will be a sharply lower dollar, much higher prices for imported goods (currently $750 billion worth per year), and most likely shortages that develop quite quickly.”

“To finish, forcing a failure to deliver [gold] is probably the cheapest and easiest of all options China has in its arsenal. It is also the most nuclear as it strikes at the core of the West’s fraud …and as bonus it will mark up all the bullion China/Russia has purchased over the last many years!”

CONCLUSIONS:
  • Some adults in the U.S. manage their finances, savings and retirement.
  • A smaller number of adults realize the dangers and risks in the current financial environment.
  • And few of those who realize the dangers have protected themselves with silver and gold.
  • Prices for precious metals are low compared to prices for stocks and bonds, total debt, and currency in circulation. Expect reversals.
  • A change or reset is coming. Gold and silver investors will survive and prosper better than those who trust paper assets with huge counter-party risk.

Miles Franklin will sell silver and gold insurance. The rest is up to you. Call 1-800-822-8080.

Gary Christenson