Rules help guide us through uncertainty.
THOSE WHO MAKE THE RULES:
For perspective on Washington D.C. and Wall Street, we listen to wisdom and wit from Bill Bonner:
“We look at the passing parade in Washington through a cynical lens…
No situation is so hopeless… so absurd… or so disastrous that the feds can’t make it worse. No policy is too stupid… too counterproductive… or too corrupt that it can’t become the law of the land.
And no man is too craven… too degenerate… or too much of an imbecile to be disqualified from public office.”
The public officials described above make the rules.
MEDIA AND GOVERNMENT RULES:
These rules come from the (slightly edited) wisdom of Alasdair Macleod.
1) Don’t believe what governments say, because they will tell you what they want you to believe.
2) Don’t believe anything coming out of the intelligence services; if the information is good it is highly unlikely to come your way, and if good information does come your way, it will be indistinguishable from conspiracy theories. [Most of what they distribute to the public is a distraction or wrong…]
3) Don’t believe conspiracy theories because they are almost never true. [A few conspiracy theories have become conspiracy facts. Others facts will be revealed in coming years.]
4) Don’t believe government statistics. [A few come to mind… the CPI, GDP, unemployment, expected deficits, revenue projections, military spending…]
5) Don’t believe western analysts, financial or otherwise, particularly when commenting on China or Russia.
6) Don’t believe the mainstream media; it usually toes the establishment line. [People are beginning to understand some of our regular news is fabricated.]
7) Don’t be swayed by nationalism or patriotism; remember Dr. Johnson’s aphorism, that patriotism is the last refuge of the scoundrel.
CENTRAL BANK AND DEBT RULES:
8) Central banks extract wealth from governments, businesses and individuals. They distribute that wealth to their owners and to the political and financial elite. Any appearance that the central bank is helping the middle class is a happy coincidence with a short life expectancy.
9) All central banks and commercial banks devalue currencies, which reduces the purchasing power of currency units and raises prices for everyone. The process is intentional because it assists the transfer of wealth to the political and financial elite.
10) Some western central banks value gold, but only if they hold it and citizens don’t. One hundred years ago circulating currencies in the U.S. were gold and silver coins and paper bills backed by gold and silver. In 2018 circulating currencies, whether digital or paper, are debts of the Federal Reserve. A transition from real gold money to digital debts (funny money) accelerates the transfer of wealth to the political and financial elite. However, digital units are convenient for Americans addicted to plastic. The banking cartel takes a slice from every transaction which increases their profits and the prices we pay.
11) Inflate or die! Richard Russell understood the need for monetary inflation long ago. Deflation in an economy addicted to and overwhelmed by debt creates disaster! Central banks will do almost everything to avoid widespread deflation. They will continually inflate the currency supply.
12) Either massive inflation or default will be needed to extinguish overwhelming debt. Pick your poison and remember the banking cartel created those choices.
BASED ON THESE TWELVE RULES WE EXPECT:
a) Expect on-going inflation of the currency supply and increasing consumer price inflation. The inevitable consequences of creating (from nothing) $20 trillion dollars of central bank liquidity are much higher prices for stocks, bond, real estate and commodities.
b) Stocks, bonds, and commodities: In late 2018 it appears stocks have peaked and are falling, perhaps for several years. Bonds peaked in 2016 and should fall for a long time. Commodities bottomed and will rise for many years as the banking cartel devalues currency units.
c) Our financial system benefits the political and financial elite. The bottom 95% struggle under heavy debt loads and higher prices as the banking cartel demands interest and extracts a slice from almost all transactions.
d) Western central banks discourage gold ownership by citizens and prefer an indebted citizenry. Asian central banks accumulate gold and encourage their citizens to own gold. Gold imported into Asia comes mostly from western gold hoards and western central banks. It will never return.
- The political and financial elite rig the US financial system for their benefit. They own congress and encourage corrupt legislators. The swamp will not be drained.
- Purchasing power of currency units has declined since 1913. That devaluation process will persist.
- Protect your savings and retirement with something that retains value. Gold and silver bullion and coins have a multi-thousand year history during which they maintained value. Unbacked paper currency units always decline in purchasing power, usually to zero. Gold and silver prices will rise as currencies are devalued. Capital will shift out of paper and into real money—gold and silver.
- Gold and silver are not always the best vehicles for preserving purchasing power. Their prices increased from 2002 to 2011, but fell after 2011. The stock market has boomed since 2011 while gold and silver fell. Because stocks have begun their bear market and gold and silver prices have bottomed, moving capital from stocks to gold and silver is sensible.
- Act like an Asian central bank. Accumulate gold and silver, avoid the debt-based and guaranteed-to-devalue Federal Reserve currency units, and avoid sovereign debt. Ignore mainstream media, government statistics, and other distractions.
Miles Franklin will recycle devalued fiat currency units into real money—gold and silver. I suggest silver and patience.