Between 1966 and 1979, the Dow Jones Industrial Average declined from 995 to 742; easily, it’s the worst multi-year performance since 1906-22. On August 13th, 1979, the mainstream Business Week published the most infamous financial article of all time; i.e., “The Death of Equities.” As you can see below, the article was released within weeks of an historic low. Ten years later, the Dow hit 2,700; 20 years later, 11,500; and 30 years later, 15,000…
In 1996, I became a buy-side analyst focusing on the energy industry; and in 1998, moved to the sell-side, where I covered oilfield equipment, service, and drilling companies until 2005 – after which, I permanently left Wall Street. Thus, I was quite cognizant of the oil price plunge of 1998, taking it from the (then economic) price of $20/barrel to just under $10/bbl. by year-end. A so-called “perfect storm” of non-recurring factors catalyzed the decline; and like today’s mining industry, the global oil industry was utterly destroyed by just a few months of such uneconomic prices – catalyzing a rash of massive mergers, such as BP/Amoco/Arco, Exxon/Mobil, Total/Petrofina/Elf, Chevron/Texaco, and Conoco/Phillips. Yes, energy industry conditions were that bad; to the point that the world’s largest oil companies were nearly bankrupt.
In April 1999, oil prices were still languishing around $11-$12/bbl. – before exploding higher in the ensuing months, reaching $27/bbl. by year-end; en route to $150/bbl. a decade later. However, just before that historic rise, the May 4th, 1999 cover of the uber-Mainstream Economist magazine highlighted how the world was Drowning in Oil; and thus, prices could fall as low as $5/bbl. in the coming years. Yes, another infamous headline from the so-called “experts” gone awry…
Which brings me to yesterday’s headline from the magazine i.e., the ultimate PROPAGANDA machine of the “evil troika” of Washington, Wall Street, and Mainstream Financial Media. Yes, the supposedly staid, conservative Wall Street Journal. As I watch PMs surge this morning – following perhaps the most abysmal ADP Employment report in years – I espied yesterday’s gold-bashing “WSJ” headline. Not only is its sub-headline that Central banks are “cutting purchases” both erroneous and fallacious, but its banner headline that “Gold Fades from the Investment Picture” will likely become as infamous as the aforementioned Business Week and Economist blunders.
Hopefully, this lesson in mainstream media has demonstrated why you need to perform due diligence on who you get your information from. There’s only a handful of “good, smart people” out there – that is, who not only know what they’re talking about, but have your best interests at heart; and I ASSURE you, you will find very few in the MSM. Thankfully, most of them write for free; and in my view, NO ONE does it better than the Miles Franklin Blog.
Speaking of foolishness from the aforementioned “evil troika,” how about this gem from the soon-to-be-bankrupt Deutsche Bank – of how the Fed might “shock” the world by announcing QE “tapering” this afternoon. The only shock this article instills in me is that Deutsche Bank’s Supervisory Analysts allowed it to be published. I’m sure it is properly couched with plenty of mays and might’s; but let’s face it – the only reason it was allowed was to bring eyeballs to Deutsche Bank’s likely flailing research group. With America’s debt crisis worsening by the minute; no more “debt ceiling” to even attempt to contain it; “uber-dove” Janet Yellen about to assume the Fed Chairmanship; countless municipalities on the brink of bankruptcy; surging unemployment; fraudulently under-reported inflation; a collapsing real estate bubble; aggressive Chinese Treasury selling; an upcoming Congressional budgeting war; and the economic catastrophe that is Obamacare; the only remaining question is just how dovish today’s FOMC statement will be. Heck, even the Fed’s so-called “mouthpiece” – Jon Hilsenrath of said Wall Street Journal – says so. Let’s face it, the Miles Franklin Blog has been DEAD-ON in its forecast of “QE to Infinity” – thank you Jim Sinclair, for coining the term; and as I wrote yesterday, it won’t be long before today’s PPT-aided stock gains are swamped by those of the cost of living – and of course, PHYSICAL gold and silver. And don’t forget that tomorrow is “First Delivery Day” for the October gold and silver COMEX contracts, many of which are sitting pretty “in the money” – with potentially explosive gains if the Cartel can’t hold them back following today’s FOMC announcement (at 2:00 PM EST).
By now, it should be crystal clear how dire the global economic situation has become; whether in the United States of Financial Misery – where QE is making a desperate situation worse; Europe, where collapsing PIIGS and burgeoning unrest threaten to destroy the entire EuroZone; or the basket case that is the “Land of the Setting Sun.” Consequently, it’s difficult to believe ANYONE is not fearful of what governments might do to unsuspecting citizens – such as what recently occurred in Venezuela, Argentina, Cyprus, Poland, and Hungary.
David Schectman, Bill Holter, and I have written ad nauseum of the proliferation of currency and capital controls across the globe; which will unquestionably expand in the coming years. History tells us this is guaranteed; as does the hopeless financial situation of countless global governments. The above examples demonstrate how governments are already confiscating privately held wealth by numerous methods – both legal and illegal, and entirely immoral. And don’t forget, such issues were VERY close to being implemented in late 2008 in the aftermath of Global Meltdown I; including here in the U.S., where Congress actively debated the confiscation of all government-sponsored retirement plans. Worldwide, we’re just “one crisis away” from such debates taking on a life of their own; and in the meantime, we are still seeing such things occur on a daily basis.
Among these “discussions,” the most ominous are emanating from the so-called “International Monetary Fund,” or IMF. Clearly, this shadow organization works in league with “elite” bankers and politicians to create a desperate, subservient society – whether by design or not. Essentially everything they publish relates to printing money, restricting nations’ growth, and imposing draconian rules, regulations, and sanctions; and thus, the fact that it recently proposed “one-time” wealth taxes on Europeans and Americans alike should terrify those holding significant capital within the banking system. TRUST ME, these proposals are dead serious; and if you think this “ultimate bail-in” is not coming, you are clearly not aware of the age-old adage that a fool and his money are soon parted. The fact is, such “confiscation taxes” are indeed one crisis away; and in some cases, will likely occur well before “the Big One” destroys global economies – and currencies.
Jim Sinclair put it most succinctly when he recently pleaded with investors to “GOTS,” or Get Out of The System – per this checklist of recommended actions. I don’t agree with everything he says – as for instance, everyone cannot viably store their own metals or own a farm. However, for the most part, I agree completely with his sentiment; and thus, have been doing such things for the past five years.
Such “confiscation taxes” are but one of many potential obstacles TPTB will place in the path of “average Joes and Janes” like us. However, they are the most obvious; and fortunately, the most avoidable. By taking capital out of “the system” and holding it in the form of REAL MONEY – or alternatively, “under the mattress” – it will be much more difficult for them to confiscate it. This is indisputable, and just may save your financial life. And by the way, I am not condoning anything illegal; but instead, having people take precautions against an evil system that seeks to exploit you. And oh yeah, helping people into the only assets guaranteed to survive what’s coming – PHYSICAL gold and silver; en route to the next (real money based) currency system; which may well arrive A LOT sooner than most can imagine.