We showed you chart a yesterday suggesting markets are grossly overvalued, to me it is obvious and self explanatory.
To make the point even more stark, take a gander at this chart of the “high yield” index.
For those who don’t know, it is proper to replace the words “high yield” with “junk bonds”. These are THE most risky, lowest rated credits there are and have soared as investors have chased yield. Does this look like a bubble to you? Has your broker suggested this arena as a way to “diversify” or to strive for added yield …safely? Do you think the smart money is chasing these blindly?
A list of billionaires and very savvy investors must have already seen these or ones quite similar as over the last year or more they have been “lining up” and getting out. The list is long, Carl Icahn, George Soros, Stanley Druckenmiller, Sam Zell, Ray Dalio, Kyle Bass, and even the quintessential establishment figure Alan Greenspan… and it’s getting longer.
A couple of names were added to the list this past week, first, the famed hedge fund manager Paul Tudor Jones said the current “market mania will end in revolution, taxes or war” Most importantly he said, “this gap between the 1% and the rest of America, and between the US and the rest of the world, cannot and will not persist. we’re in the middle of a disastrous market mania“.
Do you understand what he is saying? Have you heard this before on many occasions …in my writings? In plain English without actually using the word, Paul Tudor Jones is forecasting we have a “reset” in our future.
Another name added to the list and far more shocking was former Dallas Fed member Richard Fisher. He was interviewed one day after his retirement and it was a doozy!
Please watch this interview, for the first 2:10 it was mostly niceties and he towed the Fed line quite well. The remainder, while not totally spilling the beans was VERY telling. He said the Fed is “uber accommodative, and investors are lazy for relying on the Fed”. He iced this cake when he said the markets are “hyper overpriced” amongst other goodies!
… And to think, it only took him one day of retirement to start telling some very real truths! (He also immediately joined the board of Pepsi Cola) I could only think to myself, what does he really think? I would love to play a round of golf with Mr. Fisher and get a little bit of cold Rocky Mountain (truth serum) Ale into him to hear the rest of the story. Might the timing of his retirement say anything to the thoughtful?
In any case, “they know”. They all know and I would say they “have known” for years. The truly bright knew before 2007 where this is all going but how do you stop a speeding freight train running toward a cliff where the tracks cease to even exist? There is still time to correct your position. You can still sell your stocks and bonds. You can still buy gold and silver and have them delivered to you. You can still move your bank balances into real assets with no leverage.
You can still move to protect yourselves, the question is “how much” time is left? I don’t know. The list of names above probably don’t know either as some have been as boisterous as I have been since 2007. The key is to look at the charts at the very top and understand “what” is coming. This is not going to be a crash of the real estate markets. It won’t be a crash of a “sector” of the stock market nor just the stock market. We will not watch as the bond markets seize up singularly nor will we see our currency collapsed and not affecting any other asset class.
No, what we have coming is a collapse of everything we have worked for and everything we have built and saved over our own lifetimes and that of our ancestors. All of our financial markets are connected and none will be spared. Another aspect is ALL foreign markets and their economies are tied together with everyone else’s …you could say “we are the world”! Nothing will be left unaffected. The only thing you need to know and understand is this, gold has always been money and always ultimately seen to be the most liquid safe haven on God’s green Earth. Man has never before in history been involved in a more dangerous and all engulfing mania based on a Ponzi scheme. It matters not when nor how it ends because it will end …badly What matters is how you are positioned when it does!
Things are looking quite frothy!
an understatement.
Sobering charts indeed! Like an ice cold bucket of water over your head! For some to wake up, a picture is indeed worth a thousand words and for others there is no hope.
The latest release of “numbers” this morning from the Census Bureau, are worth about as much as the BLS so-called “stats” and government inflation levels. That is to say, worthless and meaningless.
There is but one absolute economic truth left, that you can believe in – and that is physically held gold or silver retains value and worth. ALWAYS. Their value will NEVER fall to zero as will any other paper ‘investment’.
yes.
Hi Bill – Thanks for yet another great article! I appreciate all of your blog posts. I know we are on the path to financial Armageddon. It doesn’t take much to see how things are progressing very rapidly now…
Given this article talks about bonds, I have a question – I am unfortunately locked into a 401k where my money must languish until such time as I quit my job. I’ve already made the conversion for almost all of my other assets to PMs to reduce FRN exposure, but the 401k is stuck. My company won’t let me move it out – there are no law based provisions that provide an employee to get at the money until distribution age (57.5), which I am not even close to. So what to do with it? It’s mostly in bonds and stocks now, and there are no other tangible asset options. I’ve thought about quitting and living off that money for a while, but that has its own unsavory risks. Is moving it to a money market any better? It’s stuck in dollars so I’m thinking that I’ll probably have to just write it off. How sad I spent all those years saving to just watch it go down the drain…
I just gotta wonder how much pain, agony, and suffering ‘mericans can stomach before finally getting mad enough to do something. Obviously we have not reached that Rubicon yet.
Thanks again for all you do.
Ooops – meant since on that second paragraph 🙂
thanks Rob, tough one. Is there a competitor you could begin working for and thus you rollover (or out) and take control of your “old” 401K? Just a thought?
Thanks Bill – I have been looking for someplace else to go… I have some circumstances that make that difficult but not impossible, but the job market isn’t what it used to be. Hopefully I can find someplace else to go before things ‘reset’. Until then, I guess I have to be prepared to let go of the notion of retiring with money from my 401k. Thank God I can laugh, otherwise I’d be crying…
do the best you can do.
I know it’s still paper,I’m in same situation as you with 401k, I put in sprotts phys and pslv. Figured sprott at least has the metals behind my purchase and he’s on the good side
good move.
Another good one, Bill.
This sounds like rats fleeing a sinking ship. The problem is…once you’ve flung yourself into the ocean and the ship sinks, which direction do you swim?
Perhaps “out of the frying pan, into the fire” is a better analogy.
thanks Brain
Rob,
I’m no financial advisor, but my FA told me about the 401k loan program, and that is how I at least got a significant portion out of my 401k (and into PMs). Max loan is 50% of balance, or 50k (whichever is less). If you leave employment before loan is repaid, then it is reported as an (early) distribution, but I can live with that.
At least for now, it is still an option that you may want to consider.
Mr. Holter – another home run! I really look forward to your and Andy’s columns – keep up the good work.
Bill M
thank you Bill, will try my best.
First, we can all take heart in the fact that the economic problems we face ARE worldwide problems. That means that we all have skin in this game and if a solution is to be worked out, all of us will have to join together and make that happen. This is not an us vs. them kind of thing because a worldwide economic collapse will definitely level the playing field.
Second, TPTB are the ones who benefit most from the national and world economies, so they are the ones who have the most to lose when it fails. That gives the people with the power to affect this situation the incentive to do just that.
But none of us regular folks can really affect the outcome of a national or world situation. Both are simply beyond our control. What we can affect, however, is our own personal situation. Got preps? Got gold and silver? Got the will and the firepower to protect what we have? We’d better because anything less than this is gonna finish 2nd in a 2-man gunfight.
Just sayin’
it is fast becoming “us versus them” as the U.S. isolates itself.
Yeah, it’s going to hit the fan.
And there isn’t a damn thing I can do about it. Not when the only options in my 401K are:
1)- Index funds of US stocks
2)- Index funds of US bonds
3)- Index funds of International stocks
4)- Index funds of international bonds
5)- A “professionally managed” account, consisting of a “diversified portfolio” of 1 thru 4.
All I can do is discontinue contributions, and kiss the rest goodbye.
“America, F### Yeah!”
401K prison.
I complain to my company, express my concerns about the market etc, no reply or the give me the company 401k plan brochure. I gave up, they got it locked up
not surprising.
I wish our problems were just economic and finance related, usa launches icbm as a show of force a few days ago. What is this 1950s? Lunatics running the country, any global collapse equals world war. It’s human nature, you can see it coming together. You can smell another false flag on horizon. Sorry I just don’t see any good outcomes as Americans had 13 yrs of terrorism brainwashing they will rally around the flag if fooled again and that’s my worry
a…and sending in the BIG ships.
And today house approved lethal aid to Ukraine. It’s right in front of our eyes if you dare look for it
a declaration of war.
Thanks again Bill for the great article. Regarding gold as the place to be, I agree totally. I think it’s likely that once the US government loses the ability to manipulate gold prices, it will place a tax on it to discourage buying. What are your thoughts? And if you agree, how might the tax be structured?
maybe a windfall profits tax?
Time to get out from under the fan………
certainly don’t stand in front of it!
Another Excellent Piece.
prez campaign off and running, bill,
having a great time on tweeter exposing duplicity.
They are so easy. Yours, Derrick
https://www.facebook.com/derrickmichael.reid
thanks Derrick.