Daily Quotes
Three is the Charm?
Mike Savage
In our current financial system, the US dollar has unofficially defaulted twice. First, in 1971 the US dollar was divorced from its backing with gold- basically defaulting on our promise to the rest of the world to have the dollar be as “good as gold”. This led, over time, to the second unofficial default in 2008 when the only way to stop the implosion of the entire financial system (as we were told and so it seemed) was to conjure up tens of trillions of dollars from nowhere and hundreds of trillions of currency units (also from nowhere) to pretend that we still had a system where we could still fund our debts with productive income. This, however, was just a clever ruse to prop up asset values and buy time. The real story is that, since then, we have been like a family that just keeps running up another credit card to pay off the last one and also opening up and maxing out new ones over and over again.
Buy time it did! Far more time than I could have imagined especially since the act of “printing up money” is obviously inflationary and on top of that each round of new “stimulus” has to be larger than the last to get the same results.
There have been many signs that the system was breaking down like in 2008 when $16 TRILLION was funneled to the banks and again in 2019 when $9 Trillion was again funneled to the banks- long before anyone had ever heard of the virus. Of course, we now also have the Fed (and probably other central banks also) doing repos and reverse repos to pretend that there is a lot more liquidity out there than there actually is. This likely leads the algorithms to BUY and raise asset prices. How much repo are they doing? Try around 2 TRILLION every night and setting records month after month.
It should be pretty obvious that the Fed, like many public companies, have 2 sets of books- the one for public consumption and the other “official” book. The signs here are, if you go to the Fed’s website, it appears they are shrinking their balance sheet. This doesn’t jive with the fact that they have to be purchasing hundreds of billions in government debt to keep rates suppressed. It is also interesting that Jerome Powell, in his latest speech, said specifically that the Fed is not going to sell securities- even though “officially” they don’t buy stocks even though they have a trading desk- I guess it’s just for show!
This has gone on for so long and inflation appeared to be tame for many years after this illusion started that many are sure that the powers that be will work this all out. Call me skeptical. There are many reasons why I believe we are getting VERY near the end of this long road.
- We have been conjuring up “money” to buy bonds to manipulate rates which manipulates almost all prices. This has led to NO PRICE DISCOVERY in the bond and stock “markets” for years. The level of mispricing of ALL assets cannot be overstated.
- We have been issuing new debt to pay interest on old debt and retire some old debt. In the past we had “help” from our trading partners like China, Japan and Saudi Arabia that would help purchase a lot of this debt. Recently they have become net sellers- not buyers. This leads me to believe that the Fed has to be picking up the slack- likely in the trillions.
- While the economy is imploding the “markets” are not. This disconnect is most likely a result of central banks and their friends buying it all and preventing the “market” from doing its one job of discovering the correct price for each asset. If this is true HOW could the Fed’s balance sheet possibly be shrinking? It couldn’t. This also gives me a reason to remember the $40 TRILLION plus that Dr. Mark Skidmore from Michigan State University has discovered spent but not accounted for. My guess- propping up assets in the shadow banking system where there is no oversight and no regulation.
- The constant manipulation and conjuring up cash out of nowhere (which also creates NOTHING of value) except to give the extraordinary privilege to a few to get “something for nothing”. Of course, anyone with half a brain knows that there is NEVER something for nothing- someone always pays. That would be me, you and all the citizens under this system.
- It is becoming pretty obvious that the current trajectory is leading to tremendous instability as the “HAVES” are flaunting their wealth and power while those who were struggling before are finding it hard to survive today because of the inflation we are seeing. There are riots taking place globally- many violent- that are being ignored by our mainstream media. Almost all of the civil unrest taking place is because of rising prices and the inability for many to keep the lifestyle they are accustomed to at best and not being able to afford the necessities of life at worst.
- I believe we are at a point right now where the very act of “printing up money” is becoming the disease rather than the cure. The central banks seem to have two choices #1 Protect the Currency (this could lead to an implosion of asset prices) or #2 Protect asset prices (this could lead to an implosion in the purchasing power of our dollar). I don’t believe there is a way to do both- even though they are pretending they believe they can. Many call this “Maximum Saturation” where the level of debt becomes so onerous that inflation gets out of control and the life’s work of most people gets wiped out. This tends to happen slowly at first, pick up steam and then … wham! All at once. Don’t be surprised because all the signs are here.
- A few weeks ago a video was released of an FDIC meeting where they discussed a market meltdown and bank runs and how they could prepare without alerting the public. What do THEY know that we don’t? I’d be worried too if I had $200 Billion insuring $9 TRILLION!
- The lies are becoming far more apparent. Inflation is too high so- even though they massage the numbers to make them around 50% less than our inflation in reality- they are discussing CHANGING the way they report CPI- AGAIN! 4% unemployment? NOPE! 7% Inflation- I wish! That would be far better than what we are living. Gold and silver demand is off the charts- and the price drops? That’s called fraud if you or I were to do it but manipulation if those “in charge” pull it off while buying record amounts for themselves. .What do THEY know that you don’t?
- A couple of quotes from Gerald Celente “When people lose it all-they lose it!” See riots around the world. “When all else fails they take you to war” To me, there appears to be no reason to fight Russia or anyone else for that matter. It would be better for everyone if we traded with each other and were to show mutual respect rather than being the world’s bullies to get our way. We are not dealing with Sadaam Hussein or others who really couldn’t fight back. Hopefully an adult will arise and put an end to this nonsense before we have FAR more to worry about than our investments.
If all of this seems nonsensical to you it is because it is. It is to further an agenda and it is not likely good for any of us regular people who just want to live in peace and have a little happiness and hopefully some prosperity.
It is my opinion that this current monetary system is on its last legs and will be replaced -as advertised by the BIS (Central bank of central banks) so that the CBDCs can be rolled out by 2025. To me, this suggests that a crisis of some sort is needed in the next 6-18 months. This is likely the reason for central banks buying record amounts of gold year after year. 2022 was an all-time record. It appears to me that the third “unofficial” default will come shortly and usher in the end of our fiat illusion.
BE PREPARED!
Any opinions are those of Mike Savage and not necessarily of those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice. The information in this report does not purport to be a complete description of securities, markets or developments referred to in this material. The information has been obtained from sources deemed to be reliable but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.
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6.1.23
"When the Ponzi scheme's scaffolding begins to finally shake loose and gyrate, it's every man for himself." … Kevin Depew