Weekly Article 03-08-2019
As I am writing this on Friday morning the stock markets are continuing to be weak. Many are blaming it on the jobs “report” which in reality can be almost any number the authorities would like it to be with the birth/death rate model they have been using for as long as I can remember.
It is funny how China, Asia and Europe were all having problems PRIOR to the report. I believe the real story is global economic slowdown- and not because of tariffs as we hear 24/7 but because the debts added in the past 10 years to fix the problem of too much debt 10 years ago is again starting to choke off the global economic engine. Even with trillions of dollars propping up asset prices the economy is still stumbling.
Of course, the usual suspects, Kudlow and company are all out there on the financial game shows telling us how this is an anomaly and not indicative of future slow growth. I saw him on CNBC this morning. I don’t believe Mr. Kudlow is stupid so he must just be regurgitating what he is being told to say.
I guess he doesn’t mind losing his credibility because I believe it will soon be crushed. I think he is at risk of becoming “Baghdad Bob”-remember that guy who told the Iraqi citizens that the infidels were on the run as their homes were being bombed into oblivion? Kind of like our economy with the money “printing” that many want more of even though it is really nothing more than theft from anyone who has to earn money to spend- which is pretty much all of us!
Who in their right mind would expect a good jobs report when almost every economic indicator- NOT JUST HERE BUT GLOBALLY- is showing an implosion of business activity, shipping rates and if the DOW Transports fall again today it would make it an historical 10-day losing streak.
Stores and factories are closing all over the place but “Wall Street” whatever that actually is- was supposedly disappointed with the jobs number?
I just read this morning that the Federal Reserve reported that credit cards past due for 90 days or more have hit an all-time high. We all know auto loan defaults are at an all-time high. Student debt, personal debt, auto debt, all at all-time highs. Underfunded pensions and local, state and municipal debt at all-time highs. Imagine- in the GREATEST ECONOMY OF ALL TIME! Of course, let’s not forget the 2 trillion dollars that we have gone deeper into debt in the last 2 years. What would GDP look like without that? (1)
Sorry folks! This story has been played out numerous times in history and there is not one example of a happy ending for society overall. However, I believe that with some forward thinking and strategic planning- which can seem daunting at times and sometimes even futile at the time- your outcome could be markedly better.
Look past the headlines which are meant to make you look into areas that aren’t really all that important so you do not become aware of how precarious the position we are in really is.
It was obvious to me years ago but, in my opinion, just recently confirmed that the central banks are out of bullets except for “printing” money and propping up asset prices. That is fine and dandy for the 1% but the rest of society is being burdened with higher costs for virtually everything and wages are not following suit.
This is what is leading to riots across the globe.
If I am correct and the “printing and buying” is all that is left it appears that most currencies will not be a good store of value. It appears that almost all “real” assets like food, water, energy- pretty much anything that has to be produced will ultimately have to be purchased with a lot more of the currencies that are falling in value.
Keep in mind that gold has held its purchasing power for over 5000 years. Keep in mind that those in the know- Central Banks, Too-big-to-fail Banks, Countries and billionaires are buying gold right now at record levels. (2) Also keep in mind that silver, which historically trades at 15-20 ounce Per 1 ounce of gold. Currently it takes 85 ounces of silver to buy one ounce of gold. That is also a historical anomaly which is why I often say I believe that silver is the most undervalued asset on the planet even though it is used in almost every single electronic device that we use.
It appears to me that most commodities are underpriced as we speak. It also appears that gold and silver, which are both industrial and economic metals are the most undervalued from what I can see.
Also keep in mind if confidence is lost in either fiat currencies or others ability to repay loans or bonds that gold and silver are not someone else’s liability.
1- Debt sources Bloomberg, CNBC, Seeking Alpha
2- King World News
Remember try to buy low and sell high!
Food for thought … Be Prepared!
Mike Savage, Financial Advisor
2642 Route 940 Pocono Summit, Pa. 18346
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