Are our leaders trying to deceive us into believing the economy is better than it really is? Mike Savage, financial consultant in Pocono Summit, gives us his opinion on the value of gold, silver, and crypto currencies, and how stock, bond, and real estate markets are being propped up. Get in touch today for a consultation.
Weekly Article 09-21-2018
All around us we are seeing numbers that are massaged to make our economy appear much stronger than it actually is. I believe anyone who is paying attention can easily see that the numbers we are being fed by the powers that be bear little resemblance to what we are seeing with our own eyes in the real economy.
If we were living in the USA that I grew up in we would have a clear picture of the actual 20% unemployment rate (Shadow Government Statistics) rather than the reported 3.9% that the financial game shows tout daily. In the days when there were morals and a real determination to fix our problems the public would be aware of the problem and our representatives would work on a solution. Today, when the morals appear to be a thing of the past, we let the Fed “Print” money- pretend all is ok and keep adding to the national credit card. This postpones any solution and creates far larger problems the farther down this road we go. Whenever I hear an “expert” tout “full employment” I know what they are full of and disregard any opinions that they might have.
When I hear about the booming stock market without any explanation of why it is rising it is apparent to me that this fits the story they want to tell. The entire rally recently can be traced to a few companies that buy back their own shares, have central banks “printing” up money out of nowhere and buying their shares. Add to that creative accounting and you have a trifecta of illusions.
This again is from a lack of morals. It APPEARS there is more demand for these stocks as the buybacks reduce the shares (also makes the earnings per share appear better) and central banks conjur up money to purchase shares that create false demand for the shares where far less would exist without the central bank purchases.
I also don’t hear too much of a mention about the carnage taking place in many emerging markets stock and bond markets. It is not unusual to have a crisis in a country or two but as I am writing this there are many countries that are in deep trouble financially like Venezuela, Argentina, Turkey, Iran, Brazil, Indonesia, India and many more. Notice I didn’t even bring up Greece, Italy and most other Southern European countries that would likely already be bankrupt if the ECB was not buying up their debt and causing abnormally low (in some cases negative) interest rates. Someone is also buying a load of our treasury notes to keep rates suppressed even though they (rates) appear to be breaking out also.
It is also highly unlikely if the world economy was so robust that the price of lumber would be down 40%, copper would be down 20%, and the largest exporting countries stock markets (Germany, China and South Korea) would all be down 20% +. It is also unlikely that the shipping companies would be struggling as they are today if all was so well. (Charts and Michael Pento article)
I have never seen such an intent to deceive as I am seeing now. I see every effort being taken to suppress the price of gold, silver and crypto currencies while every effort is being made to prop up the stock, bond and real estate markets.
The propping only seems to be working here in the USA and many here are unaware of the problems that surround us and that we are likely to be drawn into in the near future.
I am also seeing that the law of supply and demand can be derailed by those who are allowed to sell assets like gold and silver that they pretend to have as they sell paper contracts (not physical metal) with a market order when the thinnest trading takes place. Almost like clockwork lately at 4AM EST and 8AM EST you can see those sells take place on the charts. (Kitco.com)
Anyone who was intent on making a profit would place a limit order to get a certain price. Selling with a market order is ensuring the price will go down rather than getting the best price. Just one sign of many.
In the meantime, it has been reported by King World News that India has been buying gold in record amounts. Russia has sold most of their Treasury notes and have purchased gold for their vaults. It is well documented that China has a massive hoard of gold. Turkey, Iran and others are also purchasing gold.
Banks are purchasing gold and silver- and the price is down???
As Dr. Paul Craig Roberts (former assistant Treasury Secretary) says The only way you can have increasing demand, steady or declining supply and a falling price is- fraud. I agree!
For those of you who can’t wrap your arms around what I am saying here and insist on riding this market off of the cliff that I believe is coming I would caution you to at least buy shares of companies that provide the necessities of life. At this time many are nowhere near as overvalued as the hype stocks and will likely be the stocks that not only survive but actually provide real returns as the recovery takes place.
Anyone who follows the main stream news and considers themselves informed I have bad news for you. At best, you are misinformed. I have yet to see anything in the mainstream media about the $21 Trillion that is missing from HUD and the Department of Defense between 1998 and 2015. (Forbes) Or how about the $16 trillion for the banks that was handed out in 2009. (GAO) These examples alone should be proof enough that none of us have any clue what really happens behind Washington and the Fed’s closed doors.
The only thing I am sure of is that all of these financial shenanigans will leave us (regular people) with hell to pay for the financial mismanagement that has taken place since 1913 (Fed created) and went into overdrive after 1971 (Nixon takes us off the gold standard and any anchor for the US dollar) and became totally absurd since 2009 and is getting more and more insane daily.
In my opinion, anyone who has not taken steps to prepare for a major disruption is doing a great disservice to themselves and their families.
Have some cash available. Have some metals available if you can afford some. Have extra food, water and medical supplies. Heck, if your area gets hit with a major storm you can use this stuff if I am wrong and there is a way to unwind some $270 trillion in global debt that no one has thought of.
Remember this- the debt globally- is growing EXPONENTIALLY. Our incomes are NOT. We still think in terms of hundreds, thousands and if fortunate enough- millions. Our leaders have us on the hook for hundreds of trillions. The banks have bets (derivatives) that are reported to be over a quadrillion- I’ll bet that’s a number you didn’t learn in school! (Seeking Apha)
You can’t have unlimited growth- which is what we would need for this system to survive- in a world that has limited resources. We will learn that in due time.
Mike Savage, ChFC, Financial Advisor
Securities are offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc.
Any opinions are those of Mike Savage and not necessarily those of RJFS or Raymond James. Expressions of opinions 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 n ot 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.
Commodities are generally considered speculative because of the significant potential for investment loss. Commodities are volatile investments and should only form a small part of a diversified portfolio. There may be sharp price fluctuation even during periods when prices are overall rising. Precious metals, including gold are subject to special risks, including but not limited to: price may be subject to wide fluctuation, the market is relatively limited, the sources are concentrated in countries that have the potential for instability and the market is unregulated.
Diversification does not ensure gains nor protect against loss.