It seems like it should be last week to me. Not because I was traveling on business all week last week but because groundhog day was last week. Thursday morning is here again and we see that almost 800,000 of our brothers and sisters have filed first-time unemployment claims last week. Even more disturbing is that ongoing claims have gone back over 20 million. It’s like groundhog day every Thursday morning!

I saw an unemployment number that was 39.6% reported. Quite a bit different than the U3 report of 6.3% unemployment. Since 20 million are already collecting unemployment right now and there are approximately 330 million people here in the USA the 6% is covered just by those on unemployment. Unfortunately, according to the BLS there are over 100 million people NOT in the workforce (up from 80 million in 2000). Add that 100 million to the 20 million current collectors and the unemployment rate would be 36.3%- far higher than great depression levels. While some in that 100 million are disabled it is still easy to see that 6.3% unemployment is nothing but a mirage.

Actually, there are only 150 million jobs (over 24 million are part-time) and 8 million self-employed. No matter how you slice it (158 million divided by 330 million = 47.88% of the population that could POSSIBLY have a job). This means that 52.12 or more than half of the population is in the wagon rather than pulling it. Some are kids, some are retired but that 39.6% number looks FAR more likely than 6.3%.(BLS)

Look around. Is the economy robust? Are all of your friends back to gainful employment? Are people acting as if all is as it was last year at this time? Are you comfortable making future plans not knowing what is coming next?

“Money” continues to be conjured up out of nowhere and “assets” continue to be bought at levels we cannot even imagine. This is leading to all-time highs in US stock indexes, all-time low yields for even the most risky of debt (just this week for the first time average interest on junk bonds fell below 4%) and a general complacency by the public that all will be well shortly.

Personally, I am not buying that we are going back to “normal” anytime soon. Even though most of the data supports reopening virtually everything we have our so-called “experts” now telling the public to wear two masks. We were told that one worked even though Florida (no mask mandate and no lockdowns) have less cases per 100,000 than California (total masking and draconian lockdowns).

I believe that this is about destroying the middle class. We were already well on the way to doom for low to medium wage earners but the shutdowns put 70% of small businesses OUT of business and destroyed the many jobs that they provided. No worries though- we’ll just conjure up “cash” from nowhere and hand it out.

Add to this that with all of the “printing and buying” the “authorities” are depriving we the people of our ability to earn decent returns on historically “safe” assets and turning even grandmas into gamblers.

In the meantime Wall Street is seeing record bonuses and the rich are getting richer than they have ever been.

This is also leading to rampant speculation in the stock “market” where a virtually bankrupt company that boasts $2.6 billion in assets, has $2.3 billion in debt and is losing over $100 million per year can be bid up from $2.00 to over $450.00 in a week. The story was small investors taking on the big boys. While there may be SOME truth to the narrative Wall Street on Parade reported that major banks were buying millions of shares in this company in December. I remember FDR saying “in politics nothing happens by accident”. It appears to me that on Wall Street nothing happens by accident either and those “in on it” are able to fleece the rest of us with virtually no consequences.

It also appears that there is no one in government that is going to take a stand and hold those responsible for this so it just continues- in our faces with virtually no consequences. Pay the toll and pass go. (Cheat all you want we will fine you what many will think is BIG money but is actually a small fraction of the ill-gotten gains).

I am seeing many get sucked into FOMO (Fear of missing out). While this game may go on a little longer it will likely end in a sudden manner that few anticipate. I WILL bet that the major banks and their buddies WILL anticipate it at just the right time and be short as the sheep get sheared for the third time in a little over 20 years.

I can’t reiterate enough how important it is to have some sort of hedge against this debt-based system imploding upon itself. I don’t have any idea when that may be, but I can assure you I would rather be years early than a second late.

We are clearly seeing inflation raise its ugly head already in asset prices first and now commodities are joining the party. Natural gas and oil are rising. Corn and other agricultural commodities are rising meaningfully and prices at the grocery store are rising. Of course, as oil rises it increases the cost of everything because of its use in plastics and in the delivery of goods. As the price of raw materials rise so does the cost of finished products- IF anyone is actually making them to start with.

I believe we are eating through our inventory and the supply chain is still clogged up in many ways.

I will end with a similar sentiment as I usually do. If you want to protect your purchasing power from the debasement of fiat currencies you need to buy REAL STUFF. I also believe that if you want your savings in real money you need to own gold and silver. As JP Morgan said long ago “Gold is money- everything else is debt”.

What is the value of a fiat currency where the guarantor is OBVIOUSLY not able to repay the massive promises made with that currency being worth anywhere near the value it currently enjoys?

That is a question that is EXTREMELY important as we move forward from here.

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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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.

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