I believe that the news that I saw yesterday on MarketWatch is the clearest sign that I have ever seen that we are nearing the cliff that has been approaching for quite some time. Before I share this news, I want to make a few points.

#1 Throughout history we have seen fiat currencies introduced and were generally backed by something tangible. The paper (prior to computer blips) were really just a receipt for something tangible like gold, silver or something else of VALUE. Since 1971 our “money” is not exchangeable for any hard asset unless we purchase those ASSETS on our own. Even the “money” that we THINK we own is a debt instrument (Federal Reserve NOTE) that is owed back to the central bank. We actually OWN far less than we think.

#2 Countries that have experienced hyperinflation like Weimar Germany, Venezuela, Zimbabwe, and many other banana republics, have had the same set of circumstances that we in the USA are facing right NOW. A once thriving economy was brought to its knees by political corruption, the stifling of competition by those “in charge”, the manipulation of the news, and most importantly, the “printing” of “money” to give the ILLUSION of a thriving economy when, in actuality, the economy was imploding. All of the economic indicators have been pointing HARD DOWN for years and if it wasn’t for the conjuring up of cash and spending for endless wars the economic catastrophe taking place here would have no place to hide.

#3 These countries manipulate the economic numbers and tell everyone how “GREAT!” things are right up to a total collapse. Unemployment is too high? Change the way it is calculated. Inflation is too high- ditto! Larry Summers, former Treasury Secretary under Bill Clinton, recently revealed that if the rise in interest rates were included in the inflation numbers it would have increased from the 3% reported (totally fictitious to start with) to a whopping 10%. Add 7% to the REAL number and we would be closer to 20%. (John William Shadowstats)

#4 As governments get more desperate, they use INFLATION as a tool to extract wealth from the population. A GREAT illustration is that if you purchased the DOW on August 16, 1971, and measured “gains” with REAL money (GOLD) your “gains” would be MINUS 30% today. Even so, how many capital gains taxes have been extracted not only from stock gains but real estate and other gains that were not GAINS at all but a dilution of your purchasing power?

#5 Prior to the collapse of a currency we have seen throughout history that, as people get more desperate, societies start to break down. The rule of law either ceases to exist or there are two sets of rules. I believe that anyone watching is seeing the decay of our greatest cities taking place right before our eyes.

#6 As the collapse gets nearer the more manipulation takes place to buy more time. This is because any retreat would lead to an immediate implosion and the wrath of the population, while extending the program allows for blame to be laid elsewhere- like a WAR or an external factor when, in reality, the people who were “in charge” and conjuring up the cash are the culprits.

#7 It is IMPERATIVE to understand that with every intervention that takes place the chasm between PRICE and VALUE gets wider. This is why, after unprecedented manipulation, the VALUE you are getting for propped up assets like stocks, bonds and real estate is likely FAR below the price you are paying while the VALUE of suppressed ASSETS like gold, silver and other hard assets is likely FAR higher than the PRICE suggests. BUY LOW- SELL HIGH- which assets should you buy?



Now for yesterday’s news that I found to be so telling.

It has been obvious that there have been extraordinary measures taken to make the financial system appear to be more liquid than it actually is. This has been done with REPOS, Reverse REPOS, the Bank Term Lending Facility, etc. In addition, the buying of stocks and bonds.

We have now come to a point where we are entering what I consider to be the Venezuela Stage.  Our economy has been hollowed out and we are conjuring up cash to pay current bills, retire maturing debt, and funding wars around the world- all while our infrastructure rots under our feet.

Yesterday, I believe it was acknowledged that we are near the end of the road.

MarketWatch reported that the US Treasury will be buying back US Treasuries to “help US Debt management”. Who will be the entity that will do the buying? The New York Fed. Why is this? Because the Treasury is BROKE. The NY Fed will have to conjure up the cash to buy those bonds. Keep in mind that most of the rest of the world is shunning our bonds- for good reasons. Also keep in mind that we have a HUGE problem of having to sell around $14 TRILLION in bonds this year to retire maturing debt and also to pay current bills. Also keep in mind that a lot of this maturing debt is going to cost FAR more than the debt it is replacing which could lead to even more “printing” to cover that cost.

We also have to keep in mind that the Fed can definitely lower the overnight interest rates BUT they would actually have to conjure up “money” and buy bonds to lower rates on the other maturities. Knowing that we have $14 TRILLION needed for current funding and possibly more I find it hard to fathom that they could “print” enough to meaningfully reduce rates. Of course, if they attempt it- which cannot be ruled out- the dollar would be destroyed even more quickly.

I believe that the Fed COULD save the bond “market” but in doing so would cause a dollar collapse. They COULD save the dollar but that would lead to a bond “market” collapse- and likely a bust in stocks and most assets like we have never seen before.

My guess is that they sacrifice the dollar. This will also allow them to initiate the CBDC that they are planning on.

This is the major reason why the pullback in gold and silver prices should be looked at as a gift. After a major runup it is normal to see a pullback. Personally, I believe the writing is on the wall for the dollar AND the current existing debt-based financial system.

Remember- it is not the ASSETS that change. It is the currencies that fall in value (mainly because of being conjured up in massive amounts). It is not gold and silver going up and down. The VALUE is there. The price is manipulated with paper contracts which changes the PRICE but has no effect on VALUE.

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.

Commodities are generally considered speculative because of the significant potential for investment loss. Commodities are volatile investments and should only be a small part of a diversified portfolio. There may be sharp price fluctuations 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. Companies mentioned are being provided for information purposes only and is not a complete description, nor is it a recommendation. Investing involves risk regardless of strategy.