I see many articles out there promoting the idea that the Fed and other central banks are losing control of the situation that they themselves have created. They make many good points about the fact that the debts that have been piled up globally could not ever be repaid with the current values of the currencies.

They also bring up some extremely important points about the fact that we are facing record-breaking amounts of bankruptcies for both businesses and individuals even though there is a massive effort to forestall the inevitable with trillions in “money” from nowhere to hide massive insolvency.

Despite all of the negative news and the shutdown of the economy the powers that be are keeping most people in the dark with massive “print and buy” schemes to keep bond rates low and stock markets high while their buddies at the financial game shows and others in the mainstream media are parroting their words and misleading most.

For those who can discern fact from fiction- not enough of us it appears- it is not hard to see that the “V-shaped recovery” exists only in the minds of those in charge. The miles-long wait for food in many places is a sure sign that regular people are suffering. This is not only in rural areas but is happening in New York and many other metropolitan areas. With the “extra” unemployment being at least reduced, if not ended, the lines will likely be getting even longer soon.

I also don’t believe for a second that we would be seeing the violence and destruction we are seeing in our major cities if all was indeed well. To get people this worked up I believe they must be feeling quite hopeless and are acting out in the only way they know how. Sad but likely true.

It appears to me also that this will likely end with a THUD, and that those placing their trust in the central bankers to “have their backs” will likely suffer through the third crash in 20 years. I have been using “” when saying markets because our “markets” are not real markets at all but they have become more like gambling casinos where the house always wins. These are the most managed markets I have seen in my over 30- year career and that is NOT a good thing. An actual market would have a willing buyer and a willing seller agree on a fair price. These days, trillions in fiat currencies have distorted every market imaginable and has removed all price discovery- the market’s only true job. As in the other two crashes the market will ultimately win out and true price discovery will take place. It is only a question of when.

BUT WHAT IF… all of this has been done on purpose? WHAT IF… the central banks had a plan to bankrupt virtually everyone and then foreclose on all of the assets meaning that they would own virtually everything with nothing but keystrokes on a computer?

Sound far-fetched? I know my assertion that the metals markets were being massively manipulated was met with almost universal disbelief- until the guilty pleas started coming in.

In this case the evidence is mounting that the central banks are seizing control- not losing it. Many seem to be looking at our current situation and thinking the central banks actually care about you and me. Get a grip! If the central banks gave a darn about anyone but themselves and their owners (the major  banks) would they conjure up “money” out of nowhere at virtually no cost and then charge us interest on an “asset” that didn’t exist until a number of clicks on a computer? Basically, we are paying interest to an entity that can create this “asset” out of nowhere and it actually does nothing for anyone- but them!

The Fed is purchasing $4.5 trillion in junk bonds. They are called “junk bonds” because the companies issuing the debt are in some way compromised. The risk is greater than with an investment grade bond. Why are they doing this? The narrative is that they are bailing out companies and saving jobs. My belief is that they are positioning for the ultimate failure of most of these companies and that they will be in a position to own many of these companies free and clear when the debt is ultimately defaulted on and their bonds become equity (stock) in a company that has had its debts written off. Of course, the assets of the company would still exist. Airline companies would still have planes and infrastructure, car rental companies would still have cars and infrastructure, utility companies would still be producing electricity, water and other necessary things.

With the debts liquidated in bankruptcy these new entities would be lean, mean and ready to make massive profits in the expected recovery.

That takes me to the next sign. Small and medium sized businesses have been culled in this lockdown while large businesses have been propped up. If this was really about saving jobs the small companies would have been propped up because small to medium sized companies provide 70% of all jobs. Many of these companies that closed down will be seen no more. Ditto for the jobs they provided.

According o the latest NFIB survey on July 21- 71% of small businesses have spent all of the PPP funding they got to keep employees. Last week’s new unemployment claims of over 1 million again is a bad omen going forward.

From March 1st to August 1st over 90,000 small businesses have closed their doors for good (YELP).

Corporate America has never been in more debt, has never been as highly valued (based upon stock price) and has never faced an economy that is still faltering from an ill-conceived lockdown. What could go wrong?

It appears to me that retail investors are being set up to bear massive losses in the stock market (Stock holders in a bankruptcy almost universally get wiped out 100%) while secured bondholders get paid first. Keep this in mind while the stock “markets” are at valuations seen exactly NEVER in recorded history. They have NEVER been as richly valued as we are seeing now- not even in 1999. At least in 1999 it appeared that we had an economy that was vibrant and appeared to be accelerating. Now we have an illusion of normalcy because of trillions in new debt that will eventually have to be repaid. Notice I said normalcy- not vibrance or anything like it. As a matter of fact, our economy is DEAD. Without government transfer payments we would be well aware that we are in the beginning of a depression that will likely dwarf 1929 and lead to massive changes in most people’s lifestyles.

Many are already seeing a large change in their freedoms and ability to pretty much do what they want. Look for the loss of freedoms to become more prevalent as people start to wake up o the fact that our economy is in freefall and there is no magic “ON” switch. It appears to me that they don’t want an on switch until they carry out their plan- to buy it all with the click of a button- at our expense of course.

The reason this is so important is that if this is indeed the case you need to somehow protect YOUR assets so they don’t become someone else’s assets. Getting out of debt is a start. Owning physical goods is another start. Having a plan to protect your physical goods is important- particularly if we see what we are seeing in major cities spread outward- which is likely.

Having cash on hand is also smart just in case the system is shut down- even for a few days.

Gold and silver are also good things to have because they are universally accepted as money and have been for 5000 years. They are also nobody else’s liability so you don’t have to rely on being repaid by someone else.

Even if I am dead wrong about the central banks intentions (I wouldn’t have written this if I thought I was) I would still get prepared for a long period of economic stagnation at best and depression at worst.

In any case the central banks can stop providing new credit and the system would likely implode almost immediately and many would be impoverished beyond their wildest imaginations. This is why this is extremely unlikely in my opinion. Or they could continue to “print” until all of the “printing” renders the underlying currencies almost valueless. This is not much better of an outcome and may actually be worse in the long run by dragging the process out but it will at least buy time for those prudent enough to plan ahead. It also allows for time to hope for some kind of economic miracle- hey you never know!

While this may sound like a disaster in the making it is also the greatest opportunity that we may ever have to purchase assets that we couldn’t imagine owning today. Of course, you have to have purchasing power when the bargains present themselves which I believe they will.

What makes most sense to protect your purchasing power in this situation?

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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