It has been well documented that throughout history wealthy families have transferred generational wealth with mainly real estate, art, and gold. Of course, other assets like silver and antiques would also be a preferred way to transfer wealth also. The one thing these assets have in common is that they are real assets. They cannot be conjured up out of nowhere and, also cannot have no value and go to zero like paper assets sometimes do.
If a southern family in the 1800s stored their wealth in confederate cash, what would it be worth today?
If they held confederate bonds what would they be worth today? If there were southern companies that defaulted on their bonds and their common stock shares were wiped out what is that value? On the other hand, if that wealth was held in gold or silver what would that be worth today?
I think that this is an important point as it looks like the US dollar is in a terminal decline. It is also important because IF the US dollar is in terminal decline as I suspect then virtually all US dollar-based assets are at risk of an implosion.
Why? Because the “printing and buying” scheme by the central bank which is all that is keeping asset prices anywhere near where they are today will be rendered useless because the “money” being conjured up out of nowhere will have such little value that anyone with a brain will want to be paid in almost anything else. Who cares if your stock portfolio is worth a million dollars and it costs that for a fancy meal?
Price is what you pay- value is what you get. With stock valuations at levels NEVER seen before in history it appears that the price being paid is high but the value in return is historically low. The same can be said of artificially manipulated bond prices from treasury notes to the junkiest of junk bonds and all in between.
Real Estate is also artificially propped up by low interest rates and institutional buying with the low rates.
At the same time this cheap money and, also a lack of any oversight, has allowed many of these same players to keep the price of metals-particularly gold and silver artificially suppressed by conjuring up paper contracts and selling them into the market to manipulate the prices lower. The level of fraud here is hard to fathom. With all of the “printing” that has taken place it is likely that gold and silver may be undervalued by 10X in my opinion.
This also leads me to believe that the price being paid for physical silver, gold, and platinum is EXTREMELY low and the value is extremely high. Many may ask how is $1800.00 low for gold? It was $250.00 in the year 2000. If we take into account all the fiat currencies and particularly the US dollars that have been created out of thin air you will find that, based upon that, the price of gold is cheaper today than it was then.
Of course, we have the central banks going to further and further lengths to extend the fiat currencies life cycles but as sure as the sun will come up tomorrow the sun will also go down on those who are manipulating the system for their own personal gains at our expense and keeping a zombie economy functioning for a while longer.
It is my opinion that there is tremendous abundance in the world. The problem is that a few at the top hoard assets and make it seem as if there is a lack of many things. They promote depopulation as a way to extend the world’s lifecycle. Of course, if the trillions in assets were unleashed upon the world instead of being hoarded by the few, then it would be apparent to all that the earth can more than sustain the billions of souls who are here- and likely plenty more.
This hoarding- and the “trading” that takes place so that those few can also move prices of almost everything to create profits for themselves- also out of nowhere without creating any value of any kind will likely lead to their ultimate downfall. The reason is simple. As they take their skim off the top it distorts prices. As they manipulate prices for THEIR benefit many of those producing goods are forced out of business because there is no real price discovery. It leads to massive distortions that would not be a problem if there was a real market as opposed to a manipulated one.
Eventually, the situation will end but how many are being disadvantaged by the “traders”?
This is now so large that many people producing the real stuff we need like food, water, energy, etc. cannot produce it and make sufficient profit to keep producing. This will lead to a lack of goods going forward.
It is no big deal if the trinkets from China don’t get here but when farmers can’t produce food because the economics don’t add up, we are all in a heap of trouble.
In the meantime, our Fed Presidents, congress, etc. continue to “trade” on inside information- an offense that would lead us peons to jail. JP Morgan and the rest of the crew continue to push the price of metals down after “just” paying a nearly billion dollar fine and buying those same metals that they are shorting. In addition, the central banks are conjuring up cash out of nowhere and buying GOLD in record amounts for the past 4 years.
Pretty convenient to be able to conjure up “money” out of nowhere and buy a real asset. In addition, each dollar conjured up out of nowhere is owed back to the Fed- with interest. So not only do they buy assets BUT also charge us interest on the loan.
The fact that central banks are purchasing gold- along with the major banks and insiders, it should be a stark warning to us all about what they REALLY think of their “currencies” going forward and what asset they may be planning to use to restore confidence in the system when they decide to reset it- as they most certainly will have to do. There is NO chance that the world debt could ever be repaid with currencies having ANYWHERE near their current value.
Here in the USA we are not only not able to pay current bills-let alone paying any outstanding debt down but we are piling on debt at a faster clip than at any time in history.
Most people I speak to are aware that our country is going down the wrong path. It is a path taken by many nations in the past. They live beyond their means and use the conjuring up of cash as a way to pretend- for a while- that all is well.
Eventually, others catch on to the scheme and exit leaving only those conjuring up the cash to buy the debts of the insolvent government (known as monetizing the debt) which has a 100% track record of destroying not only the currency but the fabric of society as well. This is happening RIGHT NOW here.
Many times I have pointed out what happened in Venezuela where 12 years ago it cost 2 Bolivars for a cup of coffee. 7 years ago it was 10 Bolivars. 2 years ago it was 3 MILLION Bolivars for a cup of coffee. I also point out that an ounce of silver fed a family of 4 in Venezuela for a month. (Not updated in 2 years)
What will our prices look like a few years from now?
One thing that has me particularly concerned right now is the lack of goods that are available in many places. This is also a sign that we are moving in the wrong direction. You see, in Venezuela it isn’t guaranteed that if you have cash, metals or a trading item that you will be able to find what it is you need. When you can’t produce a product and make a sustaining profit- nothing gets produced.
While many believe things are bad right now, we have likely not seen anything yet.
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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