The illusion of “normal”. This is a phrase I have used often in the past but I believe that where we are at right now exemplifies just how Abnormal our current circumstances are.
I hear Larry Kudlow come out and say we have a “spectacular recovery” going on. Our President calls it a SUPER-V! recovery. The financial game shows happily regurgitate the numbers that are fed to them and put forth the story that we are recovering economically.
Personally, I can see with my own eyes that there is no real recovery in sight. Of course, some numbers will look good because they will be compared to the numbers of the last quarter which was the worst in our nation’s history.
Many believe that if the economy is good the sitting president will get re-elected. Historically this is true so it only makes sense that the current administration would be putting lipstick on our economic pig. I have thought many times in the past about the fact that people will vote with their wallets but more than likely it will be about how secure or confident they feel about THEIR economic future- not the overall picture.
Just a few questions for those who are buying the SUPER-V story :
If we are recovering why is the Fed still pumping trillions into the financial markets and why are other central banks still doing the same?
Why is demand for crude oil falling again if there is a real recovery? Zerohedge reported that traders are again storing oil at sea- much like they did in June when the price of a barrel of oil went below ZERO.
Why are we still seeing near a million people a week filing new unemployment claims week after week?
Why, according to the Bureau of Labor Statistics, are there a half million FEWER full time jobs than a week ago, and why are there MORE part-time jobs? Can anyone support a family on a part-time job with no benefits?
Why are we seeing, for a third year in a row, record bankruptcies across all sectors but particularly among retail outlets? Clue- It is NOT just online shopping!
Why are companies reducing dividend payments- or outright stopping dividend payments at a historically record rate if they expect a recovery? Why are others taking out loans to keep the illusion of normalcy by paying dividends they couldn’t pay without the loan? Maybe c-suite bonuses are involved?
Why are corporate insiders selling shares at again, a record pace, if they think their companies are going to prosper in the future?
Why did Warren Buffett sell most of his bank stocks and at the same time start buying gold stocks?
Could it be he sees a major problem with banks being repaid for the massive loans they have issued in e past 10 years? Could it be that he sees them tightening loan standards and decreasing credit lines particularly for lower credit score individuals? Could it be that he sees the banks are tightening credit because they fear far greater losses than are occurring? What would the delinquency rate for mortgages be without the temporary loan deferment programs? It is reported that 40 MILLION people are in danger of eviction right now. What would that look like without the forbearance plans and the legislation to defer evictions- now until the end of the year? This is fine and dandy for the renters but how does the landlord pay for the mortgage, taxes and upkeep? I guess they just don’t matter.
Could it be that he looked at history and surmised that no matter what the Fed does- whether they stop the “printing and buying” and the asset prices being propped up collapse or they continue this into oblivion (which is what they have basically announced with no interest rate increases and “unlimited” money “printing”) gold should be an asset that performs very well in either situation. In the event of a collapse in asset prices virtually everyone will be wary of their counterparties (those they are expecting to pay them) to have the ability to pay. In the event of “unlimited” money conjured up from nowhere I believe most asset prices would likely rise but very few in the way gold would. It has been used as money for 5000 years and there is no counterparty risk . The asset is the asset and you don’t have to worry about being repaid. It is not a debt like all other money has become. This is a main reason those in charge demonize gold. It actually impairs their ability to make you a debt slave.
This is likely the reason that it has been known for decades that the gold price has been manipulated, fines paid and now some criminal charges finally filed but the games continue unabated. There is a reason they need to keep gold appearing “risky” even though the central banks have it on their balance sheet as a “riskless asset”. Their words.
All the financial game shows tout that stocks are where you should be. Really?
Profits are plummeting, economic activity, while slightly recovering, is FAR from where it was 12 months ago and there are many companies still closing and employees being let go. In addition, many companies are now so saturated in debt even in a great recovery they would likely be impaired going forward. Remember- in a bankruptcy which, in my opinion, will be an epidemic shortly the common shareholders are almost universally entirely wiped out. That would be a 100% loss with NO CHANCE of recovery. In addition to this clear and present danger, with many companies, the dividends that many people bought the stocks for are being reduced or eliminated at a record pace. Why stocks again?
Gold, on the other hand has risen 684% since the year 2000. Has anyone reported that to you?
That would equate to around 32.5% average annual return over the last 20 years. Compare that to the major stock averages and gold has outperformed ALL of the major three US indexes (Dow 6.67 avg. annual return, S&P 5.9% avg annual return and Nasdaq 5.6% avg annual return) by over 4 times. None of the major stock averages have averaged over 7% per year during this time but SHH- you can’t know that! Forget the two major crashes and the few minor crashes along the way. It appears a third is imminent at this time.
These numbers are easily proved just by going to Marketwatch and looking at historical prices. This performance has taken place where there has been unprecedented effort put into propping up these same stocks and suppressing the price of gold at the same time. Look out when this scheme comes to an end and the true price of these assets get revealed.
Personally, I believe the time is VERY near and your time to be positioned correctly is quickly running out.
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