At this time of year, I always take some time to review how the year has gone and what adjustments may have to be made going forward.

Even though the economy is crumbling beneath us the “markets” have been moving higher. Having said that, I believe the worse it gets the more profits we are likely to see. The main reason is that to save the bond “market” which underpins most other “markets” like stocks and real estate, the Fed will have to conjure up trillions out of nowhere and debase our dollar at an even faster pace than is taking place right now.

I have said it many times, but it is imperative that you understand that the Fed does NOT have a magic wand to reduce rates. Anything longer than the overnight rate and the “Money” must be conjured up out of nowhere to buy the bonds and lower the rates. It is a simple trick to make the “market” think there is FAR more demand than actually exists.

The very act of “printing” increases the SUPPLY of dollars and weakens its purchasing power. Translation- Everything costs more than if they didn’t “print”. Hard assets and gold in particular should be MAJOR beneficiaries going forward.

Keep in mind that our main thesis has been that the dollar is weak and appears poised to get much weaker. There doesn’t appear to be any rational idea that could change my thinking about that. It appears to me that there are two choices- sacrifice the dollar to prop up stocks, bonds and real estate (assets that those “in charge” own) by “printing and buying” or save the dollar by not “printing and buying” which would lead to an almost immediate collapse of most asset classes. Human nature and history imply that option #1 is the path they will take.

There are many other reasons for dollar weakness going forward like:

· Our President demanding lower rates which will make the dollar less attractive to hold because of less interest income.

· The US Treasury demands lower rates, so the government has an easier time servicing the massive (and growing exponentially) debt.

· BRICS, SCO, ASEAN, and others actively working to execute trades outside of western interference and in local currencies. This will lead to less demand for US dollars even as supply goes higher as those “in charge” “print” in seemingly unlimited amounts. Supply and demand in this case = WEAKER dollar.

While I have been writing all along about digital currencies and cross-border trade in local currencies there have been two MAJOR developments recently.

#1 The EU and India have set up a system that links TIPS (Euro version of the SWIFT system) and India’s UPI payment system allowing immediate payments BYPASSING the SWIFT System and cutting out the middle- man- the US and US dollar. These are two major allies that recognize what is taking place and acting. This is not necessarily a hostile action but a prudent action to avoid being in a position where you could be sanctioned or worse. In addition, SWIFT fees and delays are also avoided.

#2 China has launched the digital Yuan and many in Asia are starting to use the digital Yuan in cross-border trade. Many bonds in Asia that used to be based on US dollars are now being issued in Yuan. I can’t help but wonder how bad our reputation must be across the globe when a majority of the world trusts China more than they trust the U.S.

Anyone who is not paying attention is likely to be blindsided by what appears to be a major reconning for the global economy. Anyone who is paying attention should be planning for some rough times ahead but also should be positioning themselves for possibly the greatest opportunities that we are likely to see in our lifetimes. As years-and decades of manipulation are rectified by reality the majority will be stunned to find out the VALUE has no bearing on the PRICE they see on the computer screen. Assets propped up will fall to fair value or lower and assets artificially suppressed will surprise to the upside leaving those positioned correctly to buy assets they couldn’t imagine owning today.

Be Prepared!

On another subject- last Thanksgiving I offered to pay for credit monitoring for any client of Savage Financial. While a few people have taken advantage of my offer (25 or so) there are many others out there who probably could use this service offered through Raymond James and administered by Eversafe. With all of the fraud and scams out there I believe this is a wonderful way to add some protection against both.

If you are interested, you can call me, and I will send the link and the code to sign up with. Keep in mind that it offers you protection and it is on ME. No charge to you.

Happy Thanksgiving!

Raymond James is not affiliated with Eversafe.

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