The US stock “markets” are setting new record highs! The first-time unemployment claims came in at “ONLY” 712,000 for last week! (Let’s not mention that is over 36 weeks in a row at 700k +- many way plus!) Over 350,000 jobs were “created” last month! (More than likely this was just people returning to jobs after lockdown and now lockdowns are making an encore performance).

All is well! Nothing to see here! Sit back and let us “print up” prosperity as we buy up everything that we can get our hands on.

The propaganda machine is well-oiled and they are attempting to put lipstick on our economic pig.

The fact of the matter is that since March of 2020 the US M1 money supply is up 40% in 8 months. This is likely one of the few reasons that many are still under the impression that the economy is not too bad.

The economy is in freefall and has been since 2008. Massive “money printing and buying” of assets has kept most people in the dark about just how dire our situation is.

While the economy is propped up with “money” from nowhere the situation on the ground is deteriorating rapidly. The reason for the apparent lull in activity may be the forbearance plans and the CARES act that does not allow evictions – until January.

According to the US Census Bureau, there are 31 states that have 30% plus of adults that are in danger of eviction or foreclosure in the next 2 months. Nine of those states are OVER 40%. The other 19 states are from 11% to 30%. This is as stunning as it is tragic for our society.

Zombie companies (those companies that can’t service existing debt with earnings) is growing substantially. According to Bloomberg 20% of the Russell 3000 companies meet that criteria.  A record near $18 trillion in global debt now trades at a negative rate (you pay THEM for lending THEM money!).

Even US states who were hemorrhaging money long before anyone heard of Covid 19 are now borrowing directly from the Fed to extend and pretend some more. I am also sure they are counting on “money from nowhere” to kick the can even further down the road. Most, if not all of this “money” will be going to pay current bills and will likely not address the trillions in pensions that are massively underfunded even though stock and bond “markets” are at all-time highs. What happens when reality rears its ugly head in the near future?

The US dollar is getting hammered this week likely because of all of these financial shenanigans taking place along with the likely loss of respect for our leadership and the rule of law that we were well known for. That appears to be long gone. It appears to me that we have gone full banana republic.

It doesn’t matter who is right or wrong- it’s who you know or who you are.

How can the major banks be naked-shorting the metals markets to suppress prices and pay a fine and walk away after the authorities described “tens of thousands” of instances of manipulation in JUST the metals market for one bank alone? Do you think any of us would get away with a millionth of what they pulled and not get hauled off to jail as well as having all profits clawed back- plus?

How is it that the politicians seem to think that you can catch this virus at mom and pop shops but Wal Mart, Home Depot and other major players are immune? To me, this is proof that they are destroying our economy on purpose and it begins with wiping out small business and the middle class.

This will likely create a dependency class and will lead to most people begging for a solution that I am sure those “in charge” have already planned.

In the meantime it was reported that Elon Musk became the second richest man in America while the vehicle he used to amass most of his wealth- TESLA- has lost 5 billion dollars and has not turned an operating profit yet. It has reported “earnings” that are “earnings” only from government subsidies and carbon credits. This is a clear example of the rich getting FAR richer at the expense of the rest of us. The people who buy and hold TESLA will likely meet a grim end while Elon will be toking away, all the way to the bank. Even with the lack of earnings TESLA is now valued at 4 times more than Ford, GM and Fiat Chrysler COMBINED. Does that sound rational- or even remotely sustainable?

If this company crashes, as I expect it will, it won’t be Elon left holding the bag but will likely be those who trusted in his “genius”.

The sick part about all of this is that this has been going on for centuries but those pulling the strings were always able to hide it. Today, this is right in our faces. The “printing and buying up everything” is now accepted even though it is likely to impoverish all but the very few at the top. The rigging in virtually all “markets” is in full view after tens of billions in fines and yet it continues unabated day after day.

We have obviously lost our moral compass and we are careening towards a future that most cannot even imagine. Day after day more of our freedoms are being threatened and our “wealth” is being stolen via debts that we can never repay with our “money” retaining its current value.

The path of least resistance is, I believe, to continue to debase our “money” so that the promise of repayment is kept- it’s just that the value received will be FAR lower than expected. Think $50.00 for a happy meal or worse!

I believe that inflation is likely coming in the near future and I also believe that many who do not prepare correctly for this outcome could wind up with more dollars than they ever dreamed of having but still may not be able to purchase the goods they need to continue their current lifestyle. This is what has happened 100% of the time when countries have gone down the “printing money” out of nowhere road. It’s human nature to go too far and kill the golden goose.

While it appears to me that some stocks may be able to help with inflation the real winners going forward should be hard assets like gold and silver but also anything that has to be produced like food, water, energy, etc. and the companies that produce these things.

As “money” becomes less valuable (usually because of too much supply) assets that can’t be conjured up from nowhere will become more and more coveted by the masses and the law of supply and demand says that “prices” for those assets will rise. Those who are alert enough to see what is coming may have a major advantage as future opportunities are exposed. It is likely that only those who have planned well will be able to take advantage of these opportunities that are being set up by current events.

Don’t be left behind. There is a new paradigm and it is coming like a freight train.

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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