As we are nearing the holidays it appears it could be a tumultuous time for many as we are seeing increases of first-time unemployment claims week after week. The reinstituting of lockdowns is certainly not making life any better for anyone.

I am seeing some serious pushback here in my local area as many restaurants are opening for indoor dining even though there is a mandate that they be closed. Those brave souls deserve our support in my opinion. I have been out many times and the facilities that I have visited have been cleaned and sanitized and I observed everyone following the mask-wearing at all times except when seated rules without exception. Personally, I have never felt safer in that environment.

Anyone who doesn’t think the restaurants should be opened are not in any way forced to go there. However, those people who own these establishments have rent to pay, employees to care for and in most cases, families to feed.

In the meantime, the politicians who are ordering the regular folks around continue to collect their full pay, flaunt their own rules (if they really believed their own “policies” they wouldn’t be acting the way they do) and apparently have no regard for those who have spent a lifetime building their dreams of doing what they love.

Enough of my soapbox but even though the economy has been sinking for 3 years this latest bout has been made a lot worse with self-inflicted wounds by our “leaders”. I use that term LOOSELY.

As the economy is in full retreat the stock “markets” are still making all-time highs. My opinion is that they will keep going up – until they don’t- then look out! It is also likely that the Fed and other central banks will continue to conjure up “money” out of nowhere until it becomes obvious that it is not worth even the paper it isn’t even printed on. Then REALLY look out!

I believe that the writing is on the wall for the US dollar and for virtually all of the fiat currencies of the world. Since the US dollar has been the most prized fiat currency it gives us the farthest to fall and the most to lose in this current money “printing” spree that can’t end without causing massive revaluations of all assets. This is one reason I like to hold some assets in foreign currencies because even if they are losing value they may still gain against our currency. Another reason is that many- particularly in emerging markets- still pay a decent interest rate- something totally lost here in the developed markets because of the central banks “printing and buying”.

What would real investors demand of interest rates? Is there anyone anywhere who would accept a negative interest rate (you pay to fund someone else)? In my opinion, only if you could conjure that “money” up with no cost.  What would the value of stocks be if there was a real supply-demand equation rather than central banks, sovereign wealth funds and hedge funds creating the faux demand that there appears to be now and what happens when they own it all?  What would the value of gold and silver be without the daily manipulations by JP Morgan and the rest?

These are the questions that I believe are likely to be answered in the next 12 months or so.

Ask yourself a few of these questions:

If I am looking to buy low and sell high what assets meet that criteria today?

If we are in a recovery- as advertised- why are 3 million people a month applying for first-time jobless benefits?

If we can “print” money and pay our bills without creating anything of value why has it been tried hundreds of times (Weimar Germany, Venezuela, Zimbabwe, Brazil, Argentina to name a few) and why has it NEVER worked? All it did was impoverish the masses. (We are the masses now!)

Why would entities like central banks who can conjure up virtually ANY amount of “money” at any time buy over 1500 TONS of gold in 2018 and 2019?

Why can JP Morgan manipulate metals prices “tens of thousands of times”, pay a fine and continue? Why, at the same time according to Ted Butler, are they buying hundreds of millions (possibly over a billion by now) ounces of silver and as of last year over 20 million ounces of gold? What do THEY know that we don’t?

Why are other major banks and many billionaires following this same path? (King World News, Zerohedge)

Personally, it appears to me that all of this “wealth” that people imagine they own is in the form of debt. This requires the entity that you are counting on to pay you to have the ability to make those payments whether it be a city, state, country, person or business.

This is not only important for bondholders but also for stockholders- the first to be wiped out in a default. PLEASE don’t forget that!

At this time the USA is “printing” money and issuing new debt to pretend that they can pay interest on the debt that already exists and roll over that debt. Many companies are using new debt to pay interest on existing debt because their earnings can’t even cover the interest due. (Zombie companies now constitute nearly 15% of all public companies).  (Bloomberg, Wall Street On Parade)

As the “printing” continues and the risks of default are growing exponentially I believe I have a couple of holdings that can help mitigate the risk of someone else’s ability to repay me. That is my gold and silver which, in my opinion, is money and not a unit of debt like all of the fiat currencies. As a matter of fact, JP Morgan himself said “Gold is money. Everything else is debt”.  I say that my gold and silver are nobody else’s liability and have been used as money for over 5000 years. That is about 100 times longer than the average lifespan of fiat currencies.

By the way, the US dollar has been a fiat (backed by nothing) currency since 1971. 2021-1971= 50.

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.

Commodities are generally considered speculative because of the significant potential for investment loss. Commodities are volatile investments and should only be a small part of a diversified portfolio. There may be sharp price fluctuations even during periods when prices are overall rising.

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.

Diversification does not ensure gains nor protect against loss. Companies mentioned are being provided for information purposes only and is not a complete description, nor is it a recommendation. Investing involves risk regardless of strategy.

Currencies investing are generally considered speculative because of the significant potential for investment loss. Their markets are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising.