Volatility: Friend or Foe?

Finance U Public Finance U
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Originally published at: https://peakprosperity.com/volatility-friend-or-foe/

After a short holiday break, we’re back! Happy New Year, everyone!

This week, Paul Kiker and I discussed a wide range of topics (See list of timestamps below).

The overarching theme was volatility. We’re seeing extraordinary moves in Japan’s bond and currency markets, enormous volatility in silver, and “decades happening in weeks” on the geopolitical front as evidenced by Trump’s move against Venezuela.

Perhaps these and many other items are unrelated events. Or perhaps they are connected by the spasms of the dying regime of debt-based fiat money. If so, then this chart of gold’s price during the death of the Weimar Republic’s mark might be instructive:

Could you, would you have hung on for every one of those gut-wrenching ~-25% drops in the price of gold along the way? Or would you have bailed, certain that gold had gone as far as it could and was due to collapse back down?

This speaks to the importance of knowing the underlying “why” of your investment and wealth protection strategies. Me? I am certain that the US government is thoroughly out of control on the spending front.

This recent tweet by Trump only added to that certainty:

Where’s that extra $500 billion going to come from? Easy, that’s going to be printed out of thin air by the Federal Reserve.

On that front, they have already begun.

To me, this signals “The End of Money” …well, not true money (which is gold) but corrupt fiat money managed by people who seem to have entirely lost the idea of the proper role of money in a society and economy.

The advice is to have a plan and be prepared to stick to it for what is certain to be a very bumpy ride.

Timestamps:

00:30 Introduction and Personal Updates
02:35 Market Shenanigans: Gold and Silver Prices
06:31 Market Manipulation and Trust Issues
10:39 Volatility in Precious Metals
12:31 The Role of Gold in Financial Markets
18:25 The Impact of AI on Information and Investment Decisions
21:38 The Global Silver Market Dynamics
29:24 Long-Term Thinking vs. Short-Term Gratification
31:46 The Dangers of Currency Debasement
33:31 U.S. Domestic Supply Chains and Independence
35:41 Japan’s Economic Push and Pull
39:32 The Impending Crisis in Japan
44:41 Venezuela’s Oil Industry and U.S. Interests
01:01:26 The Erosion of Trust in International Law
01:03:39 Emerging Alternatives to the US Dollar
01:05:15 Speculation vs. Investment: The Current Market Landscape
01:09:40 The Impact of Federal Reserve Policies
01:12:26 Generational Wealth and Responsibility
01:15:18 Navigating Rapid Change in a Complex World
01:18:25 The Future of Software and AI
01:22:37 Investment Strategies for an Uncertain Future
01:27:38 The Importance of Adaptability in Investing

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I do not mean to be trifling but people need to understand that “international law” does not exist, even if the term is extensively used.

The abuse of the term hinges upon what lawyers think “law” which is different from what We the People think it is. Lawyers view it as an amorphous mass involving the administration of their domain, exclusively. We the people, view it as a textual embodiment of specific cultural principles with the resources to enforce those principles.

Can there be “law” binding sovereign states? Answer no. Sovereignty means able to pursue unbound self-interest. What does “international” mean? It means between and among nations. However, treaties, not law bind countries but always with a reservation that allows the country to leave the treaty. A treaty is actually a document laying out common interests that may be written into the laws of the signing countries. What is law without enforcement? It is a political statement, nothing more. In total, what exists is common interests among several nations that has been spun by the legal establishment as being “law”. Slavery is supposed to be forbidden by “international law”. What “law”? What is the police force patrolling the oceans and continents to wipe out this scourge? Answer: None exists. Each country takes it upon itself to accomplish that goal. What then is NATO. The word “treaty” explains that situation. And, the UN? It is an organization offering a pulpit to explain national interests

What of the Nuremberg Trials following WW II? Google explains:

“The laws used at the Nuremberg Trials were established by the London Charter (1945), which created the International Military Tribunal (IMT) and defined its jurisdiction, prosecuting Nazi leaders for Crimes Against Peace, War Crimes, and Crimes Against Humanity, codifying principles of international law previously unrecognized. (my analysis: unfortunately, even Google uses the term “international law but leaves open that the supposed law is merely a set of principles, not actual text agreed to by all nations.”

The result is that the term “international law” is a canard, a fiction. The concept most likely exists in order to circumvent moral and religious scruples while achieving the necessity to permanently rid the world of those who would commit such heinous acts.

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I really appreciate the chart of the volatility in goldprice during the Weimar collapse. Gives me courage to buy the coming dips and hold during the peaks.

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If the government will take Venezuelan oil, it will take your precious metals. First indication of a move in that direction is a joint venture between JPMorgan and the Department of “War” in a smelting operation. Next step, mining industries, then price controls. Let’s see here, how many decades did the government set price caps on gold?

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:rofl::bullseye:

https://x.com/Kanthan2030/status/2009405918858096710?s=20

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Hilarious!:rofl:

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The AI Asian Guy has two basic messages regardless of what he is talking about and how accurate he is. 1) He says if you’re invested in paper gold and silver markets you’re in a very dangerous situation and should get out if you can. 2) He says if you’re invested in physical silver and gold, hang on to it and don’t let the news or the price volatility scare you into selling. I’ve quit listening to him because I already knew that. That’s my strategy. All the shenanigans going on are entertaining to watch and learn from, but I’m not selling (yet). However, I too am considering my exit points and strategies.

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“ I too am considering my exit points and strategies.”

Ditto. A separate thread might be nice for the discussion.

Lots to say here and I need to organize my thoughts first. And many questions to ask - including which questions to ask.

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I think we have to realize, there is no rule of law anymore..not here in the US, not internationally.
I think we have to realize All the US markets are rigged.
I think we have to assume the Fed is buying bonds with the money offshore in the Caribbean.
I think we have to realize that
SWIFT WAS weaponized, the Petrodollar is a memory, and that facism is here..by which I mean those Public Private Partnerships.
WE, the taxpayers, are paying for JP Morgans silver smelter to be built in Tennessee.
WE, the taxpayers, have just invested 900 million in CITGO, a hedge fund owned company, who will use our money to help the oil companies sell oil. And we get NOTHING. we will have to pay the going price for oil.
OIL COMPANIES ARE NOT AMERICAN. THEY ARE INTERNATIONAL
the No KINGS is ringing in my ears..
Dave Collum is also ringing in my ears.
40 years of rot.
Im too old. How do I convince the young of my family “Come out of her O my children..Babylon the Great has fallen”

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I’d sure love to hear what you and others are thinking about this! I don’t see much online about it.

Susan

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This would be a VERY VALUE add to our PP subscription.
The big question is what to do wuth any fiat?

Stocks - in bubble, great taking
RE - in bubble , RE taxes, insurance

Is there a tread on this topic yet?

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A topic on PM storage as well.

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Hunger Games meets Mad Max. Plant a garden and try to stay sane.

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Historically I have viewed personal debt as a bad thing- always tried to pay off my house asap but as I prepare to close on my construction loan I can’t help but think- if my dollars are going to be worth crap in the future wouldn’t it be better to own something that is appreciating (hard asset) and take a bigger mortgage on my land at my current dollar rate?

Are any of you PM folks in the same mindset? They are certainly appreciating much faster than 6% of late.

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Venezuelan oil is “heavy oil.” It’s not the light sweet crude that Saudi Arabia is running out of. And it is not the light sweet crude held in huge and vast Russian reserves (an “embarrassment of riches”).

Heavy oil is a real mess. What it is good for is a source of real oil to be blended with Fracking Oil (the mess forced up from US oil wells that stopped being productive decades ago. Heavy oil is almost pre-oil. Fracking oil is post-oil.

Blending Venezuelan Heavy Oil with US Fracked Oil may be a marriage made in the world oil supply. Not quite Heaven. Not quite Hell. Like I said: Blended.

Ukraine is really being terraformed as an invasion route for NATO (NATO is the United States) to steal all that Russia oil. The timetable between how much time there really is until the US runs out of its own oil and somebody else’s, may have been delayed by this thing going on in Ukraine.*

Make no mistake. The United States is in the same position Nazi Germany was during World War II. Germany had either exhausted their own supplies of crude oil or were about to. Either way, no oil no endless war and no endless warmongering. The US wants World War 3, but it wants to avoid making Nazi Germany’s mistake of not securing a massive supply before it starts a war.

Actual figures are still classified. It takes “an embarrassment of riches” to fight a World War. How much oil was consumed by all those B-17s bombing the crap out of Germany is still classified. However, rough estimates indicate about 7-billion barrels of crude oil were consumed fighting World War II. The United States alone supplied 6-billion barrels.

*Ukraine is a net importer of crude oil, its consumption far out-weighing its production (approximate reserves of just 300-million barrels).

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If things continue as they are, then yes, loans at 6% and investing rather than repaying are the way to go. If it’s hyperinflation or some other craziness, then don’t have loans. Historically, hyperinflation has wild whipsaws that create booms and busts and take out anyone with debt.

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@scarlberg

I have debated thos with myself and others for a few decades
Each time i just keep paying down the debt npt as fast as i could have but knowing the Cost of Financial Freedom COFF is no debt. Eventially it made no sense to have any debt.
I was never any good at trading manipulated markets anyhow.
Now wife and i sleep very soundly from a personal debt prespective (now global bad energy is another issue)
Pulled out COFF spreadsheet first time in 2 years and was very pleased at how close we are on having incoming = outgoung and not touching principle. That is with PMs earning no interst after all who needs interest with price increases. I have thought for well over decade stack till u can sell 1oz AU 100oz AG every month rest of our live to supplement a short fall if need or to pay property taxes - there will be unexpected circumstances that will oçcur
Hope that helps

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A fear is, the periodicity of sales( PM’s of any color) will be an alert.
Wise as serpents gentle as doves.

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I do not understand first sentence

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How to exit Silver/Gold (or BTC for that matter)?
If you have accumulated an ASSET and grew a strong position.
Exiting is something you MUST think through.

Sometimes it is tied to a $ value, Sometimes to a % increase.

One simplistic Model is selling 20% at a 5x increase (getting your investment off the table).

On the other hand, what exactly do you do with the proceeds?
Do you want to sit in cash?

Hypothetically for me. I have a target to sell 20% of my BTC at ~$250K
I will use the proceeds to payoff our daughters mortgage. Set aside
the rest in cash for living expenses.

But I have not thought about WHEN I would sell my Silver or Gold.
But I am putting some notes in writing. I can see selling 10% at 10x.
If you sold 20% at 5x, and 10% at 10x. you took 200% of your initial investment back out. It would be really hard to lose on a trade after that.
Very few trades offer this kind of return.

Also, timing. You will owe taxes. Hopefully LTCGs and not short term gains.
I would definitely sell any losers to offset the gains.

If you don’t need the money to live off of, it gets easier.
Honestly, at a certain point, I have a friend with a farm, and we have an arrangement. If he needed any equipment, those are not bad assets to have.
If he needed cash to buy/setup cattle, that would be a solid use.

But I struggle with the thought of exiting a position, with no idea of what I would want to own once I sell it. Especially if the other desirable assets are correlated. (Would you sell silver to buy gold or vice versa?) Is that really removing risk or taking something off the table?

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