Timeandtide:
Well stated. The labor and physical resources have been literally and figuratively strip-mined from the local communities. Years ago, I was talking with a gentleman who was trying to inject life into a small Iowa farming town, He pointed out the vacant buildings, vacant school, vacant lumberyard, vacant funeral home, etc. He stated, “We are surrounded by some of the finest farmland on Earth, and look at the result!” “How many of the dollars generated by all these bushels of corn and soybeans ends up here?” he asked. “Almost none.” Anybody with eyes can see what is happening, but, what to do about it?
At 40min, Mike Maloney notes that in 2000 they cut 5%, & quintupled base currency so next time we have no room to print so it will be a currency crisis. I strongly doubt this. In fact, by his logic this should have happened in 2008. Myself, I think we are just getting started & the Fed has demonstrated full totalitarian control of the US economy with the public behind them fully, demanding growth growth growth, bailout bailout bailout. Note I believe Trump will win the election, which gives 4 more years of this (sans a black swan or a good war; now Sanders or Warren with a Democratic congress could indeed cause a currency crisis IMO, but Trump? Why has it not happened yet?)
Mike thinks Treasury debt & bailouts is theft/fraud/enslavement because it dilutes the currency and we will have to pay it back. I don’t see this at all. The people want bailouts; remember 2008 with all the cries for bailouts?). And anyone can save and participate in the stock market or housing game, in as small increments as one wants. If anything, the new Fed policy is just offensive to people who expect a “safe” investment like it used to be for Boomes. Now, one must invest in individual companies actually making money and growing wealth (not marking-to-market as their goal like a FANG) and of course avoid storing wealth in banks. The world has changed; people need to change with it or just pull a MM and go 100% PM.
Surprised Mike puts his PM in “the system” (Brinks). One of the advantages of not being rich (say <$10MM in NW) is that it’s quite easy to store 10% NW in physical gold and silver outside the system under your personal control. Silver is a bit of a challenge but manageable. I guess if you are dealing in many millions mostly in silver due to the GS ratio favoring it you have some challenges, but most of us don’t have this issue. The beauty of being “poor” say <$10MM.
I thought Maloney was the weakest part of the interview so don’t have too much to add. He’s playing the 5% chance of total financial collapse, and I think 10% of NW PM plus being personally resilient with food & water and spending, takes care of that sort of risk as long as you have practice in dealing with PM in the black market, which is part of the skill set IMO. Myself, as a US citizen who has no plans to leave I don’t trust Brinks or anyone. YMMV.
Moving on to 48 minutes, I found Grant Williams to be very sharp, and this one of the smartest parts of the interview. And kudos to Adam sneaking in Grant’s “Nobody Cares” presentation right here. That was pure gold (pun intended). PM is such a small market today; a slight increase will cause it to move (pension funds will go crazy). So we are waiting for this “care” moment. And I loved how Grant moves right into investing for yield in cash generating companies, not just holding 100% in PM. But I was disappointed how everyone seemed to ignored the need for physical in this “care” moment, when the scramble for holding “real” gold starts. Not if, put when. It’s going to be a wild ride, and I can’t believe smart guys aren’t more worried about where it’s kept and preparing for the government’s response. I simply don’t trust any company here, period. Like 1933, those who have prepared and held physical gold will have ZERO political support, as the public gets crushed, they will vote against gold hoarders. And I don’t see living in other nations being a solution; small nations with supposed “rule of law” could easily turn into Argentina overnight, and Western-types who rely on those angry nations to protect their property rights may be in for a rude surprise. Myself, I like the USA, because as a citizen the risks are better known, and not insurmountable.
But regardless, this was a great part of the interview. Grant “gets it” IMO, that “profits now matter”. and well-done Adam with the full-court press on investing, when he goes into quality individual companies and not the “market” as something one can build for cash flow. The only weakness I found with Grant was his dollar bashing; I see it going the other way in a currency crisis (has he not noticed the USA stockpile of nukes, coal, oil, gold, military…I say, like Chris earlier, that the weaker links will go down first) but I could be wrong. In fact, I actually looked at a few of my stock stats when I finished listening, No matter if I wrong or not, I’ve never heard it so well put as here. I watched this part 10X. Sold.
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This was a excellent video thank you very much.
My god, I was a member of this site for more than 8 years and it was not very active. I am from Canada.
How could you form. a good community moral reliable.
I understand when you are saying that for example when you said you don’t really know farming thus you are trying to find a farming couple that will take care of this issue but this will or might come with their family members, friends etc… and when the time comes difficult ( collapse scenario) people might lost their mind or tell people that you are sefl sufficient thus you need to be very carefull of who you accept in your property .
Good discussion at ~33 min; Points:
Grant: 1/8 companies are zombie, repo panic, gold & silver waking CB buying more PM in 2019 than in the last 30 years
Chris: Fed balance sheet cliff doesn’t match their weasel words, 90X ease, 1/1 correlation of cash in to markets, Fed successful changing macroeconomic statistics pumping cash even disconnecting economics & financials, <2% yield difference between UST & junk debt, total distortion, way to back off the injection of cash.
Adam summary: Fed painted into a corner, so no they have no choice but to play for time.
My comment: This was a great talk on the “state of the economy” and “state of the Fed”. My problem? I simply don’t see the difference between 2008 and now. Excessive debt? Check. Zombie companies? Check. USA dominate military power, major resource producer, wasting more resources than even imaginable? Check. Lawless Fed willing to break any law? Check. So what exactly is it about 2020 that makes it more dangerous than 2010? Are we really ready to go back to the gold standard? Yes, always own 10% in PM as a hedge against this. But it’s been a complete BS financial game for a full decade. Does anyone really think we will stop spending until we are absolutely forced to? Who can predict some magic moment when deflation crushes everything and suddenly it’s a fire sale (as per Grant)? Couldn’t it go the other way directly into inflation so one better own real things like homes and stocks in preparation of massive upcoming inflation?
In fact, the market seems to be telling us things are just not that dangerous in this era of free food and shelter for mothers and children, even free phones for all, plus easy living in general. Chris laments how Greek debt is only about as expensive as USA debt, calling this is a “distortion”. Why this desire to instruct Mr. Market that he is wrong, wrong, wrong? Maybe Mr. Market is saying: “Hey, since the world is producing massive goods and services (look at how fat we are today!) so we can wreck the free market and still fly to Mars, still drive everywhere, and still fight stupid wars, we are still good to invest.” I don’t know myself, but when my predictions don’t work out empirically I open my mind to other possibilities. Again, with humility and trepidation; these are strange times. Mr. Market may have s few big tricks up his sleeve in the next few years for the complacent…