Avoid The Financial Circus

February 13, 2019

From Dr. Maya Shetreat, MD:

“Don’t blame a clown for acting like a clown. Ask yourself why you keep going to the circus.”

THE WALL STREET CIRCUS DISTRACTS PEOPLE.

Wall Street cheerleaders assure everyone stocks go up in the long term. Yes, they rise because the dollar is devalued every year, which they seldom discuss. Their cheerleaders avoid stating that corrections and crashes occur every five to ten years. Wall Street generates fees by encouraging individuals and pension funds to stay invested for the long term.

Bad advice from Neil Irwin as published in the New York Times—January 2019:

“If it all [stock market volatility and losses] makes you want to flee – or at least shift your 401(k) into cash – that’s understandable. It’s also a bad idea.” [Really? Ride it all the way down?]

What about the over 80% loss in the NASDAQ 100 after the 2000 bubble? Recouping nominal losses after the DOW peak in the 1960s required two decades. It took much longer after adjusting for inflation (devaluation of the dollar). Beware the “long-term.”

Stock buybacks are profitable for top management at big corporations, but often not good for stockholders. GE, GM and Apple bought back stock and lost on those purchases.

Avoid the Wall Street circus. Stocks and gold are inflation hedges but not all the time, and usually not together. Do your own analysis and don’t blindly follow Wall Street cheerleaders. The chart below suggests shifting out of stocks and into gold – NOW (actually September 2018).

FEDERAL RESERVE CIRCUS HIDES THEIR PURPOSE.

The Federal Reserve is supposed to maintain the value of the currency and encourage full employment. They proclaim their importance while they extract wealth from savings and transfer that wealth to the financial and political elite. Lobbyists and congresspersons are supported by the Fed, so the Fed is protected.

The Fed has failed at maintaining stable prices because the dollar has lost 90% – 99% of its purchasing power when measured by the cost of trucks, cigarettes, Scotch, potatoes, gold, beer, gasoline, clothing, food, healthcare and hundreds of other consumer items.

Those paper debt instruments, including dollar bills, are someone’s liabilities, and another’s assets. What if those assets are less valuable than everyone wants to believe? Instead, trust assets that are not another person’s liability—gold and silver.

The world has little need for central banks, but the political and financial elite and Deep State use central banks to increase their power and wealth.

Escape the Fed circus. The Fed, dollar devaluation, massive debt and gravity are ever-present. Avoid the destruction, devaluations and debt paper created by the Fed and the government if you can.

MILITARY CONTRACTORS

They need more dollars, lots of dollars, to protect the homeland. Their political machine is effective, and costly. Congresspersons will not argue against the premise that they must protect the homeland, especially when receiving contributions from wealthy military contractors.

Question: How did Russia and China develop “game-changing” hyper-sonic weapons (20+ times faster than the speed of sound) while spending a small fraction of the U.S. military budget? The U.S. might develop hyper-sonic weapons next decade.

Beware of the military contractor circus. Military and other spending will expand, perhaps for many years, until the U.S. government can no longer finance deficits. Expect further dollar devaluations as debt and deficits soar.

PRESIDENTIAL POLITICS

Every four years politicians besiege us with the spectacle of a Presidential election. They spend billions of dollars to elect someone who officially earns a tiny fraction of what it cost to get him/her elected. The political and financial elite benefit regardless of the outcome. Presidents change but the Deep State players are “dug in” and will not go quietly into the night.

Shun the Presidential politics circus. Expect larger deficits, more political polarization and promises, lots of promises. The Deep State will survive. Protect your savings from paper wealth destruction. Use hard assets instead.

POLITICAL PROMISES

Politicians make promises to win elections. The 2020 election circus will feature many promises. Universal Basic Income, guaranteed jobs, infrastructure projects, tax breaks, Medicare for all, free tuition, free medical care, QE for everyone, student loan forgiveness, larger welfare benefits, helicopter money, MMT, expanded food stamp programs (SNAP) and more will blanket the media.

From Thomas Sowell

“Socialism in general has a record of failure so blatant that only an intellectual could ignore or evade it.”

Few will discuss debt reduction, responsible government, and who will pay for give-away programs.

These circus acts entertain, distract and transfer wealth. Plan on volatile markets, larger deficits, expanding national debt, and higher prices—the path of least resistance. A deflationary accident could occur, but it serves nobody’s best interest. Expect more QE and higher prices for gold and silver. Stocks – maybe not.

COMEX (Paper silver and gold):

They buy and sell hundreds of paper silver and gold ounces for every physical ounce traded. The paper commitments may default someday.

Avoid the COMEX circus. Buy physical silver and gold bullion, not the paper stuff. If you don’t have physical possession, you may own paper, not bullion.

DEBT LIMIT

The debt limit fights are a circus distraction. Congress has increased the “limit” many times. Politicians abuse the “limit” for their own agendas.

Exit the debt limit circus. The debt limit will increase as needed. Name three congresspersons who want to reduce spending and lose their next election. Trouble finding even one? Actions show congresspersons want increased spending regardless of deficits.

Debt will increase, dollars will be devalued, and prices will rise. Congresspersons will pretend to address the problems they created, but will support the status quo—borrow and spend.

GLOBAL WARMING—CLIMATE CHANGE

Martin Armstrong discusses solar cycles and global warming fraud here and here. He and many others believe the world is facing a mini-ice age. I ask:

If the political and financial elite wanted increased political control, higher taxes, and more power, would they rant about “global warming” or global cooling?

Governments can tax “global warming” but they can’t tax “global cooling.” Hence they scream about global warming. Shifting the narrative to climate change, carbon taxes, CO2 reductions, melting ice caps and rising sea levels changed little.

Government could address real environmental issues and not promote globalist tax and control schemes such as anthropogenic global warming.

CONCLUSIONS

A circus exists to entertain and distract. It can be expensive. Instead of living in the circus of debt, political promises, Federal Reserve Notes, debt limits, and global warming… FOCUS ON GOLD AND SILVER.

Miles Franklin sells silver. Call them at 1-800-822-8080 and tell them you agree with the Deviant Investor regarding silver. Your price will not change. Use my name as your reference.

If you have comments, email me: deviantinvestor “at” gmail.com.

Gary Christenson

Gary ChristensonGary Christenson is the owner and writer for the popular and contrarian investment site Deviant Investor and the author of the book, “Gold Value and Gold Prices 1971 – 2021.” He is a retired accountant and business manager with 30 years of experience studying markets, investing, and trading. He writes about investing, gold, silver, the economy and central banking.

10 karat gold is 41.7% pure gold.