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This Is the Proverbial Ball You Should Be Keeping Your Eye On…
This Is the Proverbial Ball You Should Be Keeping Your Eye On…
Gold, the Brief History of U.S. Debt, Not a Great Club, and the U.S.’ Debt-to-GDP Surpassing Venezuela’s
“Blessed are the young, for they shall inherit the national debt.”
~ Herbert Hoover
If you’re like me, you probably sometimes come across an important economic or geopolitical event in screaming headlines and think, “That’s bullish for gold.” But then the metal moves in the opposite direction from what you were expecting. Doug Casey always tells us not to worry about short-term fluctuations — and he’s absolutely right — but it’s still frustrating at times.
Now, it’s easy to dismiss these thoughts because gold has recently hit new all-time highs, topping $2,400 per ounce.
But remember, there’ve been plenty of corrections during this gold bull run. And trust me, there’ll be many more.
When they happen, it’s easy to get distracted, lose patience, even sleep, and get shaken out of an otherwise winning investment.
That’s why it’s crucial that you always keep your eye on the ball. Which, I should say, is more like a snowball in this case.
Snowball's Gonna Snowball
Major financial, economic, or political shifts don’t just happen overnight. They’re more like a snowball rolling downhill, picking up speed and size along the way. Eventually, they reach a tipping point, transforming into full-blown crises, catching the unprepared off guard.
And, of course, there’s no better example of this today than the the ever-growing snowball of the U.S. debt that has become so big it’s already engulfing our whole economy. Consider this chart.
Notice that government debt was practically nonexistent halfway through the 20th century, but has seen a dramatic increase in the following decades. This happened with the expansion of federal government spending under Presidents Franklin D. Roosevelt, Lyndon B. Johnson’s, Richard Nixon. And debt just kept snowballing since.
…click on the above link to read the rest of the article…
The Fed Is Preparing to End Money as We Know It
The Fed Is Preparing to End Money as We Know It
Big Banks, FedNow, and the Road to Fedcoin
Every quarter, U.S. Bancorp (USB) releases something called U.S. Bank CFO Insights Report. It gathers insights from over 2,000 senior finance officers (CFOs) nationwide. It might not be everyone’s go-to read, but it’s a good way to stay abreast of what’s happening in the banking industry.
Just a few days ago, they dropped the latest issue, and something immediately grabbed my attention — the survey findings on FedNow, the Federal Reserve’s new real-time payments service.
The report showed that 42% of surveyed CFOs had tried out FedNow in 2023. Right now, 51% are using it, and notably, a staggering 80% plan to use it by 2026.
In other words, nearly double the number of finance leaders anticipate using FedNow in their organizations by 2026 as they did in 2023.
I’m talking about a currency that wouldn’t be printed but would only exist in cyberspace… but one that would also give the Fed and government almost unbreakable financial control over your life.
Now, FedNow isn’t a central bank digital currency (CBDC). But it’s definitely a precursor to one.
Let’s backtrack a bit to understand why.
The FedPal
You see, the Fed and big banks have been gearing up for the eventual rollout of a digital dollar for quite some time now.
As far back as 2017, a consortium including finance giants like Citigroup and JPMorgan initiated a real-time payments network operated by The Clearing House, known as the RTP Network.
This network processed a total of 173 million transactions worth about $76 billion during 2022.
The idea behind the RTP Network has always been to lay the technical groundwork and foster a culture of acceptance for a digital currency. The big banks made no secret of it.
…click on the above link to read the rest of the article…
From Zero to Hero… The Incredible Story of American LNG, Personified
From Zero to Hero… The Incredible Story of American LNG, Personified
Mezzaluna, Mr. Souki and the Journey to the Top
“If you keep digging, digging, digging, you find something.”
~ Charif Souki
O.J. Simpson died last month. Unless you’ve been living under a rock, you probably know that.
Well, I guess I sort of have been. I’d been busy working on the latest issue of Crisis Investing, so I only found out about it over the weekend. But, as I caught up on media reports about his “legacy,” I couldn’t help but think about a different yet parallel story… and one that has important investment implications for us.
And that’s the story of Charif Souki, an American restaurateur-turned-energy titan.
In the 90s, Charif owned an Italian restaurant in West L.A.’s Brentwood neighborhood. It was called Mezzaluna and, coincidentally, it was where Nicole Simpson had her last meal on June 12, 1994.
On that fateful night, Simpson’s mother left her glasses there, so a waiter from the restaurant, Ron Goldman, went to Simpson’s home to return them. Shortly after midnight, Goldman was found dead with Simpson outside her condo.
The Switch
After the murders, Mezzaluna was swarmed by reporters, photographers, and curious tourists. People bombarded employees for details, even asking about Simpson’s final meal. Charif was appalled by the media frenzy – “the morbid curiosity, the lack of taste and decency of people, was pretty astonishing,” he would later remark. It was then that he made the decision to sell Mezzaluna and venture into something new.
After some deliberating, he made the unlikely transition to the oil-and-gas industry.
His first big idea was to import cheap, plentiful natural gas from the Middle East in the form of liquefied natural gas, or LNG.
…click on the above link to read the rest of the article…
Congress Just Supercharged the Dollar’s Downfall
Congress Just Supercharged the Dollar’s Downfall
Confiscation, Weaponization, and De-Dollarization
“The dollar’s role as the world’s primary reserve currency is a boon for the United States but a bane for the rest of the world.”
~ Barry Eichengreen
The U.S. Senate has predictably voted to give $95 billion to Ukraine, Israel, and Taiwan, just three days after the House of Representatives green-lit the assistance in a rare Saturday session.
But beyond the big spending, there was a little something tucked into the Ukrainian aid bill that’ll have major implications for you as an American: the confiscation of Russian dollar assets.
The passage of the Rebuilding Economic Prosperity and Opportunity (REPO) Act, as it’s called, adds a whole new dimension to the story that Matt Smith brought to your attention on Monday.
The Dollar Weapon
Once President Biden signs it into law, he’ll gain the authority to seize more than $6 billion in Russian assets held by U.S. institutions.
Now, in case you’re wondering why Russia held these billions of dollars outside of Russia, it’s because that’s what countries do when they have surplus dollars; they put them to work in the safe and trustworthy nation of America.
The joke’s on you, Russia…
But the $6 billion is just the tip of the iceberg.
You see, it’s not about the amount; it’s about how the U.S. sets a precedent for other Western countries to confiscate the nearly $300 billion in Russian state assets currently frozen under their jurisdiction.
To be fair, it’s not the first instance of the U.S. government’s “weaponization” of the dollar… far from it.
But it has become especially pronounced in recent years, targeting adversaries such as Iran, Cuba, Venezuela, Afghanistan, North Korea, China, and, of course, Russia.
But it never affects just these countries alone…
…click on the above link to read the rest of the article…
What Would a New Civil War Look Like?
What Would a New Civil War Look Like?
Not Like the One You Learned In School
Editor’s Note: Today’s essay comes from Doug Casey’s longtime friend, Chris Weber. You might recognize his name because we often discuss his excellent newsletter during our podcasts. You can catch Doug and me discussing the latest issue here. And in the past here, here, and here. We love it.
Each issue of The Weber Report is filled with market insights you simply will not find anywhere else. Plus, it comes packed with historical insights, just like the article below, which Chris graciously allowed us to share with you.
For us, The Weber Report is a must read. To get a three-month introductory subscription, click here.
From Chris Weber in The Weber Report:
A new movie opened this past weekend in the U.S. called “Civil War”, it tries to show what would happen if a new civil war broke out in the U.S. This is not at all a far-fetched idea: at least 40% of Americans believe there will be one within the next decade. Clearly the groundwork has been laid for it over these past several years.
In America these days you hear a lot about people who once were friends but now hate each other. Or were families that now don’t speak except to yell. It’s like walking through a minefield, except for one thing: neither side knows very much. At least not much about facts concerning past civil wars. To start with, they think we’ve only had one civil war before, and on this they couldn’t be more wrong.
Those many people who are so sure we’re going to have another civil war, they rarely have hard facts at their hand. Ask them people what they actually know about the “Civil War”, and they’ll tell you some facts —mostly untrue— about the only civil war they know about.
…click on the above link to read the rest of the article…
This Double Whammy Will Unleash Unprecedented Money Printing… or Break the U.S. Economy
This Double Whammy Will Unleash Unprecedented Money Printing… or Break the U.S. Economy
Deficits, Deficits, and More Deficits, Unravelling Social Security, Money Printer Going Brrr
“A government big enough to give you everything you want is a government big enough to take from you everything you have.”
~ Gerald Ford
The Federal Reserve is gearing up to cut rates and fire up the money printer this year. And you can see why…
You have Joe Biden, who’s in dire need of a push to turn the tide in the upcoming election. Then you have U.S. banks sitting on a hefty $480 billion in unrealized losses on government securities. The Fed is poised to lend a helping hand to both.
But then there’s another reason that tells me that the Fed won’t likely stop soon once it starts up the proverbial money printer.
Let me elaborate.
Numbers Straight Out of a Horror Flick
Every six months, the Congressional Budget Office (CBO) releases a rolling 10-year “Budget and Economic Outlook.” Most people ignore reading material of this sort, but I’m always eager for it because it showcases just how utterly incompetent governments can be.
If you open the most recent report, and scroll to Page 10, you’ll find Table 1-1: CBO’s Baseline Budget Projections. Look for the line labeled “Total Deficit.” These are government deficits, and I’ve marked them in the next image.
The first thing that should catch your eye from the table above is that the deficits will consistently worsen, starting at $1.5 trillion in 2024 and reaching about $2.6 trillion by 2024. That’s an increase of 71% in just a decade.
Alarmingly, this also means that the total cumulative deficit between 2024 and 2034 would hit an astounding $21.6 trillion.
If this isn’t a damning indication that the U.S. is rapidly heading towards complete fiscal ruin, I don’t know what is. But it gets even worse.
…click on the above link to read the rest of the article…
