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Monetary Pumping and Resources

As a result of the recent strong stimulatory policies employed by the US government and the Fed, most commentators are of the view that the risk of a deepening slump in the US economy on account of the COVID-19 pandemic has now receded.

Some other commentators are not so certain that the risk has declined, arguing that the economy is still heading towards difficult times ahead. These commentators are of the view that to prevent the possible economic difficulties ahead authorities should continue with easy fiscal and monetary policies until the economy safely placed on the trajectory of stable economic growth.

Most commentators are of the view that by failing to act swiftly authorities are running the risk of raising the cost of an economic slump in terms of idle or unutilized resources such as labor and capital.

This way of thinking is succinctly summarized by Ludwig von Mises,

Here, they say, are plants and farms whose capacity to produce is either not used at all or not to its full extent. Here are piles of unsalable commodities and hosts of unemployed workers. But here are also masses of people who would be lucky if they only could satisfy their wants more amply. All that is lacking is credit. Additional credit would enable the entrepreneurs to resume or to expand production. The unemployed would find jobs again and could buy the products. This reasoning seems plausible. Nonetheless it is utterly wrong.

Conventional thinking argues that boosting the overall demand for goods and services is going to strengthen the supply of these goods and services – demand creates supply.

However, why should an increase in the overall demand be followed by the increase in the production of goods and services? This requires a suitable production structure that is going to permit the increase in the production.

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The Next Economic Crisis – Will Your Wealth Survive?

The Next Economic Crisis – Will Your Wealth Survive?

The greatest wealth transfer in history has already begun and the next crisis will only accelerate the process. As the printing presses continue cranking out more and more money, looking forward to a time when the markets pause or another economic crisis consumes the world is an issue we all should think about. How much wealth will escape the next large financial reset is very important because it will set the bar that determines the rate of inflation or deflation in coming years. If you believe we did not solve many of our financial problems after 2008 but merely masked them with a huge amount of newly printed money you are likely to embrace this concept.

The Shell Game Of Wealth Transfer

Much like a shell game where wealth is transferred about, in our modern society wealth is always on the move. Wealth and how things are valued is far from constant, it is fungible and constantly changing. While we may try to deny it, wealth is in a constant state of flux and constantly moving. Wealth comes in many forms, it can be held in the form of paper, promises, or as something more tangible and real such as property or goods.

Some items such as a tool hold “utility value” and its value may be based on how much work it can perform or the revenue it can produce. Replacement cost, supply and demand, and factors such as whether something can spoil or might grow obsolete over time also help determine its value as a place wealth can be safely stored. The term, safely stored in this case also includes placing it out of the reach of governments’ ability to tax it or make it illegal to own.
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Disoreder Will Come–As Confucious Warned

DISORDER WILL COME – AS CONFUCIUS WARNED

 

When bubbles burst, we will discover how very few superior men there actually are – as defined by Confucius:

“The superior man, when resting in safety, does not forget that danger may come. When in a state of security he does not forget the possibility of ruin. When all is orderly, he does not forget that disorder may come. Thus his person is not endangered, and his States and all their clans are preserved.” – Confucius

Superior man can exist at many different levels in society, not necessarily linked to money or investments. There will be many people without money who are prepared at an intellectual or psychological level. These people are probably the happiest since sadly many wealthy people worry about their money all the time rather than enjoy it.

In this piece I am talking primarily about preparedness in relation to one’s wealth.

PS Important Postscript at the end of the article.

FOCUS ON WEALTH PRESERVATION

The investors we meet in our business are people who are risk averse and therefore very much focus on wealth preservation. These investors buy physical gold because they are concerned about the excessive risks in markets. They want to protect and insure their wealth against unprecedented financial and currency risk. Like ourselves, these investors consider physical precious metals, stored outside a fragile banking system, as the ultimate form of wealth preservation.

But investment gold represents less than 0.5% of world financial assets. This means that a minuscule percentage of investors insure their wealth in gold. This is clearly surprising bearing in mind that over 5,000 years gold is the only money that has survived.

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Egon von Greyerz, gold switzerland, inflation, risk, gold, precious metals, wealth, financial bubble, bubble, currency, banking system

Gold Will Emerge Stronger Than Ever From the Post-Pandemic Environment: CPM Group

We’ve often heard that gold is a primary beneficiary of crises unlike any other, when investors and the average person alike wondered what would happen tomorrow. Now, when at least some of the fear has diminished, CPM Group took a look at how the crisis aggravated existing problems that have been turning people to gold for decades.

In their Gold Yearbook, CPM highlighted sovereign and private debt, government deficits and loose monetary policies as the drivers that will position gold exceptionally well over the medium and long-term. The scramble for money to keep their economies afloat by both the U.S. and governments around the world have worsened these issues in monumental fashion. Growth was already contracting prior to the crisis, and CPM believes low growth could be the biggest consequence of the official sector’s liquidity rush.

With many countries appearing to adopt even more protectionist policies, CPM points to the long-standing trade conflict between the U.S. and China as something to look out for. The group also noted that many economies are projected to post a much slower recovery than that of the U.S. Regarding gold price, CPM doesn’t expect any major rushes such as the one seen last year. Instead, its analysts think investors will become more attracted to the metal over a longer period of time, slowly buying gold whenever a dip occurs. (More in line with the behavior expected of buy-and-hold investors rather than speculators’ constant turnover.)

Their sentiment agrees with many reports asserting that money managers are reassessing the traditional portfolio model and coming to view gold as a necessary inclusion…

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birch gold group, gold, precious metals, pandemic, money, wealth, cpm,

The global reset scam

The global reset scam

This article takes a tilt at increasing speculation about statist global resets, and why plans such as those promoted by the World Economic Forum will fail. Central bank digital currencies will simply run out of time.

Instead, the collapse of unbacked fiat currencies will end all supra-national government solutions to their policy failures. Already, there is mounting evidence of money beginning to flee bank accounts into stocks, commodities and even bitcoin. This is an early warning of a rapidly developing monetary collapse.

Moreover, nothing can now stop the collapse of fiat currencies, and with it schemes to control humanity for the convenience and ambitions of government planners. There can only be one statist solution and that is to mobilise gold reserves to back and save their currencies, which in order to succeed will have to be fully convertible into circulating gold coinage. It will also require the role of governments to be reset into a non-welfare, non-interventionist minimalist role, which can only be achieved after a complete collapse of the current fiat-financed system.

Anything less will fail.

The Deep State and The Blob fuel conspiracy theories

Increasingly, people are beginning to realise that their world is undergoing a period of rapid change, with the future of fiat money now uncertain. For most, it is too difficult to even contemplate. But growing uncertainties are driving wild speculation about what those in authority now have in store for the human race in the form of a global reset. It is a time for conspiracy theorists, aided and abetted by our politicians and central bankers who are being increasingly evasive, because events are spiralling out of their control.

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Fourth Turning Election Year Crisis

FOURTH TURNING ELECTION YEAR CRISIS

“The next Fourth Turning is due to begin shortly after the new millennium, midway through the Oh-Oh decade. Around the year 2005, a sudden spark will catalyze a Crisis mood. Remnants of the old social order will disintegrate. Political and economic trust will implode. Real hardship will beset the land, with severe distress that could involve questions of class, race, nation and empire. The very survival of the nation will feel at stake. Sometime before the year 2025, America will pass through a great gate in history, commensurate with the American Revolution, Civil War, and twin emergencies of the Great Depression and World War II.” – Strauss & Howe  The Fourth Turning 

How a contested election could send the U.S. into a constitutional crisis - MarketWatch It's not the chairman of the Joint Chiefs' job to remove Trump from office if he won't leave.

“There is no darkness but ignorance. The devil can cite Scripture for his purpose.” William Shakespeare

I read The Fourth Turning in 2006, after seeing it described in John Mauldin and Doug Casey’s newsletters as an uncannily accurate assessment of American history based upon generational configurations which recur on eighty-year cycles, a long human life. Strauss and Howe wrote the book in 1997 and used their generational theory to predict the Crisis that would begin in the mid-2000’s and come to an indeterminate climax in the mid-2020’s.

 

As a student of history, the theory spoke to me. I have been writing articles since 2009, using the Fourth Turning as a guide to interpreting what has been happening and what might happen as this crisis period accelerates towards its violent culmination. The quotes above perfectly capture exactly what has happened since this crisis began in September 2008, with the Fed/Wall Street created financial collapse. The existing social order is disintegrating, but they are willing to destroy the country rather than relinquish their wealth, power and control.

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Getting Out of Dodge

GETTING OUT OF DODGE

Recently I received an email from a reader who asked for some feedback regarding a decision he was about to make. He’s in his early 50’s, single with an adult child and is considering resigning from his well paid and secure job in order to gain access to his substantial pension fund, which represents at least two thirds of his total wealth.

Why would he do such a crazy thing? Well, when he considers the growing financial, political, social, environmental and resource disruptions, he feels it may make sense to retrieve his pension now before the dollar devaluation accelerates and his pension fund loses significant purchasing power or is substantially lost to government decree and Wall Street greed.

He has talked to friends and acquaintances about what’s going on in the world these days and his thoughts about getting out and moving on with his life in a more prudent and thoughtful manner. All believe he’s nuts. Gone round the bend in fact.

So, he turned to me for some feedback (an “informed perspective” he said, though I’m not too sure about the informed part) carefully explaining he understands this is his decision alone and he’s responsible for any and all consequences of any action he may pursue.

Wow! Someone who is actually considering a radical life change and is already burning his get-out-of-jail-free victim card. What a refreshingly rare and responsible point of view. He actually led with that in his email and I couldn’t help but sit up and take notice.

Clearly this person warranted a detailed and in-depth response from me, if for no other reason than to show respect for his maturity and forthrightness. What follows below is a much expanded and edited version of my thoughts, which I promptly emailed back to him.

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LEE CAMP: The Secret Reason Billionaires Love a Pandemic

LEE CAMP: The Secret Reason Billionaires Love a Pandemic

You see, there has been a class war going on for years – perpetrated by the rich (who aren’t smarter or better) against everyone else.

We live in a time when there are more billionaires walking around than ever before. (They don’t actually walk. They have someone do that for them.) And one can’t deny billionaires are billionaires because they’ve worked harder than anyone else—roughly 300 times harder than an average worker. They are smarter, cleverer, more intuitive and show more initiative than anyone else, too. That’s why they’re billionaires and we’re not. That’s why they will always be billionaires and we will never be. That’s why we can all see ourselves in the reflection on Jeff Bezos’ bald head and yet can never touch it.

‘Deportmental ditties : and other verses;’ Graham, Harry, 1874-1936. London : Mills & Boon 1900. (University of Toronto)

Now, I must say—everything stated in the first paragraph is utterly false. No part of it is true (except the part about the walking). Most billionaires don’t work harder, don’t think harder, and don’t know more. They have nothing over your average person except: a) luck b) sometimes inheriting a fortune and c) being more sociopathic. So I guess you could say they’re extraordinary on the sociopathy front. They are more willing to crush other humans to get what they want and thereby they are more able to get what they want.

All of this might slightly explain why a vein bulges in my forehead when I read that billionaires are doing better than ever during this global viral outbreak that has killed hundreds of thousands.

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The Social Contract Between Government and People Is Unraveling – Quicktake

The Social Contract Between Government and People Is Unraveling – Quicktake

Numbers, budgets, charts and graphs about government finances. That’s what we do here. We try to understand where public money should be spent and what it accomplishes.

Through that lens, it’s difficult to know where to begin on what has befallen the Chicago area and most of the country.

For now, this simple observation seems paramount: The most fundamental element of the social contract between government and the people is cracking. That’s the obligation of government to keep its citizens safe. For that, we surrender a portion of of our freedom and wealth to government for the collective good.

Thomas Hobbes

That arrangement has been recognized as a foundational philosophy of civil society since Thomas Hobbes articulated it over 300 years ago.

Citizens expect government to protect them from rioting and looting just as they expect it to protect their lives and adhere to to a civil process when being arrested. Both expectations are now broken.

“The sight of looters and arsonists pillaging stores at will has shaken the confidence of many that law enforcement is capable of maintaining the peace. It has also tainted the very real grief felt over the tragic loss of life.” That’s not from a source that’s unsympathetic to George Floyd or protesters. It’s from an editorial in the Minneapolis Star-Tribune.

What will be the consequences breaking the social contract? Speculate if you want, but know that it may extend far beyond George Floyd’s murder and the resulting violence.

How to Prepare For the Coming Wealth Grab

How to Prepare For the Coming Wealth Grab

And here comes the next round of stimulus.

As long as large portions of the economy remain on lockdown, the government will be forced to perform massive stimulus programs/ social spending. As I write this Friday morning, the House is preparing to vote on a $3 trillion stimulus bill later today. 

While the particular bill in question is chock full of Democrats’ legislation (more abortion funding, banning voter IDs, etc.), and likely won’t make it through the Senate in this particular form, the White House and the GOP are both in favor of providing additional stimulus checks to Americans in the near future.

Put simply, regardless of specific political affiliations, the political class is currently in favor of spending vast amounts of money right now.

All of this money has to come from somewhere. Currently, it’s the debt markets (the Treasury will borrow $3 trillion between April and June alone). But at some point, the Powers That Be will begin looking for new sources of capital.

Indeed, if history has taught us anything it’s that once the government/ elites use a crisis to make a massive power grab, rarely if ever is that power given back to the people.

We saw this with the Patriot Act in 2001, the policy response to the 2008 crisis. And it’s happening again today with the economic shutdown. While individual states will all eventually reopen, the fact is that the US just took a massive jump towards outright socialism/ central planning. And the political class LOVES it.

This will result in a collapsing economy, which in turn will mean lower tax revenues, which in turn will mean a greater need for capital to finance social spending programs/ unemployment/ stimulus checks.

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Amid the Coronavirus Pandemic, America’s Billionaires Thrive and Prosper

Amid the Coronavirus Pandemic, America’s Billionaires Thrive and Prosper

Although most Americans currently face hard times, with unemployment surging to the levels of the Great Depression and enormous numbers of people sick or dying from the coronavirus pandemic, the nation’s super-rich remain a notable exception.

Financially, they are doing remarkably well. According to the Institute for Policy Studies, between March 18 and April 28, as nearly 30 million Americans applied for unemployment benefits, the wealth of America’s 630 billionaires grew by nearly 14 percent. During April 2020 alone, their wealth increased by over $406 billion, bringing it to $3.4 trillion. According to estimates by Forbes, the 400 richest Americans now possess as much wealth as held by nearly two-thirds of American households combined.

Some of the super-rich have fared particularly well. Jeff Bezos (the wealthiest man in the world) saw his wealth soar between January 1 and early May 2020 to $142 billion―an increase of $27.5 billion. During that same period, Elon Musk’s wealth grew by $11.4 billion to $39 billion and the wealth of Steve Ballmer (ranking sixth in wealth) increased by $8 billion to $66.1 billion. The gains of Mark Zuckerberg (ranking third) were more modest, but his wealth did rise to $79.3 billion.

Although some billionaires lost money, this was not likely to put them out on the streets. The wealth of Bill Gates (ranking second) dropped from about $113 billion to $106 billion, while the wealth of Larry Ellison (ranking ninth) slipped from $58.8 billion to $58.7 billion.

During this time of economic crisis, two features of the U.S. government’s economic bailout legislation facilitated the burgeoning of billionaire fortunes: first, the provision of direct subsidies to the wealthy and their corporations, and, second, the gift of huge tax breaks to rich Americans and their businesses. Consequently, although the U.S. economy continues to deteriorate, stock prices, helped along by this infusion of cash, are once again soaring.

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Let’s Be Less Productive

HAS the pursuit of labor productivity reached its limit?

Productivity — the amount of output delivered per hour of work in the economy — is often viewed as the engine of progress in modern capitalist economies. Output is everything. Time is money. The quest for increased productivity occupies reams of academic literature and haunts the waking hours of C.E.O.’s and finance ministers. Perhaps forgivably so: our ability to generate more output with fewer people has lifted our lives out of drudgery and delivered us a cornucopia of material wealth.

But the relentless drive for productivity may also have some natural limits. Ever-increasing productivity means that if our economies don’t continue to expand, we risk putting people out of work. If more is possible each passing year with each working hour, then either output has to increase or else there is less work to go around. Like it or not, we find ourselves hooked on growth.

What, then, should happen when, for one reason or another, growth just isn’t to be had anymore? Maybe it’s a financial crisis. Or rising prices for resources like oil. Or the need to rein in growth for the damage it’s inflicting on the planet: climate change, deforestation, the loss of biodiversity. Maybe it’s any of the reasons growth can no longer be safely and easily assumed in any of today’s economies. The result is the same. Increasing productivity threatens full employment.

One solution would be to accept the productivity increases, shorten the workweek and share the available work. Such proposals — familiar since the 1930s — are now enjoying something of a revival in the face of continuing recession. The New Economics Foundation, a British think tank, proposes a 21-hour workweek. It may not be the workaholic’s choice. But it’s certainly a strategy worth thinking about.

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Freaky-Deaky

Freaky-Deaky


I never subscribed to the nostrums of Marxism, but old Karl sure had a point when he said, “All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses his real conditions of life, and his relations with his kind.” Is that exactly where we’re at, or what?

The hologram of capital that was not really there dissolves before our eyes. That capital, you understand, was our notion of how wealthy we used to be, like, five minutes ago. And now the capital, the money, the mojo of modern life is going-going-gone. The hologram was projected by a fantastically hypercomplex hologram machine jerry-rigged with frauds, swindles, and false promises to pay tomorrow for that proverbial hamburger today. The people running it left the robots in charge and went off to frolic with the likes of Jeffrey Epstein, speaking of the profane. Then, the hologram machine broke and the iridescent image just plumb flickered out.

Now, under the shadow of the corona virus, everybody has been sent home to wait and see what happens next, hostages to the flat-screen, where the cable networks show little besides a non-stop real-time horror movie called The End of Your Future. It’s hard to keep morale up when you realize that all the usual conveyer belts of stuff you need to keep going are breaking down. It’s not hard to imagine fights, sure to come, over that dwindling stuff, which we will struggle heroically to allocate because we are really not all bad. Goodness abides, even in that America we managed to so deeply profane. Let’s hope there’s enough of it.

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The Delicate Balancing Act To Protect Wealth Is Full On

The Delicate Balancing Act To Protect Wealth Is Full On

We Are Walking A Tightrope 

The delicate balancing act to protect wealth is now in full crisis mode. The key players are central banks across the world and the corrupt bankrupt governments they seek to protect. At risk is the global financial system that has served them so well over the decades. For years these so-called guardians of the economy have siphoned wealth away from the many and into the hands of a few. Now unless they can pull a few more rabbits out of their hats rubber may hit the road.

President Donald Trump announced in a White House news conference that he would seek payroll tax relief and other measures to help businesses deal with the coronavirus outbreak. The Associated Press reported Trump said they were discussing “a possible payroll tax cut or relief, substantial relief, very substantial relief, that’s big, that’s a big number,” Administration officials said the White House wasn’t ready to roll out specific economic proposals, CNBC reported. Trump also said he was seeking help for hourly-wage workers to ensure they’re “not going to miss a paycheck” and “don’t get penalized for something that’s not their fault.” These were in reaction to a large market drop as the covid-19 outbreak spread.

President Trump’s proposal to cut payroll taxes is targeted at reinforcing investor confidence in the hope it will give markets a reason to rebound. It ignores the fact America’s deficit spending is already out of control. An analogy would be for a near-bankrupt parent giving their irresponsible child a raise in their allowance after finding they had been wasting money on lottery tickets.

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PRECIOUS METALS INVESTOR ALERT: Prices Are Heading Into An Entirely New Market

PRECIOUS METALS INVESTOR ALERT: Prices Are Heading Into An Entirely New Market

The Global Financial System is now under severe stress.  While there have been many factors leading to up to this point, the situation that is unfolding in China and abroad seems to be speeding up the process.  Yesterday, the market got a small WHIFF or WOKE up a TAD in regards to a global contagion and soon to be the rapid contraction of the JIT – Just In Time Inventory Supply Chain System.

Even though the Dow Jones Index lost 1,031 points on Monday and another 400+ points so far today, this is mere peanuts when we take into account what is coming in the following weeks and months ahead. Because China accounts for 21% of Global GDP and it supplies a lot of goods, parts, and consumables around the planet, a severe contraction will impact the rest of the world in short order.

But, what if this contagion spreads further to other countries as we see in Iran and Italy??  Then, we are talking about a much more severe systemic problem.  And according to my research these past 3-4 days, it’s much worse than I previously thought.  I don’t plan on doing any updates on this contagion, as many others are more qualified.  However, I will be posting some information as it pertains to the global economy and financial system.

The one thing that I will share is that if you want to wait to prepare for this until some local, state, or regional government comes in and locks down your town, city, or area… then you are behaving UNWISELY.  Of course, the situation may not get that bad, but there is nothing wrong with a little insurance, just in case.

The Precious Metals Will Do Did Exactly What They Were Designed To Do… PROTECT WEALTH

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Olduvai IV: Courage
In progress...

Olduvai II: Exodus
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