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JayDubya

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Almost a third of Americans say they may never retire because of coronavirus hardships

https://www.yahoo.com/money/america...cause-of-coronavirus-hardships-174525536.html

The pandemic’s crushing blow on the economy is derailing most Americans’ retirement plans, with a significant number worrying they won’t be able to retire at all.

Seven in 10 Americans expect the pandemic to hurt their retirement savings, according to a new TD Ameritrade survey, with a fifth predicting a severe impact. Nearly a third, or 30%, of Americans feel like they won’t ever retire, the survey found.

The outbreak is exacerbating the ongoing retirement saving crisis in the U.S. that existed well before the disease spread throughout the country.

“Unfortunately, this is not surprising. Before this economic fallout, Americans were already ill-prepared for financial emergencies,” said Steven Sexton, CEO of Sexton Advisory Group, a financial firm. “Living paycheck to paycheck and incurring unmanageable debt was already the reality for Americans before the virus hit. The pandemic has only magnified these financial issues on a much larger scale.”

Still recovering from the Great Recession
These findings come when more than 4 in 10 Americans were still recovering from the last recession, according to the study.

Almost 3 in 10 Gen Xers predicted a severe impact on their retirement, compared with 19% of millennials and 15% of boomers.


Almost 3 in 10 Gen Xers predicted a severe impact on their retirement. (Source: TD Ameritrade's COVID-19 and Retirement Survey June 2020)

“What this virus has exposed is the lack of an emergency savings account and basic financial planning,” said Cathy Clauson, senior vice president of retirement services at AssetMark, an investment management firm. “Basic financial planning is essential in good and bad times. We just feel the pain of it missing in the bad times.”

Almost a third of Americans are also under the misconception that they have to pay back their stimulus check to the government, the survey found. Under the CARES Act, many Americans received up to $1,200 in relief money and an extra $500 per child under 17.

“There’s an opportunity to educate on legislation,” said Dara Luber, senior manager of retirement product at TD Ameritrade. “Americans think they have to pay back their stimulus check since they’re taught nothing comes for free.”

Many Americans also don’t know the new pandemic rules on taking money from your retirement savings. About a third believe it’s false that the CARES Act allows you to withdraw up to $100,000 penalty-free from your 401(k), according to the survey.

Making sacrifices for retirement
Americans are also prepared to make personal sacrifices to make up for losses in their retirement accounts.

Half are open to looking for a job in retirement to increase income and save costs. More than two-thirds of Gen Xers are considering this option, while almost 4 in 10 adults will or are thinking about delaying retirement altogether.

There are other ways to protect yourself for retirement.


Michael Bonacci, 74 years-old, living for 10 years in Leisureville, an age-restricted senior community, poses for a photo at his home at Leisureville in Pompano Beach, Florida, on March 12, 2020. (Photo: EVA MARIE UZCATEGUI/AFP via Getty Images)

“They could delay Social Security and go on to do a hobby and turn that into a second job,” Luber said.

‘Over time it is best to stay invested’
For those savers scrambling to withdraw from their retirement accounts out of fear, don’t, Clauson said. “Without a doubt, history shows us that over time it is best to stay invested,” Clauson said.

After seeing the impact of the coronavirus on their retirement savings, nearly 1 in 2 Americans have or are considering increasing their contributions to make up for lost savings, according to the survey. Gen X and millennials have the home-run advantage on this strategy, Luber said.

“It’s a good sign that they want to prioritize as they see it fit, but it’s really Gen X and millennials that will have a longer time horizon than baby boomers as they come out of the pandemic,” Luber said.
 

Au-myn

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I retired early in February 2019 still at the top of my game. I choose to trade stock & options as a part time job.
I do my charting and answer to myself. Financially, it is working out well enough and my overall health is improved verses working for the man.

Have some friends that are struggling and others that have made adjustments and worked things out. It is a very difficult time for many people.
 
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Au-myn

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An interesting day for the miners as they traded lower making supply (O) entries on many PM Point & Figure charts, and closing on the higher side.
Should be interesting to see if we get the follow through of demand (X's) on the charts.
 

Scorpio

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FYI,

someone actually asked the fed if they were taking positions in companies,

his response, 'we are not allowed to do that'

but he admitted that they were 'authorized' to buy up corp bonds and have been doing so,
that if congress would write the law, he would be willing to send billions to the states

so many of these poli tools were asking him questions that were race based, underemployment, impact from boo hoo flu, etc,

wherein we are supposed to feel obligated to bail out the Nyc's and other communist districts of the us of friggin' a

now mind you, those doing the pontificating, were also the same who were commenting about the exploding debt vs the kenyan, and so on

on one side saying tramp has blown up the deficit, then on the other saying he isn't spending enough
 

JayDubya

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US National debt increased by nearly $1 trillion in the last month

In the past 30 days, the United States national debt has increased by nearly $1 trillion-- screaming past $26.2 trillion total, or 128% of GDP.

That means the US government is borrowing over $23 million per MINUTE.

But that’s just the last 30 days. The US government has gone nearly $3 trillion further into debt since March 1.

That is over $9,000 for every man, woman, and child living in the United States. And all you received was a $1200 check...

Now the “Save our Country Coalition” has penned a letter to Congress stating that the federal budget is dangerously close to $10 trillion this fiscal year.

On an inflation adjusted basis, that means the government will spend more fighting Covid than it spent fighting every single 20th century war-- plus the 21st century Wars in Iraq and Afghanistan-- COMBINED.

The cost of World War I, World War II, The Korean War, The Vietnam War, The Gulf War, The Iraq War, and the War in Afghanistan combined, does not add up to this fiscal year’s budget.

Click here to read the full story.
 

Uglytruth

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That is over $9,000 for every man, woman, and child living in the United States. And all you received was a $1200 check...
Where did the rest of it go?
 

Scorpio

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from my desk,

I do believe this whole boo hoo flu thing is not going away anytime soon,
the evidence continues to pile up that it is actually expanding, affecting more persons rather than just the impaired, and so on

this thing is morphing as I stated 2 mos ago, and now is a much more ambitious little bug,

meaning, there really is only 1 way out, and that is herd immunity, ie open it up and let 'er rip. There is no way to hold it back, as that only delays the inevitable. The whole idea of a vaccine is pure fantasy, as the vaccine would be outdated the very day it was released due to progression.

kind of on the order of how pain meds, or certain other meds do not perform as they used to,
for good reason, the bugs have become resistant or morphed beyond, thereby sailing right by the defenses employed,

as poli's do, they will call for further restrictions, further limitations, more requirements and so on,
when in fact, my opinion is that they should do the exact opposite and let it go,

take the hit and move on.

in the D Noland recent article, you will also see many references to which I speak re numbers. They aren't slowing this thing at all.
 

Scorpio

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another thing of interest,

when metals are following their seasonals, we can see the lows in the July time frame,
and as of yet, not much weakness, quite the contrary,
no breakouts yet,

so if we do get weakness between now and the end of July, might want to be prepared to stand tall
 

WillA2

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Don't forget, there is a way to end the beer flu with meds. Hydroxychloroquine Sulfate. The more people understand this, the less fear they will have of the beer flu.
 
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In the 1970's, I couldn't even afford the cheap draft beer at happy hour!
 

JayDubya

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Clearing out old emails and ran across this. from June 26 - forgive me if it's been posted elsewhere.

David Stockman on What Could Happen If the Fed Loses Control


International Man: Recently, Fed Chairman Jerome Powell said the central bank’s money printing is designed to help average Americans, and not Wall Street.

What’s your take on this?

David Stockman: Yes, and if dogs could whistle, the world would be a chorus!

The truth is, in an economy encumbered with nearly $78 trillion of debt already—including $16.2 trillion on households, $16.8 trillion on business, $23 trillion on governments—the last thing we need is even lower interest rates and even bigger incentives to take on debt and leverage.

In fact, in a debt-saturated system, the Fed’s massive bond purchases never transmit anything outside the canyons of Wall Street. This money-printing madness only drives bond prices higher and cap rates lower—meaning relentless and systematic inflation of financial assets’ prices.

As a practical matter, of course, the bottom 90% don’t own enough stock or even inflated government and corporate bonds to shake a stick at. Instead, what meager savings they have accumulated languish in bank deposits, CDs or money market funds earning exactly what the Fed has decreed—nothing!

So, when Powell says he’s only trying to help the average American, you have to wonder whether he is just stupid or the greatest lying fraud yet to occupy the big chair at the Fed.

Then again, it doesn’t really matter why.

The Fed is now a completely rogue institution that is a clear and present danger to the future of prosperity and liberty in America. The tragedy is that the clueless speculators on Wall Street and politicians in Washington don’t even get the joke.

International Man: So far, the Fed has been able to successfully manipulate interest rates to historic lows.

What are some catalysts that could cause the Fed to lose control and interest rates to spike?

David Stockman: They are chasing their tail, faster and faster. The more they expand their balance sheet, thereby injecting into the bond pits a massive artificial bid for governments, corporates, munis, commercial paper and junk, the lower the yields go, and the demand for more debt becomes greater.

Needless to say, when incomes drastically shrink due to the folly of Lockdown Nation, debt should be liquidated, not massively increased. So, the Fed and its fellow-traveling global central banks are setting up our Humpty-Dumpty economy for a very great fall.

That is to say, what will cause the central banks to lose control is the greatest wave of debt defaults in recorded history. On that score, the Fed just issued its Flow of Funds data for Q1, and it leaves nothing to the imagination. Total public and private debt on the US economy now stands at $77.6 trillion, or 3.5X GDP, and we'll be lucky to post at $21 trillion for the full year of 2020 GDP.

Recall that we supposedly got a wakeup call back in 2008, when the economy plunged into financial crisis and the worst recession since the 1930s; way too much debt was widely identified as the fall guy. But back then, total debt outstanding was just $52.6 trillion, meaning that during the last decade of purported recovery, the US economy actually took on $25 trillion of new debt—a 48% increase.

Moreover, big-spending politicians were not the only culprit. That’s because when the central banks drastically falsify interest rates to sub-economic levels, everyone is incentivized to borrow hand-over-fist. And, most often, it’s for unproductive purposes, such as more transfer payments in the government sector and more financial engineering among the C-suites.

On the eve of the Great Recession, for example, total business debt (corporate and non-corporate) stood at $10.1 trillion and has subsequently soared to $16.8 trillion. That $6.7 trillion gain represents fully 98% of the $6.85 trillion increase in nominal GDP during the same period.

This orgy of borrowing also means that business debt over the past 13 years has grown by 66.5%—far more than the 46.7% expansion of nominal GDP. Accordingly, the business debt burden on GDP has now gone off the charts, and at 78% of GDP, is more than double the pre-1970 level:

Business Debt as Percent of GDP:

  • 1955: 31%
  • 1970: 47%
  • 1980: 49%
  • 1995: 55%
  • 2007: 69%
  • 2020: 78%
Stated differently, chronic financial repression and clubbing of interest rates by the central bank have amounted to a slow-motion burial of the business sector in debt; debt that in recent decades has been overwhelmingly allocated to shrinking the equity base of business enterprises, thereby cycling wealth from the productive economy to the rent-capturing precincts of Wall Street.

Indeed, the Fed’s cheap credit never really leaves the canyons of Wall Street, where it fulsomely rewards carry-traders and risk asset speculators because zero cost money is always and everywhere the mother’s milk of leveraged speculation.

It also causes corporate C-suites to become maniacally obsessed with goosing their stock options via financial engineering gambits like stock buybacks, leveraged recaps and wildly over-priced M&A deals as a substitute for organic growth. Yet these maneuvers merely supplant equity and financial resilience with debt and financial fragility.

So when business bankruptcies soar to unprecedented levels in the month ahead as the economy reels from the folly of Lockdown Nation, the financial fragility part will become crystal clear.

But it also needs to be recalled that even as the interest rate clubbers at the Fed fostered a massive explosion of business debt after the 2008 financial crisis, it did not translate into any growth in productive investment at all.

In fact, real business CapEx minus current capital consumption (depreciation and amortization charged to current period production) is today barely a tad higher than it was 20 years ago on the eve of the dotcom bust.

In short, the Fed has fostered a zombie economy, and it is the collapse of the zombies that will eventually take it down.

nternational Man: The Fed has printed more money in recent months than it has for its entire history. The government is spending as if trillion is the new billion.

What is going on here?

David Stockman: Here’s an eye-opener to put this madness in perspective. Annual federal outlays posted at $3.896 trillion in 2014 and were the product of 225 years of relentless expansion by the Leviathan on the Potomac.

But it now appears quite certain that the annual deficit in FY 2020 will actually be larger than the total spending level that took more than two centuries to achieve.

That’s right. Owing to the mushrooming coast-to-coast soup lines hastily erected by Washington in response to the collapse of jobs, incomes and business cash flows brought on by Lockdown Nation and the evaporation of tax revenues, Uncle Sam will borrow more this year than the total spending just six years ago.

Stated differently, back in the day, we struggled to keep total federal spending during 1981 under $700 billion. By contrast, the Donald has borrowed nearly 4X that in the last 90 days!

So, yes, perhaps Trump’s one truthful boast is that he is indeed the king of debt.

Needless to say, there is nothing remotely rational, plausible or sustainable about an FY 2020 budget that’s going to end up with revenue south of $3 trillion and spending north of $7 trillion.

That’s not even banana republic league profligacy; it’s just sheer stupidity and madness, bespeaking a bipartisan duopoly in Washington that has had its collective brains turned into sawdust by the relentless, egregious money pumping of the central banks.

For want of doubt, just consider what has happened since March 11 on the eve of the Lockdown Nation’s commencement.

The public float of federal debt has soared from $17.85 trillion to $20.24 trillion, gaining $2.39 trillion;

The Fed’s balance sheet has exploded from $4.31 trillion to $7.17 trillion, gaining $2.86 trillion.

The Fed has, therefore, effectively monetized 119% of the gain in the publicly traded Treasury debt.

Of course, you can’t blame the Donald alone for this insanity; he’s been enabled by two of the greatest crackpots to hold high economic policy positions in American history—Treasury Secretary Mnuchin and Fed Chairman Jay Powell.

As it has happened, we have closely observed every combination of Fed chairman and US treasury secretary since 1970, when we headed off for our first job in the Imperial City, eager to better the world and our own prospects, too.

So, we can say without reservation that the current duo is the worst combo of spineless, principle-free empty suits to plague the nation during the last half-century. And it’s not a close call—even against a ship of fools, which include John B. Connally, G. William Miller, Ben Bernanke, Hank Paulson Jr., Timothy Geithner and Janet Yellen, among considerable others.

After all,if the Treasury Secretary and Fed Chairman are utterly clueless about the grave dangers of the fiscal and monetary bacchanalia now rampant in the imperial city, how in the world will it stop except in some fiery collapse?
 

solarion

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^^What could possibly go wrong?

1594310310359.png

1594310533473.png


For the fed's next trick...get rid of cash and bring on the non-inflation adjusted negative yields! Just make damn sure you suppress those nasty metals while doing so.
 

Uglytruth

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the US economy actually took on $25 trillion of new debt
Where did it go? Is it in circulation? Is it propping up the market? Is it invested in metals and that's why so little is available?
 

solarion

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I don't know about $25t, but the fed likes to dump fresh funny munny on their fellow banksters...and then turn right around and pay out interest on those "excess reserves".

1594340729095.png
 

JayDubya

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Federal Reserve: Everything is fine. Just like in 2008

It’s nothing but rosy news coming from the Federal Reserve.

Recently the Fed released this reassuring statement:

“The banking system remains well-capitalized under even the harshest of these downside scenarios. . .”

In other words, everything is just fine.

Yet at the same time, the Fed also announced that it would impose restrictions on bank dividends and stock buybacks, essentially preventing banks from passing along their profits to shareholders.

If those two statements strike you as completely contradictory, you’re right.

If the Fed isn’t worried in the slightest because the banking system remains strong ‘even under the harshest downside scenarios’, then why restrict what banks can/cannot do with their private profits?

This forked tongue communication style is becoming somewhat of a trend.

Back in March, the head of the FDIC released a video asking Americans to NOT withdraw their money from the banks.

“Your money is safe at the banks,” she said, with soft piano music in the background. “The last thing you should be doing is pulling your money out of the banks thinking it’s going to be safer somewhere else.”

This reminds me of back when Ben Bernanke repeatedly told the public, and Congress, that housing prices would continue rise, and that a subprime mortgage meltdown would not affect the broader economy.

Or in July 2007 when Bernanke said: “Overall, the U.S. economy seems likely to expand at a moderate pace over the second half of 2007, with growth then strengthening a bit in 2008.”

And even in early 2008 when Bernanke said, “The Federal Reserve is not currently forecasting a recession," and that the federal housing agencies Fannie Mae and Freddie Mac “would make it through the storm.”

Within months, Fannie Mae and Freddie Mac had collapsed, the economy went into the harshest recession since the Great Depression, and the entire financial system was on the brink of failure.

Bear in mind, this was the Chairman of the Federal Reserve telling people that everything was fine.

Now the Fed (and FDIC) are once again telling us that everything is fine.

Yes, everything is fine despite the fact that large sections of the economy have shut down, tens of millions of people are unemployed, countless businesses have failed and will never re-open, major cities across the United States have experienced extreme social unrest and continued economic disruption, and now a second wave of the pandemic is upon us.

But other than that, everything is just fine.

And, definitely, DEFINITELY, don’t worry about the banks. Don’t even think about the banks. Nevermind that some of the largest banks in the world failed in 2008. This time is different.

In fairness, they might be right. But who really knows?

This is one of the [many] big problems in banking: there’s practically zero transparency.

As an example, I was looking at Bank of America’s financial statements yesterday; their balance sheet shows $983 billion in loans.

And that’s about all the detail you get; even doing a deep dive into the footnotes and annual report shows little additional information.

What are the loan terms? What’s the duration risk? How valuable and marketable is the collateral? What legal security was taken over the collateral? Is there even any collateral at all?

Plus there’s extremely limited information on the bank’s exposure to riskier derivatives and collateralized loan obligations (CLOs-- which are the toxic securities du jour).

In fact there’s far more information about Bank of America’s diversity and inclusion programs than disclosures about potential financial threats.

Again, it’s possible that there’s nothing to see here and everything is just fine. But given the lack of transparency, it’s impossible to independently verify.

The Fed and FDIC insist everything is OK. But the Fed and FDIC (along with the entire financial system) insisted that everything was OK back in 2008 right before everything collapsed.

Why should we be so trusting again this time in light of such obvious risks?

To be clear, I’m not suggesting that anyone should pull their money out of the banks.

But there are a few important things to consider:

You work hard for your money. So the decision of which bank to trust with your hard-earned savings should be deliberate.

Most people choose where to bank based on irrelevant factors, like location-- ‘There’s a branch near my kid’s karate school, so I’ll deposit my funds there.’

There are far more important factors. Do they treat you well, or like a criminal suspect? Do they treat your money well, or do they gamble it away on some ridiculous investment fad?

Are they transparent? Are they conservative, responsible custodians of your money?

Those are the things that matter in a bank.

Here’s an easy litmus test: if your bank routinely sends you junk mail offering to loan money at super attractive terms, that’s a good indication you DON’T want to be a depositor there.

No money down? Teaser interest rates? No personal guarantee?

To me, those are reasons to take my money and run. Because when a bank makes it easy for people to borrow money, they’re taking on unnecessary risks. And they’re doing it with MY money. And YOUR money. Not theirs.

I prefer to deposit my savings at a bank that scrutinizes every prospective borrower and has incredibly stingy loan terms. Because at least I know they’re being very conservative with my money.

Second, you might want to also consider gold.

Gold was money for thousands of years. And the whole time, it held its value.

Even US dollars were redeemable for gold for most of US history.

But in 1971, Nixon formally ended the gold standard and divorced the dollar from gold.

And go figure, the 1970s was a dismal decade of stagflation, where the value of the dollar plummeted, wages stagnated, and unemployment soared. What a surprise!

But gold did quite well, and silver did even better.

Maybe 5,000 years of history is wrong, and humanity suddenly got smarter in 1971.

Or perhaps gold is still the safest haven we have available, despite what the central banks would have us believe.

To your freedom,



Simon Black,
 

JayDubya

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The latest from Doug Casey:

Here’s What’s Driving Gold Higher—and What’s Next for the Gold Bull by Marin Katusa
-

For the first time since 2011, gold traded hands above $1,800 per ounce.



Naturally, this has every goldbug and self-proclaimed expert on YouTube shouting from the rooftops.

Before we jump into what is going on in the gold markets, let’s first take a look at past bull markets.

Below is a chart that shows the previous major bull markets in gold. You will see that all but one of the major gold bull markets resulted in gold appreciating at least 400%. Using January 2016 as the low point for the current gold bull market, gold is up 69% from its lows.


History may not repeat itself, but it’s critical to understand what is driving the price of gold right now.

What is Driving the Gold Market Higher?

Right now, there are several major economic factors driving gold higher.

1) Large Government Stimulus Packages Around the World

This leads to currency devaluation. The global fiscal-policy response to the coronavirus is $9 trillion to date and likely to climb further. This is supportive of assets like gold, which are a store of value.

Below is a chart that shows the fiscal-policy response of major economies around the world. The fiscal-policy response is illustrated as a percentage of the country’s GDP.




2) NIRP – Negative Interest Rate Policy

Around the world, central banks are cutting interest rates. Starved investors are clamoring for any bond trading with a reasonable yield. This drives bond prices higher and bond yields lower.

Low interest rates discourage investors from investing in government bonds and forces them to look elsewhere for safe-haven investments—such as gold.

Below is a chart that shows government bond yields around the world.


You’ll notice that Europe is nearly all red.

The combination of investors starving for yields and central banks’ NIRPs has driven most government-bond yields into negative territory.

The rest of the developed world is not far behind.

These low rates have driven the total amount of negative-yielding debts to levels we’ve never seen before.

In the past 5 years, global negative yield debt has soared from zero to over $12 trillion.



3) The Deflation and Stagflation Trade

I have written extensively about the weak productivity and GDP, high unemployment, and high costs of primary goods (food, water, shelter).

This type of economic environment incentivizes investors around the world to buy safe-haven assets, which are stores of value.

The International Monetary Fund (IMF) is projecting a deep recession and slow recovery.

In its most recent remarks on June 30th, the IMF revised its forecast for global GDP to -4.9%.

What is more worrisome is that the IMF forecast for developed nations is comprised of nations like the United States, Germany, and China. The IMF forecasts they will contract by 8%. Also, the IMF projects that total business losses will be over $12 trillion.

Below are the 2020 projections for the gross domestic product of major economies.

Let’s not forget that Mexico is a very important trading partner for the U.S. There are many troubling signs in the market.

4) ETF Inflows Continue to Hit New Highs


Gold-backed ETFs have seen record inflows for weeks on end, as investors clamor for exposure to the metal.

As ETFs create new units, each of which is backed by gold, this requires the ETF to purchase more gold.



What’s Next for Gold?

I don’t see the Federal Reserve bank, or any other major central bank around the world, slowing the money printing presses.

Nor do I see any central banks of developed nations having the ability to raise interest rates. This type of currency devaluation provides a solid, long-term thesis for gold.

I do think gold needs more time to consolidate in this upper range before making a sustainable move higher.

Could Silver Play Catch Up?

Using January 2016 as the start of this bull market, it is clear that silver has drastically underperformed gold. The chart below shows silver is only up 30% from January 2016, compared to gold, which is up 67%.




This has led to a record diversion between the valuation of gold and silver. And this is demonstrated by the gold-to-silver ratio.

Much to the chagrin of silver bugs, the ratio has continuously made new highs, meaning that gold is taking off—leaving silver behind.




In fact, I don’t think the gold-to-silver ratio is particularly helpful as an investment tool.

The gold-to-silver ratio reminds me of the oil-to-natural gas ratio of the mid-2000s…

For decades, the oil to natural gas ratio was fixed at 6 to 1 because the pricing was fixed on an energy equivalent basis.

The shale revolution changed that when in 2007, the shale produced so much gas that the ratio became irrelevant.

Silver is an industrial metal with some precious metal attributes.

Don’t forget there is very little primary silver production.

That means a lot more silver is produced as a by-product of existing mines.

Also, a slower global economy does not bode well for industrial metals. Silver will do okay, but gold is where the action is and will continue to be.

How is Marin Katusa Investing in Gold?

I have spent two decades in the resource space as a professional fund manager and investor.

I make 99% of my income from investments within the resource space.

I’ll let you in on a simple formula for achieving big success in resource markets…

Here are two of my most important criteria:

  • Management team quality and track record of success
  • Assets located in +SWAP Line Nations.

A bad management team can screw up a good deposit.

On the other hand, a good management team possesses both intellectual and physical capital. This allows it to create situations with exceptional upside and less risk.

My old rule was to avoid the AK-47 nations. Those are nations where AK-47s are required to feel safe, both for traveling and as a local.

Having traveled to over 100 countries, I’ve strapped on the bulletproof vests and hired ex-military for security. I avoid that now.

It might make for a good story, but in reality, it’s not worth it.

I’ve taken my thesis a step further during the COVID-19 pandemic, with my +SWAP and -SWAP Line Nations argument.

This suggests that nations with access to US-dollar SWAP lines will receive preferential treatment and trade agreements versus those without access to US-dollar SWAP lines.

I think this is a trend that will build over the next 3–5 years before coming to fruition.

Positioning yourself in the resource game requires more than throwing a dart at the board.

Buying an ETF like the Junior Gold Miner ETF will give you some exposure, but not a lot. The sniper approach is simply the best.

It involves thousands of hours of due diligence, making site visits and talking to the best experts in the mining field.
 

JayDubya

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Personal bankruptcies plunge during pandemic, but 'a flood' could be on the horizon

https://www.yahoo.com/money/persona...-flood-could-be-on-the-horizon-195638567.html

Even as the coronavirus pandemic battered the economy, forcing tens of millions of workers to file for unemployment and shuttering businesses large and small, a surprising trend emerged: The number of people filing for personal bankruptcy plunged.

In April, consumer bankruptcies dropped 47% from the same month last year, while May filings were down 43% year over year, according to the American Bankruptcy Institute. For the first half of the year, bankruptcies were 24% lower than the first six months of last year.

Experts pointed to numerous factors for the slowdown.

Courts and attorneys’ offices remained closed during state shutdowns. Evictions and foreclosures — often precursors to bankruptcy because people want to save their homes — were put on hold. Generous government support and forgiving creditors also kept many from falling into financial distress. Last, those on the brink of bankruptcy before the pandemic had more pressing issues to deal with.

“People’s mental inboxes are full,” Professor Robert Lawless at the University of Illinois College of Law, who specializes in bankruptcy, consumer finance and business law, told Yahoo Money. “There are a lot of things to sort out in their lives — going to see a bankruptcy lawyer has been pushed further down on the to-do list for understandable reasons. I think that was a big part in the early days and weeks of the pandemic.”

But the reprieve may be short-lived as the economy sputters, stopping and going as new COVID-19 outbreaks pop up, and as many of the temporary layoffs morph into permanent ones.

‘There will be a flood of bankruptcies’ come fall

“As government lifelines to help stabilize the economy begin to expire, bankruptcy provides a shield for households and companies facing intensifying financial distress,” ABI Executive Director Amy Quackenboss said in a statement earlier this week, announcing the half-year bankruptcy statistics. “We anticipate filings to begin increasing as a result.”

How quickly people file for bankruptcy and how many will do so remain unclear, but bankruptcy attorney George Wade in Alexandria, Virginia, isn’t very optimistic.

“Everyone who files for unemployment is a potential bankruptcy,” he said, noting that many of those who lost jobs won’t be getting them back. “We’re in a state of suspended animation because the government is picking things up.”

What happens, he asked, when many of the outside forces keeping people afloat are removed, starting with the expiration of the extra $600 in unemployment benefits at the end of the month and then the eventual resumption of evictions and foreclosures?

“In the fall, there will be a flood of bankruptcies,” he said. “I think it will be a bloodbath.”

The ‘gradual’ argument

Lawless is more skeptical. His past research on bankruptcies shows that people take a long time to choose bankruptcy, typically struggling through financial difficulties between two to five years before filing. Oftentimes, they are finally persuaded after a creditor sues them.

“It’s not like if people get laid off from a job today that they file for bankruptcy tomorrow,” he said. “It has a very long tail.”

Lawless also noted that bankruptcy doesn’t find unemployed people jobs; it solves debt problems. “If they don’t have debt, they don’t file for bankruptcy,” he said.

Debt — rather than job loss — has a tighter macroeconomic correlation with bankruptcy, going back to the explosion of filings in the late 1990s during the dot.com boom and then the increase during the Great Recession. Both of those periods were punctuated by high consumer debt.

Before the pandemic, consumer credit also had been rising, approaching but not yet reaching levels seen before 2008. But that doesn’t mean Lawless doesn’t expect an increase in filings as the pandemic and its rolling economic effects continue. He just expects many Americans to turn to other debt to sustain them until they finally reach a breaking point.

“I think there will be more bankruptcies, but the shape of that curve may be more of a gradual run-up as debt problems accumulate,” he said. “We may look out two years from now and see there were a lot more people filing.”
 

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we all can remember it wasn't long ago that bankruptcy laws changed, and actually removed much of the 'clear the deck' that occurred prior,
 

BackwardsEngineeer

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we all can remember it wasn't long ago that bankruptcy laws changed, and actually removed much of the 'clear the deck' that occurred prior,
No exits.. no outs, while many have discussed these days for a generation, one thing is clear, you can check out anytime you like but you can never leave... all aboard
 

JayDubya

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What a surprise-- there’s a mass exodus out of New York City!

In the 1650s, European rivals like England and France were busy dividing up the New World in North America.

France settled much of modern day Quebec in Canada, and England initially settled colonies in the mid-Atlantic.

The English and French didn’t have much in common, and they were bitter rivals. But one thing they did agree on was their mutual hatred of Jewish people.

This was part of a long tradition in Europe. Jews had been expelled from England in 1290. France kicked out all its Jews on at least three occasions from 1192 to 1394.

Spain expelled its Jewish population the same year Columbus sailed for the new world, and Portugal followed a few years later.

And still in the 1650s, Jews were banned from the French and English colonies in North America.

The Governor of the Dutch colony, “New Netherland”, also tried to turn away a group of Jewish refugees in 1654.

But the West India Company, which essentially founded and ran New Netherland, intervened, and convinced him otherwise.

It’s not that the West India Company was into “celebrating diversity.” It simply came down to economics. They wanted productive, talented people to settle their colony.

So the West India Company gently reminded the Governor that a large portion of the colony’s capital had come from Jewish investors.

A small settlement on the tip of Manhattan called New Amsterdam was especially tolerant.

It even welcomed free black men, which was sadly radical, forward-thinking back then.

This was a time in history when the Catholic Church was suppressing science and philosophy across Europe, claiming all free thought to be heresy.

The Ottoman Empire, in modern day Turkey, did the same thing in the name of Islam, going so far as to ban the printing press.

It was this type of restriction that screamed opportunity in New Amsterdam. And it’s estimated that the settlement produced about half of all books published in the 17th century.

This included works from Galileo, who spent the last decade of his life in the mid-1600s under house arrest in Italy, convicted of heresy by the Catholic church for his scientific theories.

A remarkable number of wealthy people in the early days of New Amsterdam started from nothing. They were the original self-made men and women of America.

New Amsterdam was later renamed New York, but it kept the free-wheeling, entrepreneurial culture.

It was these values of freedom, tolerance, and a full embrace of capitalism that made it the wealthiest city in the world.

Today, New York City has totally reversed course. The city’s leadership openly attacks talented people and productive businesses, and its politicians have embraced Marxism.

Just think back to what happened last year with Amazon’s headquarters, which would have brought 25,000 high paying jobs, and half a billion dollars in yearly tax revenue to the city.

Amazon was chased out of town by Rep. Alexandria Ocasio Cortez and her merry band of Bolsheviks. And they celebrated as if it were a victory.

It wasn’t just Amazon either-- New York has been losing residents for years.

And that was before Covid-19. Then NYC became one of the worst places in the world to be locked down.

No freedom, no movement, and ridiculous rents for a shoebox apartment that you couldn’t even leave.

Now the city says it will not allow large events until at least October. Of course, that ban won’t apply to protesters and rioters-- another great reason to get out of NYC.

Many people are working from home now anyway. So any work-related reason for staying in New York City has evaporated.

According to data from the New York Times, the richest neighborhoods in New York City saw an exodus of about 40% of residents since the pandemic hit.

(That’s compared to lower and middle income neighborhoods, where fewer than 10% of residents have left.)

Overall about 5% of the NYC population-- over 400,000 people-- have left since the coronavirus lockdowns began-- and most of those were high-income earners.

Manhattan housing vacancy is at a 14 year high, and new leases are down 62% from this time last year.

This is a major emerging trend. And not just for New York City.

Data from the real estate website Redfin does show that New York City is the number one destination people want out of right now. But San Francisco and Los Angeles aren’t far behind.

Redfin also reports record numbers of people searching for real estate outside of their current metro area. They’ve seen an 87% increase in people searching for homes in suburbs with a population smaller than 50,000.

Of course, a lot of these people are still on the fence. They are thinking and dreaming of escaping to a sunny state with no income tax, like Florida or Texas.

All it would take is a second wave of lockdowns to push them over the edge.

Right now, it makes a lot of sense. Anyone who can work from home is highly mobile. And moving to a new state can bring huge savings-- lower taxes, lower cost of living, etc.

And don’t forget about Puerto Rico, where qualifying residents can be entirely exempt from US federal income tax, and reduce their total tax rate to just 4%.

I’m sure these New York politicians like AOC will celebrate that their Bolshevik policies continue to chase out productive people and businesses.

But it just so happens that the richest 5% of New York City’s population pays over 60% of income taxes in the city.

Just one of these high earning New Yorkers paid about as much taxes as 196 median-earning New Yorkers… and thousands of lower-income residents.

So, go figure, these politicians seem completely clueless that they’re chasing away more than half of their tax base. It’s another victory for American Marxism!

To your freedom,



Simon Black,
 

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'A day none of us wanted to see': American Airlines warns employees of up to 25,000 job cuts

https://www.usatoday.com/story/trav...ob-cuts-coronavirus-travel-crisis/5442084002/

American Airlines executives warned employees late Wednesday that the airline will have to lay off as many as 25,000 front-line workers this fall because travel has not rebounded from the coronavirus crisis as they had hoped.

The job cuts, which cover unionized employees including pilots, flight attendants, mechanics and airport workers, represent nearly 30% of the company's 85,000 front-line workers in its U.S. mainline operation. American previously cut 30% of its corporate staff, or 5,000 employees.

In a memo to employees, American CEO Doug Parker and President Robert Isom said the goal when the payroll protection provisions of the federal CARES Act were signed in March was to buy time for travel to rebound so no layoffs were needed when the program ends Oct. 1.

"That unfortunately has not been the case,'' they said.

American's revenue in June was 80% lower than June 2019, the executives said, and travel demand is slowing again after an uptick, due to a spike in COVID-19 infections and new travel restrictions and quarantines.

The bottom line: The airline expects to have more than 20,000 more workers on its payroll than it needs this fall as it shrinks its schedule to reflect the reality of depressed travel demand for the foreseeable future.

The airline is sending notices to 25,000 workers, however, because the federal Worker Adjustment and Retraining Notification Act (WARN) requires companies with mass job cuts looming to include employees who may be transferred, in addition to those facing layoffs. In American's case, the airline said its airport and tech operations teams face that possibility.

Flight attendants face the biggest cuts, with notices going out to nearly 10,000 American flight attendants, or 37%.

Parker and Isom said they hope the final number of layoffs can be reduced "significantly'' by voluntary leave and early-out programs it announced Wednesday.

"Although this is a day none of us wanted to see, we have created new, generous programs intended to help offset as many frontline furloughs as possible,'' the executives said. "We encourage everyone to carefully consider these enhanced voluntary options."

Another factor that could change the ultimate number: an extension of the payroll protection provisions. Airline unions have been pushing hard for it in Washington, but airline executives have not been counting on it. American executives said only that they support any legislation that would "protect our team's jobs during these extraordinary times.''

American's announcement, which the company had warned for months was a possibility, comes a week after United Airlines announced similarly grim job cuts.

'A gut punch:' United to lay off up to 36,000 workers

Delta Air Lines is an outlier, at least so far, thanks to wide acceptance of the airline's voluntary leave and exit programs. The airline's CEO, Ed Bastian, said Tuesday that Delta might not have to lay off any workers. He said 17,000, or 20%, of the airline's workers accepted voluntary early retirement.

"I’m optimistic if we do have a furlough, it’s going to be relatively minimal numbers,'' he said on CNBC.
 

solarion

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Golly, it's almost as if there'll be no V shaped recovery...

That along with nearly everything else lamestream media talking heads have said about this plandemic has proven to be totally WRONG.
 

JayDubya

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The 30-Year Mortgage Has Reached a Record Low

https://www.nasdaq.com/articles/the-30-year-mortgage-has-reached-a-record-low-2020-07-16

Mortgage rates have dropped in recent weeks, and that's a good thing for homebuyers who are looking to make their monthly payments more affordable. But today, a milestone was reached: The average rate for a 30-year fixed mortgage dropped to 2.98%. According to Freddie Mac, that's the lowest the 30-year mortgage has been in 50 years.

If you're in the market for a new home, it could pay to try locking in a mortgage immediately. Mortgage rates can fluctuate from day to day, and the longer you wait, the more you could risk losing out on a terrific deal.

What does a 2.98% mortgage rate mean for you?

Your goal in locking in a mortgage rate should be to get the lowest one possible, as that rate will dictate what your monthly housing payments look like. The average interest rate on a 30-year fixed mortgage was 3.81% one year ago. For a $200,000 mortgage, that would have meant a monthly payment of $1,492. The total interest payment throughout the life of that home loan would be $135,916.

By comparison, at today's 2.98% rate, your monthly payment for a 30-year, $200,000 mortgage would be $1,400 -- almost $100 a month in savings. And, your total interest paid throughout the life of that loan would be $102,790. That's a lot less than what you'd pay with a 3.81% interest rate (which, for the record, is still competitive in its own right).

Why such a low rate today? We can thank the COVID-19 pandemic, and the subsequent recession it's spurred. It's common for mortgage rates to decline when the economy is poor. While we never want to hope for a recession, the silver lining is that a lot of people might be able to score an affordable home loan right now.

It could also pay to look into refinancing if you have a mortgage already. To see if that makes sense, you'll need to weigh the closing costs of refinancing against your potential savings. Let's say you are able to snag a 2.98% interest rate on your refinance, or something in that vicinity, which, in turn, saves you $100 a month on your mortgage payment. If you spend $2,000 on closing costs for that refinance, it will take you 20 months to break even. Therefore, if you're planning to stay in your home beyond 20 months, refinancing would make sense.

Will you get to take advantage of today's rate?

The idea of locking in a 30-year mortgage at 2.98% may be appealing, but before you start counting your savings, you should know that this top rate will generally be reserved for the most favorable borrowers out there. To qualify for this rate, or a comparable one, you'll need to have:

  • A high credit score
  • A low debt-to-income ratio
  • A steady income that's high enough to support your monthly payments
  • A down payment of 20% (or more)
All of this holds true if you're looking to refinance as well (instead of a down payment of 20%, you'll generally need at least 20% equity in the home you already own).

Keep in mind that some lenders are imposing stricter requirements for mortgage candidates, so even if your credit score is good, you may not qualify for the most competitive mortgage rate unless it is excellent. Also, while it may be enticing to lock in a mortgage at today's rates, make sure you're in a strong enough financial position to take on the responsibility of buying a home. In addition to your monthly mortgage payment, you'll need to cover the cost of:

  • Property taxes
  • Homeowners insurance
  • Maintenance
  • Repairs
As a general rule, you should have a healthy emergency fund of at least three to six months' worth of living expenses when you buy a home -- and that's after you make your down payment. You should also make sure your job is stable -- or as stable as can be in the context of our current recession. If you work in the hospitality field, for example, which has been battered in recent months, then committing to a mortgage may not be the best idea, even if you're presently employed.

Finally, if you are going to try to lock in a mortgage, it pays to shop around with different lenders. Each lender sets its own guidelines for things like credit score requirements, debt-to-income ratio, and income level. Getting a few offers will increase your chances of walking away with an interest rate you'll be happy with.

Today's Best Mortgage Rates

Chances are, mortgage rates won't stay put at multi-decade lows for much longer. In fact, the Fed has already signaled that it expects rates to continue increasing. That's why taking action today is crucial, whether you're wanting to refinance and cut your mortgage payment or you're ready to pull the trigger on a new home purchase. Click here to get started by scanning the market for your best rate.
 

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Who gets to be reckless on Wall Street?
Regular investors are piling into the stock market for the rush. Wall Street titans say they’re making a grave mistake, but it’s not so simple.

https://www.vox.com/business-and-fi...rading-reddit-dave-portnoy-barstool-robinhood

Jennifer Chang got into investing in 2019, but it was only during the pandemic that she started dealing in options trading, where the risk is higher, but so is the reward.

“With options, you can make money so much faster. So I was then having days where I would make $1,000 a day, and then I made $10,000 in a day,” she said. “And then I started getting really cocky, and I didn’t even think I could even lose so much money. Then during the day when it was like we had a really big drop, I lost everything I had made.”

Chang, 39, lost her job at a nonprofit in the financial downturn, fell down a “rabbit hole of stock videos” on YouTube, and by now has put about $25,000 into the trading app Robinhood. The day we spoke, she was basically back where she started. “I take it in stride, because it’s money I had made, but it wasn’t really there.”

She is not an anomaly. In recent months, the stock market has seen a boom in retail trading. Online brokerages have reported a record number of new accounts and a big uptick in trading activity. People are bored at home, sports betting and casinos are largely off the table, and many look at that $1,200 stimulus check they got earlier this year as free money. Some are taking cues from mainstream sources like the Wall Street Journal and CNBC, others are looking at Reddit and Barstool Sports’ Dave Portnoy for ideas (and entertainment). And commission-free trading on gamified apps makes investing easy and appealing, even addicting.

“It’s kind of scary, because I am unemployed right now, I don’t want to put too much at risk. But I think I have enough in savings that I’m willing to take that risk a little bit, because I also really like gambling,” Chang said. She’s not sure what all of this will mean for her taxes.

I spoke with more than a dozen traders about where they’re putting their money, why, and how it’s going. Some are doing well, while others have learned some hard lessons already, and they’re aware things can get out of control — most of the people I talked to referenced a 20-year-old Robinhood trader who died by suicide in June after believing he’d lost hundreds of thousands of dollars on the app. Still, for a lot of them, it’s largely a game.

“It’s boring watching stocks, it’s not exciting, they’re not making these crazy prices,” said Adam Barker, a 31-year-old software engineer in Massachusetts. “You don’t get a rush throwing money at Berkshire Hathaway and waiting 15 years.”

Whatever the strategy of this new crop of traders — or lack thereof — they have Wall Street’s attention. They remain a small portion of the market, but there is evidence they’re making a difference along the margins. They’ve ignored predictions from high-profile investors that another crash is on the horizon, and thus far, they’ve been right. Many of them relish in their battle against the “suits” to prove that anyone can play in stocks.

There’s been plenty of finger-wagging in their direction: Billionaire investor Leon Cooperman in June said they’re just doing “stupid things” and that the momentum will “end in tears.” Oaktree Capital co-founder Howard Marks warned it’s “not healthy to have people buying stocks for fun.”

While there’s certainly cause for concern some might be in over their heads, it’s also hard to argue that financial opportunity should be cordoned off for institutions and the rich, especially in an economy plagued by inequality where financial mobility, for many, is a myth.
The trading game

Traditionally, stock-trading has come with a fee, meaning if you wanted to buy or sell, you had to pay for each transaction. But companies like Robinhood have taken a jackhammer to that system by offering commission-free trading. Other major online brokers — Charles Schwab, E-Trade, and TD Ameritrade — have followed suit. Many brokerages are also letting people buy fractional shares, so if you don’t have the $3,000 to invest in Amazon stock, you can put in $300 to buy one-tenth of it.

Trading isn’t really free, and big market-makers like Citadel Securities and Virtu Financial pay millions of dollars to process the trades and put them back onto the market, making money off of the spread — the price difference between the buy and the sell. Nathaniel Popper at the New York Times recently outlined how Robinhood makes money off of its customers, and more than other brokerages.

“It gives the appearance that you’re not paying a commission, but it’s just hidden,” said Jim Bianco, president and macro strategist at Bianco Research.

But the perception that it’s frictionless and free has helped boost retail trading, and during the pandemic, people have flocked to trading platforms to try their hand at the market. Robinhood, in particular, has become representative of the retail trading boom. The platform, founded by Vlad Tenev and Baiju Bhatt in 2013 and launched in 2015, says it has about 10 million approved customer accounts, many of whom are new to the market. Its mission is to “democratize finance for all,” according to its website. “We fundamentally believe participation is power, and that the stock market can be an important wealth creation engine,” a spokesperson for Robinhood said.

Robinhood’s version of financial democratization feels deliberately like a game. When you sign up, it offers you a free stock, generally under $10, and encourages you to invite your friends to get more free stocks. The screen turns green when you’re up and red when you’re down, and when you trade, it sometimes sends you confetti and gives you the money instantly so you can trade again. It’s easy to see how people get sucked in fast.

“Robinhood feels very gamified. The act of trading stocks was boring for a really long time, and even today, if you do it through Charles Schwab, it would seem boring. Robinhood makes it feel frictionless and fun and easy, and it can be very, very addicting,” said Noah Whinston, who founded an eSports franchise. He does some trading for fun on Robinhood but does most of his investments through a financial adviser. “I’m well aware if I put a lot of money into Robinhood, I might allocate that in ways that are not the smartest but instead based on short-term serotonin hits.”

Some people are able to resist the temptation, like Nate Brown, 23. He got his first job out of college working in government tech and decided to try out investing. “I buy stocks once a month, so probably not as often as you’d expect just because I’m trying to follow that longer trend,” he said. “I saw the options thing on the app, but it honestly kind of scares me.”

But Brown seems more like the exception in this current cohort of day traders, not the rule. What they’re doing isn’t really investing, it’s gambling.

“It’s the same exact rush you get sitting down at a blackjack table,” said Luke Lloyd, a wealth adviser at Strategic Wealth Partners. He says he worries about a new generation of traders getting addicted to the excitement. “It’s like putting all of your money on one number at the roulette table.”

Some traders have become especially enticed by more complex maneuvers and vehicles. A big draw appears to be options trading, which gives traders the right to buy or sell shares of something in a certain period. People can use options to hedge their portfolios, but most of the traders I talked to were using them to make bets as to whether a stock would go up (a call) or go down (a put) and inject some extra adrenaline into the process.

“There’s a lot of risk involved, and you can definitely see why people get into the gambling side of things. It’s definitely the rush,” Barker, the Massachusetts software engineer, said. He kicked about half of his stimulus check into Robinhood and is mainly trading options. “I’m not really in it for the long term.”

The Robinhood spokesperson said the company believes it’s “time to move away from the notion” that it’s gambling or gaming and disputed that the app is gamified, instead saying that what it has is “accessible, modern design.” The spokesperson emphasized that it doesn’t display confetti for every trade and disputed that confetti is a reward, but instead is “celebrating the achievement” of participating in markets. The company also said most of its customers aren’t day traders and that of the customers who trade in any given month, 12 percent make an options trade on average.
Reddit and Dave Portnoy, the new kings of the day traders?

Traditionally, investors have been told to read the Wall Street Journal and comb through corporate filings to make decisions. This new cohort of traders has other ideas — some are swapping the Financial Times for Reddit and Warren Buffett for Dave Portnoy.

On Reddit, many traders are gathering on the subreddit r/WallStreetBets, a coarse, bro-y space that describes itself as “like 4chan found a Bloomberg Terminal” and is now 1.3 million members — or, in its terms, “degenerates” — strong. (For comparison, the r/investing subreddit has 1.1 million members.) The subreddit is, as is par for the course on Reddit, quite ugly and excessive — users refer to themselves as “autists,” talk about “YOLO-ing” their money away, and post screenshots of their brokerage accounts showing massive losses or gains. But it’s also influential: As Luke Kawa wrote for Bloomberg in February, some stocks skyrocketed after being mentioned there, and there’s broadly an attitude that traders can try to make stocks move there through the force of sheer collective will.

At the very least, it’s a place people are hanging out and looking for ideas. And they sometimes make decisions based on little information beyond seeing a stock ticker float by or seeing a recommendation or news flash from an anonymous person online.

“Strategy? I wouldn’t use that word to describe it,” Nick Thoendel, a project manager in commercial doors and hardware in Alabama, told me when I asked him about his strategy for investing the $1,000 he’s got in Robinhood. “Just really whatever everyone’s talking about.”

Tom Pariso, 40, who lives in Los Angeles, has been trading through Robinhood for a couple of years, putting in about $15,000 in total, and got more enthralled thanks to the r/WallStreetBets community. “They’re complete strangers, but you feel like they know what they’re talking about,” he said. He had what he described as a “crazy couple of weeks where everything was clicking” earlier this year, and in March, he took to the forum to brag about his gains of more than $100,000. “Then all of a sudden, everything turned in the other direction,” he told me.

Pariso is now back to more or less where he started, but he can’t quit altogether. “I don’t know why. The app is so easy, and the interface, it feels like a game,” he said of Robinhood. He’s also still on the subreddit and feels like the conversation is getting darker there, with more users making coded references to suicide. Much of the time, he says, it’s joking, but he has started to report people to Reddit about the potential for self-harm. “There are people telling stories about how they cashed out of their 401(k) at the start of the pandemic and took their money that they had, got in at the wrong time, and lost everything,” he said.

While the force of r/WallStreetBets is a collective one, Dave Portnoy, the founder of the blog Barstool Sports, is putting on a one-man show of sorts around the stock market. Portnoy, 43, started day trading earlier this year. He livestreams himself daily trading as “Davey Day Trader Global,” or #DDGT, and claims to be the captain of the stock market. His antics can be pretty ridiculous — in June, he accidentally bopped himself on the head with a hammer anticipating market close — but he’s super entertaining. While he’s acknowledged major losses, his focus is on gains and the mantra that “stocks only go up.” The basic belief is that, eventually, prices will improve.

It’s not clear how many people follow Portnoy’s investment advice to a T — on July 1, he tweeted that Sonos should go bankrupt and it ended the day in the green. But he has caused a bit of a ruction on Wall Street. He is part of the conversation among some bigger names in investing and has been outspoken in criticizing certain figures. He declared billionaire investor Warren Buffett “washed up” and delivered a lengthy attack on Oaktree Capital and Howard Marks, decrying the firm as a “corporate raider” that engaged in “scumbag practices” in the wake of the Great Recession.

Tyler Grant, a lawyer in New York, followed Portnoy into Spirit Airlines and made money off the trade, though on other trades, he’s bet against him. “His legacy is going to be the fact that he got people who realized they can get in the game and get in the game really cheaply,” he said.

Part of Portnoy’s shtick is that he claims to have no idea what he’s doing so he can’t be held responsible for where he invests or whether people follow him. One day in June, he talked about NSPR, the stock ticker for InspireMD, making him money because a woman he went on a date with told him about it and he invested $400,000 to impress her. Another day, he picked tiles out of a Scrabble bag to find stocks to invest in. Grant said he doesn’t believe it’s as random as it seems — after all, he picked Raytheon, a nearly $100 billion defense contractor. “It wasn’t like Dave Portnoy went into a bag and pulled out a penny stock,” he said.

Thoendel, from Alabama, tried to follow Portnoy into airlines for a bit, but it didn’t work out. He has a full-time job and can’t watch the livestreams anyway, though he still keeps up where he can. “His whole claiming he’s better than Warren Buffett and stuff is hilarious,” he said. “He’s just a shock jock, basically.”

While there is likely some overlap between the r/WallStreetBets crowd and Portnoy, it’s not clear how much. Portnoy appears to steer clear of options, while on Reddit, they’re an important focus. Another curious facet: When you try to post about Barstool Sports and Portnoy on the subreddit, you get an automatic response from a moderator: “Do not post about barstoolsports or David Portnoy here please. Doing so will mean a ban of arbitrary length.”

Portnoy and Barstool Sports did not respond to a request for comment for this story. The moderators of r/WallStreetBets’ initial response was “(っ◔◡◔)っ ♥ tits or gtfo ♥.”

When I pressed about Portnoy, I got a longer answer: “Well, first: WSB is not a part of any trend — we are the trendsetters, the makers of music, the dreamers of dreams, if you will. Second: Day trading is but a part of what we do here. Mostly it is memes and calling each other lovingly derogatory names.”
Stocks only go up until they don’t

The “stocks only go up” meme is correct in the sense that according to conventional wisdom, the stock market, overall, eventually does go up. That’s why when the market crashes, experts say not to sell and instead to wait it out. The problem is, when it comes to individual stocks or trading mechanisms that are more complex, it’s entirely possible to get wiped out.

That’s what happened to Jordan, a consultant in his 40s who asked to remain anonymous to protect his privacy. He had been trading for a while on Robinhood, but in March, the coronavirus lockdowns hit and he started trading more, including leveraged exchange-traded funds, or ETFs. Basically, when the underlying index or fund goes up or down, instead of following it at a one-to-one ratio, leveraged ETFs follow at a two-to-one or three-to-one pace. In Jordan’s case, he was focused on oil.

At one point, he was up 400 percent, but now, he’s given back those gains. “To be honest, I had no idea what I was doing,” he said. “I have nowhere near the fiscal acuity to understand how those trades work.”

That’s part of the problem with investing in general: It’s really hard to get it right, even for professionals.

Spencer Miller, who runs a Robinhood Stock Traders group on Facebook with his brother, rarely uses Robinhood because he knows it can compel you into taking on too much risk. (He named the Facebook group that because he knew it would get more members.) But he sees stocks trend in the group — Hertz, Genius Brands, Luckin’ Coffee — and then fade. He also sees people learning some hard lessons, gaining a bunch of money and then losing it fast. “Robinhood at times can feel like free money, especially if you get a few winners right off the bat,” he said. “You just see the same story over and over and over again.”

The hope with most of these traders is that they’re not making bets they can’t afford to lose. But inevitably, when people piled into bankrupt Hertz in June, someone was left holding the bag and paid $5.00 for a stock now worth $1.50.

In June, 20-year-old student Alex Kearns from Illinois died by suicide after thinking he’d lost $730,000 on an options trade on Robinhood. In a note to his family, he said he had “no clue” what he was doing. Robinhood subsequently said it would make adjustments to its platform to put in place more guardrails around options trading. It’s still scary: As the Financial Times notes, when he died, Kearns actually had a $16,000 balance in his account, not a $700,000 debt.

Miller recalled a similar mix-up once happening with him, where it appeared he’d lost $200,000 on the Robinhood app and then adjusted. “It’s the way Robinhood is set up, where everything flows nicely until the moment when it doesn’t seem to.”

And the app itself, like any tech platform, is prone to glitches. Robinhood experienced widespread outages in early March when markets were going wild, locking many traders out of making any changes to their portfolios. Herman Singh, 22, estimates he lost $3,000 during the shutdowns, and the company offered to pay him back $75. “For small traders, that’s a big amount,” he said. He’s still trading, but he’s now using other apps.

“It’s not just about investing in the market, but what is your wealth confidence overall? Do you have money in retirement? Do you have an emergency fund? Do you have savings? Credit card debt? Student loan debt? If you have any of the above, conversations about the stock market shouldn’t be coming out of your mouth,” said Lauren Simmons, a former stock trader at the New York Stock Exchange, cautioning about the risk of people getting into the market. “We are reaching historic highs again, and we are in a global pandemic.”
Who has the right to move markets

The stock market bottomed out in late March and has generally rallied since. Retail investors aren’t really the cause — much of the recovery is attributable to the Federal Reserve — but they’re making a difference in certain arenas.

“I don’t think we can blame retail traders for jacking up the market, but at an individual stock level, it’s a little bit different,” said Nick Colas, co-founder of the market insight firm Datatrek Research.

Small investors bought up shares of bankrupt companies like Hertz and JC Penney, temporarily driving up their prices, this spring. If you look at Robin Track, which follows the most popular names on the platform, most of them are recognizable and ones where major institutions are heavily invested to the point that traders with a few thousand dollars in their accounts aren’t going to do much — Ford, American Airlines, Disney. They are also generally fairly safe. But then there are more surprising and lesser-known ones, such as Aurora Cannabis.

As the Wall Street Journal reported, Options Clearing Corp. has seen a 45 percent jump in daily options contract trading averages this year compared to last, and Goldman Sachs found that options volume from single-contract trades of the 50 top-traded stocks is up from 10 percent to 14 percent. Goldman also estimates that the proportion of shares volume from small trades has gone from 3 percent to 7 percent in recent months.

“If nothing else, I think everybody agrees that retail trading today is orders of measure bigger than it was a year ago,” Bianco said.

To be sure, people basically gambling with money they would be devastated to lose is bad. On the other hand, it’s not clear that’s what’s happening en masse. And the traders, well, they’ve got a point: It’s not like billionaire investors are the good guys here, and why should they be locked out of the opportunities rich people are privy to?

Yes, most speculators and day traders lose money. But the pros don’t do infinitely better: Hedge funds and professional stock pickers consistently underperform the S&P 500. It’s easy to chafe at Portnoy’s attitude and approach — not to mention issues of toxicity in Barstool’s culture — and at r/WSB’s tone. But what about private equity firms that buy up companies, fleece them, and then sell them off for parts? Or hedge funds that scooped up troubled assets during the financial crisis to make billions? Or the market-makers like Citadel Securities that are ultimately the ones making money off Robinhood’s trades? Or the money Robinhood itself is making pushing customers in a dangerous direction?

“I think Portnoy drives Wall Street crazy because he’s exposing some of the fallacies that you see on Wall Street,” said Bianco, who acknowledges he’s a “suit” in Portnoy’s world. “He’s making a mockery out of stock-picking because we all know on Wall Street the vast majority of stock pickers that run portfolios cannot beat the indexes.”

Portnoy is a multimillionaire, and he appears to be using a small portion of his total net worth to trade. He’s said once sports betting returns, he’ll go back to that, plus there’s no denying this is quite a marketing opportunity for him and for Barstool.

And the opportunity to invest in the stock market, even through commission-free platforms, isn’t available to everyone. You have to have some money to invest — Colas estimates the average account size is somewhere between $2,000 and $5,000 — and not everyone does. What’s more, it appears the majority of the people investing are men.

Still, the army of retail traders is reading the room. The stock market does, generally, recover, and the March collapse was an opportunity. There’s not a really lucrative alternative to stocks for generating returns, and the federal government and Federal Reserve have demonstrated they’re more than willing to take extraordinary actions to prop up the market and big industries. The government didn’t let the banks fail last time around, so it’s hard to believe they’ll let the airlines fail now — so why not invest?

“Really, we all kind of know they’re all going to come back,” Grant, the New York lawyer, said. “It would take a huge market collapse for there not to be a Delta.”

Of course, it’s possible the stock market will crash again or that we’ll see another correction. There is a fine line between giving people the ability to try to access opportunities to gain wealth and exposing them to predatory practices and unfair risk, like what Robinhood, seemingly pushing people toward options, is doing.

This flurry of retail traders has happened before. Before there was Dave Portnoy, there was Stuart, the fictional Ameritrade trader leading the way on the dot-com boom. Back then, everyone was into internet 1.0, Colas noted; now they’re just generally optimistic. “There is no unifying theme this time around,” he said. “There isn’t a theme that shovels billions of dollars into a raft of dumb ideas that have a common theme.”

Plus, it’s getting a new generation of people into investing, which Wall Street types should be fine with. Maybe they are.

Ultimately, the broader trading trend also says something about the economy. While for many people their new stock market habit is a game, it’s also one that’s accompanied by real goals — to pay off student loans, to start a business, to have a nest egg set aside for 20 years from now. Some people I spoke with even expressed guilt. Liam Walker, a data protection officer in the UK, said he considered investing in pharmaceutical stocks but decided against it. “Ethically, it’s strange to try to gain some sort of advantage out of the current situation that the world is in,” he said.

Alfredo Gil, 30, a New York writer and producer, expressed a similar sentiment of internal conflict with regard to his trading habits. Gil is trying to write a graphic novel and launch his own production company, and he hopes maybe the stock market is the way to save up enough money to do it. He’s investing in fairly safe vehicles — ETFs and companies like Disney and Tesla — and, depending on the given week, is up between $13,000 and $20,000. He admits that he checks his Robinhood account “often enough for it to be unhealthy.”

He worries about contributing to corporate greed and the corrupting powers of wealth, and most of his social circle know he’s investing. “I’m attending protests, and I’m very vocal with my friends about the current movement and defunding the police. To say, ‘Oh, I’m making a lot of money,’ it’s just not a cool thing to say or bring up.”

But Gil also sees that this is the system he lives in. Maybe if the United States had Medicare-for-all or universal basic income, he says, he wouldn’t be compelled to play the stock market, and things would be different. But they aren’t. “There is a strain of guilt I have regarding making money during this crisis that is increasing our inequality,” he said, “but as a gay person of color with no intergenerational wealth, I think there can be things to learn on how to navigate our world.”
 

WillA2

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The 30-Year Mortgage Has Reached a Record Low

https://www.nasdaq.com/articles/the-30-year-mortgage-has-reached-a-record-low-2020-07-16

Mortgage rates have dropped in recent weeks, and that's a good thing for homebuyers who are looking to make their monthly payments more affordable. But today, a milestone was reached: The average rate for a 30-year fixed mortgage dropped to 2.98%. According to Freddie Mac, that's the lowest the 30-year mortgage has been in 50 years.

If you're in the market for a new home, it could pay to try locking in a mortgage immediately. Mortgage rates can fluctuate from day to day, and the longer you wait, the more you could risk losing out on a terrific deal.

What does a 2.98% mortgage rate mean for you?

Your goal in locking in a mortgage rate should be to get the lowest one possible, as that rate will dictate what your monthly housing payments look like. The average interest rate on a 30-year fixed mortgage was 3.81% one year ago. For a $200,000 mortgage, that would have meant a monthly payment of $1,492. The total interest payment throughout the life of that home loan would be $135,916.

By comparison, at today's 2.98% rate, your monthly payment for a 30-year, $200,000 mortgage would be $1,400 -- almost $100 a month in savings. And, your total interest paid throughout the life of that loan would be $102,790. That's a lot less than what you'd pay with a 3.81% interest rate (which, for the record, is still competitive in its own right).

Why such a low rate today? We can thank the COVID-19 pandemic, and the subsequent recession it's spurred. It's common for mortgage rates to decline when the economy is poor. While we never want to hope for a recession, the silver lining is that a lot of people might be able to score an affordable home loan right now.

It could also pay to look into refinancing if you have a mortgage already. To see if that makes sense, you'll need to weigh the closing costs of refinancing against your potential savings. Let's say you are able to snag a 2.98% interest rate on your refinance, or something in that vicinity, which, in turn, saves you $100 a month on your mortgage payment. If you spend $2,000 on closing costs for that refinance, it will take you 20 months to break even. Therefore, if you're planning to stay in your home beyond 20 months, refinancing would make sense.

Will you get to take advantage of today's rate?

The idea of locking in a 30-year mortgage at 2.98% may be appealing, but before you start counting your savings, you should know that this top rate will generally be reserved for the most favorable borrowers out there. To qualify for this rate, or a comparable one, you'll need to have:

  • A high credit score
  • A low debt-to-income ratio
  • A steady income that's high enough to support your monthly payments
  • A down payment of 20% (or more)
All of this holds true if you're looking to refinance as well (instead of a down payment of 20%, you'll generally need at least 20% equity in the home you already own).

Keep in mind that some lenders are imposing stricter requirements for mortgage candidates, so even if your credit score is good, you may not qualify for the most competitive mortgage rate unless it is excellent. Also, while it may be enticing to lock in a mortgage at today's rates, make sure you're in a strong enough financial position to take on the responsibility of buying a home. In addition to your monthly mortgage payment, you'll need to cover the cost of:

  • Property taxes
  • Homeowners insurance
  • Maintenance
  • Repairs
As a general rule, you should have a healthy emergency fund of at least three to six months' worth of living expenses when you buy a home -- and that's after you make your down payment. You should also make sure your job is stable -- or as stable as can be in the context of our current recession. If you work in the hospitality field, for example, which has been battered in recent months, then committing to a mortgage may not be the best idea, even if you're presently employed.

Finally, if you are going to try to lock in a mortgage, it pays to shop around with different lenders. Each lender sets its own guidelines for things like credit score requirements, debt-to-income ratio, and income level. Getting a few offers will increase your chances of walking away with an interest rate you'll be happy with.

Today's Best Mortgage Rates

Chances are, mortgage rates won't stay put at multi-decade lows for much longer. In fact, the Fed has already signaled that it expects rates to continue increasing. That's why taking action today is crucial, whether you're wanting to refinance and cut your mortgage payment or you're ready to pull the trigger on a new home purchase. Click here to get started by scanning the market for your best rate.

You really need to pay attention to the details if you refinance a mortgage. If you haven't noticed, mortgage holders make certain they get their interest long before the mortgage is paid off. When you first start paying a mortgage, the interest is more than 50% of your monthly, mortgage payment. So when you refinance, the amount of principle you are paying goes down and the bankers get their compounding interest.

Yeah, I know the rate looks much better, but you will pay more interest before you're back to paying any amount of principle that matters. And that alluring rate just cost you more than you know. Just some food for thought.
 

Uglytruth

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You really need to pay attention to the details if you refinance a mortgage. If you haven't noticed, mortgage holders make certain they get their interest long before the mortgage is paid off. When you first start paying a mortgage, the interest is more than 50% of your monthly, mortgage payment. So when you refinance, the amount of principle you are paying goes down and the bankers get their compounding interest.

Yeah, I know the rate looks much better, but you will pay more interest before you're back to paying any amount of principle that matters. And that alluring rate just cost you more than you know. Just some food for thought.
When your loan payment of $1000 a month is $100 principal and $900 interest. Make as many payments as possible at the beginning to get to that 50/50 area so you don't feel ripped off.
 

JayDubya

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Doug Casey on Why This Election Could Be the Most Important Since the US Civil War

International Man: The hysteria surrounding COVID-19 and the government lockdown has completely changed in-person interactions.

How do you think this will impact the way that Americans cast their vote in the presidential election?

Doug Casey: It’s a very bad thing from Trump’s point of view. For one thing, it’s severely limiting the number and size of his rallies, which he relies on to keep enthusiasm up.

More people are staying at home and watching television than ever before. And unless they glue their dial to Fox, they’ll gravitate towards the mainstream media, which is stridently anti-Trump. People who are on the fence hear authoritative-sounding talking heads on television, and it naturally influences them away from Trump.

Furthermore, this virus hysteria is discouraging people from going out—especially older people who are roughly 80% of the casualties of this virus. They’re less likely to go to vote. But older people are most likely to be Trumpers because they’re culturally conservative. I’m assuming that the COVID hysteria will still be with us in November.

Keeping his voters at home is one thing. But the effects that the hysteria is having on the economy are even more important. Presidents always take credit when the economy is good and are berated when it’s bad on their watch, regardless of whether they had anything to do with it. If the economy is still bad in November—and I’ll wager it’s going to be much worse—people will reflexively vote against Trump.

With free money being passed out—the $600 per week in supplementary unemployment—between the state and federal payments, something like 30 million people are making more now than they were before the virus. In February, before the lockdown, there were about 3.2 million people collecting unemployment. Now, there are about 35 million. So, it seems we have over 30 million working-age people who are . . . displaced. That doesn’t count part-time workers, who aren’t eligible for unemployment but are no longer working.

When the supplementary benefits end, so will the artificial good times.

Worse, the public has come to the conclusion that a guaranteed annual income works. This virus hysteria has provided a kind of test for both universal basic income and modern monetary theory—helicopter money. So far, anyway, it seems you really can get something for nothing.

Even Trump supports helicopter money because he knows it’s all over if today’s financial house of cards collapses.

Most people will still be out of work when the free money ends. The recognition that the country is in a depression will sink in. They'll look for somebody to blame. When things get seriously bad, people want to change the system itself.

There’s now a lot of antagonism toward both free minds and free markets. Polls indicate that a majority of Americans actually support BLM, an openly Marxist movement. Forget about free minds—someone might be offended, and you’ll be pilloried by the mob. Forget about free markets—they’re blamed for all the economic problems, even though it’s the lack of them that caused the problem. The idea of capitalism is now considered undefendable.

Widespread dissatisfaction with the system is obviously bad for the Republicans and good for the Democrats, who promote themselves as the party of change.

The bottom line is that this whole episode with COVID is uniformly bad for whatever Trump or the Republicans represent. It's bad for the old status quo.

International Man: If people are afraid to go out, will it impact voter turnout?

Doug Casey: Absolutely. As I just said, especially among older people who tend to be conservative Republican voters.

But let’s be candid. This election is going to hinge on who cheats the best. And the Democrats have, over the years, developed far greater expertise in cheating than the Republicans. Saul Alinsky’s "Rules for Radicals" wasn’t written for the kind of people who vote Republican.

For one thing, there’s going to be more emphasis on mail-in votes, which make it easier to cheat. You can register dead people as voters. You can register your dog as a voter. If the fraud is ever even discovered, it won’t be until long after the election.

That's only part of it, though. A high percentage of voting machines are computerized. Fraud by hacking voting machines is apparently easy to do—and it’s pretty untraceable. It’s just a matter of planning and boldness.

One of the consequences of this widely acknowledged dysfunction is to delegitimize the whole idea of voting. As you know, I don’t believe in mass democracy, because it inevitably degrades into a system where the poorer citizens vote themselves benefits at the expense of the middle class. Basically, mob rule dressed in a coat and tie. But if the populace loses faith in "democracy" during a serious economic crisis—like this one—they’re going to look for a strong man to straighten things out. The US will look more and more like Argentina.

International Man: In previous US elections, there were issues with voter fraud and delays tallying votes in a handful of US states.

If this happens again, do you think that the election results could be contested? What would the implications of that be?

Doug Casey: The election will be contested no matter which side wins because the country has become totally polarized. No matter who wins, the other side is going to be terminally unhappy with the result.

This election is undoubtedly the most important one since 1860. The outcome of that was the War Between the States.

The Democrats really want to change the very nature of the US. If they win, they’ll be able to do so, for several reasons. First, it seems almost certain that they’ll make Washington, DC, a state; there will then be 102 senators voting—and those two from Washington, DC, will without question be left-leaning Democrats. Second, the 20 million undocumented people—illegal aliens—now in the US will undoubtedly be made citizens; they lean heavily toward the Democrats. Third, they’ll expand the size of the Supreme Court and pack it with leftists.

There could be more, of course. Perhaps they’ll probably reduce the voting age to 16; it’s already the case in Argentina and a growing number of other countries. Maybe they’ll even engineer a Constitutional Convention to change everything. The 2nd Amendment will go, of course, and the rest of the Bill of Rights would be heavily modified. Most of it’s already a dead letter—but that would formalize the change once and for all.

These things would cement the Democrats in office. But please don’t think I support the Republicans. That would be like supporting tuberculosis just because it’s better than terminal cancer.

It used to be pretty simple—the Republicans and the Democrats were just two sides of the same coin. Like Tweedledee and Tweedledum. Traditionally, one promoted the warfare state more, the other the welfare state. But it was mostly rhetoric; they were pretty collegial. Now, both the welfare and the warfare states have been accepted as part of the cosmic firmament by both parties. Now, it’s about cultural issues. Polite disagreement has turned into visceral hatred.

The Dems at least stand for some ideas—although they’re all bad ideas. The Reps have never stood for any principles; they just said the Dems wanted too much socialism, too fast. Which is why they were always perceived—correctly—as hypocrites. Things have changed, however. Antagonism between the right and the left is no longer political or economic—it’s cultural. That’s much more serious.

Look at the 20 Democratic candidates that were in the primary debates last summer. They were all radical collectivists, dedicated statists. The Republicans were all—with one exception—mealy-mouthed nonentities.

I suspect the Dems will win in November because they actually have a core of philosophical beliefs—and that counts during chaos. It doesn’t matter that they’re irrational or evil. Then, whenever a really radical group takes over—and these people are serious radicals—they cement themselves in power. And it only takes a small number of people working as a cadre to do it.

With the Russian Revolution, the hardcore Bolsheviks only numbered in the hundreds. That was enough to take control of a hundred million Russians—and stay in power for 70 years until they totally ran the wheels off the economy.

The same thing happened with Fidel Castro in Cuba. He landed with only 50 or 60 guys, but once he took over the country, his apparatus was able to keep control of it.

Serious, radical populists and socialists can pull that off. They can say they’re working for the people and can promise lots of free stuff. The hoi polloi want to hear that during a crisis—like the one we’re entering. Once they’re in, it’s almost impossible to get them out.

International Man: Millennials will soon overtake the baby boomers as the largest adult population. They’ll have a growing impact on elections.

How do you think this will affect the future direction of the country?

Doug Casey: First of all, I’ve got to say that I don’t believe in democracy as a method of government. I understand how shocking that is to hear. Let me explain.

There’s something to be said for a few people, who share traditions and culture and generally agree on how the world works, to vote on who will speak for them. That’s one thing—and it makes sense. But it’s very different from a gigantic agglomeration of very different, even antagonistic, people fighting for control and power.

Winston Churchill said two things about democracy that appear to be contradictory.

One is that "Democracy is the worst form of government, except for all the others." I would argue that’s simply not true. Perhaps we can discuss the alternatives someday.

The other thing that he said was, "The best argument against Democracy is a five-minute conversation with the average voter." He’s absolutely right in that quip.

I’d have less of a beef with democracy if the government was totally precluded from any intervention in the economy. The problem is that the institution of government itself is innately, intrinsically, and necessarily coercive.

In a civilized society, however, coercion should be limited. What does that mean?

It means that a government should be strictly limited to preventing force and fraud. That implies a police force to prevent domestic force and fraud, a military to protect the country from invasion, and a court system to allow people to adjudicate disputes without resorting to force.

If the government did nothing but those things, sure you can vote. But votes would be largely irrelevant.

Actually, an argument can be made that those three things are so important to the conduct of a civilized society that they shouldn’t be left to the kind of people that want to be elected.

The market can and will do anything that’s needed or wanted, better and cheaper than a political instrument like the government. And at this point, the government doesn’t do any of those three things well. Instead, it tries to do absolutely everything else.

But, getting back to millennials, Alexandria Ocasio-Cortez (AOC), and people like her, are both the current reality and the future of the Democratic Party — and of the US itself.

Why? It’s irrational to make a 30-year-old barmaid into an icon. But she’s cute, vivacious, outspoken, and has a plan to remake the country. And she’s shrewd. She knows how to capitalize on envy and resentment. She realized she could win by ringing doorbells in her district, where voter turnout was very low, and about 70% are non-white. There was zero motivation for residents to turn out for the tired, corrupt, old hack of a white man she ran against.

Nobody, except for a few libertarians and conservatives, are countering the purposefully destructive ideas AOC represents. And they have a very limited audience and not much of a platform. Arguing for sound money and limited government makes them seem like Old Testament prophets. Collectivism and statism are overwhelming the values of individualism and liberty.

It’s exactly the type of thing the Founders tried to guard against by restricting the vote to property owners over 21, going through the Electoral College. Now, welfare recipients who are only 18 can vote, and the Electoral College is toothless.

Of course, I don’t believe in either politics or voting. But, if you must have voting, it should only be for people 25 or over, who own a certain amount of property, so they have something to lose in the system. Most important, the government should have zero involvement in the economy. But, forget about it. Just the opposite is happening at an accelerating rate.

For the last couple of generations, everybody who’s gone to college has been indoctrinated with leftist ideas. Almost all of the professors hold these ideas. They place an intellectual patina on top of emotion and fantasy-driven ideas.

When the economy collapses in earnest, everybody will blame capitalism. Because Trump is rich, he’s incorrectly associated with capitalism. The country—especially the young, the poor, and the non-white—will look to the government to "do something." They see the government as a cornucopia, and socialism as a kind and gentle way to expropriate the middle class.

A majority of millennials are in favor of socialism. By 2050, whites will be a minority in the US. A straw in the wind is that a large majority of the people who commit suicide each year are middle-class white males—essentially, Trump supporters. The demographic handwriting is on the wall. Trump’s election in 2016 was an anomaly. A Last Hurrah.

There’s no political salvation coming from the Republican party. Like Trump himself, it doesn’t have any core principles. It just reacts to the Dems and proposes less radical alternatives to their ideas. It doesn’t stand for anything. It’s only capable of putting forward empty suits, pure establishment figures like Bob Dole, Mitt Romney, or a Bush. Or a non-entity like Pence. That’s a formula for disaster in today’s demographic and cultural environment.
 

WillA2

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I thi k Mr. Casey has missed the boat on understanding President Trump.

There is a bit more to Trump than the empty hat he thinks he is. So many pundits not willing to look just a little deeper.
 

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Nice way to fight back.

https://www.foxnews.com/politics/ca...er-trump-supporter-requests-maga-2020-display

California city washes away BLM mural after Trump supporter requests ‘MAGA 2020’ display
A number of cities have allowed residents to paint their own Black Lives Matter mural, some even commissioned the painting on city streets


Redwood City in San Francisco’s Bay Area quietly scrubbed away its Black Lives Matter mural from a city street after a resident asked to paint a similar “MAGA 2020” on the same road, according to a local news report.


Redwood City resident Dan Pease received permission from city officials to paint “Black Lives Matter” on Broadway Street as part of a Fourth of July public art celebration, according to KPIX 5. City officials even supplied him with the yellow poster paint to make the mural.

“Because we were using the poster board paint that would eventually deteriorate over time, my understanding from them was that the mural would last as long as the paint lasted,” Pease explained, the outlet said.

Then, local real estate attorney Maria Rutenberg, who reasoned that the street was now a public forum, asked the city if she could paint her own “MAGA 2020” sign on the same street.

“I saw 'Black Lives Matter' sign appearing on Broadway Street on the asphalt and I figured that’s gonna be a new public space, open for discussion, and I wanted to get my message out, too,” Rutenburg said.

The city did not respond but promptly removed the Black Lives Matter mural, the news outlet said. They said the sign was a traffic hazard and might cause accidents.

Pease said he doesn’t believe “Black Lives Matter” to be a political statement but understands the position the city was in, according to KPIX 5.

“I have no hard feelings to the city council,” Pease said. “I am disappointed but, at the same time, I am very grateful that they allowed me to put that message on Broadway.”

In light of recent protests, a number of cities have not only allowed residents to paint their own Black Lives Matter mural but even commissioned the painting of the public message on city streets.

In New York City, Mayor Bill de Blasio commissioned a Black Lives Matter mural outside Trump Tower on Fifth Avenue. That mural has been defaced three times this week, first by an unknown suspect who threw red paint on the message and second by four who threw blue paint on the mural and were later arrested.



The third time, a Black woman got into an altercation with police who were trying to hold her back as she dumped black paint on the mural. “Refund the police!” she could be heard shouting.

In D.C., Mayor Muriel Bowser allowed the Black Lives Matter message to be painted on a road leading to the White House before “Defund The Police” was added by protesters.

Conservative watchdog group Judicial Watch asked Bowser and D.C. Attorney General Karl Racine for permission to paint “Because No One is Above the Law!” on a Capitol Hill street.


“Mayor Bowser made a decision to turn D.C. streets into a forum for public expression. Judicial Watch seeks equal access to use this new forum to educate Americans by painting our organization’s motto and motivation, ‘Because No One Is Above the Law!,’ on a Capitol Hill street,” Judicial Watch President Tom Fitton said in a statement. The group later sued over viewpoint discrimination.
 

JayDubya

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A Strong Signal For A Secular Bull Market In Gold

By Daniel R. Amerman, CFA

As shown in the graph below, the first half of 2020 produced an unusual change in the relationship between gold prices, stock prices and recessions, something that has only happened twice before in the last fifty years. Each of the two previous times this has occurred after a long run up in stock prices, it has been part of a cyclical change to a cycle favoring gold over stocks for a decade or more thereafter.



What the graph shows is the rolling 2 year advantage to gold over stocks on a monthly average basis, expressed in percentage terms. (So that monthly average prices for June of 2020 were compared to prices for June of 2018, average prices for February of 1982 were compared to those of February of 1980, and so forth). Where the area of the graph is gold, there is a two year running advantage to gold, and where the graph is green, there is a two year running advantage to stocks.

As developed in previous analyses, the purpose behind this medium term measure is not day trading, or monthly trades, or even annual trades. Instead it is used to knock the statistical noise out from shorter term measures, and to identity secular cycle swings between stocks and gold, where the advantage shifts from a long term cycle strongly favoring one asset, to a long term cycle strongly favoring the other asset.

As we will develop in this analysis, what we are now seeing with the new height of the gold area in 2020, and the sharp contrast with 2013-2019 has never happened outside of a secular cycle strongly favoring gold over stocks - with one exception, consisting of ten months in 1987-1988.

However, there was no recession at that time. So when we also take into consideration the factor of the red bars of historical recessions, and the circumstances associated with the current recession, then we can indeed say that what we are currently seeing has only happened twice before after a long cycle favoring stocks over gold (at least within the fifty years studied).

This analysis is part of a series of related analyses, which support a book that is in the process of being written. Some key chapters from the book and an overview of the series are linked here.
Understanding The Contracyclical Relationship

This analysis is an important market update, but it is not intended to be a stand-alone explanation of the two year rolling end value ratio, the secular cycles, or the extraordinary swings in profits or losses that can produced from the contracyclical relationship between stocks and gold. That information is developed in Chapter Nineteen (link here), and that is the place to go if you have any questions about the measures, the methodology, or the many implications for investment purposes.




As developed in the analysis linked here, a major gap developed between gold prices and stock prices (as represented by the S&P 500 index) as the coronavirus pandemic enveloped the world, and the resulting shutdowns devastated economies and employment. The prices are shown in percentage terms, relative to the prices of gold and the S&P 500 on February 14th, shortly before the breakout occurred.



In that analysis, we started with an investor on February 14th, and compared how much their gold would be worth on each day thereafter if they had been invested in gold, compared to what the value of their stocks would have been if they had invested in the S&P 500. As an example, if gold was up 5% to 105%, and stocks were down 5% to 95%, the investor would have been 10.5% better off if they were in gold instead of in stocks (105% / 95% = 110.5%)

Looking at the actual numbers, someone who chose gold over stocks would have been 10% better off by February 24th, 20% better off by March 6th, 30% better off by March 9th, and would have peaked at being 46% better off on March 23rd, the same day the S&P 500 bottomed out at 2237.

This was a very clear cut, real time example of what my research has led me to believe is actually the most valuable use of gold for investors, which is not to use gold solely as a hedge for inflation, but to at the same time also use gold as a contracyclical asset relative to stocks, with a particular value in times of crisis (and crisis is not the same thing as inflation).

Gold over those weeks and months performed exactly as the last fifty years indicated it was supposed to, in comparison to stocks. This happened without any spike in inflation, and indeed there was a bit of deflation if we compare the Consumer Price Indexes for those same months of February to May that are shown in the graphs (before partially recovering with a bit of inflation in June).

However, there is a problem with relying too heavily on price movements over a period of a few months. When I studied those shorter term price movements over the fifty years - I just didn't find them to be all that useful or reliable. Looking at the shorter term price movements, there was a lot of randomness and "choppy" price movements, where sometimes gold and stocks would move the same direction, and sometimes they would move opposite directions. It was really hard to say whether a relative movement of gold versus stocks over a month or a few months would be at all reliable when it comes to anticipating how gold would perform relative to stocks over the next few years, or five to ten years.

But when I used the six stages of analysis laid out in Chapter Nineteen - then most of the noise dropped out, and a very clear and strong contracyclical relationship emerged, with one critical aspect being moving to a two year rolling end value advantage being a much better indicator for the secular cycles and changes in the cycles.



Because the first half of 2020 is a little hard to see on the fifty year graph, I'm including the same graph above, but am now just covering the period from January of 2000 through June of 2020. On a monthly basis, the change in the two year rolling average is now very clear cut and easy to see.

The two year rolling advantage jumped up to 22% when we compare March of 2020 to March of 2018, and then it was 21% for the Aprils, 22% for the Mays, and 20% for the comparison between June of 2020 and June of 2018.

It is very important to note that this is a relative relationship, not just stocks, and not just gold. The 22% two year rolling advantage to gold was strongly influenced by the precipitous decline in stock prices in March of 2020 down to 2652 (monthly average) - but it was also based on the two year increase in gold prices from an average of $1,325 an ounce in March of 2018 to $1,592 an ounce by March of 2020.

The importance of the relative relationship can be seen when we look at the average monthly index price for the S&P 500, which strongly recovered back to 3105 in June of 2020. This meant that it was back to the previous all time monthly high level of 3105 that had been set in October of 2019, and well above the index level of 2754 from two years before in June of 2018. Yet, gold still outperformed by 20%, even as stocks had substantially gained over the two years, and what made the difference was the two year move in gold prices from an average of $1,282 an ounce in June of 2018 to $1,732 an ounce in June of 2020.

There is nothing like that clear, bold two year advantage to gold during the 2013 to 2019 period that so strongly favored stocks. To see that relationship, we have to go back to the secular cycle favoring gold over stocks that lasted from 2000 to 2012. And the only exact match for a bold gold bar surging up in the red zone of a recession after a long green period of stocks dominating gold - is the June to September period of 2001, which was when the long term cycles turned from the stock cycle of 1980 to 2000, to the gold counter-cycle of 2000 to 2012.



When we return to the fifty year graph, then we see a lot of relative advantage to gold during the secular cycle of 1970 to 1980, including a similar surge up in the gold two year end value advantage area on the front end, even as the recession of December of 1969 to November of 1970 was in progress.
The Single Exception & Comparing The Fundamentals

Out of all the monthly two year rolling averages for entire fifty years, there is only one place where something comparable with the first half of 2020 happened, with even a 10% or more gain for gold relative to stocks on a two year rolling average, that was not associated with a secular cycle of gold outperforming the S&P 500 on a price basis. This was the ten months from November of 1987 through August of 1988.

While the timing may sound a bit obscure for younger readers, people of an age will of course recognize the correlation with one the biggest investment market moves of a lifetime, the Black Monday crash of October 19, 1987, with the S&P 500 falling 20% in a single day, the DJIA falling 22%, and much worse moves in many foreign markets.

Gold had already been trending upwards, and was trading at its highest levels since 1981 (1983 in inflation-adjusted terms). Gold jumped a bit higher still, stocks took a while to recover, and there was about a 20% two year advantage to gold that persisted for less than a year, with the advantage being similar to today.

With the benefit of many years of hindsight - Black Monday was a panic and not a crisis. There was no fundamental change in the economy in the form of a recession, there was no huge surge in unemployment, and there was no major decline in corporate earnings.

However, at the time, investors in both gold and stocks thinking and acting like there really was a crisis, produced an anomaly not seen at any other time over the last fifty years - a brief but significant (>20%), rolling two year advantage to gold over stocks, that existed outside of a secular cycle favoring gold over stocks.

Then fears of crisis receded. Stocks resumed a march upwards all the way to the heights of 2000, and an annual average inflation-adjusted S&P 500 index price that was about 2.7 times higher than it was in 1987. Gold would resume its downwards march towards the depths of an inflation-adjusted price per ounce in 2000 that was about 61% lower than it was in 1987. Investors would be about 7X better off being in stocks than gold over the next 13 years, even on a price only basis, as one of part of the secular stock cycle that would favor stock investors over gold investors by a whopping 26 to 1 margin over the full 1980 to 2000 cycle (as covered in Chapter Nineteen).
Factoring In Genuine Crisis

That was the single exception - and the record is quite different when there is an actual crisis, as opposed to fears that a crisis could develop.

We have only two other instances of seeing a 10%+ two year rolling advantage shifting to gold after a long bull market in stocks, those were both associated with genuine crises that would become a series of crises - and each one of those did indeed call the beginnings of a secular shift in the cycles to gold strongly outperforming stocks for the next decade or more.

By the early 1970s, inflation was heating up, and Bretton Woods was breaking down, meaning the last link between the value of the dollar and the price of gold was collapsing. The next decade would bring stagflation and economic "malaise" with the combination of the highest rates of U.S. inflation in the modern era, as well as a series of recessions with high unemployment. Many thought that the U.S. economic miracle had ended for all time.

After major gains in the 1960s, the Dow Jones Industrial Average peaked in inflation-adjusted terms in May of 1968, and would fall for the next 14 years, bottoming out with a 70% loss in inflation-adjusted terms by November of 1982. This was by far the worst damage the stock market took outside of the Great Depression, but most investors aren't even aware that it happened, because the destruction of the purchasing power of stocks was being covered over by inflation and the destruction of the purchasing power of the dollar, as explored in the analysis linked here. (This is something that it seems retirement investors should be keenly aware of, this 14 year destruction of the purchasing power of stock portfolios, but it is not part of the usual financial education and most people relying on stocks in retirement seem unaware.)



Put together the explosion in the value of gold as inflation shredded the dollar, and the destruction of much of the purchasing power of the stock market, and we have a secular cycle favoring gold, where gold investors would outperform stock investors on a price basis by a more than twelve to one margin over the 10 years from 1970 to 1980.

What started that major change in the cycles - was a 15% advantage to gold over stocks on a two year rolling basis, in the midst of the red bar of a recession, as shown in the graph repeated below.



That same pattern of a rolling two year advantage to gold over stocks during the red bar of a genuine recession would reappear again - for the first time since September of 1981 - in April of 2001. The tech bubble was in the process of bursting, there were massive stock losses, a recession was underway, and by July of 2001, gold had outperformed stocks over two years by about 20%, which is very similar to the numbers today. Gold would then soar for the next eleven years, as the tech bubble collapse would be followed by the real estate bubble collapse and the financial crisis of 2008, with gold investors outperforming stock investors on a price basis by about 6 to 1 over the 2000 to 2012 secular cycle.

In some ways, 2020 could be called the complete opposite of 1987, and the Black Monday panic that turned out to lack an underlying fundamental crisis. This time around, the underlying fundamentals are some of the worst we have seen in our lifetimes. Unemployment has exploded, and much of the economy remains shutdown.

The recession is global, and revenue streams based on foreign markets could be lower for years to come. Millions of jobs in travel related industries may no longer exist. Potentially millions of restaurants, bars, shops, and other small businesses who came into the government ordered shutdowns of their businesses with few cash reserves, and who lacked the easy access to the Federal aid provided to medium and large corporations, may never open their doors again.

In contrast to 1987 - stock prices have remained high, not because of economic or natural market conditions, but because of the Federal Reserve creating record sums of money to support markets and to fund extraordinary Federal government deficit spending.

However, when we look not just at stock prices, and not just at gold prices, but at gold prices relative to stock prices over the medium term using a two year measure (thereby removing much of the short term statistical noise), then we see something that is quite rare. Out of the 603 two year holding periods studied, ranging from April of 1968 to April of 1970 on the front end, and June of 2018 to June of 2020 on the back end, investors have never favored gold to this degree over stocks in the midst of underlying fundamental problems, without it being part of a secular cycle favoring gold over stocks.
Seeing The Fundamentals

Why would this would be such a rare occurrence, and why would it be a good signal of something real, a fundamental change?

For purposes of clarity - I'm a fundamental analyst, not a technical analyst. "Fundamental" versus "technical" are two quite different schools of investment analysis, and while they can overlap - just seeing a pattern in a chart isn't good enough for a fundamental analyst.

Fundamental analysts look at things like the economy, corporate earnings, debt coverage ratios, inflation-adjusted interest rates, future values and present values, and other such factors. Tracking economic and financial history can be just as important to a fundamental analyst as a technical analyst, but price changes aren't enough, things have to make sense in terms of the underlying economic and financial fundamentals.

So why would this measure matter? This particular measure is based on years of quantitative research (there are underlying reasons for choosing two years), but let me provide an intuitive explanation as best I can.

Markets move in long cycles, when it comes to the valuation of shares of stocks, as well as the inflation-adjusted price of gold. Over the course of a long stock cycle, which is often dominated by economic prosperity, the amount of corporate earnings rises, AND the value that investors place on each of those dollars of corporate earnings rises, AND the optimism that investors have about future earnings rises. This three way combination of more earnings, more value being placed on each dollar of earnings, and more confidence in pricing in today that future earnings will be still higher, can lead to much higher stock prices than can be justified by just the underlying earnings alone.

The more the time that passes since the last major crisis or inflationary bout, the less the degree of fear that the average investor feels, the less the demand for gold, and the lower the price of gold falls in inflation-adjusted terms.

What history shows us is that this continues over time, and we get secular (long term) cycles. In a stock cycle, investors grow increasingly confident even as the underlying economic fundamentals continue to be positive, and gold prices can continue to underperform or slide as fears of inflation and crisis continue to recede. So we get not just a single two year cycle, but a long string of two year cycles, each one favoring the relative performance of stocks over gold.

Then something rare happens. There is a major, fundamental change, that includes an actual economic downturn. But there is more to it than that, there have been many economic downturns.

The market as a whole, looks at the situation - and through its actions, freaks out a bit. It is as if the collective market says " Oh geeze, this is bad, the party's over." The reaction is so strong that the previous two full years of gains for stocks relative to gold are all given up, and then the price of gold goes substantially above that (relative to stocks).

Now, markets go up and down based on the ongoing battle between greed and fear all the time, there is a great deal of noise and clutter all the time, particularly when we look at daily, weekly or monthly changes.

But when we look at the combination of 1) being in a long term cycle favoring stocks; 2) the nation entering in an actual economic downturn; and 3) the market's evaluation of that particular downturn being so bad that two full years of stock gains relative to gold are given up - and quite a bit more (10%+) - that is not at all normal or common. Indeed, an investor who had been in the market for fifty years, would have only seen that combination two times before in all of those years, before this spring.

Each time - the market turned out to be right. Each time, there was a secular change in the cycles, and the contracyclical asset of gold would strongly outperform stocks on a price basis for many years to come.
A Collection Of Unprecedented Events

I'm not a believer in infallibility, but I am a believer in information value.

So, just because we've never seen something before doesn't mean it couldn't happen.

It could.

The secular cycle favoring stocks could indeed resume. To my mind, saying that couldn't happen and we know that with 100% confidence there will be a secular cycle favoring gold, is simply far too high of barrier in the real world, it just isn't reasonable to say that we could know something like that for sure.

This is particularly the case in a investment world of pervasive and unprecedented central banking interventions dominating the markets. Indeed, a very strong case could be made that the entire rebound in stocks is being driven by massive Federal Reserve interventions as part of a cycle of the containment of crisis - which was not part of the long term historical record. The battle between the current level of economic collapse and the unprecedented degree of monetary creation to fund extraordinary economic and market interventions will take us into completely new territory.

However, there is information value when it comes to making and assessing investment plans that are dependent on something happening that hasn't happened before. When we take that perspective, then the impossible task of knowing with certainty is removed. Instead, the "burden of proof" flips and we can simply say that we have never seen something before, so now we have to make a case for something happening for the first time (or at least in the last fifty years).

There are two profoundly important and quite practical implications for individuals when we flip that perspective, and look at using investment strategies that are dependent on something happening that hasn't happened before.

The first implication is that we should think through just what is the evidence that is so overwhelming that we can bet our future financial security on something happening for the first time - for sure?

It is very rare for the markets to make a call of this magnitude, it has only happened twice before in the last fifty years, stocks have strongly underperformed for a decade or more each time thereafter - what is the compelling argument for why we can be so sure, in the midst of what may be the worst downturn yet, that this time will be different, and that we can build our entire retirement investment strategy around that assumption?

That can be a difficult standard of proof - as it should be, when it comes to asserting that a first time event is the only reasonable possibility.

The second implication is perhaps the more important one, even if it is one that most individual investors seek to avoid. This implication is the introduction of doubt, in the form of at least reasonable doubts, and perhaps very strong doubts.

When something like this happened in the early 1970s, what would follow was not only recession and inflation, but what would become a 70% inflation-adjusted loss in the purchasing power of the Dow Jones Industrial Average (1968-1982). Between 1970 and 1980, on a price basis, an investor in gold over the secular cycle would have ended up with 12X the net worth of someone who invested in stocks (and yes, dividends mattered, but they are nowhere near where they used to be, particularly on an inflation-adjusted basis).

The employment blow the United States just took over the matter of a few months was far harder than anything experienced in the stagflationary 1970s - can we really make our plans with confidence based on assuming that the 2020s will be a much better decade for stock investors relative to gold investors - or should we have our doubts? Strong doubts?

When the tech bubble popped in 2000-2001, gold was languishing at near two decade lows, and the idea that gold could outperform stocks would have seemed laughable to many investors, particularly those who had been day trading the creation of the stock bubble. Yet, as part of the collapse of the tech bubble, the collapse of the real estate bubble, and then financial crisis of 2008, gold would outperform stocks on a price basis by 6 to 1 in the 2000 to 2012 era.

We already have a hit to the global economy that exceeds what we saw in 2008, with a financial system that is only being held together by monetary creation and deficit spending on a scale far greater than what was seen in even the depths of the prior financial crisis. Can we really just make a base case assumption that what happened before won't happen again (or worse)? Or should we have doubts? Strong doubts?

Perhaps the most interesting part about understanding the contracyclical relationship between stocks and gold, is that it provides both signals and solutions. We have just seen a rare but strong signal, that has happened only twice before after long stock market run ups and while a recession in process. Each time, there has been a change to a secular cycle favoring gold over stocks by very large margins over the long term.

But we don't need to know that will happen for sure. Because gold and stocks are contracyclical assets. That means that using the two in combination in targeted strategies can be a very good tool for dealing with (well-justified) doubts. As introduced in Chapter Nineteen (link here), when we understand the historical mathematical relationship between gold and stocks, this opens up an entire range of risk reduction strategies, including rebalancing strategies, ratio strategies and combinations thereof.

Gold can be a wonderful investment for inflation. It can be an even better tool for financial crisis, or when deployed inside of combined strategies with stocks for risk reduction while still maintaining positive inflation-adjusted returns. What is best of all - is understanding both uses, and hopefully the free book and the series of gold analyses have been helpful to you in that regard.
 

Uglytruth

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The $600 unemployment kicker is coming to an end. It covered up a lot of the problems with the foundation of the economy.
Rumor is the next one will be 70% of what you were making...... even that it will be a huge cut for many that were getting more than double their old wages. It was a way to float universal basic income. NOTE it paid about 42K a year + unemployment.
 

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Uglytruth

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Was furloughed for 2 weeks in April. Don't even have my unemployment yet after 5 letters & a phone call. System won't let me apply.