I’m going to start out by laying just a bit of ground work here with a couple of definitions. A definition of the word Fraud is “A deception deliberately practiced in order to secure unfair or unlawful gain.” The next definition is of the word Defraud, which is “To trick or cheat someone or something in order to get money : to use fraud in order to get money from a person, an organization, etc.”.
OK, that should be enough to get the ball rolling.
Over the course of millennia, governments have time and again failed to manage a fully functioning status based solely on their overtly defined revenue streams. Although many reasons can be pointed out as causes for blame, it most always has boiled down to incompetence, corruption, greed, and lust for power.
When originally defined revenue sources failed to provide sufficient funding, governments have chronically relied on one particular fail-safe “mechanism” to fill the funding gap. That “mechanism” has been to defraud their own citizenry in some fashion.
Although historical situations varied, one of the most popular fashions of fail-safe “mechanisms” was to covertly (or not so covertly) devalue their country’s currency.
Although certainly not the first, the Roman Empire was a classic case of the use of currency devaluations. They created devaluation by both decreasing the size of their coins, and by decreasing the percentage of precious metal content (gold or silver) vs. the alloy metals contained in their coins.
Another notorious case of currency devaluation was used by the Weimar Republic (Germany 1920’s), when they simply printed paper currency at will (with nothing to back it up). Now again, they weren’t the first country to ever over print their paper currency, but their proficiency at it took on the level of an art form that set the “standard” for inflation metrics (a persistent decline in the purchasing power of money, caused by an increase in available currency and credit) that is still referenced today.
Now lets move forward to more recent history (ours to be precise), and address the case of CEREAL, ummmm, I mean the SERIAL Case that I mentioned in this email’s subject title.
You see, I’m referring to the “case” of our own government having become a SERIAL perpetrator of financial fraud on the American people.
I’m afraid the “rap sheet” is a long and inglorious one:
In 1913 the United States Congress created the Federal Reserve System to “provide a safer, more flexible banking and monetary system”. Of course, in retrospect the question remains, SAFER FOR WHO?
Then in 1933 FDR issued an executive order outlawing the private ownership of gold in the U.S. The actual reason for the gold confiscation was a bailout of the privately-controlled Federal Reserve Bank.
In 1934 FDR officially ordered the end of our domestic “gold standard” and revalued gold from $20.67 to $35 per ounce, therefore the U.S. dollar was instantly devalued by 41% vs. the cost of gold.
Then President Johnson (under the 1964 Coinage Act), officially withdrew the use of silver in American coins (except for a small, temporary exception in the Kennedy half-dollar)., thereby destroying the inherent value of 1965 and later dimes, quarters, 1/2 dollars, and “silver dollars”.
In 1971, due to the U.S. dollar now seriously being over printed (due to the Vietnam War and Pres. Johnson’s “Great Society” program), President Nixon was forced to discontinue our country’s international backing of the dollar with gold at $35/oz., and refused further redemptions of our paper currency held in foreign hands with gold from our rapidly diminishing reserves.
Then in the early 1980’s the government initiated a new twist to defrauding the American population by a series of steps to recalibrate the way the CPI (consumer price index) was calculated. This enabled the government to UNDER PAY Social Security recipients by under calculating the actual cost of living raises. This practice continues to this day and the compounded losses to present and future SS recipients is STAGGERING.
Lets now move forward to 2008 when the fraudulent Federal Reserve established the ZIRP (zero interest rate plan). This is another case of defrauding the American people by artificially lowering interest rates to the benefit of the banks and the government, while destroying the American saver’s opportunity to earn a fair return on their savings. Not only is a fair return denied individual savers and pension funds alike, due to the actual rate of inflation, all savers are in “real terms” losing the value of their savings because their returns are less than inflation.
Also starting in 2008 and continuing through most of 2014 (overtly), and continuing to this day (COVERTLY), the Federal Reserve established a program called Quantitative Easing, which in it’s very simplest (and honest terms) was a system in which the Federal Reserve created TRILLIONS of DOLLARS out of thin air (not even printed currency, just digitally created), and used that money to buy bad debt off of the big banks and to purchase our government debt instruments that other nations would not buy because the interest rates had been manipulated insanely low.
What I have just described for you (without a ton of complicated details) is at it’s most base point of relevance, a blatant, deliberate, calculated, case of SERIAL FINANCIAL and MONETARY FRAUD which has been perpetrated on the American people by our own government (and it’s lackey creation, the Federal Reserve) which has wielded over the last 103 years, a heinous, covert tax on the American people, and a simultaneous destroyer of the value of our currency and and our savings.
To give specific detail to the ramifications of this SERIAL FRAUD CASE, using the “eternal money”, gold, as a measure stick: just since the year 2000 the dollar has lost 78.7% of it’s purchasing value, since 1975 the dollar has lost 86.8% of it’s purchasing value, since 1934 the dollar has lost 97.4% of it’s purchasing value, and since 1913 (when the Federal Reserve was created to provide a SAFER MONETARY SYSTEM), the dollar has lost 98.6% of it’s purchasing value.
I don’t know about you, but…….. I don’t think we can afford any more safety in our monetary system!!!
I realize most of you already knew this stuff, but I just wanted to make sure we were all on the same page about what safe, caring, and capable hands our financial futures were in.
So when I say protect yourselves by insuring some of your savings by owning precious metals, we all will know it’s because of the ongoing SERIAL CASE OF FRAUD, and not because of just another case of CEREAL.
Below are a few quotes from the recent Hat Trick Letter, and then some great linked items, etc. Take care.
“If we recommend [indictment], we literally hand over documentation implying the entire government is involved in treason at the highest levels and everyone is about to duck and cover, as well as some sensitive details of Special Access Programs which would obliterate national security. I am not sure, but some of my war strategy buddies are estimating a high probability that Russia will leak all the info they have to the world, since Clinton wants to go to war with them and they have no desire to be in a conflict with the United States. My message to you and everyone on this board is do not get distracted by Clinton’s e-mails. Focus on the Foundation. All the nightmarish truth is there. The e-mails will pale in comparison. If leaking data en masse destroys my country, we betray the country. If we do nothing, we betray the country. I am not disagreeing with you. I am saying the situation is more complicated when you are inside. You do not have to breathe the information that I have that would make your eyes fall out of your skull if you knew what all was going on.” ~ USDept Justice (from leaked document)
“If a food run at a Hoboken New Jersey supermarket took place over a bank run in Italy, it will surely be over a 100 times worse if a confiscation event occurs at a US bank. It would spread to Walmart, supermarket food stores, retail stores like Target, and even home center stores. The run on banks and stores would quickly turn disorderly. Novelty and specialty stores would cease to exist. Shopping malls would morph into homeless hotels. It would result in riots and great damage to property, maybe even some lost lives. Nothing compares to fear of not having enough food in the cupboard. Farmers beware!” ~ JeffH (Hat Trick Letter client)
“QE is Zimbabwe monetary policy. Quantitative Easing conducted by the US Fed results in total destruction if continued, even when not pursued by other central banks. The key here is the Global Reserve Currency is being subjected to hyper monetary inflation. The key point here is not that other nations might repeat the same destructive procedure. The US Fed is doing it. The global currency reserve is being debauched. The global banking system is being undermined entirely. The QE policy is a death warrant to the US Dollar and death sentence to the Global Economy.” ~ Jackass
https://www.youtube.com/watch?v=feW-iDhkoiA This is an ABSOLUTE MUST LISTEN TO interview of Catherine Austin Fitts of the Solari Report by Greg Hunter. Overall, I believe this woman is the smartest guest Greg Hunter has on, and she understands (and talks about) the government in a way that no one else does. You just don’t get many opportunities to hear this type of information.
http://kingworldnews.com/andrew-maguire-7-16-16/ This is a very interesting (but at times somewhat complex) interview by King World News with Andrew Maguire. It’s definitely worth your time because there are parts of his commentary that all of us can benefit from as he expounds on his VERY positive outlook for gold.
http://kingworldnews.com/terrifying-2-quadrillion-monster-now-totally-control/ Egon von Greyerz does another excellent job explaining his take on the global debt crisis for King World News.
http://kingworldnews.com/china-is-about-to-shock-the-world-and-the-global-financial-system/ It’s been at least 2 years, and maybe more like 3, when I first started presenting the idea that China was buying copious amounts of gold and had as their goal to offer the world an alternative gold backed currency choice as a replacement for the corrupted and fraudulent U.S. fiat currency. You must understand that this is coming, and our paper or digital dollars (and those who hold a large amount of their wealth in them) are in for a severe drubbing.
As I am writing this on Tuesday morning the rally in the stock markets is continuing. By the time you read this- who knows?
It appears that this latest short-term rally has to do with a trip to Japan by our former Chairman of the Federal Reserve- Ben Bernanke. In the meeting it is reported that he told the Japanese to continue Abenomics and that there is an idea that “helicopter money” may be coming to Japan- and likely elsewhere if the stunt should work.
To say the least, I have my doubts that this latest attempt to turn the tide in a 30 year losing battle with deflation will work any better than the money “printing” and negative interest rates have. Each of these trials have done the exact opposite of what was intended- at least since the beginning of 2016.
It is interesting to me that the stock markets continue to rise even though for the last 17 weeks individual investors have been pulling money out of equity funds. A Bloomberg chart shows that the pace of withdrawals are the highest of any on record for the first half of a year.
This appears to suggest that central banks are the buyers here. As a matter of fact, according to Citi Research “a surge in net global central bank asset purchases to their highest since 2013”. Why is this important? Remember 2013. It was in June of that year when Chinese bank lending seized up and our 10-year treasury note rose from 1.5% to 3%. While that may not sound like much, if our banks have $572 TRILLION in derivative bets as reported, based upon interest rates this was a HUGE deal. It led to a meeting attended by all of the major bank CEOs, the Fed, FDIC, Federal Home Loan Mortgage Corp. and the President of the USA.
While the financial game shows made a point about the large fines the banks were paying and how embarrassing it must have been to face the President, I believe it is likely that the reason for this hastily called meeting was that there was a solvency threat to these banks and they had to find an answer fast.
It appears to me that the stress in the financial system is reaching a tipping point yet again; the central banks are well aware of it and just might be making their last stand right now. I hope for all of our sakes that they can figure this out, but my confidence is low based upon what I am seeing.
I wrote last week about the problems in the Italian Banks, and as I write, this Deutsche Bank- possibly the largest threat to financial stability globally has seen its share price crater and according to Subsidium LLC “Deutsche Bank CDS is higher now than it was at any point during the 2008 crisis or almost any time except briefly during the sovereign debt crisis. Markets are basically saying Deutsche Bank is a junk rated company given its present capital situation”. CDS (Credit Default Swap) is what people are willing to pay to insure against a default.
It is obvious to me that there are many central bank operations taking place behind the scenes to keep the illusion of prosperity and safety alive. A look at the charts will show that the volatility in most asset classes are already at historic levels even though it appears all is calm on the surface.
The giddiness of the financial game shows to this latest rally would have me rolling over laughing if it wasn’t so dangerous to everyone’s financial health.
Headlines: Markets (Dow & S&P) hit all-time highs! Nasdaq at highest level this year!
Let’s do a little comparison:
Index (2000) (11- 2014) (7-12- 2016) (20 month return) (2000-2016 return)
DOW 11,500 17,950 18,350 +2.2% +59.6
S&P 500 1,500 2067 2150 +4% +43.3%
Nasdaq 5,000 4797 5016 +4.56% ZERO
Gold 260 1150 1344 +16.86% +417%
Pardon me if my enthusiasm for these “all- time highs” is a little suspect. The reason I picked November of 2014 is that earnings and economic activity have been falling since then which would normally lead to lower stock prices- not higher. This adds to my theory that the central banks are doing all they can to keep the markets where they are and the upside potential is dwarfed by the downside risk.
If there was ever a time to turn off the financial game shows and get information that doesn’t have an ulterior motive, that time is now. Many people are getting excited by stocks again and are ignoring the monster red flags that are hiding in plain sight.
Negative interest rates, “money printing”, asset buying, helicopter money, propping up some markets, hindering others. These things are seen and dismissed as if they are somehow normal. THEY ARE NOT!
This is the most confusing time in the markets ever because there is virtually nothing that can be ruled out as “off limits” to the powers that be.
The only answer, in my opinion, is to have assets everywhere and overweight where your greatest beliefs are. You may even have to question some of your long-held beliefs like “the markets always go up over time”. Eventually they probably will again but your time horizon may be far too short to take advantage. I believe US stocks must be bought at far lower levels. We have a plan for that! I believe that most bonds are now grossly overvalued and you are not being compensated for the increased risk you are taking.
I also believe that based upon all of the central bank actions that gold, silver and other assets are at historically low values and represent a few ideas that may help get you through the coming weeks, months and years that look to me to be the most dangerous times that we will likely ever experience.
I am praying that I am wrong, but I am preparing as if I am right. I hope that you will also …
Mike Savage, ChFC Financial Advisor
2642 Route 940 Pocono Summit, Pa 18346
Raymond James Financial Services, Inc. Member FINRA/SIPC
Many people contact me or stop me and say that this writing I do weekly really makes their day. Of course, they are being sarcastic because of the content of what I put in my notes. I am not trying to advance any agendas, I don’t care if what I write conflicts with the financial game shows and I surely don’t care if I ruffle any feathers because I have one goal. My goal is to be honest about the real state of the economy so that regular people, like you and myself, have a realistic chance at making good decisions going forward.
Just like a computer. Good information in will lead to good information out. If the information is flawed then your outcome will be flawed also- much like we saw where the economic laws that have been around for centuries (such as supply and demand) can be hijacked for a while by a “Printing press” but ultimately, reality will rear its ugly head and asset prices will find their true value.
If anyone is simple enough to believe that, as is reported on those same financial game shows, we are at “full employment” and the economy is picking up steam, there are green shoots, now is always the time to buy any stock etc. you don’t need to read this. Go back to sleep- the Fed and the government will take care of you!
As markets are reaching all-time highs even the most bullish actors on those financial game shows are finding it hard to justify. It’s simple folks- the central banks panicked after Brexit and are pulling out all of the stops to keep European banks from imploding and stock markets from finding their true valuations- likely far, far lower than where they sit right now if history is any guide. It is a sugar high that will likely be short-lived.
As the markets are at all-time highs (not much higher than 20 months ago by the way) the economy continues to stumble. In a Financial Times article they say:
” Policymakers and economists have grown increasingly concerned about a slowdown in global trade growth. But according to the latest report by Global Trade Alert, which monitors protectionism around the world that growth has disappeared altogether with the volume of goods traded around the world stagnant since January 2015. Such a prolonged period of no growth is rare in economic history, said Simon Everett, professor of international trade at Switzerland’s University of St. Gallen”. “It really doesn’t happen very much outside recessions”.
Truck traffic is down, trains are sitting idle around the country, particularly out in the Western USA and global shipping rates are not far from the historic lows that they just touched recently. According to Bloomberg the BDI Index is down 55.86% YTD and 28.91% in the last 12 months (July 18, 2016 quote). We are in driving season here in the USA and oil stockpiles are growing again instead of being used up!
If you really think we have a vibrant economy because we are starting to spend more on oil products again and the “strength” in purchasing that comes from rising health care costs and more utility costs because of a warmer than normal June then you are likely just looking at numbers and haven’t worried about seeing WHY they look like they do. If there was real economic health stores would be opening- not closing.
Add to all of this the fact that 100 companies have defaulted on their debt so far this year (50% more than for the same period in 2015 and the highest level since 2009 -Jeff Cox CNBC) I find it hard to get excited about corporate debt or the stocks of most companies at the level they are at right now.
I have long said that the chasm between the numbers that are reported and the actual experience that we, on Main Street, are living through are so disconnected that even massaging the numbers does nothing to change anyone’s mind about how the economy is doing. That is, outside the “experts” on the financial game shows that needs to keep you watching and buying.
Currently, the direction of the stock averages are simply mimicking the difference between reported numbers and actual economic performance- of course helped along with “free money” from the central banks and asset purchases (or dumps in the case of the metals).
This is leading us to a situation where the answers left are all bad. Keep “printing” and because you need more and more stimulus each time to get the same result you risk destroying your currency. I believe a major reason for the suppression of the gold price by the major banks was to mask what is actually happening to most currencies as they race to the bottom to gain a trade advantage.
Stop “printing” and propping up assets and suppressing others and it is likely that the 1929 episode would look like a walk in the park. A deflationary depression the likes of which we have never seen would be the most likely outcome.
While the deflation outcome sounds worse remember that prices of EVERYTHING would likely crash and anything that would be bought would be bought much cheaper also.
Of course, as usual my short-term outlook appears dire. Keep in mind that after these events take place the people will demand change- get it (one way or another) and there will likely be a sustainable recovery that should be a rising tide that can raise all boats. I am not saying it will be easy or fast but it will likely ultimately happen. To take advantage of that you will have to have purchasing power at that time. To do that you will have to think outside the box, make plans and …
Mike Savage, ChFC Financial Advisor
2642 Route 940 Pocono Summit, Pa 18346
Raymond James Financial Services, Inc. Member FINRA/SIPC