E-Mail 'Economics & Investing For Preppers' To A Friend

11 Comments

1. Today Bank of America announced that they will no longer loan money to companies that manufacture ‘assault weapons’ for the civilian market. https://www.bloomberg.com/news/articles/2018-04-10/bofa-will-no-longer-lend-to-some-gunmakers-vice-chairman-says

2. “China Is Studying Yuan Devaluation as a Tool in Trade Spat”

   They did this in 2016 and markets turned negative but recovered rather quickly. Of course in ’16 Wall Street had a fed put and QE 12 (or whatever it was then). That punch bowl has been removed. This time would likely roil markets much more significantly even in this (supposed) strong economy.

   China has aspirations about the Yuan being the worlds reserve currency. Despite assurances from our global masters, the ChiComs don’t like us much. This will not go well for the US in the long run.

3. I understand about boycotting Dicks Citiecorp, and Delta, (and now B of A?) (I see these as no great loss). But you left out almost all of the major car rental organizations. Which include (but probably is not limited to) Avis, Hertz, Enterprise (which is parent to Alamo and Dollar)and Budget. (I would appreciate correction on any of these if I have misspoken.
   Interesting thing about Enterprise is the founder is a U.S. Navy vet who served on the Enterprise, so obviously he has taken the oath to “protect and defend from all enemies foreign and domestic” Really sad what we will do for the business model at the expense of our country, culture and freedom

4. In your cascade of events a key moment is that of rate inversion. When short goes higher than long term rates the record is 7 out of 7 times that a recession was triggered.

   1. Precisely!

      More details:
      “…an inverted yield curve (where longer-term rates become lower than short-term rates) has a good track record of forecasting recessions. Each of the seven recessions over the past 50 years was preceded by the Fed hiking short-term rates enough to invert the yield curve (as measured by the difference between 10-year and 3-month Treasury securities).”
      https://lplresearch.com/2017/06/29/does-a-flattening-yield-curve-mean-were-headed-for-recession/

      and:
      “An inverted yield curve, which has correctly predicted the last seven recessions going back to the late 1960’s, occurs when short-term interest rates yield more than longer-term rates. The last two times the yield curve inverted was in the years 2000 and 2006 before each of the last recessions.”
      https://www.cnbc.com/2017/06/05/inverted-yield-curve-predicting-coming-recession-commentary.html

      I’ll say it again. The stock market and the economy won’t handle 3 percent short term rates, which is the target by 2020. I’m not saying that they should or shouldn’t handle it, or that they can or can’t, they won’t. No amount of ivory tower pin headed academic models or historical analysis can change this.

5. I agree with Bill Holter that the selling of treasuries by China would be fairly easily absorbed by the US just as they currently buy US debt instruments, i.e. it is not a material weapon against the US. What IS a weapon that has received little comment is that the gold and silver market of COMEX can be bought for pocket change by Russia and China and all they have to do is demand delivery to crash the entire Potemkin system and pave the way to exposure of the paucity of US precious metals holdings and the strength of Russian and Chinese holdings. The implications for the US currency and fiscal structure would be existential. And not a shot fired.

6. The fed is the second largest buyer of treasuries and it has an unlimited check book through dollar creation. This is not inflationary if sterilized. The fed will buy all of the treasuries it needs t at whatever rate it would like to cap. There is no china bond buying boycot rate spiral. It cannot happen.

7. Has anyone thought that governments will go cashless if things get tight?
   That one action will make silver, gold worthless.

   And all dollar assets will be under government control.

   Lastly, since I know people quote Scripture, how does the Anti Christ cause all people to have the mark and no one will be able to buy or sell without it in a world that has a collapsed economy?
   The future requires a higher tech, not chaos.

   1. I disagree. Gold and silver will be the basis for the underground economy when the Fed goes cashless. Precious metals will always have value. The underground or barter economy always exists. In modern parlance that would be called the “black market”.

      In history who creates the conditions for the black market to rise? Always and without failure it is the actions of governments that have created the black market and all the crime and corruption and all the associated deaths and destruction that surround it. Excessive regulation, excessive taxation (think cigarettes in New York, remember Eric Garner), and as always, prohibition. Think, the war on alcohol in the 1920’s, the war on drugs for the last 80 plus years, the increasing war on gun ownership eventually leading to prohibition, and finally the war on cash in the 21st century. Governments do what they do, the results are always the same, history is always ignored, and the powers-that-be just don’t give a s**t.

      1. You forgot they’ve done it before(outlaw pm)and that was when a lot more was circulating.

8. Charles, would you trade food for silver or gold? Would you trade your weapons or ammo for gold or silver?
   If or when Governments go cashless just like when FDR confiscated gold, anyone found with it was punished in the extreme.

   Anyway, it’s my belief that if gold hits the $2000 per ounce or the silver it’s $100, than buy tangibles that have multiple purposes. There will be the time to get great value from PM’s but wait to long, you will lose.
   And just because Governments go cashless doesn’t mean your money is gone, it just changed forms.

   In fact I rarely see people use actual money anyone. The pay via phones or their computers.

Comments are closed.