Seems like only yesterday I was shopping at Costco and decided to purchase 1 ounce of gold for $2720. Yesterday I WAS shopping at Costco and saw they were having another "sale" on gold, only now 1 ounce was $3360. I decided to purchase another 50 or so rolls of toilet paper, figuring in the next year or two my investment in TP might increase even greater than the price of gold. Plus I needed a few rolls, and you can never have too many.
One of the most reliable measures of true wealth in this life is an amount of premium quality toilet paper that causes your spouse to ask “what’s so wrong in the world that you think we need so much Charmin Ultra Soft on hand…?”
Yep. Sure seems like we've finally hit that inflection point many of us (certainly me!) have long and fruitlessly expected. I think Jeremy Grantham, 80+ years though he is, has been sharp as a tack on this cycle vs. past cycles. The AI bubble emerging as the "big bubble" was deflating -- that was a tricky curveball. Like two wave-forms colliding.
Independent of that, one thing I see very few people focusing on -- and it's a little surprising frankly -- is the global geopolitics. There's such a faith in American global dominance, such an unquestioning faith in Hollywood's version of U.S. military. But that's a sand castle and a Hollywood fable. NATO has been shellacked in Ukraine/Europe. Russia is way ahead, decades ahead, now on weapon systems. The U.S. is good at expeditionary adventures against 3rd world nations but has no ability to project power -- other than M.A.D. nuke threats -- in continental war scale anywhere. The Navy is tops in world no doubt, but that's limited. This isn't the Teddy Roosevelt era. Is there any serious way to bully China, Russia with the Navy? Very limited. This is no knock on U.S. armed forces people. None. It's just a sober look at actual geopolitics vs. myths and legends. I suspect it's one reason Trump is mending fences. What's the alternative? There is none. Except nukes.
All that has implications for the dollar/petro dollar. The dollar/petro dollar was always enforced by U.S. military world supremacy. That's gone, pretty much. And it's so self-evident to anyone who looks in to it. NATO is a ghost bureaucracy; that's about it. Who are they going to fight? Russia? Not now. Not in 10 years. China? Iran?
It's complicated. and it's heading for a world less and less focused on the dollar more and more. That impacts Treasury markets for sure too.
It's a new world,. The post WW2 architecture is over.
So few "market pundits" talk about any of this. Probably cause most are spokesmodels and can't be seen questioning the U.S.-centric narrative.
the only thing I wonder about is Trump's comment about U.S. having weapons no one has seen or knows about. That's a rabbit hole, zero-point energy, etc. For now, I don't think that's analytically tractable in any way.
Unfortunately not a surprise. Kind of why I got a kick out of the “sell the whole fn thing” mug. My portfolio, at least the equities portion, had been sold to the derision of some peers. When I replaced quite a bit of it with metals and SQQQ I really got teased. They quit laughing a few weeks back. Thanks Chris for your insights and “guests”. Much appreciated. Any chance you chat with Lyn Alden at all? She has some interesting takes also.
Hold tight my friend. It's Friday so go ot and enjoy a happy hour or any preferred substitute. I listened to Peter's interview a couple of times and would like to submit a few comments.
Peter makes a few dubious assumptions as follows:
1) The threatened tariffs will take place and remain in place over the long term. While this is not impossible, it is unlikely, as the tariff threat is a negotiation tool to even out the trade deficit as much as possible. If I had to guess, China will be the last one to the table, waiting until they actually see the effect on their economy before blinking.
2) The European market will easily replace the US market for Chinese goods. If this were even close to being true, the E would already be a major market for those goods. The EU is a largely production economy and not a consumption economy. The views of it's members are largely nationalistic, and self sufficient, beyond production for export.
3) The coming recession will be limited to the US. Up to now the US economy has been simply the pig with the best lipstick among western and even world economies. All western and even beyond, nations are likely to fall in to recession if the US does.
4) Germany will repatriate it Gold. This is possible, however, if the EU stays determined to pursue war with Russia, gold, along with other hard assets will flee the EU for the US to avoid being frozen by the EU.
The things Peter got right are as follows:
1) The US has been living beyond it's means by running up the debt, inflating the dollar and relying on continued cheap imports to hide the under reported actual inflation of the dollar.
2) Gold prices are a reflection of a loss of faith in the dollar. This is true from the time that Biden seized Russia's reserves in the Ukraine debacle. Biden put a hole in the dike of faith in the dollar reserve status the second he did that. Reserve currency status is based on trust, and he destroyed that in one second of total stupidity. Maybe there is a Dutch boy somewhere who will stick a finger in the hole, but it better be soon.
3) Gold stocks are a great investment opportunity.
At any rate, one thing that is certain is that, if the US does not repatriate its strategic manufacturing capability, it is a sitting duck against a hostile outside world, as best represented today by China. If no attempts are made to change this, our days are numbered even beyond economically.
You are 100 percent on point and Schiff is one of the best financial commentators, despite all the hate he gets. The man is right most of the time which is why so many people disparage him because most people hate bad news. I don’t understand that human phenomena because when you can look into the abyss you can position yourself accordingly. I’ve been investing in precious metals, energy and foreign stocks for years because they make the most sense on a cost/value perspective. Simon Hunt projects USD to lose value against other currencies going into the future and when he says that I listen, which lines up with your sentiments.
I just don’t see it. I understand it. I don’t see it.
Where are people going to go? The Euro? Yuan? Some new globalist CBDC? Nobody has a thesis as to how any of the above are even in the realm of possible. It’s laughable. BRICS is like a D&D group for a bunch of dipshit nerds who want to talk about killing infidels with their +5 vorpal blades. Meanwhile China’s sitting there thinking, “which one of these fuckers is going to take our surplus of iron and aluminum that we can’t even bury in a desert anymore?”
People think in light of globalist butthurt that it’s time to take their welfare football and go home. Yea right. It took us months to get our kid to stop wanting the nipple. The world’s been sucking on ours for nearly a century. Yes, “rotate” into Europe. I’ll list it as top 5 dumbest fucking transitions you can make, just behind taking cross sex hormones and chopping off your genitals.
The deal has been that we are simply, OBJECTIVELY, better than you. Either by way of higher education, talent, technology, freedom, rights, geography, politically and ultimately, militaristically. Usually all of the above. Somehow the message got lost to half the country who decided it was time to LARP as a permanent victim class to suck up welfare in a basement dwelling somewhere instead of taking on their rightful roles as God’s favored sons and daughters: Americans. I hear people afraid of offending “that country” or “those people” constantly and in turn I am offended by such willful and abject denial of their own birthright or naturalized homeland. I see actual American news organizations throwing AMERICA to the ground in defense of foreign nations. It makes me want to break things.
You are not weak. We are not weak. There is no better place in this world or this universe to go. People need to pick their asses up and get back to work and stop complaining about the stock market. The stock market might have been some forward looking indicator of the health of our economic prospects once, but that is now gone. It’s now a casino and the Algos run the show. You can thank the dickheads in charge for expanding ways to cheat leverage, blatantly wide open arbitrage gateways inaccessible to normal humans but left ajar for fuckfaces, and the brilliant idea of zero day options trades and now, 24 hour markets.
And how fucking stupid do you have to be as a corporation to not imagine that at some point your number would be called if you operated in China? A nation of NO INDIVIDUAL RIGHTS. No let’s do the opposite and leave 75% of our trillion dollar company’s exposure in the Chinese Communist Party’s territory. And as an institutional investor let’s make sure we buy lots of that stock so our portfolios are intertwined with the fate of that (those) ticking time bombs.
China is fucked. They going to keep offloading and unwinding USD? To go where? The Iraqi Dinar? They bringing back gold? Did they find a meteor the size of Russia that was made of gold that we don’t know about?
Anyway, we’re obviously going to have a world war. I just hope we blow up Europe. Those smug entitled cunts.
Good evening to all from Zuni Pueblo. It’s something to see when you realize that the Zuni and the other Southwestern Indian tribes have stood up
to everything that the “West” could throw at them for hundreds of years and survived in their homeland. Just sayin’.
Would that interest rates were positive - THEY’RE NOT (not if you use any “real” measure of inflation. THEY’RE STILL NEGATIVE. That’s why we have stagflation - it still makes a certain amount of sense to borrow, to throw good money after bad, to prop up the bad debts, to try and unload the garbage to some sucker who still believes that the Magical Money Tree Sprite is going to sprinkle his Fartcoin with fairy dust and turn it into a real investment.
There are huge numbers of people who are delusional about huge numbers of things and as a result are willing to keep pretending that the shit (the Tariffs) has not been deliberately thrown at the fan. Nevertheless it has - and that means that Bretton Woods and all of its bastard progeny (Petrodollar, Plaza Accord, Louvre Accord and all the secret “Protocols”) are OVER, FINITO, KAPUT!! It’s a New World - just no “Order” yet.
A perfect economic and financial accompaniment to all the rest of the crises attendant upon this Fourth Turning.
Keep that shoulder harness snugly buckled - the ride is only going to get wilder from here on out.
I would enjoy hearing of a company manufacturing nuts, bolts & screws in the USA. It's the small things we use in everyday life that are the sinews of the overall economy.
I do hope the current administration can do something to encourage small industry.
Peter was right and the Dr was wrong. The only reason Peter was less right is that the government bailed out entities that should have received the ramifications they deserved. Until we stop doing the bailing, it will continue
Wouldn't a good strategy be to filter for household names trading at or below book value? If a viable company can shut its doors and make a liquidating distribution equal to or in excess of market value, that's a pretty safe bet. For example. Intel's book value per share is $23. It's trading at $19 right now. That's a $4 per share or a 21% locked-in, no brainer profit. There are dozens of these scenarios right now. If we're talking a non-Armeggedon, still-functioning market, this seems as safe as gold. Am I missing something?
My wife is Peruvian. She owns a rental apartment in Florida. We are now thinking about selling and buying a rental apartment in Lima, Peru. Peru has been in a real estate bear market for ten years now. Maybe it's time for things to finally turn around there? Peruvian real estate skyrocketed during our Great Financial Crisis.
Your tone> “I like these calm little moments before the storm… it’s like when you put your head to the grass, you can hear it crawling. You can hear the insectzzzzaaa.” Serious Stansfield vibes.
Chris, I agree things are very difficult right now, and it is not clear the best path forward. but one thing you must remember is that throughout history, real interest rates have been positive far more often than not, and, in fact they were a key signal of the required return for starting a business. the negative real rate story is much more recent and a result of ZIRP/NIRP policies in the post GFC world. look at the Fred graph here of real 10-year yields (https://fred.stlouisfed.org/series/REAINTRATREARAT10Y) Granted, the debt load is a key problem, and ultimately I suspect we will see some form of YCC to allow the government to refinance.
but gold/ commodities remain the best place to be in my view, although a little more suspect of oil now.
Just my take on it, but it seems like it's all just excess liquidity draining out. Overpriced stocks (and real estate, and compensation, and eggs, and ESG/DEI, and...) are coming down to normal historical trend level values.
Gold is moving up b/c people - and governments - are afraid and don't know where to put money. Change brings fear. Nothing new there - gold's been a "safe" store of value for longer than most of our current countries have existed.
But capital is always going to go somewhere, there will be value and opportunities somewhere, unless you are predicting a Mad Max style apocalyptic scenario...in which case, guns and ammo are your best investment bets.
Gold has been MONEY for far longer than any contemporary nation on earth has existed. Gold, and silver, have been the ONLY true Monies since the beginning of recorded history.
Seems like only yesterday I was shopping at Costco and decided to purchase 1 ounce of gold for $2720. Yesterday I WAS shopping at Costco and saw they were having another "sale" on gold, only now 1 ounce was $3360. I decided to purchase another 50 or so rolls of toilet paper, figuring in the next year or two my investment in TP might increase even greater than the price of gold. Plus I needed a few rolls, and you can never have too many.
One of the most reliable measures of true wealth in this life is an amount of premium quality toilet paper that causes your spouse to ask “what’s so wrong in the world that you think we need so much Charmin Ultra Soft on hand…?”
Yep. Sure seems like we've finally hit that inflection point many of us (certainly me!) have long and fruitlessly expected. I think Jeremy Grantham, 80+ years though he is, has been sharp as a tack on this cycle vs. past cycles. The AI bubble emerging as the "big bubble" was deflating -- that was a tricky curveball. Like two wave-forms colliding.
Independent of that, one thing I see very few people focusing on -- and it's a little surprising frankly -- is the global geopolitics. There's such a faith in American global dominance, such an unquestioning faith in Hollywood's version of U.S. military. But that's a sand castle and a Hollywood fable. NATO has been shellacked in Ukraine/Europe. Russia is way ahead, decades ahead, now on weapon systems. The U.S. is good at expeditionary adventures against 3rd world nations but has no ability to project power -- other than M.A.D. nuke threats -- in continental war scale anywhere. The Navy is tops in world no doubt, but that's limited. This isn't the Teddy Roosevelt era. Is there any serious way to bully China, Russia with the Navy? Very limited. This is no knock on U.S. armed forces people. None. It's just a sober look at actual geopolitics vs. myths and legends. I suspect it's one reason Trump is mending fences. What's the alternative? There is none. Except nukes.
All that has implications for the dollar/petro dollar. The dollar/petro dollar was always enforced by U.S. military world supremacy. That's gone, pretty much. And it's so self-evident to anyone who looks in to it. NATO is a ghost bureaucracy; that's about it. Who are they going to fight? Russia? Not now. Not in 10 years. China? Iran?
It's complicated. and it's heading for a world less and less focused on the dollar more and more. That impacts Treasury markets for sure too.
It's a new world,. The post WW2 architecture is over.
So few "market pundits" talk about any of this. Probably cause most are spokesmodels and can't be seen questioning the U.S.-centric narrative.
the only thing I wonder about is Trump's comment about U.S. having weapons no one has seen or knows about. That's a rabbit hole, zero-point energy, etc. For now, I don't think that's analytically tractable in any way.
Unfortunately not a surprise. Kind of why I got a kick out of the “sell the whole fn thing” mug. My portfolio, at least the equities portion, had been sold to the derision of some peers. When I replaced quite a bit of it with metals and SQQQ I really got teased. They quit laughing a few weeks back. Thanks Chris for your insights and “guests”. Much appreciated. Any chance you chat with Lyn Alden at all? She has some interesting takes also.
Ive put about 40% of my brokerage account in SQQQ the past year. Lets roll…
She is great, subscribed to her newsletter for years, she and QTR would be love at first sight 😂
Treasuries popped below an uptrend line today. Along with Japans auction train wreck may be a good time to own SQQQ 😁
Hold tight my friend. It's Friday so go ot and enjoy a happy hour or any preferred substitute. I listened to Peter's interview a couple of times and would like to submit a few comments.
Peter makes a few dubious assumptions as follows:
1) The threatened tariffs will take place and remain in place over the long term. While this is not impossible, it is unlikely, as the tariff threat is a negotiation tool to even out the trade deficit as much as possible. If I had to guess, China will be the last one to the table, waiting until they actually see the effect on their economy before blinking.
2) The European market will easily replace the US market for Chinese goods. If this were even close to being true, the E would already be a major market for those goods. The EU is a largely production economy and not a consumption economy. The views of it's members are largely nationalistic, and self sufficient, beyond production for export.
3) The coming recession will be limited to the US. Up to now the US economy has been simply the pig with the best lipstick among western and even world economies. All western and even beyond, nations are likely to fall in to recession if the US does.
4) Germany will repatriate it Gold. This is possible, however, if the EU stays determined to pursue war with Russia, gold, along with other hard assets will flee the EU for the US to avoid being frozen by the EU.
The things Peter got right are as follows:
1) The US has been living beyond it's means by running up the debt, inflating the dollar and relying on continued cheap imports to hide the under reported actual inflation of the dollar.
2) Gold prices are a reflection of a loss of faith in the dollar. This is true from the time that Biden seized Russia's reserves in the Ukraine debacle. Biden put a hole in the dike of faith in the dollar reserve status the second he did that. Reserve currency status is based on trust, and he destroyed that in one second of total stupidity. Maybe there is a Dutch boy somewhere who will stick a finger in the hole, but it better be soon.
3) Gold stocks are a great investment opportunity.
At any rate, one thing that is certain is that, if the US does not repatriate its strategic manufacturing capability, it is a sitting duck against a hostile outside world, as best represented today by China. If no attempts are made to change this, our days are numbered even beyond economically.
You are 100 percent on point and Schiff is one of the best financial commentators, despite all the hate he gets. The man is right most of the time which is why so many people disparage him because most people hate bad news. I don’t understand that human phenomena because when you can look into the abyss you can position yourself accordingly. I’ve been investing in precious metals, energy and foreign stocks for years because they make the most sense on a cost/value perspective. Simon Hunt projects USD to lose value against other currencies going into the future and when he says that I listen, which lines up with your sentiments.
“because most people hate bad news” — you nailed it.
Ive had to curb my greed and focus back on Schiff’s foundations. His advice and basic strategies have never steered me wrong. Robert Kiyoaski too.
I just don’t see it. I understand it. I don’t see it.
Where are people going to go? The Euro? Yuan? Some new globalist CBDC? Nobody has a thesis as to how any of the above are even in the realm of possible. It’s laughable. BRICS is like a D&D group for a bunch of dipshit nerds who want to talk about killing infidels with their +5 vorpal blades. Meanwhile China’s sitting there thinking, “which one of these fuckers is going to take our surplus of iron and aluminum that we can’t even bury in a desert anymore?”
People think in light of globalist butthurt that it’s time to take their welfare football and go home. Yea right. It took us months to get our kid to stop wanting the nipple. The world’s been sucking on ours for nearly a century. Yes, “rotate” into Europe. I’ll list it as top 5 dumbest fucking transitions you can make, just behind taking cross sex hormones and chopping off your genitals.
The deal has been that we are simply, OBJECTIVELY, better than you. Either by way of higher education, talent, technology, freedom, rights, geography, politically and ultimately, militaristically. Usually all of the above. Somehow the message got lost to half the country who decided it was time to LARP as a permanent victim class to suck up welfare in a basement dwelling somewhere instead of taking on their rightful roles as God’s favored sons and daughters: Americans. I hear people afraid of offending “that country” or “those people” constantly and in turn I am offended by such willful and abject denial of their own birthright or naturalized homeland. I see actual American news organizations throwing AMERICA to the ground in defense of foreign nations. It makes me want to break things.
You are not weak. We are not weak. There is no better place in this world or this universe to go. People need to pick their asses up and get back to work and stop complaining about the stock market. The stock market might have been some forward looking indicator of the health of our economic prospects once, but that is now gone. It’s now a casino and the Algos run the show. You can thank the dickheads in charge for expanding ways to cheat leverage, blatantly wide open arbitrage gateways inaccessible to normal humans but left ajar for fuckfaces, and the brilliant idea of zero day options trades and now, 24 hour markets.
And how fucking stupid do you have to be as a corporation to not imagine that at some point your number would be called if you operated in China? A nation of NO INDIVIDUAL RIGHTS. No let’s do the opposite and leave 75% of our trillion dollar company’s exposure in the Chinese Communist Party’s territory. And as an institutional investor let’s make sure we buy lots of that stock so our portfolios are intertwined with the fate of that (those) ticking time bombs.
China is fucked. They going to keep offloading and unwinding USD? To go where? The Iraqi Dinar? They bringing back gold? Did they find a meteor the size of Russia that was made of gold that we don’t know about?
Anyway, we’re obviously going to have a world war. I just hope we blow up Europe. Those smug entitled cunts.
OUTSTANDING comment, bravo!
I heard my dad talk about his general investments this morning. He only has a small percentage of his investments in gold and emerging markets.
I'm doing the opposite of my dad. The US is a very different place and in a different economic and political situation than it was for the Boomers.
I hope we're not out of time. I'm just getting started.
Good evening to all from Zuni Pueblo. It’s something to see when you realize that the Zuni and the other Southwestern Indian tribes have stood up
to everything that the “West” could throw at them for hundreds of years and survived in their homeland. Just sayin’.
Would that interest rates were positive - THEY’RE NOT (not if you use any “real” measure of inflation. THEY’RE STILL NEGATIVE. That’s why we have stagflation - it still makes a certain amount of sense to borrow, to throw good money after bad, to prop up the bad debts, to try and unload the garbage to some sucker who still believes that the Magical Money Tree Sprite is going to sprinkle his Fartcoin with fairy dust and turn it into a real investment.
There are huge numbers of people who are delusional about huge numbers of things and as a result are willing to keep pretending that the shit (the Tariffs) has not been deliberately thrown at the fan. Nevertheless it has - and that means that Bretton Woods and all of its bastard progeny (Petrodollar, Plaza Accord, Louvre Accord and all the secret “Protocols”) are OVER, FINITO, KAPUT!! It’s a New World - just no “Order” yet.
A perfect economic and financial accompaniment to all the rest of the crises attendant upon this Fourth Turning.
Keep that shoulder harness snugly buckled - the ride is only going to get wilder from here on out.
Giddy up.
I would enjoy hearing of a company manufacturing nuts, bolts & screws in the USA. It's the small things we use in everyday life that are the sinews of the overall economy.
I do hope the current administration can do something to encourage small industry.
Peter was right and the Dr was wrong. The only reason Peter was less right is that the government bailed out entities that should have received the ramifications they deserved. Until we stop doing the bailing, it will continue
Wouldn't a good strategy be to filter for household names trading at or below book value? If a viable company can shut its doors and make a liquidating distribution equal to or in excess of market value, that's a pretty safe bet. For example. Intel's book value per share is $23. It's trading at $19 right now. That's a $4 per share or a 21% locked-in, no brainer profit. There are dozens of these scenarios right now. If we're talking a non-Armeggedon, still-functioning market, this seems as safe as gold. Am I missing something?
Damn good...you've nailed it.
My wife is Peruvian. She owns a rental apartment in Florida. We are now thinking about selling and buying a rental apartment in Lima, Peru. Peru has been in a real estate bear market for ten years now. Maybe it's time for things to finally turn around there? Peruvian real estate skyrocketed during our Great Financial Crisis.
I have a neighbor whose daughter goes down to Mexico to get all of her healthcare done.
Your tone> “I like these calm little moments before the storm… it’s like when you put your head to the grass, you can hear it crawling. You can hear the insectzzzzaaa.” Serious Stansfield vibes.
Chris, I agree things are very difficult right now, and it is not clear the best path forward. but one thing you must remember is that throughout history, real interest rates have been positive far more often than not, and, in fact they were a key signal of the required return for starting a business. the negative real rate story is much more recent and a result of ZIRP/NIRP policies in the post GFC world. look at the Fred graph here of real 10-year yields (https://fred.stlouisfed.org/series/REAINTRATREARAT10Y) Granted, the debt load is a key problem, and ultimately I suspect we will see some form of YCC to allow the government to refinance.
but gold/ commodities remain the best place to be in my view, although a little more suspect of oil now.
Just my take on it, but it seems like it's all just excess liquidity draining out. Overpriced stocks (and real estate, and compensation, and eggs, and ESG/DEI, and...) are coming down to normal historical trend level values.
Gold is moving up b/c people - and governments - are afraid and don't know where to put money. Change brings fear. Nothing new there - gold's been a "safe" store of value for longer than most of our current countries have existed.
But capital is always going to go somewhere, there will be value and opportunities somewhere, unless you are predicting a Mad Max style apocalyptic scenario...in which case, guns and ammo are your best investment bets.
Gold has been MONEY for far longer than any contemporary nation on earth has existed. Gold, and silver, have been the ONLY true Monies since the beginning of recorded history.