The Dow/Gold ratio was 20 three years ago. It is 16 today; stocks have lost 20% of their real value. They need to lose another nearly 70% from here (in gold terms) before they are real bargains.
And if that sort of “unsafe disinformation” remains published; will there be days, weeks, months where there are no ask…just spot take it or leave it… bids become futile irrelevancies.
Today, Kitco’s Au print right now is $1 between ask & bid. Same 1 in € & £. hhmmm
Likely true, but it would be basically unnecessary. Our general population has been purposefully misled and dumbed down to not consider PMs as a form of Money, much less as the only form of True Value and best method to Store Wealth.
Not to worry. The whole world will very soon be whomped upside the head with a Golden BRIC, and the sheep in the US/EU will look around bewildered as to why there is so little to eat...
And just try buying an F150 for $38,000. You won’t find one with that number in the lower right hand corner of the window sticker. If you show the dealer the advertised “starting at” price of $38,000 he will tell you, if he’s honest, that dealers don’t order the “stripped” version because buyers don’t want it. Dealers don’t order it and Ford doesn’t build it. So the advertised pricing is a chimera, a charade. The real average price of an F150 is probably closer to $45,000, and you can pay a lot more. Want the works? If it’s a Raptor it will be $90K out the door.
I bought a Ford Ranger (considered a big pickup here) 4 years ago (UK) for £33,000. When I went to test drive the latest version and the dealer ran the numbers I laughed in his face and walked out - £55,000. Official inflation figures are pure fantasy.
So true, and those phony inflation numbers don’t even address the entire services industry other than perhaps medical care in the US(“free” in the UK but not in the US). The sevice industry has probably seen the highest inflation of all here in the last 4 years.
Tariffs might not have kept a US-made Ranger available on the cheap inside CONUS, but if they forced Ford to onshore the manufacturing, tariffs would ensure the majority of $$ spent on Materials, Salaries and Hourly Wages stayed in the US - with US CITIZENS.
It’s a complicated sourcing picture no matter where modern capital goods are made. Chances are the vast majority of the parts that make up the Ranger, including the costly engine and drive train, are the same parts, with same sourcing, whether assembled in Thailand, Detroit or South Africa. So the Thailand assembly plant probably has less than 10% of the value add. That said, these offshore assembly plants come with strings that ensure the “local” market can afford the product. So there is a complicated pricing and contractual structure where market access is the primary benefit to the OEM, not margins per vehicle. Of course higher production volume for engines, to take one example, means engines are cheaper for the Thai, US and South African plants, so everyone benefits. And local assembly means tariffs will never be an issue for the local market.
I hear you and am very familiar with the story of what it takes to get a pencil produced.
I was commenting in a more general sense, i.e. if we continue to have 90%+ of the manufacturing process for ANYTHING/EVERYTHING offshore, there is a zero chance that our workers, communities and, yes, government (through increased tax revenue) wll benefit. IOW, bring back as much of the manufacturing process as possible and watch American workers and entrepreneurs take the ball and run with it - like we always do...
I really do think it’s a mixed story. When I worked at General Motors in the late 1970s GM had 26 automobile assembly plants in the US. Today they have 15. But at the same time the Japanese and Germans had zero US automobile(and truck) assembly plants prior to 1980. Today they have 17 based here! This is, I believe, a good picture of what free trade eventually brings about in any industry given enough time. There will inevitably be disruptions that are very hard on some communities. That has certainly been the case here, particularly in rural America. But you have to compete, and the long term opportunities will grow. US manufacturing was making a strong comeback prior to Covid, which set back many parts of the world.
Yesterday I listened to a podcast in which Alasdair Macleod made the assertion that it is not so much that central banks outside the US are buying gold as it is that they are using gold as a means to divest themselves of their US Dollars...
That might be something that provides the necessary catalyst to start what I call The Great Unravelling. It is clear to me that we will not, because we cannot, help ourselves, and so some outside input is going to be necessary. Best always. PM
I don't know if it is so much that we cannot; perhaps it is more that the people who should be dealing with the problem refuse to even acknowledge the problem exists. They are like Hitler in his bunker, moving tokens on a map that represent Wehrmacht divisions that, in reality, no longer exist...
I wonder if we will ever know that those in power really believe. We do know that they will do whatever they feel is necessary to hold on to power. All we can do is prepare, as best we know how, for what we think is coming...
There is nothing more likely to destroy the capitalist society than inflation - quoted by Keynes attributing it to Lenin. Is it ignorance or rabid (short term) self interest that is impelling our political and central bank leaders down this path?
While Ayn Rand wrote about what the role of government should be, one would also be under the impression that she would consider government to be "a necessary evil". Much to my surprise, in an essay (can't remember which one), she made the point that "government is a necessary good" if it is based on individual rights. Even the free market cannot, in and of itself, enforce rights. It exists in an environment where individual rights are upheld and that can only be done by a rights respecting and limited government - limited only to the protection of individual rights. Ayn Rand defined what that would entail in her essays.
The fact that our Constitution has been corrupted/ignored does not refute the fact that the idea of a government protecting individual rights is unattainable. It only shows that without an educated citizenry who follow a rational thought process, we will decline into tyranny. The fix is not easy. It means educating the people. For now, that would be in our school systems, the same school systems that have taught and are teaching our kids leftwing Marxist/leftist/progressive ideology. We must teach them individual rights instead. Shouldn't be that hard. These leftwing nut jobs took over the education system, we can take it back. And then, of course, we also have to educate the public. This is better than devolving into some sort of anarchy which will never work. Anarchy only works if people are rational and rights respecting, same ideas that it would take to make our government rights respecting.
Completely agree with your post - unfortunately, we are too far gone and don't have nearly the time left to make even a small dent in fixing the root causes of our demise.
Prepare Physically, Mentally and Materially to protect you and yours. Shitsa comin'...
A thought revisits me from time to time; in which the unraveling does lead to some folks helping themselves …to whatever they want whenever they want it …and it looks a lot like countless urban bastille days devolving into Port au Prince ghettos in every province and state with Idi Amin-like characters vying with pappa doc’s trying to outdo pol potskies forming up fringe blues & rouges
I thought this was a great quote for whats it worth.
"If I were given a choice between a significant increase in the likelihood of being murdered and the abolition of my moral or legal right not to be murdered, I would choose the former, Somehow that status, abstract as it is, is vitally important, and its recognition by a society is an enormous good in itself, apart from its consequences."
Ayn Rand also promised me that the good guys would balk, and they didn't. I still stand by my contention: no government is preferable to bad government. I believe the only way to limit government is to limit the group or entity that is being governed. A small, cohesive, motivated entity has a better chance of producing desired ends. Let it grow to what we currently have, and there is no way for any kind of standards or productivity or morality to hold sway. Of course, I could be wrong, and that's exactly why I come here. Best always. PM
An earthly answer may be a book by Morris and Linda Tannehill called The Market For Liberty. That would be a help. But until Divine intervention comes, We live as best as We know how. With guidance from?
Those of you who were tuned into Bill Bonner’s April 8, 2024 essay, might recall him saying that sometime during the next presidential term, we will be going over the tipping point. By tipping point, he was referring to the point when the interest on our debt will exceed our income. Bankruptcy. I then suggested in comments over the next several days, that we must elect “a Walking Saint“ to reverse our course.
Well, we never found that Walking Saint. But certainly, Trump is the “lesser of two evils”, hands down. So, let us get him elected!
Some are saying that Trump is and has been bank rolled by Peter Thiel. Those same sources are saying that Thiel is also the money backer for J.D. Vance. So logically, the next question is , "Who is Peter Thiel? Is he Saint or Sinner? Of course, we know that he made his bucks with Elon putting together PayPal. Can someone please fill us in on the rest of Thiel's story?
No where is this more apparent, than in bankruptcies. Getting 1% or 2% increase in your salary, while everything around you increases 20% or more, is a surefire way of not being able to make ends meet. I was visiting our accountant recently, who happens to share offices with a bankruptcy agent (a Licensed Insolvency Trustee). He mentioned that while he is doing good, the bankruptcy guy down the hall is doing a booming business right now.
The following are the Canadian bankruptcy stats as of July 31, of 2024.
For the 12 month period between August 1, 2023 and July 31, 2024 there were 139,819 bankruptcies or proposals, a 24.2% increase over the year before (118,427). Bankruptcy is end game (there were 33,098 of those). Proposal is offering something to the creditor other than existing terms (there were 106,721 of these).
The following are the US stats as of December 31, 2023.
In the US, a chapter 7 filing is the equivalent of the a Canadian Bankruptcy. There were 261,277 of those in 2023. Likewise, a chapter 13 is the equivalent of a Canadian Proposal, where 183,956 individuals with regular income developed a plan to repay all or part of their debts over time. These two numbers constituted a rise of bankruptcy filings of 16.8% over the year before, but still only totalling 452,990 filings (including chatpter 11 and 12 filings as well).
As opposed to the nightmare called COVID. Over 774,940 businesses and individuals filed for some form of bankruptcy in 2020 (tax year 2019) in the USA.
Yeah, it ain't looking pretty. Even though Canada has less bankruptcies, we have 10 times less population. Yet we outpace the USA by just over a 2 to 1 margin when it comes to bankruptcies per capita according to these numbers.
Ouch. Now is not the time to be holding any debt, regardless of what country you live in.
WHy aren't inflation indexed bonds doing good if inflation is high? Is it because they are tied to the fake inflation rate put out from the government/
I wonder if Mr. Bonner thinks that the Powell interest rate arrangement is an effort to influence the US election.
I certainly have my suspicion, and would like BPR to consider Nov-Dec scenarios with any of the four possible outcomes (there seems to be very little attention to the potential Congressional votes.)
Ok, so what is the answer! Forget that F150 (that we can't afford now) and buy gold, so you "can" afford it or something better later on. The question! What can I buy enough of that's still "cheap", and gives me the potential to make some real money, besides physical gold or gold miners. amd doesn't cost four arms and a leg? Me, I am buying small gold royalty company stocks, such as EMX. I've used this type of investment in past gold mkts and it's worked for me. I haven't gotten rich off of these but have consistantly made a few dollars in the past, during these gold run ups, without risking a large amount of money. Just don't get greedy, sell when you've made a "real" nice profit. There you have it. Advice, from an "old" man whose been thru a nbr of these "gold" mkts. However, do your own research and find a gold royalty stock that suits your investment affordability.
With all the experiences you mention above, and in light of current Global conditions - do you think this is the "Big One" in the sense that Gold may waver, but it's not going to ever significantly drop again in our lifetimes? In other words - is it time to get off the "equity farm", buy as much glittery metal as possible with the proceeds and hunker down?
I know what Bonner, et al say. I'd like to hear from you...
I can't say it is the big one or not. However, we've never had this kind of debt before or the possibility of another world standard currency (Brics} replacing the dollar, since WWII. If any of these world leaders makes a miscalculation and causes WWIII, "long" term investments may not matter. For now, I'm just putting 50% of my available cash in my gold investments, with plans to sell later in 2025. The rest is in cash, except for a small amount (about 10%) in two very small and extremely speculative gold exploration stocks. Heck, an old man needs a little excitement in my life.
Publishing the daily price of gold will soon be labeled "unsafe disinformation" at the behest of the Fed.
Brilliant Dennis. Priceless!!
And if that sort of “unsafe disinformation” remains published; will there be days, weeks, months where there are no ask…just spot take it or leave it… bids become futile irrelevancies.
Today, Kitco’s Au print right now is $1 between ask & bid. Same 1 in € & £. hhmmm
Hola Dennis -
Likely true, but it would be basically unnecessary. Our general population has been purposefully misled and dumbed down to not consider PMs as a form of Money, much less as the only form of True Value and best method to Store Wealth.
Not to worry. The whole world will very soon be whomped upside the head with a Golden BRIC, and the sheep in the US/EU will look around bewildered as to why there is so little to eat...
And just try buying an F150 for $38,000. You won’t find one with that number in the lower right hand corner of the window sticker. If you show the dealer the advertised “starting at” price of $38,000 he will tell you, if he’s honest, that dealers don’t order the “stripped” version because buyers don’t want it. Dealers don’t order it and Ford doesn’t build it. So the advertised pricing is a chimera, a charade. The real average price of an F150 is probably closer to $45,000, and you can pay a lot more. Want the works? If it’s a Raptor it will be $90K out the door.
Agreed! Try finding a pickup truck with a standard cab, manual transmission, hand-crank windows and a minimum of electronics but also a CD player...
A 1996 model with those specs may fit your needs.
A friend has one he doesn't use much that I was looking at for our son.
Buy it. Quickly...
You can't !
I bought a Ford Ranger (considered a big pickup here) 4 years ago (UK) for £33,000. When I went to test drive the latest version and the dealer ran the numbers I laughed in his face and walked out - £55,000. Official inflation figures are pure fantasy.
So true, and those phony inflation numbers don’t even address the entire services industry other than perhaps medical care in the US(“free” in the UK but not in the US). The sevice industry has probably seen the highest inflation of all here in the last 4 years.
You showed him…
Thats consistent with what we see here up in the great white North in CAD terms of course.
Hi Brien, to make things worse:
A friend who moved to Thailand last year bought a Ranger Wildtrakt in May for the equivalent of 28k € , so in USD -Terms its around 25k only.
Brandnew of course and I swear, with auch more charming service.😁
Yes Petra and the Thai benefit from Thailand being one of four countries that build the Ranger. Much cheaper than buying from Detroit.
Butbutbut muh tariffs.
Tariffs might not have kept a US-made Ranger available on the cheap inside CONUS, but if they forced Ford to onshore the manufacturing, tariffs would ensure the majority of $$ spent on Materials, Salaries and Hourly Wages stayed in the US - with US CITIZENS.
This ain't Rocket Surgery...
It’s a complicated sourcing picture no matter where modern capital goods are made. Chances are the vast majority of the parts that make up the Ranger, including the costly engine and drive train, are the same parts, with same sourcing, whether assembled in Thailand, Detroit or South Africa. So the Thailand assembly plant probably has less than 10% of the value add. That said, these offshore assembly plants come with strings that ensure the “local” market can afford the product. So there is a complicated pricing and contractual structure where market access is the primary benefit to the OEM, not margins per vehicle. Of course higher production volume for engines, to take one example, means engines are cheaper for the Thai, US and South African plants, so everyone benefits. And local assembly means tariffs will never be an issue for the local market.
Hi Brien -
I hear you and am very familiar with the story of what it takes to get a pencil produced.
I was commenting in a more general sense, i.e. if we continue to have 90%+ of the manufacturing process for ANYTHING/EVERYTHING offshore, there is a zero chance that our workers, communities and, yes, government (through increased tax revenue) wll benefit. IOW, bring back as much of the manufacturing process as possible and watch American workers and entrepreneurs take the ball and run with it - like we always do...
I really do think it’s a mixed story. When I worked at General Motors in the late 1970s GM had 26 automobile assembly plants in the US. Today they have 15. But at the same time the Japanese and Germans had zero US automobile(and truck) assembly plants prior to 1980. Today they have 17 based here! This is, I believe, a good picture of what free trade eventually brings about in any industry given enough time. There will inevitably be disruptions that are very hard on some communities. That has certainly been the case here, particularly in rural America. But you have to compete, and the long term opportunities will grow. US manufacturing was making a strong comeback prior to Covid, which set back many parts of the world.
Yesterday I listened to a podcast in which Alasdair Macleod made the assertion that it is not so much that central banks outside the US are buying gold as it is that they are using gold as a means to divest themselves of their US Dollars...
That might be something that provides the necessary catalyst to start what I call The Great Unravelling. It is clear to me that we will not, because we cannot, help ourselves, and so some outside input is going to be necessary. Best always. PM
I don't know if it is so much that we cannot; perhaps it is more that the people who should be dealing with the problem refuse to even acknowledge the problem exists. They are like Hitler in his bunker, moving tokens on a map that represent Wehrmacht divisions that, in reality, no longer exist...
Like Dollars they still believe are worth something...
I wonder if we will ever know that those in power really believe. We do know that they will do whatever they feel is necessary to hold on to power. All we can do is prepare, as best we know how, for what we think is coming...
And Macleod is totally on his game here - https://vimeo.com/1017577311/aaaf32f856?utm_source=substack&utm_medium=email
Thank you for the link!
Thank you for posting this.
There is nothing more likely to destroy the capitalist society than inflation - quoted by Keynes attributing it to Lenin. Is it ignorance or rabid (short term) self interest that is impelling our political and central bank leaders down this path?
What destroys society, capitalist or otherwise, is government. Best always. PM
While Ayn Rand wrote about what the role of government should be, one would also be under the impression that she would consider government to be "a necessary evil". Much to my surprise, in an essay (can't remember which one), she made the point that "government is a necessary good" if it is based on individual rights. Even the free market cannot, in and of itself, enforce rights. It exists in an environment where individual rights are upheld and that can only be done by a rights respecting and limited government - limited only to the protection of individual rights. Ayn Rand defined what that would entail in her essays.
The fact that our Constitution has been corrupted/ignored does not refute the fact that the idea of a government protecting individual rights is unattainable. It only shows that without an educated citizenry who follow a rational thought process, we will decline into tyranny. The fix is not easy. It means educating the people. For now, that would be in our school systems, the same school systems that have taught and are teaching our kids leftwing Marxist/leftist/progressive ideology. We must teach them individual rights instead. Shouldn't be that hard. These leftwing nut jobs took over the education system, we can take it back. And then, of course, we also have to educate the public. This is better than devolving into some sort of anarchy which will never work. Anarchy only works if people are rational and rights respecting, same ideas that it would take to make our government rights respecting.
Hi John -
Completely agree with your post - unfortunately, we are too far gone and don't have nearly the time left to make even a small dent in fixing the root causes of our demise.
Prepare Physically, Mentally and Materially to protect you and yours. Shitsa comin'...
Yea, I know. Not giving up, though, until the fat lady sings.
Unfortunately, the fat lady has sung and - like Elvis - has left the building.
💯💯
Which one do you want? I know quite a few, though some sing better than others. Best always. PM
Well , to bring everybody up to current speed. The fat lady has sung. And the fat man has left the building.... The heaven reported sightings though.
Oh man. Ouch! This truth §¶!T hurts.
A thought revisits me from time to time; in which the unraveling does lead to some folks helping themselves …to whatever they want whenever they want it …and it looks a lot like countless urban bastille days devolving into Port au Prince ghettos in every province and state with Idi Amin-like characters vying with pappa doc’s trying to outdo pol potskies forming up fringe blues & rouges
Maybe that leads to the "Escape from New York" movie premise, where NYC is a big open air prison. Extrapolate that to all major metropolitan areas.
I thought this was a great quote for whats it worth.
"If I were given a choice between a significant increase in the likelihood of being murdered and the abolition of my moral or legal right not to be murdered, I would choose the former, Somehow that status, abstract as it is, is vitally important, and its recognition by a society is an enormous good in itself, apart from its consequences."
Thomas Nagel
https://www.amazon.com/Equality-Partiality-Thomas-Nagel/dp/0195098390
That sounds like Thomas Aquinas.
Perhaps, it could be its been a long battle.
Ayn Rand also promised me that the good guys would balk, and they didn't. I still stand by my contention: no government is preferable to bad government. I believe the only way to limit government is to limit the group or entity that is being governed. A small, cohesive, motivated entity has a better chance of producing desired ends. Let it grow to what we currently have, and there is no way for any kind of standards or productivity or morality to hold sway. Of course, I could be wrong, and that's exactly why I come here. Best always. PM
An earthly answer may be a book by Morris and Linda Tannehill called The Market For Liberty. That would be a help. But until Divine intervention comes, We live as best as We know how. With guidance from?
Sounds like an episode of "Walking Dead." That was 10 seasons, of people building up governments (small ones) and clashing with bigger governments.
Resulting in (you guessed it) war.
"Anarchy only works if people are rational rights respecting"
The same people who promise to uphold those rights?
Yes. Both.
With a side helping of an orchestrated plan to end the most prosperous experiment in Freedom that the world has ever seen...
Please forgive all caps— almost blind
Those of you who were tuned into Bill Bonner’s April 8, 2024 essay, might recall him saying that sometime during the next presidential term, we will be going over the tipping point. By tipping point, he was referring to the point when the interest on our debt will exceed our income. Bankruptcy. I then suggested in comments over the next several days, that we must elect “a Walking Saint“ to reverse our course.
Well, we never found that Walking Saint. But certainly, Trump is the “lesser of two evils”, hands down. So, let us get him elected!
Some are saying that Trump is and has been bank rolled by Peter Thiel. Those same sources are saying that Thiel is also the money backer for J.D. Vance. So logically, the next question is , "Who is Peter Thiel? Is he Saint or Sinner? Of course, we know that he made his bucks with Elon putting together PayPal. Can someone please fill us in on the rest of Thiel's story?
Sincerely,
Liam
By his assistant, Alex
Good job Alex!
No where is this more apparent, than in bankruptcies. Getting 1% or 2% increase in your salary, while everything around you increases 20% or more, is a surefire way of not being able to make ends meet. I was visiting our accountant recently, who happens to share offices with a bankruptcy agent (a Licensed Insolvency Trustee). He mentioned that while he is doing good, the bankruptcy guy down the hall is doing a booming business right now.
The following are the Canadian bankruptcy stats as of July 31, of 2024.
For the 12 month period between August 1, 2023 and July 31, 2024 there were 139,819 bankruptcies or proposals, a 24.2% increase over the year before (118,427). Bankruptcy is end game (there were 33,098 of those). Proposal is offering something to the creditor other than existing terms (there were 106,721 of these).
Source: https://ised-isde.canada.ca/site/office-superintendent-bankruptcy/en/statistics-and-research/insolvency-statistics-july-2024
The following are the US stats as of December 31, 2023.
In the US, a chapter 7 filing is the equivalent of the a Canadian Bankruptcy. There were 261,277 of those in 2023. Likewise, a chapter 13 is the equivalent of a Canadian Proposal, where 183,956 individuals with regular income developed a plan to repay all or part of their debts over time. These two numbers constituted a rise of bankruptcy filings of 16.8% over the year before, but still only totalling 452,990 filings (including chatpter 11 and 12 filings as well).
As opposed to the nightmare called COVID. Over 774,940 businesses and individuals filed for some form of bankruptcy in 2020 (tax year 2019) in the USA.
Source: https://www.uscourts.gov/news/2024/01/26/bankruptcy-filings-rise-168-percent
Yeah, it ain't looking pretty. Even though Canada has less bankruptcies, we have 10 times less population. Yet we outpace the USA by just over a 2 to 1 margin when it comes to bankruptcies per capita according to these numbers.
Ouch. Now is not the time to be holding any debt, regardless of what country you live in.
WHy aren't inflation indexed bonds doing good if inflation is high? Is it because they are tied to the fake inflation rate put out from the government/
Excellent question, sir...
Yes.
I wonder if Mr. Bonner thinks that the Powell interest rate arrangement is an effort to influence the US election.
I certainly have my suspicion, and would like BPR to consider Nov-Dec scenarios with any of the four possible outcomes (there seems to be very little attention to the potential Congressional votes.)
Ok, so what is the answer! Forget that F150 (that we can't afford now) and buy gold, so you "can" afford it or something better later on. The question! What can I buy enough of that's still "cheap", and gives me the potential to make some real money, besides physical gold or gold miners. amd doesn't cost four arms and a leg? Me, I am buying small gold royalty company stocks, such as EMX. I've used this type of investment in past gold mkts and it's worked for me. I haven't gotten rich off of these but have consistantly made a few dollars in the past, during these gold run ups, without risking a large amount of money. Just don't get greedy, sell when you've made a "real" nice profit. There you have it. Advice, from an "old" man whose been thru a nbr of these "gold" mkts. However, do your own research and find a gold royalty stock that suits your investment affordability.
Hi Kenneth -
Question from a "younger" man:
With all the experiences you mention above, and in light of current Global conditions - do you think this is the "Big One" in the sense that Gold may waver, but it's not going to ever significantly drop again in our lifetimes? In other words - is it time to get off the "equity farm", buy as much glittery metal as possible with the proceeds and hunker down?
I know what Bonner, et al say. I'd like to hear from you...
I can't say it is the big one or not. However, we've never had this kind of debt before or the possibility of another world standard currency (Brics} replacing the dollar, since WWII. If any of these world leaders makes a miscalculation and causes WWIII, "long" term investments may not matter. For now, I'm just putting 50% of my available cash in my gold investments, with plans to sell later in 2025. The rest is in cash, except for a small amount (about 10%) in two very small and extremely speculative gold exploration stocks. Heck, an old man needs a little excitement in my life.