I think it is very important we start discussing normalized inflation data. So use the most realistic numbers instead of revalued formulas to favor the US gov’s position. What do 1980 numbers show? http://www.shadowstats.com/alternate_data/inflation-charts shows ~14% inflation. So, 5% yield equals a 9% loss annually.
Here we have it folks. Mayhem is here!! We are not Cuba, we are not Venezuela, we are not even in Zimbabwe. We are in Larry, Curly and Moe's neighborhood. Where are the Keystone Cops? We are in zany town USA. Crime out of control, borders no longer exist, people borrowing money they can't or won't pay back, the pres thinks he's superman, no one is in charge and we all look and see a cartoon instead of the United States. What would our founders say? We have lost our collective minds! I have lived a long time and have never seen this in the world, let alone the country I was born in. Just sayin and I paid $2.20 this past weekend for a nickel Snicker bar! Inflation must really be three or four hundred per cent! Maybe one thousand!
I can only speak for myself, but I've been doing just that ever since I 𝘀𝘁𝗮𝗿𝘁𝗲𝗱 working an official job, nigh on fitty years ago. Mr. Bonner has pointed out this fact, very eloquently, many times.
I don't know any different and neither do tens of millions of sheep just like me...
Well, its the same for me and if we were to explain it to others, the view or comment is the same, "get the government to pay for it". As if they produce all things.. oh wait ?. I used to tell people money doesnt grow on tree's but we know truth is stranger than fiction.
I remember in 3rd grade I used to pay 10 cents at the corner store for a Hershey bar that was 1.5 oz of better chocolate than today. And I'm not even old!
In the interest of "slowly, then all at once" - is it possible one of you could pen a missive outlining, 𝗶𝗻 𝗴𝗿𝗲𝗮𝘁 𝗱𝗲𝘁𝗮𝗶𝗹, exactly what steps are recommended when the Dow/Gold Ratio hits at or near 5? I've been putting some thought into the immediate aftermath and I have some questions. Using numbers that came from a rectal retrieval, maybe address this hypothetical for starters:
I have 50 oz. of Gold. It hits $7500.00 and the D/GR drops to 5.3. I rush out to my off-book (or official) coin dealer and cash out in preparation of buying the Dow selections you all will surely be suggesting (hopefully ahead of time.) Now I have $375,000.00 of rapidly deteriorating fiat. I need to get that into my brokerage account stat - everybody with me so far?
What do you see as the potential tax implications, not to mention any workarounds for the likely inevitable visit from IRS/DHS/FBI? What do you all recommend as the best, most efficient way to make this key transfer? Is there an alternative route to the obvious one and if so, which is more advantageous? Not looking for personal advice, and surely you all have thought beyond the instant the ratio gets near 5. The 35% PM allocation is great, but when the rubber meets the road and you tell us it's time to go all in with High Cap/Fat Dividend Equities, how precisely do you see the initial stages playing out on an individual level?
I, for one, will appreciate any thought and advice you can give on this dilemma. And it is but the first of several "sticky" circumstances I can envision butting up against once the BPR Dow/Gold Trigger gets pulled. I imagine that having a plan already in place (as much as possible) will be essential for the desired result of your subscribers keeping as much of their wealth as possible when we undertake the Great Switcharoo.
It appears the kitchen is catching fire now and I'd like some sound advice and guidance before the house is fully engulfed in flames...
Yes brother Starboard, you already know the answer for extinguishing a fire, and definitely know what will be more valuable then any assets most consider wealth. A pound of gold is worthless if you can’t protect it. It’s also valueless if you can’t eat it, drink it or shoot it. This current banana republic administration will try very hard to take away the only true asset you need…let’s not allow that to happen 🇺🇸🇺🇸🇺🇸
Hey Star. I have all my receipts and Hence pay all my taxes. Then try to get that money invested as fast as possible. What scares me is, then the feds see our stock accounts getting fed nicely. Do they then decide to nationalize all stock markets? I know it sounds harsh but I hope they end Social Security, Medicare, and all pensions. When we get to reset we need. When I say end, I mean they have no money so we have 350 million people fighting for resources. I truly believe millions will die and I pray that I am wrong. In the last depression, 80% of the population had chickens, goats, and a garden. Plus they were way way way tougher. We will see
Holy Cr*p. If even a minority of people understood what the federal government was doing in sneakily "rolling over" bonds that were expiring, there would be a run on the banks. Yesterday.
Following Mark Hoffman's timely reply below, I asked my good friend CGPT v4 to weigh in on the conversation. Here was the reply:
What sort of event might trigger a default on bonds and Treasury bills?
While a default on U.S. bonds and Treasury bills is highly unlikely, there are some hypothetical events or scenarios that could potentially trigger such a situation:
Political gridlock: A failure by the U.S. Congress to raise the debt ceiling, which is a statutory limit on the amount of debt the federal government can issue, could result in a temporary default. If lawmakers are unable to reach an agreement on raising the debt ceiling in a timely manner, the Treasury might not have enough cash on hand to make all of its required payments, including interest and principal payments on bonds.
Severe economic crisis: A catastrophic economic event or crisis, such as a deep recession or depression, could lead to a significant decline in government revenue, making it difficult for the government to meet its debt obligations. In this situation, the U.S. might be forced to default on some of its bonds or Treasury bills.
Hyperinflation: If the U.S. experiences a period of extremely high inflation, the value of the dollar could decrease rapidly, eroding the purchasing power of the currency. In this case, the U.S. might struggle to pay its debt obligations, as its currency becomes essentially worthless.
Major geopolitical event: A large-scale war, natural disaster, or other geopolitical event could severely strain the U.S. government's resources and lead to a default if the country's ability to raise revenue and manage its debt is significantly impaired.
Mismanagement of monetary policy: The Federal Reserve plays a crucial role in managing the U.S. economy, including setting interest rates and controlling the money supply. If the Federal Reserve were to make serious mistakes in managing monetary policy, it could lead to high inflation or other economic issues, potentially resulting in a default.
Loss of reserve currency status: The U.S. dollar is the world's primary reserve currency, which provides the country with significant economic benefits, including lower borrowing costs. If the dollar were to lose its status as the primary reserve currency, it could lead to higher interest rates and a more challenging environment for the U.S. to service its debt, raising the risk of default.
CGPTv4 even does a nice job of covering it's digital as*.
While these scenarios are possible, it's important to emphasize that the probability of a U.S. default remains very low. The U.S. has a strong economy, a history of meeting its debt obligations, and the advantage of issuing debt in its own currency, which provides it with flexibility in managing its debt through monetary policy.
While I agree with your entire post (particularly the last paragraph), I couldn't help myself from saying "Check" in my mind as I went down each point. At our current Reality it is not only conceivable, but 𝗵𝗶𝗴𝗵𝗹𝘆 𝗹𝗶𝗸𝗲𝗹𝘆 that we will soon end up with "All of the Above."
IMO and Yikes.
Relax folks. Things are proceeding more than less according to plan and the fat lady is now entering from stage left. Tsk, Tsk - so sad I lost all my PMs, weapons and ammo in that tragic boating accident somewhere off the shores of Palm Beach...
Was that your boat I saw sinking as I was being rescued by the coast guard after mine went down? There musta been 5 or 6 others all going down at once...
Thank you Bill , good reading today your essaie ...
Still think that next step will be a big deflation coming , JP will cut rates and Wall-street will have what it wishes for rate cut and a bonus a huge recession , always come tougher Fed rate cut and recession , big one ... then we will see QE as never seen with inflation going back to double digit , usd dollar will go to hell and gold to heaven ...
I am not being cynical, but note the contradiction in your comment i.e. QE with currency debasement and roaring inflation yet we expect the big deflation. When does this occur? Do we need the economy to collapse completely for this to happen? We are already witnessing prices falling in the stock market and real estate asset bubbles. If the Fed pivots as it appears to have and persists with its QE when do we reach the state of big deflation?
Hi Juan, I did not mean to offend. What I find contradictory is mentioning the big deflation as well as idouble digit inflation if the Fed gives up its phony war on inflation. What I sought from you was how do we get from the one to the other.
My understanding of how we get from the one to the other is what Ludwig von Mises witnessed in the 1920's in Austria and Germany. If left unattended as the Fed appears to be doing we can expect hyperinflation which leads up to a crack up boom with a complete loss of faith in the currency and a collapse of the economy in other words a depression. Businesses fail unemployment rises and prices fall The big defatlion. I merely wanted to test my theory with you. I believe we are in agreement. If the fed persists with running the printing press the currency will become worthless and the economy will collapse
Andrew my theory of deflation is that soon will come a recession equities and commodities will fall , ( I don’t know about groceries , rent , transport) may be too .
Then as recession is there Powell cut rate to the bottom and start a new QE . All this in the space of 24 month . Then after that période an inflationary période start again with gold going up , usd going down .
But since I have been in the forex and precious metals 1978 , in recession times usd get stronger and gold weaker .
A few hours ago S&P published a bad rating forecast for the Swiss bank UBS, which was forced to "buy" the failing bank "Credit Suisse" last night, and it lowered the rating forecast for UBS from "stable" to "negative". This may create shocks tomorrow in the Swiss bank shares, and in general.
S&P explained the downgrade "We see a substantial execution risk in the integration of Credit Suisse into UBS,"
I think it’s important to draw a distinction between consumer price and asset price inflation. CPI is most probably understated at 7% but not convinced assets in general (apart from gold) are going up at the same rate. I can not see how speculators and borrowers can still earn a net 2% with interest rates at close to 5% and rising... except for very sophisticated money dealers.
I want to change ALL of my worth to gold and some silver. Is there an institution that I can change my dollars to gold and have way that I can write a check like from a bank check from the gold/silver
Writing a cheque to an institution to convert your cash to gold, comes with new challenges.
Who will hold the gold? Where will it sit? How are you going to get at it if there was a run on the banks and everything went to hell? What if that institution suddenly disappears?
If you do it on your own, the only thing you have to worry about, is where to safely store it. Hopefully, not at your local bank's safety deposit box.
TB: A company that I deal with from time to time is: Asset Strategies International at 1/800 831-0007. Located at 1700 Rockville Pikes, Rockville, MD 20852. www.AssetSrategies.com.
Gold and other metals are their specialty. Been in business for a very long time and have a very good reputation. They also store the metals for you. They are very nice to deal with. Good Luck.
I have not researched this but I trust the source until proven differently.
The Swiss government forced a on UBS bank the acquisition of Credit Suisse bank for $3.3B. The past weekend proved to the shareholders of both banks that the Swiss government is NOT interested in their opinion or approval. The Saudi central bank just erased $25B from its worth due to its exposure to the losses of Credit Suisse. A major financial storm is ahead of us!
I think it is very important we start discussing normalized inflation data. So use the most realistic numbers instead of revalued formulas to favor the US gov’s position. What do 1980 numbers show? http://www.shadowstats.com/alternate_data/inflation-charts shows ~14% inflation. So, 5% yield equals a 9% loss annually.
Yes, it does Dow
Here we have it folks. Mayhem is here!! We are not Cuba, we are not Venezuela, we are not even in Zimbabwe. We are in Larry, Curly and Moe's neighborhood. Where are the Keystone Cops? We are in zany town USA. Crime out of control, borders no longer exist, people borrowing money they can't or won't pay back, the pres thinks he's superman, no one is in charge and we all look and see a cartoon instead of the United States. What would our founders say? We have lost our collective minds! I have lived a long time and have never seen this in the world, let alone the country I was born in. Just sayin and I paid $2.20 this past weekend for a nickel Snicker bar! Inflation must really be three or four hundred per cent! Maybe one thousand!
People are working for depreciating dollars? that cannot end well.
Hi Pete -
"People are working for depreciating dollars?"
I can only speak for myself, but I've been doing just that ever since I 𝘀𝘁𝗮𝗿𝘁𝗲𝗱 working an official job, nigh on fitty years ago. Mr. Bonner has pointed out this fact, very eloquently, many times.
I don't know any different and neither do tens of millions of sheep just like me...
Well, its the same for me and if we were to explain it to others, the view or comment is the same, "get the government to pay for it". As if they produce all things.. oh wait ?. I used to tell people money doesnt grow on tree's but we know truth is stranger than fiction.
We’ve had MN on the FC podcast before. Must invite him on again soon. Clever fellow.
Ah yes, Byron. Another gent we’ll have to invite on again...
I’m having trouble sourcing this quote, Mark. Where is the original from again?
That’s what I thought, but I didn’t see it. I only see one comment, even their says 20 comments are posted. I’ll dig into it some more.
I remember in 3rd grade I used to pay 10 cents at the corner store for a Hershey bar that was 1.5 oz of better chocolate than today. And I'm not even old!
Hola BPR Team -
In the interest of "slowly, then all at once" - is it possible one of you could pen a missive outlining, 𝗶𝗻 𝗴𝗿𝗲𝗮𝘁 𝗱𝗲𝘁𝗮𝗶𝗹, exactly what steps are recommended when the Dow/Gold Ratio hits at or near 5? I've been putting some thought into the immediate aftermath and I have some questions. Using numbers that came from a rectal retrieval, maybe address this hypothetical for starters:
I have 50 oz. of Gold. It hits $7500.00 and the D/GR drops to 5.3. I rush out to my off-book (or official) coin dealer and cash out in preparation of buying the Dow selections you all will surely be suggesting (hopefully ahead of time.) Now I have $375,000.00 of rapidly deteriorating fiat. I need to get that into my brokerage account stat - everybody with me so far?
What do you see as the potential tax implications, not to mention any workarounds for the likely inevitable visit from IRS/DHS/FBI? What do you all recommend as the best, most efficient way to make this key transfer? Is there an alternative route to the obvious one and if so, which is more advantageous? Not looking for personal advice, and surely you all have thought beyond the instant the ratio gets near 5. The 35% PM allocation is great, but when the rubber meets the road and you tell us it's time to go all in with High Cap/Fat Dividend Equities, how precisely do you see the initial stages playing out on an individual level?
I, for one, will appreciate any thought and advice you can give on this dilemma. And it is but the first of several "sticky" circumstances I can envision butting up against once the BPR Dow/Gold Trigger gets pulled. I imagine that having a plan already in place (as much as possible) will be essential for the desired result of your subscribers keeping as much of their wealth as possible when we undertake the Great Switcharoo.
It appears the kitchen is catching fire now and I'd like some sound advice and guidance before the house is fully engulfed in flames...
Yes brother Starboard, you already know the answer for extinguishing a fire, and definitely know what will be more valuable then any assets most consider wealth. A pound of gold is worthless if you can’t protect it. It’s also valueless if you can’t eat it, drink it or shoot it. This current banana republic administration will try very hard to take away the only true asset you need…let’s not allow that to happen 🇺🇸🇺🇸🇺🇸
Hey Star. I have all my receipts and Hence pay all my taxes. Then try to get that money invested as fast as possible. What scares me is, then the feds see our stock accounts getting fed nicely. Do they then decide to nationalize all stock markets? I know it sounds harsh but I hope they end Social Security, Medicare, and all pensions. When we get to reset we need. When I say end, I mean they have no money so we have 350 million people fighting for resources. I truly believe millions will die and I pray that I am wrong. In the last depression, 80% of the population had chickens, goats, and a garden. Plus they were way way way tougher. We will see
Mark, I have been saying that to my wife for several years. Our church services appear to be bigger
Hello gentlemen -
I often feel that Prayer and Faith are the only "concrete" things we have left in our world.
Ironic in a way I guess...
Star
my friend that is 100% the way I feel. This world is absolutely crazy.
Holy Cr*p. If even a minority of people understood what the federal government was doing in sneakily "rolling over" bonds that were expiring, there would be a run on the banks. Yesterday.
Following Mark Hoffman's timely reply below, I asked my good friend CGPT v4 to weigh in on the conversation. Here was the reply:
What sort of event might trigger a default on bonds and Treasury bills?
While a default on U.S. bonds and Treasury bills is highly unlikely, there are some hypothetical events or scenarios that could potentially trigger such a situation:
Political gridlock: A failure by the U.S. Congress to raise the debt ceiling, which is a statutory limit on the amount of debt the federal government can issue, could result in a temporary default. If lawmakers are unable to reach an agreement on raising the debt ceiling in a timely manner, the Treasury might not have enough cash on hand to make all of its required payments, including interest and principal payments on bonds.
Severe economic crisis: A catastrophic economic event or crisis, such as a deep recession or depression, could lead to a significant decline in government revenue, making it difficult for the government to meet its debt obligations. In this situation, the U.S. might be forced to default on some of its bonds or Treasury bills.
Hyperinflation: If the U.S. experiences a period of extremely high inflation, the value of the dollar could decrease rapidly, eroding the purchasing power of the currency. In this case, the U.S. might struggle to pay its debt obligations, as its currency becomes essentially worthless.
Major geopolitical event: A large-scale war, natural disaster, or other geopolitical event could severely strain the U.S. government's resources and lead to a default if the country's ability to raise revenue and manage its debt is significantly impaired.
Mismanagement of monetary policy: The Federal Reserve plays a crucial role in managing the U.S. economy, including setting interest rates and controlling the money supply. If the Federal Reserve were to make serious mistakes in managing monetary policy, it could lead to high inflation or other economic issues, potentially resulting in a default.
Loss of reserve currency status: The U.S. dollar is the world's primary reserve currency, which provides the country with significant economic benefits, including lower borrowing costs. If the dollar were to lose its status as the primary reserve currency, it could lead to higher interest rates and a more challenging environment for the U.S. to service its debt, raising the risk of default.
CGPTv4 even does a nice job of covering it's digital as*.
While these scenarios are possible, it's important to emphasize that the probability of a U.S. default remains very low. The U.S. has a strong economy, a history of meeting its debt obligations, and the advantage of issuing debt in its own currency, which provides it with flexibility in managing its debt through monetary policy.
Hi Luke -
While I agree with your entire post (particularly the last paragraph), I couldn't help myself from saying "Check" in my mind as I went down each point. At our current Reality it is not only conceivable, but 𝗵𝗶𝗴𝗵𝗹𝘆 𝗹𝗶𝗸𝗲𝗹𝘆 that we will soon end up with "All of the Above."
IMO and Yikes.
Relax folks. Things are proceeding more than less according to plan and the fat lady is now entering from stage left. Tsk, Tsk - so sad I lost all my PMs, weapons and ammo in that tragic boating accident somewhere off the shores of Palm Beach...
Was that your boat I saw sinking as I was being rescued by the coast guard after mine went down? There musta been 5 or 6 others all going down at once...
Star. Yeah, me too!😂😂😂😂😂😂😂
Thank you Bill , good reading today your essaie ...
Still think that next step will be a big deflation coming , JP will cut rates and Wall-street will have what it wishes for rate cut and a bonus a huge recession , always come tougher Fed rate cut and recession , big one ... then we will see QE as never seen with inflation going back to double digit , usd dollar will go to hell and gold to heaven ...
The big deflation you predict.
I am not being cynical, but note the contradiction in your comment i.e. QE with currency debasement and roaring inflation yet we expect the big deflation. When does this occur? Do we need the economy to collapse completely for this to happen? We are already witnessing prices falling in the stock market and real estate asset bubbles. If the Fed pivots as it appears to have and persists with its QE when do we reach the state of big deflation?
Hey Andrew, most people I follow, believe deflation will come after hyper inflation. We will see.
Hi Andre ,
Just red again my comment , don’t see any contradictions.
Let me explain my opinion .
Price in equities have been going south but nothing huge yet Dow , S&P 22 % and 27 %
Soon I believe (from July to December ) we will have a recession. Price in equities will go down a lot . Inflation will go down too .
Mr. Powell will pivot and cut rates , big way again and a new QE big way too .
At that point inflation will start rising again usd will go down ag gold and ag major currencies ( debasement of usd ).
Then inflation will hit double digit .
I could be wrong but there is no contradiction in my map path .
Hi Juan, I did not mean to offend. What I find contradictory is mentioning the big deflation as well as idouble digit inflation if the Fed gives up its phony war on inflation. What I sought from you was how do we get from the one to the other.
My understanding of how we get from the one to the other is what Ludwig von Mises witnessed in the 1920's in Austria and Germany. If left unattended as the Fed appears to be doing we can expect hyperinflation which leads up to a crack up boom with a complete loss of faith in the currency and a collapse of the economy in other words a depression. Businesses fail unemployment rises and prices fall The big defatlion. I merely wanted to test my theory with you. I believe we are in agreement. If the fed persists with running the printing press the currency will become worthless and the economy will collapse
Hi Andrew ,
You did not offend me at all ,
Andrew my theory of deflation is that soon will come a recession equities and commodities will fall , ( I don’t know about groceries , rent , transport) may be too .
Then as recession is there Powell cut rate to the bottom and start a new QE . All this in the space of 24 month . Then after that période an inflationary période start again with gold going up , usd going down .
But since I have been in the forex and precious metals 1978 , in recession times usd get stronger and gold weaker .
When recession will come , i am referring to deflation in price of equities and commodities ( gold , silver , copper , oil etc etc )
A few hours ago S&P published a bad rating forecast for the Swiss bank UBS, which was forced to "buy" the failing bank "Credit Suisse" last night, and it lowered the rating forecast for UBS from "stable" to "negative". This may create shocks tomorrow in the Swiss bank shares, and in general.
S&P explained the downgrade "We see a substantial execution risk in the integration of Credit Suisse into UBS,"
I think it’s important to draw a distinction between consumer price and asset price inflation. CPI is most probably understated at 7% but not convinced assets in general (apart from gold) are going up at the same rate. I can not see how speculators and borrowers can still earn a net 2% with interest rates at close to 5% and rising... except for very sophisticated money dealers.
I want to change ALL of my worth to gold and some silver. Is there an institution that I can change my dollars to gold and have way that I can write a check like from a bank check from the gold/silver
Writing a cheque to an institution to convert your cash to gold, comes with new challenges.
Who will hold the gold? Where will it sit? How are you going to get at it if there was a run on the banks and everything went to hell? What if that institution suddenly disappears?
If you do it on your own, the only thing you have to worry about, is where to safely store it. Hopefully, not at your local bank's safety deposit box.
TB: A company that I deal with from time to time is: Asset Strategies International at 1/800 831-0007. Located at 1700 Rockville Pikes, Rockville, MD 20852. www.AssetSrategies.com.
Gold and other metals are their specialty. Been in business for a very long time and have a very good reputation. They also store the metals for you. They are very nice to deal with. Good Luck.
Hey Tedford. Apmex They will mail right to your house.
I have not researched this but I trust the source until proven differently.
The Swiss government forced a on UBS bank the acquisition of Credit Suisse bank for $3.3B. The past weekend proved to the shareholders of both banks that the Swiss government is NOT interested in their opinion or approval. The Saudi central bank just erased $25B from its worth due to its exposure to the losses of Credit Suisse. A major financial storm is ahead of us!
Okay, where do you go to get a return of more than 7%?
Why didn’t these banks with fed bonds underwater go to the Fed open market window for a loan using them as collateral?
Yes brother, much fraudulent activity in our world today...If stones for nickel, what would you believe to be in Fort Knox? Gold?