No One Comes Back From This Uninjured. In one word, the devaluation is set to ESCALATE.
In fact, I term it Competitive Devaluation. There are several countries that will be the pioneers of it, but it will eventually reach the United States of America. In Europe and in Japan, we are closer to seeing it happening; in the next 2-5 years, you’ll hear about governments’ first official plans to do this.
They will NOT alert the media to notify the public to own gold and silver. They haven’t thus far (and they won’t going forward, either), and meanwhile, they’ve been accumulating them at the fastest pace in more than half a century.
The central banks want to buy gold, uninterrupted. Since they do not buy silver, the mania that will ensue in that niche market will be huge.
Not just gold and silver stand to gain from devaluation; companies that are able to increase prices and not lose consumers will be great winners as well. These are the world-dominators with pricing power, and I will profile my top-5 holdings for the Endgame Decade (2020-2029) in a Special Report due to be published by September 30th.
Real estate prices in metropolitan areas will also continue to rise; these are hard assets that are difficult to increase in supply, but my analysis is that of the three – world-class companies, precious metals, and real estate, silver will be the BEST PERFORMER.
Courtesy: U.S. Global Investors
Central banks are not able to inflate the real debt levels away. The most extreme case of this is Japan, whose central bank has done ALMOST everything under the sun to relieve the country of its deflationary spiral and has failed miserably.
We are a few years from that because many countries have still not reached the negative-yield world. Trump’s entire argument is that the FED doesn’t need to have ammunition come next recession, because interest rates are never going higher again, so just slam the bid, shove the thing to ZERO, or lower and help monetize bonds.
That’s Trump’s attitude, and as bizarre as it sounds, it is becoming our way of life. Under this fiat monetary system, we are never going back to normalized rates; the path is Competitive Devaluation.
Debts will be written off, savings will become extinct and it’s all because our political systems, demographics projection, and growth curves do not align at all.
In the short-term, September will be a month of relief. The Treasury will be funded, the debt ceiling will be raised and dollar liquidity will be increased by the FED; they will lower rates with 100% uncertainty. Any other announcement and the markets will dive by 15%-20%, like in December.
Of course, people living on a fixed income, who represent most of the individuals in the world (employees with salaries), will be HURT THE MOST.
Inflation has the same effect on society as poisoning the water supply: it contaminates and destroys one of the elementary requisites for an orderly society – a stable medium of exchange.
Worse, it diminishes trust in authorities.
Worst of all, it makes everyone a bit more extreme in their views and raises their primal instincts for survival; it reveals the violent side of the personality.
This past week, my wife, daughter and I have been enjoying the beauty and the architectural splendor of the Liguria Sea, the area known as the Italian Riviera, with the Cinque Terre UNESCO World Heritage Park and the magnificent Portofino peninsula.
When looking at all the tourists who flock these shores in August and early September, it is sometimes unimaginable to envision times in which people will be concerned about their basic needs, when mega-yachts dock on the picturesque marinas, but I can cite a list of more than 20 countries that saw this crisis in the 20th and 21st centuries hit them, seemingly out of the blue.
Just 11 years ago, the U.S. papered-over a major banking disaster. Argentina went from being one of the top-10 economic engines in the world to a criminal enterprise with corruption everywhere. Empires fall, due to mismanagement. Countries collapse, due to wrong policies. It’s the way of the world.
No one will like the endgame or leave it unscathed, but some will be in a better position to capitalize on the boom that follows. Priority No.1 is to meaningfully elevate the active income you derive from your career, by becoming a more valuable person. Priority No.2 is to invest the savings wisely.
The race is only beginning!