Let’s talk about financial “experts”; “gurus”; or whatever nom du jour floats
your boat. Like political, social, and corporate “ascendants,” they
attain their 15 minutes of fame for a variety of reasons – from bona fide
success; to diligence, luck, nepotism, or marriage, among others.
Whatever the reason, the stars aligned for said “precious few” for a brief
period of time, enabling a combination of celebrity, financial rewards, and
adoration. And nowhere more so than the financial world, where millions
of investors desperately seek people to trust.
Unfortunately, the odds of long-term success in the business world
are slim to none – which, by the way, is why it’s so impressive that David
and Andy Schectman have been able to maintain Miles Franklin’s financial
health, market position, and reputation for so long. Remember, not only
is our industry
unregulated (except, as of last year, in our home state of Minnesota);
but its end product represents “enemy #1” to the political and financial
establishment – i.e., Washington and Wall Street.
Regarding financial experts specifically, Warren Buffett is widely
considered the “smartest investor of our generation”; when in fact, like Alan
Greenspan, much of his success stems from having sold out to “the powers that
be.” Which is why the “Oracle of Omaha” was not only bailed out in 2008
– let alone, from the very same “weapons of mass financial destruction” he,
in a prior era, publicly
railed against – but handed essentially free, “government protected”
ownership in fellow “too big to fail” companies like Goldman Sachs and
General Electric – in return for years of sound bytes of how strong the U.S.
economy is, and how undervalued its stocks. In the meantime, like
Greenspan, Buffett started to drink the “manipulation Kool-Aid” himself –
yielding last week’s S&P outlook downgrade of Berkshire Hathaway, after
it dabbling in one too many ridiculously leveraged buyouts. And while
Berkshire stock hasn’t yet been damaged, Buffett’s reputation certainly has –
to the point that outside of his personal lapdog at CNBC, Becky Quick, few
could care less what America’s biggest corporate sell-out has to say.
And to think, his father, the Senator Howard Buffett, was one of America’s
pre-eminent real money advocates!
Shifting to the “hedge fund” sector – whose massive underperformance
since the 2008 crisis belies the reality that few, if any, consistently
generate significant “alpha” relative to broad market averages – “15 minutes”
is a wild overstatement of how long they can typically maintain alpha.
And frankly, the most valuable asset a good hedge fund manager can have is
not the ability to actually make money, but convince investors
you have the ability to do so. Bill Miller, Bill Gross, David Einhorn,
Steven Cohen, and countless others have come and gone – but few stand the
test of time. And that includes me as well, having dramatically
outperformed in my personal investments over the first eight years of my
“investment career” – from 1999 through 2007 – before dramatically
underperformed thereafter (in large part due to the gold Cartel), causing me
to permanently end my love affair with financial assets in 2011; and
particularly, “paper PM investments” – in lieu of physical gold and
silver.
This morning, Paul McCulley, a former PIMCO managing director and
long-time associate of the aforementioned, long since discredited Bill Gross
(who still seems to be lauded by the financial press, despite being heavily
underinvested in the very credit markets he was paid to invest in, amidst an
historic, multi-decade bull market), was on CNBC to discuss the same old,
tired topic of whether or not the Fed will raise interest rates by a quarter
point sometime in the future – be it September, December, or otherwise.
To that end, I’m not here to again discuss the ludicrousness of such a
potentiality – given America’s massive addiction to record, skyrocketing debt
levels, and the all-out, accelerating implosion of global economic activity;
currencies; and commodities; occurring in plain sight, for the entire world
to see. Oh, by the way, yet another “15 minute guru” – Jeff Gundlach –
claimed yesterday that plunging oil prices – having just breached
March’s lows – will have “terrifying geopolitical consequences.” Hmmm,
I seem to recall having said something similar ten months ago – when I
wrote “crashing
oil prices portend unspeakable horrors.” Then again, I predicted
the Chinese Yuan devaluation back in April,
when no one even considered it; much less, on Monday
morning, barely 12 hours beforehand.
In McCulley’s obviously “propagandized” view – given he works for a
shadowy “think tank,” funded by who knows who – it would be ‘no big deal’ if
the Fed raised rates. Aside from his moronic “belief” – or whoever
wrote it for him – that the U.S. economy is ‘looking strong,’ he claims the
strong dollar is not an issue at all. No, not an issue, despite
everyone from the White House to America’s largest corporate titans weighing
in otherwise. Not to mention, essentially every Central bank on Earth –
each, working in their own interest – debauching their currencies as
rapidly as possible, to put the “burden” of a strong currency on America.
And this, as America – not to mention, the Federal Reserve itself – sits atop
history’s largest debt edifice, supported solely by the very money
printing required to hold rates at record low levels. Laughably,
McCulley supports his case for the “immateriality” of such a decision by
claiming just 13% of U.S. “GDP” is due to exports, “offset” by 14% attributed
to “imports.”
Listening to such drivel, I’m reminded of Rodney Dangerfield in my
favorite comedy ever, Back to School. When, as a grizzled, successful
businessman, he’s forced to listen to an Economics 101 professor tell him how
business works on paper. Dangerfield – i.e., Thornton Melon –
tells Dr. Phillip Bombay “you forgot a bunch of things”; and eventually, that
Bombay’s fictional business model could only exist in “Fantasyland” (MUST WATCH).
To wit, he claims the Bureau of Labor Services, or BLS – which calculates
GDP, “double seasonal adjustments” and all – can accurately calculate the
impact of a rising dollar on overall economic activity, much less using its
arbitrarily GDP calculation. Obviously, he is either lying or speculating;
and when the “liar” or “speculator” is of dubious credibility to start with,
his conclusions must be viewed with significantly heightened
skepticism. That said, it doesn’t take a “think tank genius” to realize
the global economy hasn’t been helped by eithera “strong” or “weak”
dollar. Or that the historic asset
bubble collapses; parabolically surging debt defaults; and accelerating commodity,
currency, and emerging
market equity implosions that would result from rising rates would be a
decidedly bad thing for America.
Not to mention, the all-out collapse of the biggest financial and economic
Ponzi scheme of all time – in China;
or the complete destruction of the world’s largest economic union – in Europe
– where this morning’shorrific
GDP report put an exclamation point on how bad things have gotten
in the land of “NIRP and QE to Infinity.” Let alone, its weakest link –
Greece – whose Parliament, laughably, approved “bailout #3” in last night’s
wee hours, taking Greece’s real debt/GDP ratio to roughly 300%, and
putting it on a crash course with a guaranteed GrExit
in the very near future; which, unquestionably, will be followed by not just
the other “PIIGS,” but the vast majority of cratering European
economies. To that end, take a look at how Greece’s largest, for all
intents and purposes nationalized, bank is
doing today if you think Greece is saved.
All that said, if you ask “powers that be” with self-serving agendas –
like McCulley – they’ll tell you “all’s well; sprinkling in every propaganda
buzzword imaginable, from “tapering,” to “recovery,” to “rate hikes.”
Of course, all such nonsense is eventually washed over by reality. And
thus, I’ll put my “Yellen
Reversal” prediction against his pro-Fed propaganda any day. Heck,
the Fed is practically screaming it themselves – as following this
week’s further, decidedly NOT “strong” data, its own “GDP Now”
tracker is forecasting just 0.7% third quarter GDP growth, compared to the
current Wall Street “consensus” of 2.7%! And that, before the
impact of the past two weeks’ catastrophic commodity implosion have had a
chance to filter through to sovereign, municipal, institutional, corporate
and individual spending plans.
Sadly, no “powers that be” have agendas more contrary to the “99%” – and
for that matter, their own countries – than said Central
bankers. Led, of course, by Whirlybird Janet and her world-destroying
printing press – which have been eviscerating purchasing power, living
standards, and the Middle Class for decades – particularly since the 1971
abandonment of the gold standard. That said, no one noticed, or cared,
until the inevitable “debt saturation”
fiat currency Ponzi schemes always result in was reached; in America’s case –
and most of the world’s – in 2008.
Since then, the money printing cancer that had been gradually spreading
since Greenspan took over the Fed in 1987 – when, “coincidentally,” the PPT
was officially
formed – has not only turned “malignant,” but rapidly infected the entire
global “body.” The initial post-2008 money printing orgy took but three
years to miserably fail; as when 2011’s Global Meltdown II hit, the
European Union was nearly destroyed; America lost its (undeserved) triple-A
rating; the Nikkei plunged to a 30-year low, and “dollar-priced gold”
surged to an all-time high of $1,920/oz (with silver hitting $50/oz, before
the May 1st, 2011 “Sunday
Night Paper Silver Massacre”).
Consequently, said Central banks, realizing their “point of no
return” had arrived, went “all-in” with an unprecedented scheme of overt and
covert money printing, market manipulation, and propaganda – with no peer
in history, either in the scope of its operations, or the horrific political,
economic, and social damage engendered. Think “Operation Twist and QE3”
in the U.S.; Abenomics in Japan; QE and NIRP in Europe, for just a few
examples. This, and this alone, is why paper gold and silver
prices have been slaughtered – and stocks and bonds boosted – whilst global
economic activity has plunged to its singularly lowest point in generations.
Of course, all said scheme has truly “accomplished” is accelerating, and
prolonging, the devastating impact of already historic economic
overcapacity and financial bubbles – whilst physical gold and silver demand
has surged to record levels; above ground inventories evaporated; and the
mining industry, perhaps permanently, imploded. I mean, geez, I just yesterdaydiscussed
how the bullion industry’s silver supply is vanishing – to the point
that 2008-like shortages may well be as imminent as they are
inevitable. And yet, with NO OTHER MARKET so much as BUDGING, this is
what said “powers that be” just did to paper silver – turning 12 hours
of gains into losses with the same “Cartel Herald”
algorithm they have used to stop EVERY gold and silver rally for two
decades; at exactly the 10:00 AM EST close of the global physical markets; on
a Friday afternoon when clearly, said “powers that be” are terrified of what
kind of reading and thought might go on this weekend (just look
at how many hits, and thumbs up, my latest Greg Hunter podcast,
uploaded just Tuesday night, has received). Much less, as physical
silver demand – which was so strong, the U.S. Mint was forced to suspend
Silver Eagle sales before this week’s massively PM-bullish Yuan
devaluation announcements – has rocketed higher, as evidenced by extremely
strong buying this week through Miles Franklin, one of the nation’s largest
bullion dealers.
Just two weeks ago, I wrote of how the “only
difference between late 2008 and today” was the historically manipulated
financial markets resulting from the aforementioned post-“point of no
return” Central bank machinations. However, the truth is that today
is far worse – as not only is the global economy far weaker; global
debt levels many multiples higher; and social and geopolitical tensions
exponentially broader; but faith in the world’s “financial leaders”
has never been lower. Which is quite a terrifying situation, as said
“leaders” – i.e., Central banks – have already spent the vast majority
of their ammunition, with only one remaining “live” bullet to be used.
Which is, of course, all out hyperinflation; to not only pay back
exponentially rising debts, but foster a series of “scapegoats” to blame
their failures on.
With this week’s commencement of the nuclear phase of the “final currency
war” – which thus far, has ushered in the annihilation of countless commodities
and currencies, as well as surging
physical PM demand – it can’t be long before “Economic
Mother Nature” overwhelms the aforementioned forces of financial
destruction, unleashing the most terrifying economic scenario in
generations. Undoubtedly, the “end of belief that Central banks can
save us” is arriving. And to the contrary, by this time next year, I’d
be shocked if they are not universally viewed as destroyers of
economies and markets, rather than the saviors they purport themselves to be.
To that end, no matter how prescient such views are, I assure you the Miles
Franklin Blog will never be viewed as “gurus” – and more likely, “Cassandras”
to the bitter end. Fortunately, we don’t care a whit – as if we have
convinced just a handful of people to protect themselves beforehand (and
frankly, there’s only enough gold and silver for a “handful” anyway), we’ll
sleep the “sleep of
the just,” knowing our professional lives have been a decided “success
