Those of you who’ve been reading my blog for any length of time should be familiar with several unflinching statements that appeared in prior posts. For well over three years I’ve made several bold statements that initially sent numerous hate mails to my inbox by the closed minded fast to react personalities.
It’s taken it’s time in arriving but recently that’s all changed and the vast majority of emails are of appreciation in connection with accuracy, open minded thought, thought that’s come to fruition and what a guy like me can address the best. Holy Shit I never thought it could happen but… One thing for sure standing the test of time will always segregate accuracy from bullshit and it still amazes me that so many bloggers can’t understand this simple fact.
Three of the most controversial (though I tend to think for many it falls more along the line of emotional) subjects to date have been 1, The fate of the US Dollar 2, Where the PM’s would beheading over the next few years and finally the hockey stick graph in violence commencing last quarter 2015 to beginning of 2016.
Opinions are like ass holes everybody’s got one including yours truly. But let’s briefly touch on all three of these controversial subjects and delve a bit deeper into the third the violence. Now that our last guests have departed I finally have the time to commence with articles and other bits of information that are long overdue.
First touch point the US dollar. Easy enough almost three years later and look at where it currently is. Still it’s the king of the hill when compared to its rivals. As grossly overvalued as it is now and for the next foreseeable while it’s still the only game in town. This fact holds true in spite of what’s been said all over the net. Currently there’s nothing out there that’s even close to having the volume and confidence to replace it.
Now read carefully I’M NOT SAYING THIS MEANS FOREVER!!! Only a fool would believe any one currency would remain intact as the reserve forever. Never the less it always was and will be all about confidence rather than intrinsic value. Currency is merely a medium of exchange not a store of wealth. It’s about people having confidence that it will be accepted as a means of exchange for goods and services… nothing more.
Now for all us expats who are currently receiving US Dollars and then buying local off the conversion are doing really well. I wish the same were true on the reverse side but those who are forced into trading in local currencies and buying US goods are taking it on the chin. This seems to be holding true in all other countries but I caution you to remember every stick has two ends.
Before you start running to the closet searching for that long lost stars and stripes bandana proudly covering your bald spot while simultaneously singing I’m proud to be an American you might want to understand something very important. The strong US dollar is exactly what’s going to eventually become your demise.
If you’re grasping what’s just been written you’ll promptly start to realize two things. First all international loans are funded in US Dollars at least the vast majority are. Second the ever widening spread between the currencies will cause a high percentage of these loans to be reneged on. The ever widening spread is alleviating countries from affording the interest payments alone. Anyone hear of Brazil, Venezuela or Puerto Rico?
I find Gresham’s Law provides an excellent definition of what I’m trying to get across. Gresham’s Law: The tendency for money of lower intrinsic value to circulate more freely than money of higher intrinsic and equal nominal value. This is often expressed as Bad money drives out good. When that time arrives and it won’t be tomorrow but when confidence has finally been lost then and only at that time is when people will begin dumping dollars faster than a truck dumps it dirt. This will happen rapidly once confidence is lost in Government. From that moment it becomes a water fall event.
But in the mean time the fear porn naysayers will keep your eyes glued to their web sites waiting for the full on full off moment to happen underscoring the fact that it’s a gradual change not an on/off change to begin with.
On to our second controversial subject the subject concerning Precious metals. I have always been a believer in spreading one’s portfolio to obtain a broader foundation. A wider base has fewer tendencies to topple. This includes spreading portfolios into other nations as well as expanding one’s immigration status. Part of that base at least to me should include commodities such as precious metals.
But here is where my thought patterns divide from the crap being portrayed on almost all metal sites. Go back in time roughly three years. From 2012 gradually start working towards the present. Have you found even one example of this is a good time to sell. NO YOU HAVEN’T! Metals are a market and as such will have their peaks and valleys. Nothing rises forever!
As a prudent starting point have you ever even asked yourself this rather obvious question? Why are all of these people so willing to accept you’re so called near worthless paper currency (their words not mine) in exchange for this rare and precious commodity? I mean there’s no shortage of paper currency is their? Again have you ever asked yourself that question?
If you haven’t perhaps let me enlighten you a bit too hopefully inform you why. It’s because they know how markets function and most of you don’t. That’s why. They understand the average person following their advice doesn’t know squat about how markets operate… and so they take advantage of it.
By the way that doesn’t make them bad people rather it focuses more so on the uninformed gullible public eager to react on bad information. These people “the masses” are the populace that are always wrong yet they seem to cherish and hold onto their misinformed bad decisions the longest. OK caught me I’m basically saying focusing on the tendencies that most really have shit for brains when it comes to investing wisely. There I said it my bad.
Still you’re always going to have the masses thinking with their hearts before their heads. With the aforementioned still held in place I thought I’d quickly do some research and go back those three years myself and discover if possibly I’m full of shit.
So here we go. In 2012 gold sold for a monthly low of 1591.19 with a yearly average of 1668.85. Continuing onto everyone favorite metal let’s have a look at how silver performed. In 2012 silver started around 35.50 and finished out the year lower.
I just ran the real time values for both metals this very moment. Fast forwarding three years and today at 2:30PM gold was trading at 1117.15 and silver at 14.51 which makes all of you that keep buying into the metal heads bullshit real smart right?
I personally know many that clashed with me on this subject in the past. Still today even after the cold hard numbers are provided they continue insisting they’re correct. I don’t really know what words can describe that kind of thinking but intelligent is not one of them.
Metals are a good hedge against Government and everyone should own some in physical form of small denomination. They as all markets will have their say but don’t rely on the misguided belief that even a broken clock is right twice a day or you’re gonna lose big time.
Let’s continue to move onto my last topic of this post. That pre-mentioned hockey stick graph in rising violence. I started putting together some graphs and articles to have a closer look. Was I correct in my previous thoughts? Before even venturing into US stats I thought it might be interesting at least to Liane and me if we had a look at our home town of Edmonton.
Since Edmonton Alberta is without a doubt an oil town and the oil business has been all but cut off at the knees thought it might make for some interesting results. Not to be disappointed it did. Crime calls have tripled in under a year up over 9000 from YTD last year. Over 40,000 oil patch jobs have been lost with more on the horizon.
Switching over to the US I started gathering information from 2014 and comparing it to the first three quarters of 2015. Listed below are just some of the major cities scattered across the US. Of course all stats will vary depending from which source they were first obtained from however it does seem to support research from almost three years prior. I fear this is merely the beginning phases of that dreaded hockey stick curve skyward and will only escalate enormously over the next foreseeable years.
For the three out of the four weekends in September at least 46 people were shot in Chicago OVER EACH WEEKEND! Huston had 73 murders in the first quarter of 2015. School and campus shootings are soaring with the latest occurring the identical time I happen to be writing this post. The latest massacre of innocent students took place at Umpqua Community College. Apparently campus carnage is somewhat common throughout US campuses. CLICK HERE
Baltimore 105-2014 to 155-2015 up 47.6%
Chicago 171-2014 to 203-2015 up 18.7%
Dallas 53-2014 to 68-2015 up 28.3%
Huston 46-2014 to 59-2015 up 59%
Kansas 45-2014 to 54-2015 up 20%
New Orleans 72-2014 to 98-2015 up 36.1%
St. Louis 58-2014 to 93-2015 up 60.3%
Traffic gridlock shootings, Gas station shootings convenience store shootings are all now quite the norm. Hell even missing the 10 o’clock breakfast cutoff at McDonald’s seems to be a good enough reason for violence these days.
So I ask you better yet ask yourself does any of this seem normal to you. Certainly the taste of an Egg McMuffin can’t be the cause. AH Yes the meds seem to be working. I love it when we’re asked “are we safe here” actually makes us laugh politely under our breath. We have a few B and E’s but compared to what happening at your rink… give your head a shake!
Remember all I was able to do was current YDT for 2015. There’s still the last quarter remaining till the years complete but it does tend to support the previous research. It saddens me to say 2016 reveals only the beginning of what may be lasting a long time into the future.
I want to reconfirm one last time so your clarity is crystal clear. When I state the last quarter of 2015 to the first of 2016 it is absolutely imperative that you understand this is the beginning of the chaos. Things are just beginning to unveil themselves.
A lot of uncertainty is beginning to unfold. Just like the spinning top that’s about to fall over and die. At first it wobbles tremendously which relates to volatility. Volatility in markets, crime, employment and just about anything else you care to mention. It may for a short period straighten itself out but rest assured soon after will fall over on its side and die.
Much of what’s recently begun occurring could not have been fantasized just a few years prior. Really did you ever think a Palestine flag would be flying out front of the UN? I didn’t. Be prepared for all kinds of wildcard events any of which can easily ignite the dry kindling.
Look there’s no place that’s perfect. Save that thought for a good night at the movies. But it does kind of bring you back to another point I’ve often mentioned. Whether or not it’s understood is irrelevant but the real question most people are trying to figure out is NOT will I be affected… we all will BUT rather to what degree will I be affected? Might want to ponder on that question but not for too long or you’re going too affected and odds are not in a positive way. Good to be back with you all and as always until next time this is Barry in DR.