Signs Of The Time, Part 104

In the May 2016 issue of The Atlantic there’s an article entitled “The Secret Shame of Middle-Class Americans.” Neal Gabler writes:

Since 2013, the Federal Reserve Board has conducted a survey to “monitor the financial and economic status of American consumers.” Most of the data in the latest survey, frankly, are less than earth-shattering: 49 percent of part-time workers would prefer to work more hours at their current wage; 29 percent of Americans expect to earn a higher income in the coming year; 43 percent of homeowners who have owned their home for at least a year believe its value has increased. But the answer to one question was astonishing. The Fed asked respondents how they would pay for a $400 emergency. The answer: 47 percent of respondents said that either they would cover the expense by borrowing or selling something, or they would not be able to come up with the $400 at all. Four hundred dollars! Who knew?

I didn’t know.

But I’m really not surprised to learn of it either.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Gabler, Neal. “The Secret Shame of Middle-Class Americans.” The Atlantic. May 2016. (http://www.theatlantic.com/magazine/archive/2016/05/my-secret-shame/476415/). 24 May 2016.

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Peter Schiff: Obama, Federal Reserve, Government Have Failed As ‘This Economy Is A Disaster’

Economist, financial broker/dealer, and author Peter Schiff appeared on the Alex Jones Show last Friday. Schiff, who correctly-called last decade’s housing crash and recent global economic crisis, discussed a number of subjects with Jones, including Puerto’s Rico’s recent default/economic crisis and “modest” U.S. inflation numbers. The “crash prophet” said of the U.S. territory:

It’s never a problem until it is. So Puerto Rico is broke, but now it’s a problem because the creditors figured out that they’re broke. Well America is more broke than Puerto Rico. That’s a fact. It’s just that our creditors haven’t figured it out yet. But when they do, then Donald Trump is going to end up being right, because all we can do is default. And if we don’t default, if we print money- which now Trump is saying, “Oh, we don’t have to default because we can print.” Well printing is worse than default, because printing doesn’t just wipe out the bondholders, it wipes out anybody who hold U.S. dollars.

When asked by Alex Jones where all the inflation is being hidden, the CEO of Euro Pacific Capital pointed out:

It’s actually hiding in plain sight because, because first of all, the inflation is all the money printing. That’s the definition. The consequence of inflation is that prices go up. But look, stock prices went way up. Real estate prices went back up. Rare art went back up. Collectible cars went back up. I mean, asset prices have gone up like crazy- that is inflation. And, of course, anybody who lives in America knows that the prices are going up. Look, rents are up about 8 percent year-over-year. Look how much health care costs have gone up. Utilities are going up. Look at the price of food. Have you bought a steak recently at a supermarket? Prices are going up. It’s just that the government is not doing an accurate job of reporting, and that is by design…. The standard of living is going down. Americans are working two or three jobs a piece. And they can barely make ends meet. You know, this economy is a disaster. And everyone wants to pretend that it’s great, because no one wants to admit that Obama is a complete failure, that the Federal Reserve was a complete failure, that everything that government has done has failed.


“Venezuela Is America’s Socialist Future”
YouTube Video

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

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Marc Faber: ‘Most Attractive Assets In My View Are Gold Shares And Oil And Gas Shares’

Swiss-born investment advisor/money manager Marc Faber was on the phone with the CNBC TV show Trading Nation last Wednesday. The publisher of the monthly investment newsletter The Gloom Boom & Doom Report talked investment strategy, and shared the following with viewers:

My view is that in June, [the Federal Reserve] will not move, that they will not increase rates. And that the market will begin to perceive that the Fed wants to support asset markets, which they have stated on numerous occasions before. And that in that environment, gold, which from now on may correct maybe 5 percent or so, will start to move up again. I think an investor should understand, we don’t know how far central banks will move around the world. We need to be diversified. To own some real estate makes sense. To own some equities makes sense. To own some cash and bonds probably makes sense. And to own some precious metals makes sense. The most attractive assets in my view are gold shares and oil and gas shares. I think they still have significant upside potential this year.

(Editor’s note: Bold added for emphasis)


“Marc Faber on investment strategy”
CNBC Video

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; a qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

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Quote For The Week

“Patriotism is supporting your country all the time, and your government when it deserves it.”

-Mark Twain (American author and humorist. 1835-1910)

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Tuesday, May 24th, 2016 Government, Quote For The Week No Comments

Signs Of The Time, Part 103

Last week I saw the following e-mail from Crain’s Chicago Business in my inbox. The subject line was:

Chicago is in crisis. Let’s talk. Be there.

And the body of the e-mail:

Crain’s Future Of Chicago Conference

Chicago is at a tipping point and the world spotlight is directed squarely on us

(Editor’s note: Bold added for emphasis)

Been warning about this situation for how many years now?

There was also this:

Business, government, education and civic leaders are coming together at this pivotal point to forge a way forward at a Crain’s conference like no other…

I wonder how many of these “leaders” helped bring about the present crisis? And if they were involved in the debacle, does it really make sense they should be relied upon to fix it?

I won’t be attending the conference, but I wish participants the best of luck with their attempt to “forge a way forward.” They’re going to need it.

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Wednesday, May 18th, 2016 Debt Crisis, Signs Of The Time No Comments

Quote For The Week

“A danger foreseen is half-avoided.”

-Cheyenne (Native American nation of the Great Plains) proverb

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Monday, May 16th, 2016 Quote For The Week No Comments

Jim Rogers: ‘Not All Of Us Are Going To Survive What’s Coming In The Next Few Years’

Well-known investor, financial commentator, and author Jim Rogers was recently interviewed by Jay Taylor (editor of J Taylor’s Gold & Technology Stocks newsletter) for the radio show Turning Hard Times into Good Times. It was a phenomenal discussion about a number of finance/investing related topics.

Regular readers of Survival And Prosperity know that the former investing partner of George Soros is forecasting that the U.S. economy will be in recession “sometime in the next year or two.” He’s also seeing signs of the next economic crisis “already happening.” But does Rogers think the winner of this November’s U.S. presidential election will turn the country around? He lamented:

No matter who of the major candidates, no matter who wins Jay, it’s not going to be good for America or good for the world. If Donald Trump does the things he says he going to do, I mean, we’re going to have trade wars with half the world. Well trade wars have always, always, throughout history led to bankruptcy and led to war. I don’t know if he means what he says, I don’t know if he knows he means what he says. But Sanders of course, Sanders will bankrupt us very, very quickly. Hillary Clinton, for god’s sake, she’s a disaster too! The bankruptcy will just be slower, that’s all, if she’s elected. So, I don’t see any prospects for salvation for the U.S. from the present people who are likely to become President of the United States.

Host Jay Taylor asked the world traveler if he knew of any “safe” place where Americans could weather the approaching economic storm. From their exchange:

TAYLOR: Is there any place- you’re in Singapore, I suspect you feel relatively safe there- but is there any place where people might go, people who cherish freedom and the opportunities to use their God-given talents? Is there any place on Earth besides Singapore, or where can we go? Is there any place to go? It used to be the United States. I felt that we were safe here. Is there any place we can go to be safe? I guess the answer is probably there’s no place you can be sure of, right?
ROGERS: Well, there’s no place at the moment that I know of. Even Singapore, as I said before, the port here is the most important port in Asia and if things blow up, everybody needs that port. And Singapore has a lot of Muslim neighbors too that could turn into a problem some day. Where would one go? I think one needs to find an isolated place. I guess maybe some places in South America. Maybe a way to make it through. Some places in Asia. North Korea, I’m very optimistic. North Korea has dramatic changes taking place. It’s where China was in 1981. But if there’s a war, North Korea is probably going to be involved. All of Korea is probably going to be involved too. But you need to find a place Jay that’s not in the mainstream where people don’t really care too much. But even then you have to be careful because you wind end up in a place where the army’s using you as a highway or a transit point. So you have to be careful.

Rogers concluded the interview with this advice to listeners:

I urge people to get knowledgeable from listening to you and other people like you, because the world is facing some very complicated and difficult times. Once you become knowledgeable, you’re going to get very worried, which you should, and then you might get prepared, because not all of us are going to survive what’s coming in the next few years. I hope I survive, I hope everybody listening to this survives. But it’s going to be a very, very damaging and difficult time. So be worried. Be prepared.


“Where is Jim Rogers Investing His Money Now?”
YouTube Video

Jim Rogers’ latest book…

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Peter Schiff: Rising Gold Stock Prices ‘Just Getting Started’

Peter Schiff, the CEO of Euro Pacific Capital who correctly-called last decade’s housing crash and recent global economic crisis, was on the Fox Business Network yesterday. Chatting with Liz Claman about the recent terrific performance of gold mining stocks, Schiff told viewers:

But this is just getting started. These gold stocks are just recovering ground they never should have lost. I don’t know why anybody’s surprised at these bad numbers coming out of Macy’s. The retailers have been reporting horrible sales all year. The consumer is broke. We are back in recession. That’s why Trump is a nominee. That’s why Bernie Sanders is beating Hillary Clinton in all these primaries. Because the voters know how awful this economy is. They don’t have any money left to spend…


“Retail Tanking, Gold Stocks Doubling”
YouTube Video

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; a qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

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Jeremy Grantham: U.S. House Prices ‘Might Beat The U.S. Equity Market In The Race To Cause The Next Financial Crisis’

Last night I finally got the chance to read the latest quarterly investment letter from “crash prophet” Jeremy Grantham, the British-born investment strategist and founder/former chairman of Grantham, Mayo, Van Otterloo & Co. (currently oversees $99 billion in client assets). Grantham divided up May’s installment (covering the first quarter of 2016) into two parts. Part I, “Always Cry Over Spilt Milk,” was a recap of a paper he wrote six months ago. Part II was entitled “Updates,” in which Grantham provided these investing nuggets:

The tone of the market commentators back in January, when I was writing my last quarterly letter, seemed much too pessimistic on global stock markets, particularly the U.S. market, and I said so.

This relative optimism was an unusual position for me and the snapback in these markets has validated, to a modest degree, my thinking at the time. I still believe the following: 1) that we did not then, and do not today, have the necessary conditions to say that today’s world has a bubble in any of the most important asset classes; 2) that we are unlikely, given the beliefs and practices of the U.S. Fed, to end this cycle without a bubble in the U.S. equity market or, perish the thought, in a repeat of the U.S. housing bubble; 3) the threshold for a bubble level for the U.S. market is about 2300 on the S&P 500, about 10% above current levels, and would normally require a substantially more bullish tone on the part of both individual and institutional investors; 4) it continues to seem unlikely to me that this current equity cycle will top out before the election and perhaps it will last considerably longer; and 5) the U.S. housing market, although well below 2006 highs, is nonetheless approaching a one and one-half-sigma level based on its previous history. Given the intensity of the pain we felt so recently, we might expect that such a bubble would be psychologically impossible, but the data in Exhibit 1 speaks for itself. This is a classic echo bubble – i.e., driven partly by the feeling that the substantially higher prices in 2006 (with its three-sigma bubble) somehow justify today’s merely one and one-half-sigma prices. Prices have been rising rapidly recently and at this rate will reach one and three-quarters-sigma this summer. Thus, unlikely as it may sound, in 12 to 24 months U.S. house prices – much more dangerous than inflated stock prices in my opinion – might beat the U.S. equity market in the race to cause the next financial crisis

(Editor’s note: Bold added for emphasis)

Note that bit about “the threshold for a bubble level for the U.S. market is about 2300 on the S&P 500.” 2,300 remains the same threshold from the last time I blogged about Jeremy Grantham on Survival And Prosperity (it had been 2,250 prior to this). As I type this, the S&P 500 is at 2,064.

In addition to U.S. stock and housing prices, Grantham talked about crude oil. From the newsletter:

My belief remains that a multi-year clearing price for oil would be the cost of finding a material amount of new oil. This appears to be about $65 a barrel today, and costs are drifting steadily higher as the cheapest old oil is pumped. My guess is that the price of oil will indeed be as high as $100 a barrel again within five years

(Editor’s note: Bold added for emphasis)

Once again, another insightful installment from the British “crash prophet.”

You can read the entire piece on GMO’s website here (.pdf format)

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; a qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

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Signs Of The Time, Part 102

From the official website of the National Association of REALTORS- realtor.com- this past Tuesday:

“Prepping for Doomsday: Bunkers, Panic Rooms, and Going Off the Grid”

Excerpts from the article included:

“If the booming sales of panic rooms are any indication, more and more city dwellers these days are obsessively worrying about everything from home invasions to terror attacks…”

“Some real estate companies are seeing big increases by specializing in ‘survivalist properties’…”

“Survivalists are also particularly hungry for metal containers they can convert into shelters and bury underground…”

While there’s the expected mocking tone to the piece (“Welcome to the brave (and for some, highly profitable) new world of paranoia”), it’s still an interesting look at what’s going on with panic/safe rooms, survival real estate, and (underground) shelters- topics I’ve blogged about from time to time over the last several years.

You can read the entire article on realtor.com here.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Survival And Prosperity
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Christopher E. Hill, Editor

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