Signs Of The Time, Part 99

Sandwiched between “Kobe goes out healthy” and “Over-the-top Best Kiss win” in the headlines of my Internet service provider’s home page Sunday was this:

Don’t panic over awful earnings season

Energy and materials sectors will be hit hard, but investors shouldn’t drop everything and run for the hills yet…

And Monday night I spotted the following headline over on the MarketWatch website:

Risk of a recession may be higher than you think

Q1 profits expected to decline by 9%, according to FactSet…

Some might construe all this as the mainstream media trying to prevent Main Street from dumping stocks while at the same time conditioning the American public for the real possibility of an economic recession in the coming months.

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 information 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. Christopher E. Hill, 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 presented on the site.)

The People Who Predicted The Global Financial Crisis

“Vice President Dick Cheney says that his boss, President George W. Bush, has no need to apologize to the American people for not doing more to head off the financial calamity, saying no one saw the crisis coming.

During an interview Thursday with The Associated Press in his West Wing office, Cheney defended the administration’s performance on an economy that is growing weaker daily and which recently collapsed in spectacular fashion. Cheney said that ‘nobody anywhere was smart enough to figure it out.’

-Associated Press, January 8, 2009

(Editor’s note: Bold added for emphasis)

It’s Monday, and since I’m not adding anything new from the “crash prophets”- Marc Faber, Jeremy Grantham, Jim Rogers, and Peter Schiff- I thought I’d take Survival And Prosperity readers for a stroll down memory lane.

I recently stumbled across a page on the Investor Home website entitled “Who Predicted The Global Financial Crisis?” Gary Karz wrote:

In the years since the Global Financial Crisis exploded on the scene, there have been a number of articles and initiatives documenting the individuals that publicly predicted the crisis and arguably deserve credit for having sounded the alarm. This page summarizes those efforts and links to those sources (and I expect to update it over time as more information and research becomes available). While plenty of foreign leaders and professional doomsayers have long predicted the collapse of the US economy, to the extent possible it should be useful to differentiate them from those that legitimately warned about a financial crisis or critical elements of it based on some logical analysis that appears to have merit after the fact. I believe a large percentage of investors and home buyers were exposed to at least some credible warnings about a housing bubble, but clearly many people chose to ignore those warnings or dismiss the predictions of a coming housing crash and/or crisis as unlikely to come true. Separately, I was interested in hearing what these individuals prescribe…

(Editor’s note: Bold added for emphasis)

Personally, I’m interested “in hearing what these individuals prescribe” in 2016, as these people managed to correctly-call last decade’s housing bust, the global economic crisis that reared its ugly head in the fall of 2008, and the “Great Recession.”

Not so much their peers who completely missed the signs of the financial storm yet whose forecasts are still touted and relied upon, with some among this group even trusted with getting America out of this ongoing mess.

A solid effort by Karz, which you can view on his website here.

Now I’m just waiting for him to publish the list entitled “Who Incorrectly Called The Global Financial Crisis,” so I know exactly who not to listen to concerning such matters.

“I hope you know that this will go down on your permanent record…”

Actually, this “nattering nabob of negativity” already has a pretty good idea of who those people are. And anything they say I take with a grain of salt…

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

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James Rickards: Gold Other Money That Renders Central Bank Power ‘Meaningless’

The “Quote For The Week” runner-up. From American investment banker, risk manager, attorney, and financial commentator James Rickards, in a recent interview with Schiff Gold’s Albert K. Lu:

I actually think of gold as money. Money is different from an investment or a commodity, so, is gold a commodity? Is it an investment? Is it money? Well, it depends a little bit. Like a chameleon, it changes color. I think of it as money. But I think that’s why there is such bitter opposition, and so many really canards and made-up stories, anti-gold. These come from the PhDs. Whoever controls money controls the world. You control wealth, you control politics; you control who wins and who loses. It’s a very powerful thing to control.

Who controls money today? The answer is the central banks, and those are all PhDs, they come from MIT, Harvard, Chicago, Stanford, just a really small number of universities. They all know each other. It’s a club. Well, if you were in this PhD club that controls the central banks, you wouldn’t want people to even think about gold. You wouldn’t want them to talk about gold, because gold is the competition. Gold is the other money that can render their power meaningless. And so they perpetuate these myths about gold. Unfortunately, a lot of students, a lot of journalists, a lot of everyday citizens follow the leader, follow these PhDs without ever examining the assumptions…

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 information 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. Christopher E. Hill, 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 presented on the site.)

Rickard’s new book…

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Quote For The Week

“This is an economy on a solid course. Not a bubble economy. We try carefully to look at evidence of a potential financial instability that might be brewing, and some of the hallmarks of that are clearly-overvalued asset prices, high leverage, rising leverage, and rapid credit growth. We certainly don’t see those imbalances. And so, although interest rates are low and that is something that can encourage reach for yield behavior, I certainly wouldn’t describe this as a bubble economy…”

-Federal Reserve Chair Janet Yellen, speaking at New York City’s International House on April 7, 2015

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

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Signs Of The Time, Part 98

“Well, if they’re in Illinois today, they’re probably so much in love with Illinois that they’re not going to leave”

-Illinois Speaker of the House Michael Madigan, on whether a proposed tax hike on millionaires might drive them from the state, Chicago Tribune website, March 21, 2014

According to a report last month from the Johannesburg, South Africa-based research firm New World Wealth, about 3,000 individuals with net assets of $1 million or more, not including their primary residence, moved out of Chicago in 2015. From the March 2016 report entitled “Millionaire migration in 2015”:

The following cities had the biggest net outflows of millionaires in 2015

Country/Outflow of millionaires in 2015/Millionaires, 2015/% lost

1. Paris, 7 000, 126 000, 6%
2. Rome, 5 000, 73 100, 7%
3. Chicago, 3 000, 134 000, 2%

Destinations:

• Paris: most moved to the UK, USA, Canada, Australia and Israel.
• Rome: most moved to the UK and USA.
Chicago: most moved to other parts of USA (internal migration)

Why did they leave?

We interviewed migration experts and HNWIs to find out on their reasons for leaving. Notable reasons that they mentioned included:

• Paris: Rising religious tensions, lack of opportunities.
• Rome: Economic slump, lack of opportunities.
Chicago: Rising racial tensions, rising crime levels

(Editor’s note: Bold added for emphasis)

Shocking, right?

The entire report can be view on the New World Wealth website here.

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

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Peter Schiff: ‘Phony’ Recovery ‘Another Federal Reserve Bubble Just Like The One That Popped In 2008

The CEO of Euro Pacific Capital, Peter Schiff, appeared on CNBC TV earlier Wednesday. Schiff, who correctly-called last decade’s housing crash and recent global economic crisis, talked to Rick Santelli in Chicago about the Federal Reserve, interest rates, and the U.S. economy. From their exchange:

SANTELLI: On April 1, you wrote a letter- you normally write lots of pieces- called “April Fool’s In March.” And there was a quote in there I have to read and the best way to get into it is just to read it. “It may be impossible to underestimate the gullibility of professional Fed watchers.” Why did you write that? What does it mean?
SCHIFF: Well, because remember in March you had people talking about the possibility of April being a live meeting, and everybody talking about whether or not the Fed was going to raise rates. All this is part of their bluff. It’s a charade. They really can’t raise rates because they don’t want to put too many holes in this bubble. Because this recovery was never real. It’s phony. It’s another Federal Reserve bubble just like the one that popped in 2008. Only this one is even bigger. And I think what we really should be talking about is not when the Fed is going to hike rates, but when they’re going to admit the economy is much weaker than they’ve been pretending, when are they going to cut rates, and when are they going to launch QE 4.


“Santelli Exchange: Fed ‘stimulus trap’”
CNBC 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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Jim Rogers: ‘We’re Certainly Going To Have Worse Times Than We’ve Had In Our Lifetime’

Let’s talk finance and investing for the remainder of the day. Well-known investor, author, and financial commentator Jim Rogers recently made an appearance on GoldSeek.com Radio, and in the April 1, 2016, broadcast, the former investing partner of George Soros talked about several topics including a coming U.S. financial crash, where he’s putting his money these days, and the prospect of another buying opportunity with gold. On a coming crash, from the exchange with host Chris Waltzek:

WALTZEK: You know you’ve mentioned that this could be the “last rally.” I put that in quotes and we’re seeing again signs of that. But these price-to-earnings ratios, the CAPE ratios, some of our individual stocks 300, 500-priced-to- earnings. I mean, they’re priced to perfection for eternity. Could this lead to maybe a 1929-style scenario, or are we in worse or more dangerous water?
ROGERS: Chris, we’re certainly going to have worse times than we’ve had in our lifetimes. How bad it is? I expect it to be, well to repeat, worse than anything we’ve had in our lifetime, because the debt is like nothing it’s ever been in recorded history. America is now the largest debtor nation in the history of the world. Higher and higher. But so does everybody else’s debt. So the next time around- yes, it’s going to be very, very disastrous. The only hope Chris is that somehow the world survives the next time around. Well we won’t survive the one after that, I assure you, because the debt will be so much higher, money printing will be so much worse. We’re going to live in very interesting times, which as you know, a Chinese curse to live in interesting times.

Regarding where the Singapore-based investor is putting his money:

WALTZEK: So give us an idea then where those funds of yours are headed and where you feel safe right now.
ROGERS: I own a lot of U.S. dollars, not because it’s going to be a horrible currency in the end, but with the bad times coming many people will put their money in what they consider safe assets or safe havens, and many people think the U.S. dollar is a safe haven. Compared to the rest of the world- yeah, it is a safe haven compared to the yen or the euro or other currencies. So I own U.S. dollars. I own Chinese renminbi. I own Chinese shares. I’m short in the U.S. I’m long agriculture. I bought recently some Russian government short-term bonds in rubles. I own some gold and silver which I have for years- I haven’t bought any recently. Some stocks that I’ve owned for twenty or thirty years- I don’t see any reason to sell them since I bought them so long ago. That’s basically, off the top of my head, where my investments are.

On the prospect of another buying opportunity in gold, Rogers said:

I’m not rushing in to buy. I still expect a better opportunity to buy gold sometime in the next two or three years. If that happens, I hope I’m smart enough to buy more. If it doesn’t happen, I own some gold, so I’ll make money. But I’m still waiting for my… another opportunity.

The CEO of Rogers Holdings and Beeland Interests, Inc. shared with listeners:

There are other places I’m looking at but I’m really not very active at all. I’m mainly just watching the world unfold. Be knowledgeable, be worried, and be prepared.

“Be knowledgeable, be worried, and be prepared.” Wise words to digest.


“GSR interviews JIM ROGERS – March 31, 2016 Nugget”
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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Martin Armstrong Warns Illinois ‘Taxpayers Are Absolutely Screwed And This Is Not A Place You Want To Own Property’

Speaking of Martin Armstrong, I was reading the economist’s blog early Wednesday morning when I came across the following in his April 4 post entitled “Illinois on the Brink of Bankruptcy”:

The pension crisis is brewing and the one state that appears to be heading toward a complete bankruptcy is Illinois. Clients should not own ANY debt from Illinois, be it city, municipal, or state. Just get out before the curtain falls. The Illinois Constitution plainly states that pension benefits, once granted, “shall not be diminished or impaired.” Thus, taxpayers are absolutely screwed and this is not a place you want to own property

(Editor’s note: Bold added for emphasis)

“Taxpayers are absolutely screwed and this is not a place you want to own property”

“Just get out before the curtain falls”

Regular readers of Survival And Prosperity know this has been a major concern of mine for a couple of years now. I blogged back on November 9, 2012:

Events that have unfolded at the local level on up for some time now have convinced me that my future lies outside of Chicago, Cook County, and Illinois. Which is a shame, because as I’ve mentioned before, my family has deep ties to the area. So much so a number of family members are familiar with the tale of one ancestor who fought courageously to save his tailor shop (at least the contents of it) from the approaching flames of the Great Chicago Fire back in 1871.

141 years later, another looming disaster looks to be in store for me and my loved ones if I don’t take action, and soon.

It’s bad enough Chicago, Cook County, and Illinois was already overrun by too many residents that live their lives in pursuit of the Ubi East Mea (“Where’s Mine?”) mentality and politicians who have been quick to pander to these individuals with “free” things in exchange for votes- long before last Tuesday’s election results revealed the rest of America is now marching down this same path.

But combine this with poor financial health, a bleak economic outlook, and growing attacks on the finances and freedoms of productive, law-abiding residents as politicians rob Peter to pay Paul in their attempt to remain in office- and you’ve got one hell of a mess coming to this area of the Midwest in the next few years.

Eventually, I predict the productive residents will split town (this happened before in Chicago in the late 60s-early 70s in some neighborhoods), there will be no more money for “freebies,” and the “Where’s Mine?” brigade will riot. Athens-style.

As I’ve been telling those close to me for some time now, “First you’ll see the strikes. Then the larger protests. Until finally, the riots.”

History shows you don’t want to be in the city when the riots break out.

And I don’t plan on being here in Chicago when the coming civil strife erupts either.

I split town several months after writing all that.

You can read Armstrong’s entire blog post on his company’s website here. Disturbing stuff for citizens of “Madiganistan.”

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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Follow-Up: Martin Armstrong’s Quote For The Week

Before I really get going for the week on Survival And Prosperity, after I published the “Quote For The Week” Monday- the one from economist Martin Armstrong about a “lack of recent reports of UFO sightings or abduction” in this goofy election year- I couldn’t help but remember my 1992-93 winter break from college where I invited a bunch of buddies up to my family’s cabin in Wisconsin. As the host, I got to pick the VHS movies to watch, with one of them being the 1988 John Carpenter sci-fi film They Live starring the late “Rowdy” Roddy Piper of pro wrestling fame. From Melissa Portell on the IMDB website:

Nada, a down-on-his-luck construction worker, discovers a pair of special sunglasses. Wearing them, he is able to see the world as it really is: people being bombarded by media and government with messages like “Stay Asleep”, “No Imagination”, “Submit to Authority”. Even scarier is that he is able to see that some usually normal-looking people are in fact ugly aliens in charge of the massive campaign to keep humans subdued.

(Editor’s note: Bold added for emphasis)

My friends had never heard of the flick. But I had already seen it. And the one part of the movie that really stood out for me (and which I thought my buddies would appreciate) was the fight scene where Piper (Nada) tries to get actor Keith David to wear the “special” sunglasses:


“They Live (2/4) They Live Fight Scene – FULL (Explicit Language) (1988)”
YouTube Video

In my opinion, one of the best fight sequences ever to grace the “Silver Screen.” And my guests wholeheartedly agreed as well.

In 1992, the message that movie conveyed was somewhat lost on us meathead college boys (the beer certainly didn’t help either).

Some twenty-three years later, sans the alien bit, I can’t help but be a little creeped out by the resemblance between America of 2016 and Carpenter’s nightmarish setting:

The world as it really is: people being bombarded by media and government with messages like “Stay Asleep”, “No Imagination”, “Submit to Authority”…


“Newscasters Agree: A Christmas Present Or Two Or Ten Edition”
YouTube Video

Funny?

I don’t know about you, but that segment really started getting disturbing for me around the minute mark.

Live long and prosper… if you can.

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

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Follow-Up: Requesting Reader Help

Last week, I asked Survival And Prosperity readers on Facebook to please consider voting for a young girl I know personally- Hayley- who has a rare disease (“Childhood Alzheimer’s”) and who entered a contest to win an adaptive bicycle.

I just wanted to let you know that Hayley won the bike.

Needless the say, Hayley and her family are excited… and grateful. A huge thanks goes out to readers who took time out of their busy schedules to vote for her.

The 2016 Great Bike Giveaway was held by the Friendship Circle of Michigan, “a non-profit organization that provides programs and support to the families of individuals with special needs.”

Thank you again,

Christopher E. Hill
Editor

Tuesday, April 5th, 2016 Housekeeping No Comments
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