Financial insights to avoid the casualties of Modern Monetary Theory, and out of control Central Bankers
Here we are fellow Patriots, nearing the end of the road, the runway, and the train tracks, simultaneously in financial markets. In today's insights, I will provide content that will be custom tailored for my interview tomorrow with Gregory Mannarino. There is way too much information in the world to digest for most today, so I have prepared what I believe you should focus on, as we hurdle on this blob of rock we call the Earth. The most important thing is to listen to many voices, use logic and reasoning to hear them, and to allow God into your life, to touch your heart as to who to listen to more frequently. Prayer and Faith, with action, will seldom do you wrong when your heart has good intentions. God does move mountains, some just may not have noticed yet.
Greg has copyrighted a fantastic market indicator called the MMRI, the Mannarino Market Risk Indicator. If you've never heard of it before, you should familiarize yourself with it. It's a simple formula that gives anyone a fast way to assess the general level of risk in the stock, bond and currency markets, using the dollar (DXY) and the 10-year Treasury, divided by 1.61, which is a Fibonacci number. As Warren Buffett famously stated in the past, tell me where the 10-year Treasury is, and I will tell you where stocks should be.
Any MMRI under 100 is low risk, 100 to 200 moderate risk, 200 to 300 high risk, and 300+ is extreme risk in the stock market. We are at 275, which is high, almost to extreme levels. I use the MMRI mainly to assess the health of the "financialized economy", as it provides a useful number that I can quickly tell how other market participants view the financial sector, and the short to medium term health of the overall economy.
As we know, the real economy and the financialized economy are bifurcated, and separating more quickly as the wealth gap continues to widen - the poor are getting poorer, and the rich are getting richer. The MMRI is more of a high level macro indicator as opposed to trying to gauge any one specific sector of the market.
Whether you like it or not, you were born into this system. You were marked as chattel when you received a social security number, and the state drew blood and fingerprints from you at birth. We all must learn how to play the different games within the system, and hone in on the specialized games that God has made you good at.
Play the Damn Game already
The fact of the matter is, a criminal cartel runs our country, and also runs the world. We must collectively learn how to play multiple games within the system in order to take away the power from the evil ones. The easiest single way that every person can start participating is by purchasing physical ounces of Silver, delivered to you or a private storage vault. Silver is the single weakest link, the largest bottleneck in their game. Patriots around the globe have been chipping away at this since the Silver squeeze in early 2021. This movement must continue. People must learn to think for themselves, and have the mindset that only you will be the best steward of your own wealth. Fix your savings account by turning it into Silver, and everything else will eventually fall into place when real money is discovered once again.
Some phraseology I want to bring to your attention is the term "Black Market". This is propaganda that has been pushed over many decades that describes something bad. Black market is essentially the same as a "natural market", or a "local market", but without permission by a governing body. This could be literally someone standing at a busy street corner, who offers a wide variety of products and services that you, the consumer, needs, but where the government has created so much red tape, and where the state or city has not formally authorized an individual to conduct business in a particular place, that is when the Mafioso's have a problem.
When price controls are implemented by authoritarians, that is when these markets really flourish. Estimates of "black market" transactions vary by source, but 5% to 20% is probably a good estimation for most markets in the U.S., while some international markets may exceed 50%.
People ask me all of the time, " How do I know when to sell my precious metals"? Of course, everyone should have an exit strategy. However, with Gold at $1,919 and Silver at $24.29 as I write this, we are near generational lows when you factor in how much money printing has gone on since 2020, with about 80% of all money created in the last 3.5 years. If currency is like waves and the tide, precious metals are the wave breakers. Gold and Silver are real money, constitutionally speaking.
The government can allow a private bank to manipulate currency, but that only makes what is fake, more fake, and strengthens the wave breakers. I would look at ratios as opposed to price to determine when to spend your real money. The Dow to gold ratio peaked at 1:1 in early 1980, with both at around 850, and the Gold to Silver ratio briefly hit 17:1. Regardless of M2 money supply (even if decreasing), more currency will seek a haven of financial insurance during dark days. If we get anywhere close to 1:1 on Dow:Gold, Silver should be somewhere in the 15:1 to 20:1 against Gold. And this will be against rapid deflation in the economy for most goods, including homes (where you will be able to obtain a home for 200-1,000 ounces of Silver, while necessities such as food and energy will see continually rapidly intensifying inflation.
As shadowstats reports, if we are anywhere near 20% inflation on anything, that is a halving of your buying power in just 3.5 years (precisely how long it's been since the whole COVID debacle started). Precious metals always revert to the mean, and they always overextend. This is as hard of a fact as gravity. It just is.
Banking and Brokerage crises, dead ahead
No doubt, this year has been the year of the ultimate dead cat bounce. Charles Schwab Bank is, in my opinion, the next bank to need a bailout or bail in. "Charles Schwab Bank" is a separate entity from "Charles Schwab", the Brokerage house. That will do little to stem the panic, and in fact, there could be so much confusion, that the Fed and Treasury have to rush something in order to stave off a "Collapse of Trust" through the rest of the brokerage houses. Here is some up-to-date data from a reliable Twitter account.
The Great Taking
As we assess the House of Cards, I encourage everyone to read the book "The Great Taking", by David Rogers Webb (I will put a PDF copy on my website). This book cannot be found on Amazon and seems to be well hidden. But the book discusses broker dealer failures and failure to deliver securities if the DTCC files bankruptcy. DTCC has its own line of secured creditors, who are first in line "first lienholders" to own all global securities held within the DTCC, should it have to file for bankruptcy. That means any brokerage house who does not have physical certificates would be affected.
Most brokerage houses use DTCC to store various forms of securities. This, in my opinion, would be the ultimate Black swan, and although unlikely to happen, the probability is high enough (5%-10% chance of it happening), that it warrants you to read the content for yourself, and make your own observations and judgments.
Some final thoughts
War is peace. Freedom is slavery. Ignorance is strength. - George Orwell, 1984
2023 is to 1775 as 2024 will be to 1776. My prediction is that stocks will crater in 2024 as interest rates hit unbelievable highs, not imagined by any economist today. I think we will be looking at 12% mortgages by the election, if there even is one.
Although things seem bleak at the surface, I am helping individuals transition into the hard asset movement, which is very much a real thing. Anything inside the system is at systematic risk moving forward. Precious metals, energy security through oil, gas and water investments, and land, including high quality real estate will outperform other asset classes moving forward, for the foreseeable future.
Get your financial house in order also involves getting your spiritual house in order. Pray to God Almighty for forgiveness, and to heal your heart of any wrongs received or given. Love God and love yourself, and you will be able to love your neighbor as yourself.
Daniel J Tinkham