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Sometimes it Smacks You Right in the Face!

We’re talking about the breakdown of American prosperity!

We do things no normal person would want to do, all as part of our pledge to keep you up to speed on the dollar, the Fed, the economy, gold, and silver.

We follow money supply and Fed asset numbers closely and listen carefully to Fed officials as they lurch from one misshapen policy to another.  We dive deep into reports about bank solvency and watch the frightening congressional budget process…

As we say, things no normal would want to do.   

But sometimes there’s no need to go looking.  The story just smacks you in the face.  Like this one.

The Drudge Report (9/12/23) ran the following stories in a row on its front page: 

Incomes Fall For Third Straight Year…

Average household now has $10,170 credit card debt…

More Baby Boomers Sliding Into Homelessness…

Adults ordering from kids’ menus to save money…

Incomes keep falling, credit card debt keeps rising, baby boomers are finding themselves homeless, and adults desperate to save are forced by rising costs to order kids’ meals.  The links above are all live if you would like to know more about any of those stories.

We don’t even have to look to find more stories like this.  We just got this new one that says pet owners are trading down from expensive gourmet brands to less expensive brands of pet food.

Nothing is too good for Fido and Fifi, except when the currency begins to go bad, These thing are bellwethers for those of us who track the breakdown of the unbacked, irredeemable paper money currency scheme.  They are provided by us, Republic Monetary Exchange, as a free public service for our friends and clients who want a sense of how critical things are getting.

They are getting pretty damn critical.  More soon.  Watch this space. 


Another Government Shutdown? (Here We Go Again)

Own gold and silver in times of governmental failure!

Looks like we’re headed for another government shutdown.  

Congress has until September 30, which is the end of the 2023 fiscal year, to agree on a budget and avoid another shutdown.

Nine out of 10 Americans, according to a Peterson Foundation survey, want Congress to come up with solutions to the national debt and avoid a shutdown.   

Thirty-five percent of those surveyed believe the problem is not going to get better.  They believe it will get much, much worse.

The US war budget is larger than the war budgets of China, Russia, India, Saudi Arabia, the United Kingdom, Germany, France, South Korea, Japan, and Ukraine combined.  The national news media always – always – refers to this as “defense spending,” but that appears to be misleading since none of the Biden billions spent on Ukraine can be said to really be defending the people of the United States.  On the contrary, it is likely to draw us into larger conflagrations. Nevertheless, companies on the receiving end of Washinton’s largesse, companies as Lockheed Martin, Huntington Ingalls, General Dynamics, and Northrop Grumman have a great deal of influence in Congress. 

The Capitol Hill newspaper The Hill reports that “over the last 20 years, the defense sector has dropped $285 million in political donations and $2.5 billion on lobbying to influence Congress and the federal government.”  Just one of those companies, Lockheed Martin “spends roughly $7 million per year on campaign contributions and $13 million a year on lobbying.”

It is hard for the interests of ordinary citizens to prevail against that kind of lobbying and campaign contribution firepower. 

Meanwhile, our friend economic commentator Michael Shedlock shares a widespread skepticism about the new budget showdown:  “Rest assured another budget showdown humiliation is coming. Republicans will surrender after starting a budget fight, like always. It’s more humiliating that way.”

Oil and Gold: Remembrance of Things Past

None of our clients or friends will be surprised to learn that price inflation in August took its biggest jump in over a year.  

The Wall Street Journal:

The consumer-price index rose 0.6% in August from the prior month, the Labor Department said Wednesday. More than half of the increase was due to higher gasoline prices. So-called core prices, which exclude volatile food and energy items, rose by 0.3% last month after even lower readings in June and July.  

We warned that inflation was about to tick up, writing last month: 

Gasoline prices have been climbing in August.  That will show up in the next CPI report next month with higher prices factored in.  

Furthermore, low inflation months (July ‘22 – 0.0 percent; August ’22 – 0.2 percent) that have been holding the 12-month numbers lower the last couple of months, will be dropping out of the 12-month average, with mostly higher monthly numbers replacing them.  

So, there are still higher inflation numbers headed our way.   And now the problem is compounded.  After all, Biden took a break from stumbling up the stairs of Air Force 1 to drain America’s strategic petroleum reserves.

So those emergency reserves will have to be replenished at higher prices.

It should go without saying that rising energy prices are exactly like a tax on American households and businesses.  

Crude oil is about $90 a barrel.  Some observers, among them JPMorgan Chase CEO Jamie Dimon, think we may be headed to $150 a barrel.  It all calls to mind the Stagflation Decade.  Oil prices quadrupled in 1973 and nearly tripled in 1980.  

The Keynesian and Modern Monetary Theory economists who have been in charge of monetary policy in this country for most of a century have tried to blame rising oil prices for the Stagflation Decade.  The truth is quite the opposite.  OPEC producers clearly warned in advance that selling their appreciating oil, recovered from the earth at great effort and expense, for US dollars that were depreciating and could be reproduced endlessly at no meaningful cost, made little sense.  If the US dollar kept losing purchasing power, they warned, it would certainly lead to higher oil prices.  

Indeed, it did.  Then the vicious cycle got underway in which the Treasury tried to cushion the effect of higher energy prices by printing money to make the OPEC price increases illusory in real terms.

Of course, you know what also performed profitably in the Stagflation Decade?  Gold and silver.

We’ll leave you with two thoughts.  First, a suggestion is that you update your gold and silver holdings for what is headed our way.  And secondly, a line from comedian Steven Wright:

“Right now I’m having amnesia and déjà vu at the same time. I think I’ve forgotten this before.”


Somebody in Washington Finally Noticed the Deficit

But of course, by the time Washington notices, it’s waaaaay too late!

This one took us by surprise.   Not the fact that we’re headed to a crisis, but that The Wahington Post, the house organ of the Deep State, noticed that the deficit is exploding!  

How could they say such a thing?  After all, President Biden has been running around talking about how much he cut the deficit. 

Somebody, maybe Jeff Bezos, must have said something!

Whatever it was, it’s too late.  The Fiscal Year ends in three weeks, running a deficit of about $2 trillion.

Jason Fuhrman was an Obama administration economist.  He thinks there must be “some weird, freakish thing going on.”  

Count on an Obama economist to be surprised.  But high inflation means Social Security payments ticked up, while Bidenomics had a spending deal targeted at just about every constituency.  Federal spending is tracking a 16 percent increase so far this year.  

Most people would have noticed higher interest rates, too.

But here’s Fuhrman expressing his surprise:

To see this in an economy with low unemployment is truly stunning. There’s never been anything like it,” Furman said. “A good and strong economy, with no new emergency spending — and yet a deficit like this. The fact that it is so big in one year makes you think it must be some weird freakish thing going on.

Where’s all this headed?  It’s headed to a crisis.  We’ll let Brian Riedl with the Manhattan Institute – noting that he is not an Obama economist – spell it out in simple terms:

“A debt growing much faster than the economy will drive up interest rates, reduce economic investment, and over time make interest payments the largest federal expenditure — risking a federal debt crisis,” Riedl said.


Banks Are in More Trouble Than We Thought

It’s bad.  Very bad.  When it hits the fan, gold will be there, as it always has!

We know what happened to a handful of big banks earlier this year.  Banks like Signature and Silicon Valley suddenly were forced to realize their unrealized losses.  And that was the end of the road for them.

As you know the value of bonds goes down when interest rates go up, so those banks with their reserves all parked in bonds suddenly found themselves in deep trouble as the Federal Reserve raised interest rates.

But the rest of the banking industry is just fine, right?

Wrong.  Double wrong!

Here’s a link to a Wall Street on Parade article that pulls the curtain bank on the banking industry.  It reports that at the end of the first quarter, banks were sitting on more than a half trillion dollars in unrealized losses!

That’s deep kimchi!

The academic study the story draws on describes the banks shamelessly gambling on being bailed out by us:

Banks with the most fragile funding… sold or reduced their hedges during the monetary tightening. This allowed them to record accounting profits but exposed them to further rate increases. These actions are reminiscent of classic gambling for resurrection: if interest rates had decreased, equity would have reaped the profits, but if rates increased, then debtors and the FDIC would absorb the losses.

Only 6 percent of the total bank assets were protected from rising rates with interest rate swaps.  At the end of the first quarter, March 31, 2023, the banks had unrealized securities losses of $515.5 billion.  And the Fed has raised rates two times since then!

Wall Street on Parade:

The use of the phrase “classic gambling” to describe 75 percent of the U.S. banking system by highly credentialed academics might be something that the U.S. Senate Banking Committee might want to hold a hearing about with some sense of urgency.

Not to put too fine a point on it, but this is the year in which banking regulators were left scratching their heads at the dizzying speed at which multiple banks collapsed. In the span of seven weeks this spring, running from March 10 to May 1, the second, third, and fourth largest bank failures in U.S. history occurred. In order of size, those were: First Republic Bank (May 1), Silicon Valley Bank (March 10) and Signature Bank (March 12). The largest bank failure in U.S. history, Washington Mutual, occurred in 2008 during the financial crisis.

With all due respect, we don’t think the suggested Senate Banking Committee hearings are worth the bother.  For two reasons.  First, it is too late to fix anything.  The cows are already out of the barn.  And secondly, the Senate will inevitably make the taxpayers fork out to paper this over.

The other day Bill Bonner summed up our present predicament this way: “Oblivious to the rising tide of debt, deficits and defaults, mankind stumbles toward disaster…”

If you are still trusting the government and its institutions, the Fed, the FDIC, Congress to look out for your welfare, you are putting your trust in the wrong place.

Gold and silver are not dependent on trust some unknown party.  Unlike banks, securities, bonds, and paper money, they have no counterparty risk.  That means that there is no risk that some party to the transaction will fail to perform and leave you with the loss.

In times of trouble, it is imperative that you protect yourself, your family, and your money with gold and silver.  We’re Republic Monetary Exchange.  We’re here to help.


Interest Rates Squeeze Washington

Buy gold before the next gusher of Fed funny money!

The US government deficit has exploded!

What’s up?  The Wall Street Journal cites a deadly conjunction of two things at once: “: a steep drop in tax revenue related to capital gains” and at the same time “an increase in interest payments on old debt.”

Wolf Richter describes it this way:  

“The gigantic US government debt is now approaching $33 trillion, amid a tsunami of issuance of Treasury securities to fund the mind-blowing government deficits and roll over maturing securities.” 

None of this stuff is very complicated.  As long as Washington keeps spending money it doesn’t have, it will have two choices for funding its deficit spending:

A. It will have to borrow the money.  But interest rates are screaming higher thanks to massive government borrowing.  And funding that borrowing at ever higher rates is already a fact of life as the following chart illustrates.

B. Or it will have to print the money to fund the deficit.  That is by definition inflationary.

Meanwhile, the cost of energy is soaring.  That will show up in the price indices in no time.  It is the equivalent of a tax on American households and businesses.  

Let’s look at this like adults.  The spending game should have been brought under control many years ago.  Instead, the political classes learned to buy votes by making promises to people and to reward its cronies for their campaign funding by letting them feast at the Capitol Hill hog trough.  Now we suffer the consequences of generations of irresponsible governments.

The Bidenistas and the left are hiding behind something called Modern Monetary Theory, which holds that the government can spend whatever it wants because it owns the printing press.   Any country that will believe such nonsense probably deserves its fate  —  bankruptcy! 

We can’t tell you the exact day and hour of the next massive Fed money printing spree, but the trajectory is clear.  It is very soon.  Possible triggers include the snowballing financial stress in China and a global economic downturn, a stock market breakdown, a disastrous US Treasury debt auction, more energy price hikes, and advancing trade wars.  

That is why foreign dollar holders are de-dollarizing their reserves.  That is why you would be wise to de-dollarize as well with the enduring money of the ages worldwide:  gold and silver.

We’re here to help.   Republic Monetary Exchange is a market leader in gold and silver, real money you hold in your hands.  Real money for free people.  Contact us today.


Don’t Worry! The Fed Will Fix Everything!

(They Just Haven’t Started Yet 🤷‍♂️)

‘Yeah, I think the Fed’s record on these things is wonderful. It’s almost guaranteed to be wrong.’ 

Jeremy Grantham, Co-Founder, GMO

Let’s start with this CNBC headline:

61% OF AMERICANS ARE LIVING PAYCHECK TO PAYCHECK — INFLATION IS STILL SQUEEZING BUDGETS

After cluelessly denying the severity of inflation as it returned to levels that hadn’t been seen in 40 years, the Fed vowed to do something about it.  So in March 2022, it began raising interest rates.   

Since then, the Fed has raised rates 11 times, pushing the Fed funds rate to the highest level in more than 22 years.

They’ve been at it a year and a half now.  Mission accomplished?  

Not even close.  

The people are still stuck with the higher prices the Fed engineered.  They’re trying to make ends meet, but 61 percent are still living paycheck to paycheck.  And that number is going up, not down.   After all, once Fed policy has ratcheted prices higher, they end up staying higher.  

As for those who are managing to save some money, the US household savings rate is down.  It dropped by a substantial 0.8 percent in July.  Which prompts the question, why would people save in a currency that is being eroded?  What kind of incentive is that for capital formation?

Meanwhile, the latest numbers show that consumer spending is up, but disposable income is down.  That is not a formula for success, either.  In fact, if anything, it explains why Rich Men North of Richmond is one of the hottest songs in America:

🎵 It’s a damn shame what the world’s gotten to
For people like me and people like you
Wish I could just wake up and it not be true
But it is, oh, it is

Livin’ in the new world
With an old soul
These rich men north of Richmond
Lord knows they all just wanna have total control

Wanna know what you think, wanna know what you do

And they don’t think you know, but I know that you do.🎵

So, 61 percent of the American people are living paycheck to paycheck.  Maybe, just maybe, the men in the Fed headquarters, the Marriner Eccles Building in Washington – just north of Richmond – will get everything under control.

Or maybe you should protect yourself and your family by owning gold and silver!


History Rhymes

Take a look at this!  You’ll want to own more gold!

Larry Summers, Former Director of the National Economic Council, tweeted (or X’ed) this chart the other day, noting the similarity between price inflation’s rise and slowdown and rise again in the 1970s and today’s chart.

“It is sobering,” he says, “to recall that the shape of the past decade’s inflation curve almost perfectly shadows its path from 1966 to 1976 before it accelerated in the late 1970s.”

Sobering indeed!

If the next leg of today’s movement, the yellow line, tracks what happened after 1976, we could reexperience what was one of the greatest gold and silver bull markets in history.   

Stephen Moore comments on the chart, “Twelve years of inflation was finally smothered by the Reagan-Volcker era of tight money, falling tax rates, and deregulation. 

“Past isn’t always a prelude. But if the 1970s and early 1980s taught us anything, it is that the solution to Bidenflation (just as was the case with Carter inflation) isn’t just higher interest rates. It’s growth policies that expand the supply side of goods and services.”

Resistance to the Fed’s interest rate policies is growing.  Already some are arguing for the Federal Reserve to abandon or raise its two percent interest rate target.  As funding US and corporate debt grows more difficult, that resistance to higher interest rates will grow as well.  

The digital money printing presses haven’t been disabled.  They are just idling.

For now.

Be prepared!


The Mountain of Debt

Why they’ll have to crank up the money printing!

The mountain of debt is not just big.  It is ridiculously large!  Unpayably huge!  

It is unpayable unless the authorities inflate the currency to near worthlessness.  Unfortunately, that seems to be the preferred alternative for central banks that find themselves in a debt squeeze like ours.

From a New York Federal Reserve Bank press release:

TOTAL HOUSEHOLD DEBT REACHES $17.06 TRILLION IN Q2 2023; CREDIT CARD DEBT EXCEEDS $1 TRILLION

The Fed, which drove this bubble of unsustainable debt with the misleading signals it sent to businesses and consumers from decades of interest rate suppression, is now driving this debt mountain into crisis territory.  That is because, having hiked interest rates 11 times since March 2022, debtors are beginning to find that higher interest rates are eating them alive.  

At the same time, the Fed’s inflation has raised the price of consumer staples to a new plateau.

Although few of them had that much, Americans used to believe that they needed $1 million to fund a comfortable retirement, according to a Yahoo! Finance article.  But now thanks to the depreciation of the dollar, the piece reports that Americans now believe they will need $1.9 million:  

A million bucks isn’t what it used to be. It was once thought a retirement savings milestone, but 401(k) plan participants now believe they’ll need nearly twice as much, according to a Schwab Workplace Financial Services survey.  

The problem is much bigger than higher consumer prices and credit card debt.  Government borrowing faces the Fed’s higher interest rates as well.  In fact, US debt will rise by $5.2 billion — every single day for the next decade!

We have an idea for you.  How about liberating yourself from the failing monetary system, one that will have to massively inflate the currency to make nominal payments of its debts?  How about protecting yourself with money that can’t be printed?  

Actually, it is a time-tested idea, one that has protected the wealth of people throughout the centuries and from reckless government and their mountains of debt everywhere around the world.  Gold and silver are the world’s preferred money in times of government failure and monetary crises.

Remember, they can’t just print more gold and silver!  Speak with a Republic Monetary Exchange precious metal professional today.  Don’t procrastinate.  Behind the curtains, things are moving very fast!

Trouble Hiding in Plain Sight!

“Unprecedented” deficits!; “Crisis-size deficits!”

Here’s the lead of an August 24 Bloomberg News story:

US Budget Deficits Are Exploding Like Never Before

The outlook for the federal budget right now is essentially unprecedented—crisis-size deficits as far as the eye can see, even though the economy appears to be in good health. That prospect is making investors uneasy, as demonstrated by yields on benchmark 10-year Treasuries climbing above 4.3% this week, their highest levels since 2007. Other borrowing costs are rising in tandem: The average rate on a 30-year fixed mortgage has surged above 7% for the first time in more than two decades.

Our thanks to Bill Bonner and his newsletter Bonner Private Research for calling Bloomberg’s story to our attention.  We certainly know what’s going on with the Biden deficit, but it saves us from having to write it.  And after all, we are a little overwhelmed with everything headed our way.  

  • China’s economy is beginning to swirl down into black hole of deflation.  Remember, it is as they say a global economy.  The popping of one bubble, especially one as big a China’s inevitably will mean the popping of others. 
  • US creditworthiness has been downgraded and is at risk and as is the solvency of a growing number of US banks. 
  • Freddie Mac says the latest weekly average 30-year mortgage rate, 7.23 percent, is the highest in two decades.  Meanwhile, at the Jackson Hole gathering, Federal Reserve Chairman Jerome Powell has signaled that the Fed isn’t finished raising rates.
  • Saudi Arabia and the United Arab Emirates have been admitted to the BRICS economic and trade consortium.  John Rubino points out that the world’s second and third largest oil producers, Saudi Arabia and Russia, “will be operating at least partially outside the dollar-centric financial system.”  Furthermore, Iran, Argentina, Egypt, and Ethiopia are now scheduled to join BRICS next year. 

As you can see, trouble for the US economy is hiding in plain sight.  Isn’t it time to review your investment portfolio to fortify your holdings of real money – gold and silver.  Call today and speak with a Republic Monetary Exchange precious metals professional!


Two Forces Driving De-Dollarization…

And that should be driving you to gold and silver!

The world isn’t looking skeptically at the US dollar because it doesn’t like green.  That would not be enough to drive de-dollarization.  Nobody cares what color the money is as long as it functions adequately.

Nor is de-dollarization driven merely because the world is eager for a change – a change for change’s sake.  

Not at all.  In fact, if the problems with the US dollar were bearable, they would be borne.  Remember how Thomas Jefferson put it in the Declaration of Independence, “Mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed.”

If people are moving away from the dollar, to which they are long accustomed, it suggests that dollar problems are no longer sufferable.  

Leading drivers of the de-dollarization movement are the weaponization of the currency on the global stage, and the refusal of Washington to get its fiscal house in order.  Today we offer up a snippet from the news about each.

First, the dollar on the global stage.  At the BRICS Summitt in South Africa, Russian president Vladimir Putin summed up dissatisfaction with the weaponized dollar this way:

We are all united in our commitment to shaping a multipolar world order with genuine justice, based on the international law and in keeping with the key principles set forth in the UN Charter, including sovereignty and respecting the right of every nation to follow its own development model. We oppose hegemonies of any kind and the exceptional status that some countries aspire to, as well as the new policy it entails, a policy of continued neo-colonialism.

Let me point out that it was the attempts by some countries to preserve their global hegemony that paved the way to the deep crisis in Ukraine….

We are grateful to our BRICS colleagues who are active in trying to end this situation and achieve a just settlement by peaceful means.

Colleagues, what matters is that we all unanimously stand in favor of a multipolar world order that is truly fair and based on international law.

The unconcealed subtext is that Russia and other countries will move to a non-dollar global currency to avoid America’s geopolitical hegemony.

For the refusal of Washington to manage its affairs prudently, we turn to former Congressman and presidential candidate Ron Paul.  His latest weekly column, “Growing US Debt Menaces Liberty and Prosperity,” offers Dr. Paul’s insider take on why nothing substantive is likely to be done to get a handle on US debt:

The sad fact is both parties, along with a majority of the American people, are addicted to welfare-warfare spending. What little resistance there is to big government within the Republican party is likely to be further weakened by the rise of a new form of “conservatism” that advocates the use of government power—including deficit spending and increasing the federal debt — to advance conservative political and social goals.

The failure to take seriously the threat to the American economy caused by reckless federal spending is illustrated by the reactions to the credit rating agency Fitch’s downgrade of the US government’s credit rating. Instead of treating it as a wake-up call, government officials like current Treasury Secretary (and former Federal Reserve Chair) Janet Yellen dismissed the downgrade as “arbitrary and based on outdated data.”

So, there you have it.  Much of the rest of the world has grown resentful of the US.  That is why there is a long line of nations seeking entry into the BRICS group.  And why they are seeking alternatives to the dollar standard.

And as for the US, it will be more spend and spend from Washington.  Never mind that the average American household is spending $709 per month more on living expenses than they were two years ago.  

Ron Paul concludes, “Eventually, the Fed-created debt-based economy will collapse as the dollar loses its reserve currency status. This will increase political divisions and may even lead to political violence.”

Before that happens, make sure you have taken the necessary steps to protect yourself and your wealth with gold and silver.  Speak with a Republic Monetary Exchange specialist about silver for personal protection and gold for wealth protection.


More Banks on the Edge!

Gee, you don’t suppose it would be a good idea to take money out of the bank and put it into gold?

Banks aren’t getting any safer!  More are getting creditworthiness downgrades; more are being put on troubled bank watch lists.

It was only a couple of weeks ago that we shared the news that leading credit rating agency Moody’s cut the credit ratings of 10 banks.  At the same time, it put 4 of the 15 largest US banks on a watchlist for possible downgrades.

Well, move over Moody’s.  Because now one of the other major credit rating agencies, S&P Global, has cut the credit rating of five banks, and cut its outlook on other banks to negative.   More details from Wall Street on Parade here.

So, it looks like the problems we saw with Silicon Valley Bank and Signature Banks last March may be just the tip of the iceberg.

It’s not just that deposits are pouring out of banks as investors seek higher and safer yields.  There is also the spreading commercial real estate problem that we have warned of.  S&P says, “Banks with material exposures to commercial real estate, especially in office loans, could see some of the greatest strains.”  

And we should not forget that Fitch just downgraded the sovereign debt of the US government as well.  In fact, Bank of America analyst Michael Harnett points out that US government debt will rise by $5.2 billion every single day for the next decade!

Ron Paul says the latest downgrade of US debt should be a wake-up call:  

The failure to take seriously the threat to the American economy caused by reckless federal spending is illustrated by the reactions to the credit rating agency Fitch’s downgrade of the US government’s credit rating. Instead of treating it as a wake-up call, government officials like current Treasury Secretary (and former Federal Reserve Chair) Janet Yellen dismissed the downgrade as “arbitrary and based on outdated data.”

The consumers are not in great shape either, at least judging by their skyrocketing credit card debt.

Troubled banks.  Troubled government.  Troubled consumers.  That’s pretty much a trifecta!

What can you do?  Steer clear of banks.  Don’t get lulled to sleep by government assurances that it will get things under control.  And don’t expect to get bailed out if you get into debt trouble.  Bailouts are for Washington’s cronies only, not for you.

You must take steps to protect yourself.  The place to begin is with silver for personal protection and gold for wealth protection.  Take advantage of today’s prices to establish a sensible gold and silver portfolio.   Speak with a Republic Monetary Exchange precious metals professional today!


The Big Short

In Stocks? Watch Out Below!

They’re lining up to warn you about the stock market!  Here’s a quick rundown:

Jeremy Grantham is as close to a bubble expert as there is on Wall Street.  His bubble calls are the stuff of legend.  And he says the US stock market is about to pop just like it did in 1929 and in 2000.

Here is the headline from Fortune:

Legendary investor Jeremy Grantham says the stock market has a 70% chance of crashing—and it could be an epic burst like the 1929 crisis.  

More in this snippet from The Motley Fool:

Grantham believes current market conditions have created a textbook setup for a bubble, and that the market has benefited from “almost perfect” conditions for roughly 10 years now. Specifically, Grantham points out that there has been a long period of economic growth, a bull market, and earnings strength.

“I’m only interested in the really great bubbles, like 1929, 2000, and 2021, [which] are the three senior bubbles in [the] U.S. stock market. We have checked off pretty well every one of the boxes,” he recently told WealthTrack.

And there is someone else whose genius we admire who is expecting a stock market calamity.  Maybe you’ve seen him portrayed in a hugely popular motion picture about the 2008 market meltdown.  Addison Wiggins provides some details:

Michael Burry of Big Short fame, played by a scruffy Christian Bale in the movie… just bet $1.6 billion on a stock market crash… sort of.

Burry placed bets that the S&P 500 would drop below 4,000 and the Nasdaq 100 would drop below 300. 

If you want to get technical, his hedge fund Scion Capital made the bets by buying put options on the $SPY, an ETF which tracks the S&P 500, and $QQQ, which tracks the top 100 stocks on the Nasdaq. 

It certainly looks like a chart that has roll over for a fall.  Burry is betting more than 90 percent of his portfolio on this position.  He is serious about it.

Along the same line, our friend Robert Kiyosaki points out that Burry isn’t the only one who thinks the stock market is way overvalued.  Warren Buffett is sitting on a pile of cash, says Kiyosaki.  On Neil Cavuto’s Fox show, Kiyosaki observed, “Buffett is on the sideline with $147 billion, his money’s in short-term Treasurys.”

“I just watch these guys waiting for the market to crash then go back in,” said the Rich Dad Poor Dad author.  “It’s a lot of money sitting on the sideline right now.” 

Meanwhile, here is a five-year gold chart.  Notice especially the triple-top.  As you can see, gold topped out in August of 2020 just north of $2,000.  It did it again in March 2022.   And for the third time, it topped out in May of this year just above $2,000.

A chart like that suggests that when gold breaks over $2,000 it will run long and hard!  Our friend market analyst Michael Shedlock points to the same triple top, saying, “Neither triple tops nor triple bottoms tend to hold. If that view is correct, gold is headed higher.”

Shedlock points out one other extremely bullish gold chart formation, the classic “Cup and Handle.”

“That is likely the prettiest cup and handle technical formations you will ever see,” he says.  “It took 10 long years for gold to get back to its 2011 high. Then we had a handle build over three years.”

A repeated theme from Shedlock is that gold tends to reflect faith in central banks.  There are few institutions as discredited today as central banks, including the Federal Reserve.  “If you have faith in central banks, sell your gold. Otherwise, I suggest hanging on to it!”


When They Run Out of Cash

Just a reminder to own gold and silver in times like these!

The sign in the bank window reads, “Due to emergency conditions and to accommodate all customers, today’s daily cash withdrawal limit is $1,000.00”

Here’s a similar sign from a British bank.  It is notifying depositors that it may want to know why they are withdrawing money and may ask for documentation.

One of the so-called “fact checkers” online disputes the authenticity of the notice limiting withdrawals.  And an American Bankers Association spokesperson says, “The safest place for your money is in a federally-insured and highly regulated bank where your accounts are secure and deposits are protected.”

We note that an influential organization like the American Bankers Association has the clout to have objected and even stopped the Federal Reserve from devaluing their customer’s deposits with inflationary practices.  We would even venture that it has a fiduciary responsibility to speak up on behalf of depositors while their money is being debauched.  

Meanwhile, we note that the banking crisis is not over yet and refer you to our blog posts on the matter including this one: Large Banks are Bleeding Deposits!  And this one:  Banking Crisis?  What Banking Crisis?


Robert Kiyosaki’s Warning Grows Louder!

Rich Dad Poor Dad author:  “America is broke!”

You don’t have to spend much time with Robert Kiyosaki, the author of the bestselling financial advice book of all time, Rich Dad Poor Dad, to be convinced that you should own gold and silver.

Now Kiyosaki’s warnings are growing louder!  

“Brace for a crash landing,” he says.  We agree and for the reasons he says.

“Don’t they know,” he asked in a recent tweet, “the stock market is up because Biden raised debt ceiling?  America’s debt is going up … so stock market going up!” he wrote. 

“America is broke,” he said, cutting to the chase. 

It’s true.  $32.658 trillion is official US debt is only part of the story, the visible part of the debtberg.  The hidden part of the US debtberg is much, much bigger.

“They’re smoking fantasy weed!”

Yahoo! Finance writes, “The author’s concern about America’s escalating debt was echoed by Fitch Ratings. Shortly after that tweet, Fitch downgraded the United States’ long-term foreign-currency issuer default rating from its highest AAA rating to AA+. The credit rating agency pointed to ‘expected fiscal deterioration over the next three years,’ a ‘high and growing general government debt burden’ and an ‘erosion of governance’ as reasons behind the decision.

Fitch’s downgrade of US debt was followed by Moody’s downgrade of ten banks with others on a watch list.

Now Fitch is warning that it may be forced to downgrade the creditworthiness of dozens of banks.

With all of that, forget a soft landing for the economy, says Kiyosaki.  “First shoe to drop. Fitch rating services downgrades U.S. credit rating from AAA to AA+. Brace for crash landing,” he tweeted. “Sorry for the bad news yet I have been warning for over a year the Fed, Treasury, big corp CEOs have smoking fantasy weed.”

As we said, you don’t have to spend long with Robert Kiyosaki to realize you much protect yourself with gold and silver!

Something’s Got to Give

On a collision course with fiscal reality!

We’ve taken the title of today’s commentary, Somethings Got to Give!, from David Stockman’s recent newsletter.

Stockman, director of the US budget under President Reagan, concludes that “Washington is asking for a thundering collision.”

We couldn’t agree more.  Most of the letter is about the Biden team depleting the nation’s strategic petroleum reserve in a naked vote-buying scheme.  Citing Bloomberg News, Stockman points out that it only took the Biden administration six months to drain the US oil supply down to a 40-year lowIt will take decades to refill it.

But Stockman is only warming up with his discussion of the strategic petroleum reserve.  Here is his treatment of Biden’s spending calamity:

During the past 12 months the U.S. government spent $6.7 trillion. That’s up 14% on a year-over-year basis. And while that’s still below the insane $7.6 trillion peak at the height of the stimmy bacchanalia in the spring of 2021, it’s still 43% above the pre-Covid level of Federal outlays of $4.8 trillion recorded in 2019.

Likewise, for fiscal year 2023 to date the U.S. federal deficit is up a staggering $900 billion to nearly $1.4 trillion. That’s because YTD revenues are down $422 billion while outlays are higher by $455 billion.

You can’t make this up. The one-time capital gains tax windfall harvested in FY 2022 is long gone, but they are still spending like drunken sailors. During the first nine months of FY 2023 receipts of $3.4 trillion covered only 71% of outlays at $4.8 trillion.

Meanwhile, Treasury Secretary Janet Yellen has been running around the world again.  Uh oh!  In India, Yellen talked about using US taxpayer resources – laundered of course through institutions the US funds like the World Bank and the IMF – to do something about the trouble foreign debtors are in.  Wait a minute!  The US cannot pay its own debts and she’s acting like Rockefeller tossing dimes to children and finding ways to funnel good money after bad?  

Yellen is not too good on her best days, but this is crazy.  Maybe there is something to that story about Yellen dining on psychedelic mushrooms in China.  Then there is the Vice President, Kamala Harris.  Among her other recent word salads, the VP artfully explained the other day that A.I. is two letters that stand for “artificial intelligence.”  And as for the President himself, he took a break from stumbling on the stairs of Air Force One to talk about his plan to build a railroad “across” the Indian Ocean. 

We don’t want to be victimized by a monetary system that is on the ropes thanks to that kind of leadership.  We prefer gold and silver, because as Stockman said, “Something’s got to give!”


Rich Dad on Shocking US Debt Downgrade

Robert Kiyosaki says Mom and Pop are in trouble!

Our friend Robert Kiyosaki warned about it, and now US sovereign debt has been downgraded by another one of the big three credit rating agencies.  

In a major development, Fitch cut the US AAA credit rating last week.  And this is just the first shoe to drop says the author of the biggest-selling personal investment book of all time, Rich Dad Poor Dad.

In this interview on Fox Business News, Kiyosaki cuts to the chase:  “Life is getting harder and harder.  Mom and Pop are in trouble!”  

As Kiyosaki says, paper money is fake.   Only gold and silver are real money.

Make plans to visit with a Republic Monetary Exchange precious metals specialist before the next shoe drops!

Watch the video here.


America’s Debt Gets Downgraded

Bad news for the U.S., good news for gold

In a major reassessment of US creditworthiness, Fitch, one of the leading credit rating agencies has downgraded the U.S. credit rating from AAA to AA+. 

Fitch based its downgrade on “expected fiscal deterioration over the next three years, and a high and growing general government debt burden.”

Fitch isn’t the first of the three leading rating agencies to downgrade US debt.  The US lost its S&P AAA rating in 2011, shortly after then-Treasury Secretary Timothy Geithner said the US would “never” lose its triple-A rating.

Underscoring the significance of the move, Treasury Secretary Janet Yellin is throwing a fit: “President Biden and I are committed to fiscal sustainability.”

Right

 “Fitch’s decision does not change what Americans, investors, and people all around the world already know: that Treasury securities remain the world’s preeminent safe and liquid asset and that the American economy is fundamentally strong,” said Yellin. 

But no matter how hard it tries, Washington can’t spin this as a good thing.

From Fitch’s statement:

“In Fitch’s view, there has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025. The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management. In addition, the government lacks a medium-term fiscal framework, unlike most peers, and has a complex budgeting process….”

The downgrade was announced on Tuesday.  On Wednesday the Treasury Department announced plans for record new borrowing.  Wolf Richter writes about the “shocker of an announcement” by the Treasury Department “that it would have to borrow $1 trillion in the quarter through September and another $852 billion in the quarter through December, on top of the $32.6 trillion the government already owes.”

It’s another leg up in what Richter calls “Debt Out the Wazoo!”

To add insult to injury, Fitch says, “Everybody who reads the newspaper knows that the United States has a very serious long-term fiscal problem.”

It’s a good point, except that newspapers don’t cover the news as they once did.  Take a look at this ironic snippet from Wall Street on Parade

There is a website where one can look at the front pages of newspapers across America on any given day to gauge the concerns of our fellow citizens. Yesterday, we checked small and medium size newspapers across the country to see if any newspaper reported the Fitch downgrade of the U.S. credit rating on its front page. Of the two dozen newspapers we sampled, we couldn’t find any mention of the credit downgrade.

The US losing its Triple A debt rating is a seismic even in the financial world.  That’s why foreign central banks want gold.  For protection against the dollar.

And that is exactly why you need to protect yourself as well with gold and silver.


Where to Store Gold and Silver

We are frequently asked by our clients where they should store their gold and silver.

It should go without saying that you will want to store your precious metals where you can get your hands on them in a crisis.  Imagine that you have been wise enough to invest in precious metals before a banking crisis, but you’ve stored your gold in a bank-safe deposit box.  

When they declare a “bank holiday,” you will probably be out of luck.

Several years ago, RME published an article about the safest methods to store your precious metals. You can visit that article here. In addition to those tried-and-true methods, we’d like to share some pointers from Substack’s John Rubino…

John Rubino has been writing about gold and the economy for a long time.  We thought we would share a few thoughts from his recent Substack newsletter on things to consider about gold storage.

Avoid the obvious. To defend against thieves you have to think like one. So imagine a person who has picked the lock on a stranger’s back door and is ransacking their house in search of something worth taking and selling. Our thief is obviously nervous and wants to be out of there ASAP. So they prioritize, starting with the highest-probability targets like master bedroom dressers and closets. Which means nothing of value should ever be stored in those places. You want hiding spots that are both counterintuitive and hard to reach. 

A floor safe. Sink a safe into the floor and cover it with floorboards and it will be very hard for thieves to find and access. That’s a lot of work, but the result is highly effective. 

Backyard burial. The “tin can in the backyard” concept is more metaphor than actual plan. In reality, you want a container that’s waterproof and otherwise impervious to the elements. This strategy is vulnerable to metal detectors and nosy neighbors who see you digging. But regular thieves will never find it. One (obviously) crucial thing: Find a place on your property that you’ll always remember and that is easy for a trusted confidant to find using your directions. 

Toe-Kick Hideaway. There’s a four-inch-tall cavity under most kitchen cabinets. Getting in there takes a bit of carpentry, but once you’ve made a toe-kick removable you’ve created a great space for high-value items. 

Old appliance. Put a junky old appliance in a crowded corner of the garage and thieves will probably overlook it. But make sure your family doesn’t throw it away.

For more, follow this link to Rubino’s Substack article.

Our final thought on the subject is this.  Of course, you will want your spouse or other family member to be able to access your gold and silver if anything happens to you.  Otherwise, the best security is not telling anyone what you have.  Or, as they said during World War II, “Loose lips sink ship.”


Honest Currencies Last; Fake Currencies Fail

This is an excerpt from Jim Clark’s important book REAL MONEY FOR FREE PEOPLE

This selection is especially relevant for these times, with recent bank failures and ongoing solvency concerns.

Because the book describes the entire American gold story in a clear and easy-to-understand way, and because it is information you need for the challenging times coming our way, we want you to have a copy absolutely free!

Just stop by Republic Monetary Exchange and let us give you a copy of REAL MONEY FOR FREE PEOPLE.

No cost.  No obligation.

Gold and silver are the only monetary assets that are not someone else’s liability. They are not dependent on someone else’s solvency, promises to perform, or honesty. Their value does not depend on the endorsement, propriety, or honesty of any State or institution. They have no counterparty risk, no risk of rule changes, nonpayment, default, or bankruptcy by individuals, companies, financial exchanges, institutions, and banks—quite apart from being insulated from the risks of the Fed’s fiat dollar as well. 

It is a wonderful thing for people’s promises to be reliable, and for institutions to be vigorous fiduciaries of their client’s interests. The modern world with all its miracles is built on the assurance that people will meet their obligations, fulfill their contracts, and respect others’ property…. 

When this environment of trust begins to fray, sophisticated civilization itself is at risk. 

Now, with the elimination of gold from our monetary system at the hands of Franklin Roosevelt and Richard Nixon, along with the abandonment of silver, the US dollar has remained unmoored, unanchored, and untied to anything real ever since. Unlike fiat currencies that have gone before, the dollar is the ultimate fiat currency. It is global in scope because it is the world’s reserve currency. At the same time, the United States is the biggest debtor in history….

By now you should have realized that central banks and fiat money are managed for the greater glory of the State and for the special advantage of the State’s cronies, and not for the benefit of the people. Inflation is the means by which the State enriches itself by subterfuge, quietly eroding the purchasing power of the currency for its own benefit. And while inflation itself is actually the State’s increase of the supply of money and credit, it is the effects of that increase—higher prices because of the currency’s failing purchasing power—that people call inflation.

The destruction of a currency’s purchasing power is evidence of the currency system’s failure. 

Today we do not have real money, a redeemable currency that is actually backed by gold and silver, a monetary system that could have served as a bulwark against the usurpations of the State. And after several generations of being under assault by the State on every front, it is safe to say that the light of liberty has dimmed and that the fires of freedom do not appear to burn brightly in the hearts of many of the American people. 

And so, the monetary system of fraudulent, legalized counterfeiting has now been allowed to reach its logical extreme and will now collapse of its unrestrained excesses and deceit.

To some, it may appear melodramatic to announce that we are at a monetary endgame. But it is clear-eyed realism that follows from the historical precedents. And from the hard accounting.

To learn more, speak with one of the Republic Monetary Exchange’s gold and silver professionals.  Get all of your questions about precious metals answered, and learn how to protect yourself, your family, and your retirement with real money, money of enduring value that can’t simply be printed.

Stop by Republic Monetary Exchange and let us give you a copy of REAL MONEY FOR FREE PEOPLE!


Shrinkflation!

Shrinkflation is everywhere these days.  That’s when retailers try to disguise price inflation by shrinking the package sizes instead of hiking the price.

One of our friends mentioned that his toothpaste tube used to be 8.2 ounces.  Now it is 5.2 ounces instead.  Of course, the new smaller tube brags that it is new and improved in some way, but the product has bragged about being new and improved for most of our lives.

The half-gallon of ice cream container is now only 1 ½ quarts.  

You’ve probably noticed the price of postage going up.  Someone joked that they had to raise prices to cover the additional cost of storing your mail for the week before they actually get around to delivering it.  

In any case, a First-Class Mail Forever stamp now costs 66 cents.  That’s up from 58 cents a year ago.  That’s a hike of more than 10 percent in a year.   In fact, just three months ago, a First-Class Mail Forever stamp cost 53 cents, so it has gone up about 5 percent in just three months.

That may be a better way to judge the real inflation rate than all the carefully massaged government indexes like the CPI, the PPI, and the PCE.

Shrinkflation is so widespread there is even a sub-Reddit for shrinkflation with 78,000 members.  Here are a couple of shrinkflation photos people have posted there:

Yes, even our beloved Costco paper towels!

Businesses have other ways of trying to conceal price increases as we have noted before.  Materials may get cheaper.  Furniture that was once made of solid wood begins to be manufactured in particle board.  If the installation of a purchase was free, now it becomes an extra charge.  Did you use it to get a two-year warranty?  It may be only a year next time.

Businesses may be hiding price increases, but prices are rising because our money is being ruined by money printing.  It buys less.  We aren’t happy that businesses are trying to conceal price increases with inflation.  Maybe they think it’s all they can do to lessen the pain, but nobody is fooled by the incredible shrinking candy bar.

The problem is the monetary system.  The authorities know as well as we do that they are cheating people, stealing from them when they depreciate the dollar.  It is a dishonorable practice that reminds us once again of H.L. Mencken’s observation that every decent man is ashamed of the government he lives under.

You need to invest in gold and silver because the government continues to erode the purchasing power of the dollar and steal from you.  

And they aren’t even close to being finished!


Nations Bring Home Their Gold

Trust in Global Financial Order Continues to Erode

With the specter of the Cold War hanging over Europe, countries like Germany that might have been caught in the crossfire choose to leave their national gold reserves in safer places like the Bank of England in London and the US with the Federal Reserve in New York.

That was then.  This is now.

Slowly those nations have now begun repatriating their gold.  Slowly is the operative word because for inexplicable reasons some of those who have asked for their gold back have had to wait for some time.  Wait without clear explanations for the holdup.

These days nations are increasingly uncomfortable with their gold being held by the US.  They are taking their gold into their own possession.  They are afraid of being victimized by US geopolitical dominance.  

There has been an explosion of US financial heavy-handedness around the world. It consists of sanctions, penalties, and asset seizures:  foreign banks have been slapped with billions of dollars in fines.  Entire nations have seen their foreign assets frozen for what they believe are arbitrary US sanctions.  

The obvious corollary for gold investors is that owning gold you don’t have in a tangible form and in your possession is not a preferred strategy.  That is why at Republic Monetary Exchange, our business is providing real, actual gold and silver to our clients.  Not paper.  Not promises to pay.  Not claims or presumed title to gold held elsewhere.   

Here is an excerpt from a must-see Reuters report on the annual Invesco Global Sovereign Asset Management Study survey about central bank and sovereign wealth fund gold repatriation:

Last year’s freezing of almost half of Russia’s $640 billion of gold and forex reserves by the West in response to the invasion of Ukraine also appears to have triggered a shift.

The survey showed a “substantial share” of central banks were concerned by the precedent that had been set. Almost 60% of respondents said it had made gold more attractive, while 68% were keeping reserves at home compared to 50% in 2020.

One central bank, quoted anonymously, said: “We did have it (gold) held in London… but now we’ve transferred it back to own country to hold as a safe haven asset and to keep it safe.”

Rod Ringrow, Invesco’s head of official institutions, who oversaw the report, said that is a broadly-held view.

“‘If it’s my gold then I want it in my country’ (has) been the mantra we have seen in the last year or so,” he said.

Invesco’s survey also found that more than 85 percent of the institutions surveyed by Invesco expect higher inflation in the coming decade.

Isn’t it time to see to it that you have real wealth – gold and silver – in your possession, instead of relying on a global monetary system that is breaking down?


Gold Treasure Discovered in Corn Field!

Civil War Era Stash Includes Rare $20 Gold Liberties!

They are calling it “The Great Kentucky Hoard!”

A Kentucky man whose name has not yet been revealed is suddenly very rich, thanks to the discovery of a lifetime.  While digging in his cornfield, he uncovered a stash of Civil War-era gold coins.

The stash consisted of more than 800 gold coins altogether.

The treasure includes 18 $20 Gold Liberties as well as $10 gold Liberties, and more than 600 US $1 gold Indians, with dates ranging from 1854 to 1862.

The National Post reports that one of the coins is an 1863 $20 Gold Liberty, a coin that has sold in the past at auction for more than $100,000. 

“This is the most insane thing ever!” said the lucky finder.

Better to have gold coins buried in your backyard than to try to negotiate the monetary turmoil ahead with unbacked, fiat paper dollars.  If you have not prepared for the dollar’s eventual demise from its current iteration, then you should consult a Republic Monetary Exchange gold and silver professional right away!


China and India Are Gold Super Consumers!

The Two Countries Make Up Nearly Half of the World’s Gold Demand!

The gold rush is on.  If you don’t see it, it is because it is taking place in Asia.  

 India and China together are gobbling up the world’s gold.   The two nations are responsible for half of the world’s total gold demand.  In fact, Asia taken as a whole is responsible for 60 percent of the world’s demand, while both China a Japan are reducing their US dollar holdings.

That is a gold rush, in our view. 

While the US has a long and foolish track record of suppressing gold ownership by its citizens, China has a different outlook.  It has liberalized gold ownership and reduced restrictions on its people.  The result is a five-fold increase in gold consumption since the 1990s.  China is today the largest gold producer in the world as well as the largest net acquirer of gold.  (India is the second largest acquirer of gold.)  If history is any guide – and it is – this means that China (and perhaps eventually India) will become more influential in the affairs of mankind.  The West, which is dis hoarding gold, will wane in influence.  

Here is a link to an October 2022 Bloomberg News article headlined, The Gold Market’s Great Migration Sends Bullion Rushing East!”  

The People’s Bank of China added to its gold reserve again in June, increasing its holdings by 23 tons.  That is the eighth consecutive month of the central bank gold growing its gold stock.  These increases are a strategic move, one that coincides with China reducing its dollar reserves held in US government bonds.  The promiscuous application of dollar sanctions and trade restrictions are making the dollar into a toxic asset in the eyes of many foreign nations.

We expect the global flight from the dollar and into gold to continue.  It is not just a sound strategy for nations, it is a wise strategy for individuals.

Your Republic Monetary Exchange gold and silver specialist is available to guide you in protecting yourself and your wealth with precious metals.

Large Banks are Bleeding Deposits!

The largest 25 US banks have lost a whopping 7.88 percent of their deposits since April 2022.

More than $920 billion has left the big banks in a little over a year.

Wall Street on Parade reports that the flight from US banks is not quite what has been described by much of the national press:

You may recall reading a burst of headlines during the banking crisis in March of this year about depositors fleeing small banks for the perceived comfort of the largest banks. Unfortunately, those headlines were never put in context or updated to reflect a broader picture….

Deposits at the smaller banks didn’t peak until December 14, 2022, reaching $5,413,667,700,000. The most current reading on June 21 was $5,170,296,000,000, a decline of 4.5 percent from the peak versus the 7.88 percent decline at the 25 largest banks. In actual dollar terms, those 4,071 banks shed just $243.37 billion versus the $920.78 billion at the 25 largest banks.

The exodus of depositors is just one crisis for the banking system.  Rising interest rates exacerbate the problem of the sinking value of the banks’ bond portfolios, as well.  And then there is the problem with their commercial real estate portfolios.

Wolf Streetwrites, “The delinquency rate of Commercial Mortgage-Backed Securities (CMBS) backed by office properties jumped to 4.5% by loan balance in June, up from 1.6% just six months ago in December 2022.”

Here’s a close look at the unfolding crisis from Wolf Street:

Giant landlords such as private equity firm Blackstone and private equity firm Brookfield – have defaulted on the mortgages and then walked away from the property. They lose the equity in the property, and the lenders then have to sell the office tower for whatever they can get.

But whatever they can get for older office towers is a lot lot less than anyone had imagined a few years ago when the CMBS were issued. The losses on the mortgages for CMBS holders are huge, such as 88% and 82% by two Class-A office towers in Houston, or even a total loss, with the proceeds of the foreclosure sale just paying for fees and expenses, which happened with the vacant 46-story former One AT&T Center in downtown St. Louis. Two class-A office towers in San Francisco sold at 70% off the pre-pandemic price estimates, though they didn’t involve mortgages. Other office towers were sold with 40% to 50% in losses.

So these older office towers create some serious investor-bloodletting.

In short, there is big trouble brewing in the banking sector, all of it driven by the Federal Reserve’s unhinged interest rate manipulations.  Never did any of the Fed authorities from Greenspan to Bernanke, from Yellen to Powell, ever give a substantial warning of the market distortions they were building into the system of falsified interest rates.  They operated as though they could distort rates and power endless malinvestments in the economy for a generation or more without consequences.  And so, year after year, the dislocations and false signals about the price of money continued.

Now the problem is much bigger than anything the FDIC can backstop.  A maturing bank crisis can only be addressed in the current fiat money structure by massive money creation by the Federal Reserve.  But it will require money printing on a scale most people can barely imagine, one that will leave the US dollar a quivering, empty husk.

The handwriting is on the wall.  A national tragedy is in the making.  You must prepare for it by owning physical gold and silver. 

Better a day early than a day late. 


Banking Crisis? What Banking Crisis?

With big banks tumbling last March – First Republic Bank, Silicon Valley Bank, Signature Bank, and Credit Suisse – people were lining up to get their money out of banks.  Many of them, foreseeing more financial and monetary stress ahead – turned to gold and silver.

It turns out, as they suspected, that like a ticking time bomb, more banks are finding themselves in deep trouble.  As Wall Street on Parade puts it, “The banking crisis has pretty much disappeared from the headlines but the smoldering remnants of the crisis are very much still with us.”  The website decided to see how much stock prices have plunged for the nation’s 15 leading banks.  This would signal the assessments of the banks’ woes by those who follow the banks most closely.

It’s not a good picture.  Wall Street on Parade reported on those performances from the end of 2021 until last week:

Among the 15 largest banks, the following five banks have performed the worst in terms of share price declines since December 31, 2021: Truist Bank (ticker TFC), Citizens Bank (CFG), U.S. Bank (USB), PNC Bank (PNC), and Bank of America (ticker BAC).

Bank of America is the second largest bank in the United States with $2.5 trillion in consolidated assets and 3,804 domestic bank branches. It has lost 37 percent of its market value (market capitalization) in a year and a half.

As uninsured depositors, those with assets above the FDIC’s $250,000 insurance cap limit, began to make withdrawals, the runs began to snowball.  $42 billion was pulled from Silicon Valley Bank in a single day.

First Republic Bank, Silicon Valley Bank, and Signature Bank were the second, third, and fourth largest bank failures in history.  And yet, as Wall Street on Parade pointed out, those banks were not even on the FDIC’s “Problem Bank List.”

The moral of this story is that the banking crisis is far from over.  The Fed continues to promise higher interest rates to come, which will exacerbate troubles for banks that have mismatched deposits and loans, or in bank speak “have borrowed short and lent long.”  

Those that began moving to gold in March were just ahead of the curve, which is far better than being behind the curve.


China Prepares to Take Taiwan!

Are we headed to “a very dark place?”  Be ready!

“It is clear as day that Xi Jinping is planning to move militaristically over Taiwan. We’re hoping it doesn’t happen. History is rhyming right now. I think we’re heading to a very dark place,” said Kyle Bass just days ago on CNBC.

Bass is the founder and chief investment officer of Hayman Capital Management.  He made half a billion dollars disregarding government economists like Alan Greenspan and Ben Bernanke.

He was also an important voice challenging the Federal Reserve’s assertion that the inflation it created was transitory.  Those are just a couple of reasons we keep track of Bass’s analysis.

Now we would like you to watch his take on the China/US standoff.  Pay attention to the correlation of naval forces he cites, and bear in mind the long supply lines the US has in the event of engagement over Taiwan, versus China already in position. 

China is already lightening up its US dollar exposure.  From more than a trillion dollars a year ago, it is down now to about $860 billion in Treasury bonds.  A kinetic war with China will see the US dollar tank and send gold prices to the moon.  

We conclude on the evidence that the Biden administration is entirely capable of getting the US into at least a crippling trade war with China.  We conclude that the Biden administration is capable of escalating its proxy war with Russia.  And we conclude that the Biden administration is capable of lurching blindly -into a two-front war, with Russia in Europe and with China in the Pacific.  

If you haven’t prepared yourself for the damage the Biden administration can inflict on this country, you are risking a lot.  Speak with a Republic Monetary Exchange gold and silver specialist today about self-preservation and wealth preservation.


Silver Demand Outpaces Supply

Powerful bullish fundamentals taking shape!

“Changes to solar panel technology are accelerating demand for silver,” reports Bloomberg News.  The result is an increasing deficit in silver while the outlook for additional new mine production is thin.

The Silver Institute, an industry association, reports that as recently as 2014 solar technology accounted for only about 5 percent of annual demand.  This year, solar is projected to amount to 14 percent of silver demand.

The Silver Institute projects total silver demand to increase by 4 percent this year, while production is expected to grow by an anemic 2 percent.

Bloomberg explains this subpar production outlook:

The trouble for silver buyers is that cranking up supply is far from easy, given the rarity of primary mines. About 80% of the supply of the metal comes from lead, zinc, copper, and gold projects, with silver as a by-product.

And in an environment where miners are already reluctant to commit to large new projects, lower margins in silver compared with other precious and industrial metals mean positive price signals aren’t enough to crank up output. Even newly approved projects could be a decade away from production.

The result is a strain on supply so significant that a study from the University of New South Wales forecasts the solar sector could exhaust between 85–98% of global silver reserves by 2050.

Speak with your Republic Monetary Exchange precious metals specialist about what this supply/demand mismatch can mean for future silver prices.


Biden Says America is Not a ‘Deadbeat’ Nation

But the record says differently!

President Joe Biden recently tweeted that America is not a deadbeat nation. 

 “We pay our bills,” Biden said in a related press conference.   “America has never defaulted on its debt.  And we never will.”

Well.  The President should be expected to know better.  He was so very wrong that he even got blasted by fact-checkers on Twitter’s Community Notes.

One linked to a story in the San Francisco Examiner headlined, “A short history of U.S. credit defaults (You didn’t know it’s happened multiple times before?)”

According to the report, “Only a few months after Congress created the dollar, the government defaulted on the new currency. Happened in 1862.

“Five months after what was then called the “Greenback” was created in 1861, President Lincoln’s Treasury Department failed to redeem them in January 1862.”

Another linked to a Mises Institute article called, “A Short History of US Credit Defaults.”  Among others, it points to defaults during Franklin Roosevelt’s administration including the Liberty Bond default of 1934.  Better known and even more outrageous was Roosevelt’s decision “to default on the whole of the domestically-held debt by refusing to redeem in gold to Americans and devaluing the dollar by 40 percent against foreign exchange.”

Another response linked to a piece in The Hill that read, “The US has never defaulted on its debt — except the four times it did.”

It cited another default in 1968 when the US government defaulted “by refusing to honor its explicit promise to redeem its silver certificate paper dollars for silver dollars. The silver certificates stated and still state on their face in a language no one could misunderstand, ‘This certifies that there has been deposited in the Treasury of the United States of America one silver dollar, payable to the bearer on demand.’ It would be hard to have a clearer promise than that.”

The same article cites the severing of the dollar’s ties to gold in 1971 defaulting on “the U.S. government’s commitment to redeem dollars held by foreign governments for gold under the Bretton Woods Agreement. Since that commitment was the lynchpin of the entire Bretton Woods system, reneging on it was the end of the system. 

It was, said President Nixon at the time, a temporary measure.  This was 52 years ago… which reminds us of Milton Friedman’s observation that nothing is as permanent as a temporary government program.

If it were only Biden who is uninformed, that would be one thing.  But we have seen a continuous flow of government officials who are utterly detached from reality.  Janet Yellen testified in Congress that, “The U.S. has never defaulted. Not once.”

President Obama was shown to be utterly clueless on national TV when asked about the size of the US national debt.  

If the American people keep sending people manifestly incapable of knowing or caring about their stewardship obligations, then maybe old H.L. Mencken was right when he said that democracy is the theory that the common people know what they want and deserve to get it good and hard.

As for us though, we prefer to be protected from inept politicians and the calamitous results of their policies.  

That’s why we invest in gold and silver.


BRICS Nations:  A New Gold Currency Ahead?

Circle August 22 -24 on your calendar.

That is when the BRICS nations gather for a key summit meeting in Johannesburg, South Africa.  

The US dollar will be in their crosshairs.  And a BRICS currency tied to gold is expected to be a part of the discussion.  It is not a coincidence that a move to re-monetize gold is on the table.  More and more of the world’s central banks have independently been moving reserves away from the dollar and into gold.  

It may be early in the development of a BRICS gold currency.  There are steps along the way.  But to be clear, an unbacked, irredeemable, made-up fiat currency like the US dollar cannot possibly compete with an honest gold currency.

The BRICS is a consortium of five nations – Brazil, Russia, India, China, and South Africa – that together are responsible for 31.5 percent of global productivity.

That means the BRICS have now surpassed the total productivity of the G7 nations consortium, which includes the US, Canada, France, Germany, Italy, Japan, and the United Kingdom.  Together the G7 is accountable for only 30 percent of total global production.

To put it poetically, you could say the BRICS are waxing, while the G7 is waning.  Here is a chart that illustrates the changing dynamics.

The BRICS have not been shy about the need for a challenge to the US dollar as a weaponized tool of US imperialism.  They represent a revolt against the economic interventionism in their internal affairs, the unilateral global military hegemony, and the regime change wars of the US.  

Other nations have similar views about the US, so the ranks of the BRICS are bound to grow.  Among the nations that have expressed an interest in affiliation with the BRICS are Egypt, Nigeria, Mexico, Iran, Indonesia, Turkey, and others.

From a recent Fortune magazine article:

The BRICS summit comes as countries across the world are confronting a changing geopolitical landscape that is challenging the traditional dominance of the West. And while the BRICS countries have been seeking to reduce their reliance on the dollar for over a decade, Western sanctions on Russia after its invasion of Ukraine have accelerated the process.

Meanwhile, rising interest rates and the recent debt-ceiling crisis in the U.S. have raised concerns among other countries about their dollar-denominated debt and the demise of the dollar should the world’s leading economy ever default.

e BRICS have called for a new global currency that can challenge the dominant role of the US dollar in the international monetary system. 

As the world seeks to reduce its dependency on the dollar, gold appears as the best, most confidence-inspiring and reliable store of value.  We will be watching the BRICS summit closely and reading between the lines of their official announcements.

When gold is remonetized, we believe its price in dollar terms will skyrocket higher.  

Be ready.


Beware the Global Digital Currency

As usual, the IMF is up to no good.

It looks like the race is on!

The race between the Federal Reserve’s Central Bank Digital Currency (CBDC) and the International Monetary Fund’s latest global monetary scheme.

We know the Biden administration and Federal Reserve are working desperately on their digital currency.  Now the Managing Director of the IMF, Kristalina Georgievahe, has announced that the multinational institution is “working hard on the concept of a global CBDC platform.”

Speaking at a conference in Morrocco, Georgievahe said the global CBDC “needs to be interoperable between countries,” noting that “if we are to be successful, CBDCs could not be fragmented national propositions.”  Urging quick action, she said, “A digital revolution is underway, greatly impacting the role of currency. Failure to act promptly will result in missed opportunities and pose risks to our future.”

For years some commentators have insisted that when the US dollar fails, plans are in place to swiftly replace it with the IMF’s “Special Drawing Rights,” a non-redeemable currency that would supposedly be backed by claims on IMF member nation assets.  None of them have been able to explain why the American people,  having been fleeced by the failure of the US fiat currency would be willing to go through the same sort of fleecing again with a multinational fiat currency of even less validity than the dollar.

Washington’s interest in CBDCs can be seen in President Biden’s March 2022 Executive Order (EO) 14067, “Ensuring Responsible Development of Digital Assets.”   The Federal Reserve has large numbers of economists plunging ahead on the CBDC issue as well.

Keeping their gaze permanently fixed on your wallet is the special activity of central banks and multinational bureaucracies.  You will not be surprised to learn that Georgievahe is a former head of the World Bank, another institution dedicated to the conveyance of taxpayer money to sketchy recipients.  Ron Paul once remarked that foreign aid is taking money from poor people in rich countries to give to rich people in poor countries!

Meanwhile, Treasury Secretary Janet Yellen has lent her mighty intellectual support to efforts to set a minimum global tax rate.  The Organization for Economic Cooperation and Development (OECD) has set its sights on a global corporate tax rate of 15 percent.  

The might of predatory multinationals is on the rise, along with designs on your freedom by Washington’s financial and monetary bureaucracies.  

We suggest you take steps to avoid being financially skinned by either one.  Boycott the looters and their currency schemes and delusions with gold and silver.

You’ll be glad you did!


Take Another Look at the National Debt

It was only a few weeks ago, on June 3, that President Biden signed the bill suspending the US national debt ceiling.  At that time the national debt was $31.4 trillion.

Now, less than three weeks later, it has climbed $700 billion.  The national debt is now $32.1 trillion.

And that is why investor Ray Dalio told Bloomberg investment conference attendees last week that we have a problem.  “We are at the beginning of a late, big-cycle debt crisis when you are producing too much debt and have a shortage of buyers,” Dalio said.

Beginning with the public debt as a percentage of GDP, here are a few graphics from the Peterson Foundation to help drive home the scale of our problem:

How long can anyone or any government continue to spend more than they earn?


They’re Coming for Your Bank Account!

A looming bank crisis is creating the perfect pretext for the forced introduction of Central Bank Digital Currencies!

That’s the conclusion of noted author and financial commentator John Rubino.

In his Substack newsletter, Rubino describes two dangerous financial trends that are converging now:

  1. “Central banks are conspiring to force us out of traditional savings and checking accounts and into central bank digital currencies (CBDCs).”
  2. “Deposits are now fleeing local and regional banks because an inverted yield curve makes it impossible for those banks to pay competitive interest rates on deposits. Put another way, there’s a shortage of dollars in the banking system, which is an existential threat for a lot of banks.”

Rubino, in turn, cites an article about Eclectica Asset Management founder Hugh Hendry, who believes that investors pulling deposits from banks may force the Fed to place limits on withdrawals.

“That could reach a crescendo where the Treasury and the Fed may have to come in and actually restrict your right as a U.S. citizen to pull money out of the U.S. banking sector,” says Hendry.  He likens the current situation scenario to 1934 when a desperate government confiscated the people’s gold.

“I would recommend you panic,” he Hendry.

According to Rubino, the crackdown “will begin with more Silicon Valley Bank-style failures, leading the government to ‘protect’ the banks by limiting depositors’ ability to pull their money out. This in turn will make banks even less attractive to depositors, leading to an acceleration of withdrawals and a surge in bank failures. Which gives the Fed its pretext.”

What should you do?  Act before the crisis hits!

“One certainty,” says Rubino, “is that in a bank run/deposit freeze/CBDC forced adoption, money will pour out of the banking system — and out of the dollar generally — and into gold and silver.”

As usual, the best advice is this:  Don’t wait until it is too late. Speak with your Republic Monetary Exchange gold and silver professional today.

Gold vs. US Debt

We have written a lot about the US national debt lately, in part because of the debate about, and the suspension of, the debt ceiling.  

Our rising debt is part of a well-worn cycle of currency destruction, one that has been enacted so many times that one would think that people would learn from it.  But they never really do.

It generally works something like this:  the government spends money it doesn’t have.  It borrows more than it can afford, more than it can pay back, and finally turns to inflation – legal counterfeiting – to pretend to meet its obligations.

Because they can’t print gold, gold goes up while the value of the currency goes down.  

This chart, courtesy of Visual Capitalist, is a graphic portrayal of the growth of US debt and the gold price from 1970 to 2033.  

We think you can see where this is headed!


New Dollar Competitor Linked to Gold?

BRICS+ Could be A Bombshell!

“The most significant development in international finance since 1971!”

That’s what bestselling author and gold commentator James Rickards is calling an event headed our way in August.  

That’s when a geopolitical shock wave will be delivered by the BRICS, an international financial consortium consisting of Brazil, Russia, India, China, and South Africa.  That represents about 40 percent of the world’s population.  

Now, with other nations seeking to join the core BRICS nations, the term “BRICS+” has been coined.  Potential additions to the currency and trade partnership, says Rickards, are “eight nations that have formally applied for membership and 17 others that have expressed interest in joining. The eight formal applicants are Algeria, Argentina, Bahrain, Egypt, Indonesia, Iran, Saudi Arabia, and the United Arab Emirates.”

“The 17 countries that have expressed interest are Afghanistan, Bangladesh, Belarus, Kazakhstan, Mexico, Nicaragua, Nigeria, Pakistan, Senegal, Sudan, Syria, Thailand, Tunisia, Turkey, Uruguay, Venezuela, and Zimbabwe.”

Rickards suggests that a new BRICS+ currency may be announced at the annual BRICS Summit Conference set for August 22 – 24 in Durban, South Africa.

Rickards:

When the new currency launch is announced in August, the currency will not fall on an empty field. It will fall into a sophisticated network of capital and communications. This network will greatly enhance its chances of success….

What’s behind this quest to ditch the dollar? In no small part the answer is U.S. weaponization of the dollar through the use of sanctions.

What makes the plan not just a major global financial development, but an actual bombshell, is Rickards’ conclusion that the plan is to link the new BRICS+ currency to gold.  And that will create a real upheaval in the global monetary markets.


Debt Out the Wazoo!

The total federal deficit in 2003 – the deficit for the entire year – under President George W. Bush was $377.6 billion dollars.

On Monday, June 5, — in a single day – the national debt increased by almost that amount, by a total of $359 billion.

Now the US national debt is more than $31.8 trillion.  That’s what you could call debt out the wazoo!  And there is a lot more where that came from.

What’s going on?

When the debt ceiling of $31.4 trillion was reached and the issue of suspending the debt ceiling was being debated in Washington, a lot of accounting tricks were put to work to keep the bills paid.  It’s as those some money was moved from the sock drawer to the underwear drawer, and from the front pocket to the back pocket.  Some bills were shuffled to lower-priority positions; they didn’t have to be paid at that moment.

Then on the first business day after President Biden signed the debt bill, the Treasury started borrowing more to pay bills that were stacking up.  And the debt jumped by almost $400 billion.

Wolf Richter at WolfStreet.com says, “And that was just the beginning, there will be more hair-raising single-day spikes of the debt over the next few days:

By some estimates, the Fed could issue a flood of Treasury bills, $800 billion to $1 trillion, rattling the markets.

Richter points out that for the first time, “the Fed’s QT [Quantitative Tightening] is happening simultaneously with the refilling of the TGA [the Treasury’s general account] and they’ll both simultaneously for the first time draw liquidity out of the market.

We’re in for some real fiscal turmoil!  How is your gold and silver position? 

Are you ready?


Jim Rogers

“Be Extremely Worried” Warns Jim Rogers

Coming Wall Street crash biggest in a lifetime!

“[In] 2008, we had a bear market because of too much debt,” says legendary investor Jim Rogers.  “Look out the window since 2008, debt everywhere has skyrocketed.”

“It’s a simple statement that the next bear market will be the worst in my lifetime because the debt has gone up by such staggering amounts in the past 14 years.”

It’s been a while since we checked in with Jim Rogers, but he is an informed and often prescient voice.   During the brutal bear market of the 1970s, the Quantum Fund, which Rogers co-founded, beat the S&P by an incredible 4,150 percent, making it one of the best-performing hedge funds ever.

Since there is no substitute for up-close and personal real-life experience, Jim Rogers has twice driven around the world, once by motorcycle, crossing primitive frontiers and backwater boundaries in search of investment opportunities.

It has been a long time – too long – since we last wrote about Jim’s outlook.  In fact, last time we did, the national debt was only $22 trillion.  Now it’s about $10 trillion higher, with the statutory debt limit being raised again.  (If nothing else, we need to be aware that things are moving fast… very fast).

Back then, Jim was saying that things in America peaked out in about the year 2000.  “Since then,” he says, “with Dubya’s $5 trillion war against Iraq… Obamacare… quantitative easing and a negative real fed funds rate for 10 years… transgenderism, the Kardashians, Lee Greenwood, trillion-dollar deficits, $22 trillion in federal debt, fake money, fake interest rates, and fake wars – it has been all downhill.”

Speaking to a group of fund managers in May, Rogers addressed the debt crisis, foreseeing trouble for both the country and the dollar: “Every country in history that’s gotten into this situation has had serious problems eventually,” the investment veteran said. “And we will, too.”

“You should be extremely worried because if you’re not, you don’t know what’s going on,” he warned. “Many countries are starting to look for alternatives to the U.S. dollar, partly because of its horrendous debt problem.”

Jim Rogers is a gold and silver investor himself.  “The best place to be when you have inflation is real assets, and real assets are commodities,” he said.


That’s A Lot of Debt!

When the government’s debt is unsustainable, buy gold!

Without the slightest regard for how the Washington debt ceiling debate has evolved by the time this commentary is published, we’d like to put the current size and scope of federal debt front and center.

That is because it is huge.  And it cannot be retired by normal, straightforward, and honest means.  It can only be contained by the expedient of inflation.  In other words, federal debt management will require a massive and ongoing devaluation of the dollar.

The US national debt clock, always worth a visit at usdebtclock.org, tracks the national debt at $31.818 trillion.  That works out to $95,016 per citizen, or more than $380,000 for a family of four.  Where are the people expected to get the money to pay that?  

They are not expected to pay for it.  It is unpayable.  

The unfunded liabilities of the US government promises it has made to people that are not funded, things like Social Security, Medicare, and veterans’ benefits, amount to an additional $187.996 trillion.  That is an additional $560,594 per citizen or $2,242,000 for a family of four.  Where are the people expected to get the money to pay that?

They are not expected to pay for it.  It is unpayable.

In other words, it doesn’t matter much what Mr. Biden, Mr. Schumer, Mr. McConnell, and Mr. McCarthy do. They won’t do what must be done.

Let us backtrack for a bit.  We said the national debt cannot be retired by normal, straightforward, and honest means.  We should have said by any such means that are politically feasible.  On the other hand, Senator Rand Paul has proposed a solution that is straightforward but is not politically feasible.  He proposes capping total spending, cutting 5 percent of the total budget every year.  

From The Hill:

Under his [Paul’s] plan, if government spending continues at its current rate, an automatic $302 billion cut would take effect in 2024 and another $241 billion cut would take effect in 2025 — amounting to a total of $545 billion in cuts over the next two years.  

Paul says his proposal would balance the budget by fiscal 2028 if the government adhered to its caps.  

It would also mandate that growth in federal outlays may at no point exceed the growth in revenue from the previous fiscal year.  

Senator Paul’s plan is not the only one.  There are other workable alternatives to bring spending into control.  None of them has the slightest chance of being enacted.  Yet if there are not real, substantial cuts in spending, the debt will have to be repudiated or inflated away.

The pain would be much less under Senator Paul’s plan.  The inflation alternative is capable of destroying the Republic and ruining the culture, or such culture as we have left.

In either case, your dollars will become worth less and less until they become worthless.  

But your gold and silver will become worth more and more.  You might say that it will become priceless in terms of dollars.


The World is Leaning on Debt!

Consumers, the US, and the rest of the world are all leaning on debt... what could possibly go wrong?

You’ve probably heard the story from long ago about the South Seas islander explaining his view of creation to the visiting missionary.

The world stands on the back of a turtle, he explained.

“Well,” ask the missionary, “what does that turtle stand on?”

“Another turtle,” explained the islander.

“And that turtle,” the missionary asked, “what does it stand on?”

“You can’t fool me,” said the islander.  “It’s turtles all the way down!”

It’s a fun story, at least for those that haven’t heard it too often.  But it’s not as fun when it is about debt.  Today, it’s the debt all the way down.

That thought occurred to us when we learned that Americans are now carrying about a trillion dollars in credit card debt.

The Hill reports that the average interest rate on a new card is 24 percent, the highest rate since the 1980s, and that the typical household has a record $10,000 in credit card debt:

If that doesn’t sound like a lot of debt, try paying it off. At $250 per month, with 24 percent interest, you’ll be making payments until 2030, and you’ll spend a total of $20,318, twice what you owed. And that assumes you never use the card again. 

“It’s hard to build wealth when you’re paying 20 percent interest every month,” said Ted Rossman, a senior industry analyst at Bankrate.com.  

The nation’s credit card debt stands at $986 billion, according to the Federal Reserve. The figure has climbed by $250 billion in two years.  

Some other estimates range higher. A WalletHub report put total card debt at $1.2 trillion at the end of 2022.

Total US consumer debt has hit a new record high of $17.05 trillion.  

Then there is government debt, the much-debated statutory debt limit of $31.4 trillion.  Total world debt is estimated to be $305 trillion.

The thing is that all that debt is balanced on a very small point of non-debt liquidity called gold.  Gold is an amazing monetary commodity, but the load as shown in this graphic portrayal called the Exeter Debt Pyramid is growing fat too top heavy.  Already it is wobbling.  There is too much debt for such a small amount of real liquidity.  

Of course, the gold will still be fine, it will continue to be money, but everything else from derivatives to government debt and paper money will come crashing down.   

And that is just one more reason to take steps to protect yourself.  Speak with a Republic Monetary Exchange gold and silver specialist today.


Let’s Ask ChatGPT What It Thinks About Gold as Money

Since people everywhere are talking about Artificial Intelligence these days, we thought we should find out if AI is actually more intelligent than the people that gave us funny money.

Turns out it is!

We asked ChatGPT, the popular artificial intelligence chatbot that came out last November,  a simple question:  Why has gold been money for thousands of years?

We found ourselves impressed with its straightforward answer.  See what you think:

The remaining text in this article was 100% generated by artificial intelligence.

Gold has been used as a form of money for thousands of years due to several unique characteristics and properties that make it desirable as a medium of exchange. Here are some reasons why gold has historically been used as money:

Rarity and Scarcity: Gold is relatively rare, which means it’s not easily found or mined in large quantities. Its scarcity gives it inherent value and makes it a limited resource, unlike fiat currencies that can be printed in unlimited amounts. This rarity adds to its appeal as a valuable medium of exchange.

Durability: Gold is highly durable and does not corrode, rust, or tarnish over time. It can withstand the test of time without losing its quality or value. This durability makes it a reliable store of wealth, allowing it to retain its purchasing power over long periods.

Divisibility: Gold is highly divisible, which means it can be divided into smaller units without losing its value. This divisibility allows for more flexibility in transactions, as smaller amounts can be exchanged for goods or services.

Uniformity: Gold is uniform in quality and purity, making it easy to determine its value. It can be measured and weighed accurately, allowing for standardized pricing and easy comparison between different quantities of gold.

Portability: Despite its relative weight and density, gold is still portable compared to other valuable commodities. It can be easily transported and stored without significant degradation, enabling it to serve as a reliable form of money.

Wide Acceptance: Gold has been widely accepted as a form of payment across different cultures and civilizations throughout history. Its universal recognition and desirability have made it a trusted medium of exchange in various regions and time periods.

Psychological and Cultural Factors: Gold has had symbolic and aesthetic appeal for human societies. Its bright color, malleability, and beauty have attracted people across cultures, enhancing its desirability as a medium of exchange. Additionally, its historical use as a status symbol and its association with wealth and power have contributed to its longstanding acceptance as money.

It’s important to note that while gold has a long history as money, the modern global financial system relies on fiat currencies that are not backed by a physical commodity like gold. However, gold still holds value as an investment, a hedge against inflation, and a store of wealth in times of economic uncertainty.

-ChatGPT

Three Reasons to Buy Gold Now!

Take it from the Swiss!

UBS, the Swiss banking giant, has a “most preferred” rating on gold.  Now, in a report entitled “Three Reasons to Buy Gold Now,” its Chief Investment Office says that it expects gold to break its all-time high later this year, and has offered three specific reasons for its forecast of higher gold prices.  

1. Central bank demand should remain robust.

“Last year marked the 13th consecutive year of net gold purchases by global central banks and the highest level of annual demand on record dating back to 1950…. We think this trend of central bank buying is likely to continue amid heightened geopolitical risks and elevated inflation. In fact, the US decision to freeze Russian foreign exchange reserves in the aftermath of the war in Ukraine may have led to a long-term impact on the behavior of central banks.”

We concur.  In a recent post, China Keeps Buying Gold, we reported that in April China added to its gold reserves for a sixth consecutive month.  Poland’s central bank added 14.8 tons of gold in April as well, its biggest addition in three years.

The National Bank of Poland’s governor, Adam Glapinski said it is in 2021 that Poland was preparing for “the most unfavorable circumstances.”

“Why does the central bank own gold?” asked Glapinski.  “Because gold will retain its value even when someone cuts off the power to the global financial system.  Of course, we do not assume that this will happen. But as the saying goes – forewarned is always insured. And the central bank is required to be prepared for even the most unfavorable circumstances.”


2. Broad US dollar weakness supports gold. 

UBS says it sees see another round of dollar weakness over the next 6–12 months.  “The direction of a weakening dollar is clear, with the US Fed having signaled a pause in its current tightening cycle after 500 basis points of rate hikes over the past 14 months…. We believe the reduction in US yield carry will continue to weigh on the greenback.”


3. Rising US recession risks may prompt safe-haven flows.

“Overall, recent data coming out of the US showed the country’s growth is slowing, with weaker-than-expected 1Q GDP, six consecutive months of contracting manufacturing activity, and the weakest consumer sentiment since November. Tighter credit conditions, evidenced by the Fed’s latest Senior Loan Officer Opinion Survey, are also likely to weigh on growth and corporate profits. Based on data since 1980, gold’s relative performance versus the S&P 500 improved significantly during US recessions.”


UBS is the world’s largest private bank.

Speak with a Republic Monetary Exchange gold and silver specialist about today’s troubled monetary system.


Another Currency Call-In

Gold, Jewelry Sales Surge in India on Central Bank’s Currency Crack-down!

The Reserve Bank of India continues its war on cash and its attempts to herd the nation’s people into the banking system.  

In a sudden move, the central bank announced that it was withdrawing 2,000-rupee notes from circulation.  The notes are equal to about $12.

The call-in is reminiscent of India’s crack-down on cash in 2016 when it withdrew 500- and 1,000-rupee notes from circulation.  That move caused inconveniences, dislocations, and upheavals across the country.  

Because it is inevitable that the US will in time experience its own currency call-in, here is a brief digest of India’s experience in 2016 when the government demonetized its widely used 500- and 1,000-rupee notes. 

Predictably the government disguised the currency call-in as a way to catch drug dealers and counterfeiters.  It did no such thing.  It was a combination of a tax grab and a means of stampeding the populous into the crony banking system.  The old bills were exchangeable for a period of weeks, after which they became worthless.  People who turned in currency were expected to be able to explain the source of their money and had their fingers marked with indelible ink so they couldn’t make subsequent exchanges.  

At the same time, the government banned all cash transactions of 300,000 rupees or more, an amount less than $5,000.   The sudden currency call-in cost millions of jobs, lost in the cash economy.  A billion people who lived in places without reliable electricity and internet access were nevertheless forced into digital banking.  It was no surprise to find angry mobs had taken to the streets.  

Now the Indian government is at it again.  Details of the current currency call-in are somewhat different than the last one.  The Hindustan Times reports that “people scrambled to buy gold and silver in bulk in bullion markets, leading to an increase in prices.”  At the same time, the government is cracking down on hawala transactions, informal non-bank, and non-reported fund transfers.

India’s government insists that this new currency call-in does not mean demonetization of the currency.

Meanwhile, the war on currency and privacy continues here in the US.  And hint:  neither privacy nor honest currency is likely to end up on top.  Make sure you have ample gold and silver in your portfolio as the crackdown continues.


China Keeps Buying Gold

Month after month…

China just keeps adding to its gold reserves.  The Peoples Bank of China acquired another 8.1 metric tons to its holdings in April.  It has now added gold reserves for six consecutive months in a row.

 

The World Gold Council reports that since November, China’s official reserves have grown by 128 tons, to a total of 2076.5 tons.

Close observers have concluded that China’s total gold holdings are much larger than what is reflected in its central bank reserves.  It is widely suspected that China keeps additional gold in substantial unreported accounts in the name of entities like the People’s Liberation Army, the Chinese Communist Party, and the Chinese Youth League.

China’s national industrial policy has prioritized gold production as well.  It is now the world’s leading gold producer.

We note as significant that China’s gold boost is occurring at the same time it is repositioning itself on the global stage in a more assertive way.  It is brokering of a detente between the Saudis and Iran is a leading example.  The proactive stance extends to trade and currency issues.  Russia, Iran, and Venezuela account for 40 percent of OPEC’s proven oil reserves.  China has managed to have each of them now selling oil to China at discounts to world market prices.

OilPrice.com reported earlier this year that “The countries of the Gulf Cooperation Council (GCC)–most notably Saudi Arabia and the UAE–account for another 40 percent of proven oil reserves, and they are increasingly cozying up to China.  The remaining 20% is also accessible to China, and China is already the largest importer of crude in the world.”

If you intended to overtake a tired and high-inflation currency on the world stage, one that has long since repudiated its promise to redeem its money in gold, and has used its currency as a means of enforcing its foreign policy mandates around the world, what would you do?

You might start by prioritizing gold production and building gold reserves for the future.  You might take advantage of the de-dollarization trend by making your own currency more inviting, more alluring.  And that is just what China is doing.

Nothing happens overnight, but the dollar’s role on the world stage is changing.  You need to consider adding to your own personal gold reserve now.  Speak with a Republic Monetary Exchange gold and silver specialist today.


A Look at the Debt Ceiling

It’s Up, Up, and Away!

Washington spends one or two trillion dollars more than it collects in taxes.  (We’d be more specific, but what are a trillion dollars between friends?)

So where does it get the difference?  Like any household whose income doesn’t keep up with its outgo, it has to borrow the difference.  (We’ve covered the government’s money-printing business many times and will save it this time for a later discussion.)

Creditors, like Mastercard and Visa, put limits on individual credit lines.  That’s when consumers realize they need to cut back.  They can’t spend beyond their income forever without unwanted consequences.

Our government doesn’t seem to believe it must ever cut back its spending meaningfully.  When Washington runs up against its statutory debt limit, it just passes another law, unilaterally raising its legal borrowing limit.

And for all the debate, the pitched drama from the media, and posturing politicians, we feel safe in predicting that the debt limit will be raised and that any compromises and concessions will not be enough to save the US from having to inflate wildly to avoid an eventual default on its debt.

For now, take a closer look at the history of the debt ceiling in this graphic from Visual Capitalist.

The Fed is the Number One Problem

We should also mention fiat currency!

“The Fed is problem No. 1 in American finance.”

So says the wickedly smart Jim Grant, the author/editor of Grant’s Interest Rate Observer.

Grant says the long-term suppression of interest rates by the Federal Reserve is the source of our problems.  “I think generally that the suppression of rates introduces all manner of distortions in the economy,” Grant said in a recent interview.  “It distorts savings. It causes people to go and reach for growth, for yields as if they were on their hands and knees with a flashlight looking under their furniture for some return on their savings.”

During Congressman Ron Paul’s presidential race years ago, he was asked who he would like to appoint to the chairmanship of the Fed.  After no doubt explaining first that there should be no Fed, Dr. Paul suggested that if Fed did remain in place, then Jim Grant would be on his list.

That was a good call!

“I think that the basic idea of buying up bonds and thereby suppressing longer-dated interest rates, in the hopes of generating rising asset prices and thereby stimulating the economy by dint of people spending the proceeds of their capital gains, this idea that the Bernanke Fed surfaced in 2010-11 I think it is a very, very dicey proposition longer term. I don’t think it works,”

We agree with Grant that the Fed is a problem that has cost the American people dearly.  It has destroyed 93 percent of the value of the dollar during its existence — by design.  We think the very existence of the Fed is an outrage and is nothing less than a huge wealth transfer machine that enriches Washington’s banking cronies.  

But we might describe the problem somewhat differently, as being the unbacked, fiat, made-up, irredeemable dollar.  We suspect Grant would argue with us.  He is, he says, “eternally bullish on gold.”

And why not?  Gold is the go-to money of the ages around the world and in every kind of financial crisis.  And we are sure in a crisis now as people are noticing.


Every Picture Tells a Story

Why the American People Must Own Gold and Silver!

Today we are going to (mostly) dispense with our own narrative and let you just see for yourself what’s going on in our economy.  These pictures will depict some of the mess we are in.  They make self-evident the need to own gold and silver as protection from an unstable monetary system.

Because he is the former US Budget Director (under President Reagan), we decided to select the following charts and some explanations from David Stockman.  His excellent newsletter is called David Stockman’s Contra Corner.

First off, a graphic of federal spending as a percentage of total US productivity (gross domestic product).  You might call federal spending off the charts:

Federal Spending Share Of GDP, 2000 to 2021

The next chart shows the way this off-the-charts federal spending was enabled by a massive explosion in the Fed’s balance sheet (the purple line, think of that as assets the Fed purchased with money in simply created out of thin air). 

The Fed’s skyrocketing balance sheet is wildly out of proportion to economic growth.  Stockman notes that since the Great Recession, “the Fed’s balance sheet grew by an absurd 17.4% per annum during the next 14 years, rising from $900 billion to a recent peak of nearly $9 trillion.”

Index of Federal Reserve Balance Sheet Versus GDP, 1953 to 2021

The next chart shows how bubbles are created.  It depicts the stock market, using the Wilshire 5000 index, depicting how it has grown completely out of proportion to productivity, and GDP.

Stockman points out that through the end of 2021, the stock market “rose by 600%, even as the GDP increased by only 66%.”

“There is simply no stable and sustainable financial universe in which stock market capitalization grows 9X faster than the aggregate national income for an extended period of time. The vast disconnect shown below, in fact, is accounted for by the rampant money-printing in the Eccles Building.”

Stockman makes clear that the prevailing system of made-up money has grossly exaggerated the wealth divide in the US, which is exactly what crony capitalism can be expected to do.

“In round number,” says Stockman, since 1989 “the top 1% gained $40 trillion of wealth over that 33-year period compared to the mere $3 trillion gain of the bottom 50%.

“In more mundane terms, there are currently 65 million households in the bottom 50%, which have an average net worth of just $56,000. This compares to the 1.2 million households in the top 1% which sport an average net worth of $38 million.

“Needless to say, there is no reason to believe that left to its own devices free market capitalism would generate this 680:1 wealth differential per household. Indeed, three decades ago—and well before the Fed went into money-printing overdrive—the per household wealth differential between the top 1% and the bottom 50% was barely half of today’s level.”

Net Worth of Top 1% Versus Bottom 90%, 1989 to 2022

That is enough for today except to say that made-up, fiat, unbacked monetary systems are highly unstable.  They remove spending discipline from the authorities, enable cronyism, and create massive wealth polarization.

On the other hand, they eventually wake people up to the government’s flimflammery.  Speak with us about protecting yourself from the creaking, swaying, toppling fiat monetary system with gold and silver.


Americans Get a Clue About Gold

Confidence in Fed at All-Time Low!

Americans prefer gold to stocks over the long term.

That’s according to a new Gallup poll.

The highest inflation in most people’s lifetimes, ever-climbing debt, and a governing class that is quite unwilling to get its spending under control have apparently had an impact on public attitudes about both gold and the Federal Reserve.

A Forbes report on the poll says that “Americans favor gold as the strongest long-term investment at the largest proportion in over a decade, a new survey found, as equities lose favor while the precious metal hovers at a near-record high.”

  • About a quarter (26%) of Americans view gold as the best investment over the long term, according to a Gallup poll conducted between April 3 and April 25 among 1,013 American adults.
  • That’s the highest faith in gold since 2012 and a nearly two-fold increase from last year.
  • It’s also the first time since 2013 more respondents have favored gold over stocks.

Earlier this month Gallup reported that 48 percent of Americans are worried about the safety of their money in the banks.  

At the same time, the public is not all buying what the Fed is selling.  Here’s a new Bloomberg headline:

JEROME POWELL FACES LOWEST PUBLIC CONFIDENCE FOR FED CHAIRMAN ON RECORD, GALLUP SAYS

Just 36% say they trust Powell to do the right thing for economy

At the recent Berkshire Hathaway shareholder meeting, Warren Buffett warned authorities to be careful.  “”It’s very hard to see how you recover once you let the genie out of the bottle and people lose faith in the currency,” he continued.

It’s “madness to just keep printing money,” Buffett said.

The Forbes article points out that gold is “up 11 percent year-to-date and just shy of its 2020 peak. Various destabilizing factors including geopolitical tensions stemming from the Russian invasion of Ukraine, the Federal Reserve’s aggressive monetary policy and the U.S. dollar’s decline are behind gold’s surge in value.  Spot prices of fellow precious metals platinum and silver are each up nearly 20 percent over the last year.”


Beware of the Twin Crashes!

Beware of the Twin Crashes: Commercial Real Estate and Bonds!

“The twin crashes in US commercial real estate and the US bond market have collided with $9 trillion uninsured deposits in the American banking system. Such deposits can vanish in an afternoon in the cyber age.”

So writes veteran British journalist Ambrose Evan-Pritchard in The Telegraph’s Economic Intelligence newsletter.

We keep reading that the failures of First Republic, Silicon Valley, and Signature banks were “idiosyncratic.”  That means that the failure was not systemic to the banking system but was limited to just those banks.

Of course, if the failure of those leading banks is a sign of things to come, then you would rush right out and buy gold and silver.  

Evans-Pritchard is not having any of that “idiosyncratic” nonsense.  It is a “dangerous evasion” he says:

Almost half of America’s 4,800 banks are already burning through their capital buffers. They may not have to mark all losses to market under US accounting rules but that does not make them solvent. Somebody will take those losses.

He cites Amit Seru, a professor at Stanford’s Graduate School of Business, who also says, “Let’s not pretend that this is just about Silicon Valley Bank and First Republic. A lot of the US banking system is potentially insolvent.”

Evans-Pritchard:

Prof Seru and a group of banking experts calculates that more than 2,315 US banks are currently sitting on assets worth less than their liabilities. The market value of their loan portfolios is $2 trillion lower than the stated book value.

These lenders include big beasts. One of the 10 most vulnerable banks is a globally systemic entity with assets of over $1 trillion. Three others are large banks. “It is not just a problem for banks under $250bn that didn’t have to pass stress tests,” he said.

Already US bank closings have produced losses of about $550 billion.  As the problems cascade through the banking industry, the FDIC will find itself inadequate to the last of providing the kind of liquidity necessary to stave off a collapse.  It is more than the Federal Reserve can handle without massive money printing.

Evans-Pritchard concludes, “The horrible truth is that the world’s superpower central bank has made such a mess of affairs that it has to pick between two poisons: either it capitulates on inflation, or it lets a banking crisis reach systemic proportions. It has chosen a banking crisis.”

You don’t have to be personally victimized by either crisis.  Insulate yourself by owning gold and silver during the difficult times coming our way.  Speak with a Republic Monetary Exchange specialist today.


The Weaponized Dollar

One more reason the US Dollar is losing market share to gold!

In the three months to the end of March, central banks added 228 tons to global reserves, the highest rate of purchases seen in a first quarter since the data series began in 2000.

CNBC, 5/5/23

How would you like to use a bank that makes you comply with policies that have nothing to do with banking?  Maybe it is crazy woke.  Or it decides to worship some weird made-up deity. Or maybe you have to agree with its political positions and vote for its candidates.  

You would probably move your account somewhere else in a jiffy.

Of course, you would. 

It is imperfect, but that is the best analogy we can come up with for the global role of the dollar.  Instead of being a neutral currency without fear of favor, the White House gets to decide what foreign nations must do.  And if they don’t comply, not only are they frozen out of the dollar economy and trade settlement systems that use the dollar, but sometimes their dollar-denominated assets are just taken from them.

Other countries, even long-standing allies, don’t like it very much.  And that is why so many nations are moving central bank holdings out of US dollars and into gold.  

That is one of the reasons that world-class billionaire hedge fund manager Stanley Druckenmiller says his only high-conviction trade is betting against the dollar.

It just makes sense.  Nobody wants their assets held hostage.  But the US dollar has been weaponized.  Elon Musk explained it in one terse tweet:

Economist Peter Earle at the American Institute for Economic Research makes the same point:  “by weaponizing dollar dominance and permitting expanding mandates to disorient US monetary policy, the dollar’s fate as the lingua franca of world commerce over the long haul may already be sealed.”

No wonder a Financial Times article reports that central banks are headed to gold now and in the future:  “An annual poll of 83 central banks, which manage a combined $7 trillion in foreign exchange assets, found that more than two-thirds of respondents thought their peers would increase their gold holdings in 2023.”

It is a trend that is well underway as the following chart illustrates.

It is not good enough to try to reign supreme over other countries.  Washington wants to wield the same power over you.  Its forthcoming Central Bank Digital Currency is an attempt to have veto power over your personal choices.  

Just as the weaponized dollar is driving people out of the dollar and to gold, the appetite of the Deep State Money Manipulators to surveille you should be enough to drive you to the privacy offered by gold.

Speak with a Republic Monetary Exchange gold and silver professional today.  He will answer all your questions and help you make a sensible move to the enduring money of the ages.


Visualizing De-Dollarization

As more countries seek alternatives to the US Dollar…

Here is the world’s most important financial megatrend in a graphic presentation.  It will make you want to own more gold and silver.

From Visual Capitalist:  The U.S. dollar has dominated global trade and capital flows over many decades.

However, many nations are looking for alternatives to the greenback to reduce their dependence on the United States.

This graphic catalogs the rise of the U.S. dollar as the dominant international reserve currency, and the recent efforts by various nations to de-dollarize and reduce their dependence on the U.S. financial system.

Gold Coin Sales “Explosive”; “Record High” Silver Demand

All it took was the closing of a few banks and another bailout of the cronies to trigger a gold and silver rush!

March saw the biggest monthly sales of American Eagle gold coins in over two years while the Buffalo gold coins hit the highest sales level since 2009.

Coin News reports:

Sales of American Eagle and Buffalo gold bullion coins from the U.S. Mint experienced an incredible rally in March, rocketing from the prior month, and far beyond last year’s sales figures from the same month. This resulted in a remarkable improvement in their first quarter totals, bringing them in line with last year’s performance…

In March, sales of American Eagle gold bullion coins surged significantly, with a total of 215,000 ounces sold — the highest monthly sales since January 2021. This marks a 277.2% increase fom February’s sales of 57,000 ounces and a 38.3% increase from March 2022’s sales of 155,500 ounces. First-quarter sales for this year totaled 435,500 ounces, a 2.1% increase from the 426,500 ounces sold during the same period last year.

Meanwhile, the Silver Institute reports record high silver demand for the year 2022:

All major silver demand categories achieved record highs in 2022, pushing total silver demand to a new high of 1.242 billion ounces (Boz) last year. Silver industrial demand rose by 5 percent, physical investment increased by 22 percent, and jewelry and silverware rose by 29 and 80 percent, respectively, leading to the total global silver demand milestone. Since 2020, the global total has increased by 38 percent as world economies recover from the pandemic…

Along with record silver demand and lower mine production, the silver market achieved its second consecutive annual structural deficit, at a significant 237.7 million ounces (Moz) last year.

The bullish conditions in both the gold and silver markets are the natural consequence of high inflation and an unbacked, irredeemable paper and digital money system.  And it looks like we are in the early and accelerating stages of long-term dollar decay. 

Get ready!


Beware the Deflating Superbubble!

Happening now – just as we warned.

The air is coming out of the Federal Reserve’s Superbubbles.  

And gold is stirring!

Tom Dyson, with Bonner Private Research, puts it in a nutshell for us:  “They blew up a gigantic wealth bubble by suppressing interest rates, printing money, bailing out bad investments, and encouraging speculation. Now that era is over. The days of free money and low consumer price inflation are finished. We’re in a new period of rising interest rates, falling valuations, and inflation volatility. It’s just getting started.”

Sound familiar?  

We’ve written about the popping of the Fed’s bubbles many times in the past.  For example, in a piece in called Bubble Spotting, we cited the world’s foremost bubble spotter Jeremy Grantham:

“There will be an enormous negative wealth effect, broader than it has ever been, compared to any other previous bubble breaking. It’s the first time we have bubbled in so many different areas – interest rates, stocks, housing, and non-energy commodities. On the way up, it gave us all a positive wealth effect, and on the way down it will retract, painfully….”

Now we are seeing the effects of bubble retraction not just in the stock and bond markets and cryptocurrencies, but in housing markets as well.  The damage is spreading to banks as we learned with Silicon Valley Bank, Signature, Silvergate, Republic, and Credit Suisse.  

The next shoe to drop is commercial real estate, with high-rise office buildings across the land in fire sales or foreclosures due in large part to work-at-home policies.  That spells more trouble for banks that hold about 45 percent of commercial real estate debt.  

Corporate bankruptcies are on the rise too, as the air comes out of the bubbles.  Here’s a CNN account:

More companies around the world defaulted on their debts in the first three months of this year than in any quarter since late 2020, when businesses were still hamstrung by restrictions to stop the spread of Covid.

In a report Tuesday, credit rating agency Moody’s said 33 of the corporations it rates defaulted on their debts in the first quarter…

Meanwhile, credit conditions are tightening throughout the economy as banks are under the spotlight:

Not to be overlooked is that the US dollar has been “bubble-ized” by the Fed as well.  Now the air is coming out of the global dollar and its companion payment system.  

We are witnesses to a historical event, but it is one we wouldn’t wish to have to experience:  the popping of a global funny money Superbubble.  It can pick up speed at any time, so we urge our friends and clients to make sure they have adequate gold and silver positions to protect their wealth and prosper as the bubbles deflate.


China Keeps Buying Gold

A lot of what China does is like an iceberg.  It’s hidden from open view below the waterline.  But one visible activity of the Chinese People’s Republic is acquiring gold.  A lot of gold.

China is up to something.  It has been on a gold-buying spree for five consecutive months now.   A growing position in gold is clearly a move toward assuring itself financial resilience when the prevailing fiat monetary calamity unfolds.

Krishan Gopaul, a World Gold Council senior market analyst, reports that China purchased an additional 18 tons of gold in March.  That brings its purchases over the last five months to 120 tons.  

China’s purchases have come even as the gold price has marched toward all-time highs.

Gold’s rising price has not taken place just against a lower dollar.  It has risen against all the world’s major currencies.

Meanwhile, exchange-traded funds (ETFs) have reversed course and begun making net increases in their gold holdings for the first time since April 2022.

And finally, apropos of nothing in particular, we’d like to end this commentary with the most interesting quote of the last few weeks, this one from newsletter writer Bill Bonner:

“No matter how much life insurance you buy, you will still die.  And no matter how much money the Fed ‘prints,’ it will still go broke.”


Central Bank Digital Currencies on Fast Track

When this happens, you will wish you owned gold.

We are encouraged that more and more people we talk to are aware of the freedom and prosperity destroying properties of Central Bank Digital Currencies (CBDC).  Unfortunately, we must report that these digital, Deep State, total surveillance monetary substitutes are headed our way on a fast track.

You may remember the truckers in Canada during the Covid lockdown protests in Ottawa.  The freezing of their financial assets was only the beginning.  

The latest development on the fiat, digital, fake-money front involves the International Monetary Fund’s plunge into CBDCs.  It is hard enough to keep an eye on and pry freedom-hating, power-worshipping politicians out of office in one national government, but it will become an insurmountable problem if governance becomes globalized.   It is bad enough when your nation-state attempts to corral you into a complete control currency, but it is far worse if such a currency is globalized.  Then there will be no place to go, no place to turn that is outside the system.

But the people’s interest notwithstanding, all the multinational institutions – the World Bank, the IMF, and the Bank for International Settlements – appear to be pushing CBDCs.

In addition to CBDCs’ power as a tool of social control, they represent totalitarian economic and financial power, enabling the authorities to impose top-down fraudulent and misleading interest rate schemes, undebated and unstoppable taxes, and currency devaluations.

Here is a news release about an announcement made last week:

WASHINGTON, April 10, 2023- Today, at the International Monetary Fund (IMF) Spring Meetings 2023, the Digital Currency Monetary Authority (DCMA) announced their official launch of an international central bank digital currency (CBDC) that strengthens the monetary sovereignty of participating central banks and complies with the recent crypto assets policy recommendations proposed by the IMF.

PRNewswire

Our thanks to Michal Snyder at the Economic Collapse Blog for bringing this news to our attention.  Snyder writes:

As the press release quoted above indicates, this new “Universal Monetary Unit” was created by the Digital Currency Monetary Authority.

So who in the world is the Digital Currency Monetary Authority?

Honestly, I had no idea until I started doing research for this article.

The press release says that the organization consists of “sovereign states, central banks, commercial and retail banks, and other financial institutions”…

We recommend reading Snyder’s article at the above link.  Meanwhile, be aware that when the authorities begin the wholesale restructuring of a currency system, changing denominations, convertibility, redeemability, and planning currency call-ins, it is because currency failure is in the offing.  

So while the Deep State Money Manipulators are intent on stampeding the people into the universal control of CBDCs, their own central banks, are acquiring gold at record rates.  

Of course, they are.


Why Americans are Broke

Hint: It’s Because of the Money!

Doesn’t it feel like we are seeing stories like this more and more often?  58 percent of Americans are living paycheck to paycheck according to a CNBC poll.  

The people have no savings.  It’s a mystery why this should be a mystery.  It happens because Washington clearly is at war with savers.  It’s a pretty old and reliable rule of thumb:  if you penalize something, you can generally expect to get less of it.  And… the state sure does penalize saving!

You know it does, because every dollar you save loses purchasing power hand over fist.  By design.  

You can think of inflation as rising prices, and you would end up befuddled.  But if you learn to see inflation for what it is, a decrease in the dollar’s purchasing power, then you’ll understand that the American people are being punished for saving.  It’s because of inflation.

Imagine you locked $100 dollars up in the bank for a year.  When you take the money out to spend it, you will discover that thanks to the deep-state money manipulators and their money printing, your dollar buys less.

Exactly!  Then why save if it makes you a guaranteed loser? 

Here’s a chart we borrowed from David Stockman.  It shows in green the declining purchasing power of the dollar since 2000.  Down, down, down.  

Then why save dollars?

The other lines show the increase in consumer prices over the same period.  The overall CPI is shown in blue.  The red line is the rising index of food prices.  The purple line shows the increasing price of energy.  Up, up, up.

So perhaps we should understand when we learn the people have no savings it is because the waning purchasing power of the US dollar disincentivizes saving.

In a gold based monetary system, people are very likely to be saving.  Because gold is good money.  As we like to say, they can’t print more gold.  

Gold investors know a thing or two about wealth preservation.  To learn more, speak with a Republic Monetary Exchange gold and silver specialist today.


When the Government Stole the People’s Gold!

How the U.S. ended the Gold Standard!

April 5 was the 90th anniversary of a day that this present generation of Americans should remember:  the day the government stole the people’s gold.

Here’s a description of the event from Jim Clark’s important book REAL MONEY FOR FREE PEOPLE:  The American Gold Story.

Franklin Roosevelt was elected president in a landslide on November 8, 1932. He was inaugurated on March 4, 1933.

On March 6, the new president ordered a nationwide “bank holiday.” During the closure, banks were forbidden to pay out any gold or engage in foreign exchange. Four days later, on March 10, Roosevelt issued another order extending the gold and foreign exchange prohibitions, except for those who had obtained a special government license.

On April 5, the President issued yet another decree, this one outlawing  “hoarding,” and confiscating the American people’s gold. Among the limited exceptions to Executive Order 6102 was gold for industrial purposes, art, and rare-coin collections. Otherwise, the American people were mostly forbidden to own monetary gold. They were ordered to surrender gold coins, gold bullion, and gold certificates to the Federal Reserve at the prevailing price of $20.67 an ounce (where it had been for a century) “under penalty of $10,000 fine or ten years’ imprisonment or both.”

The order began by invoking authority under law, including the Trading with the Enemy Act of 1917. America was not at war at the time, so there was no enemy as defined by the Constitution (Article 1, Section gives Congress the sole power to declare war, America’s last eighty years of undeclared wars notwithstanding; there is no means other than a war declaration for the designation of an enemy. That is an important protection of the people, as it prohibits politicians from unilaterally and promiscuously declaring “enemies.”) Because the Trading with the Enemies Act only empowered the president to restrict trade with its enemies in times of war, the administration had already had Congress extend that authority to peacetime with its Emergency Banking Act, which was passed a few days after Roosevelt’s inauguration.

The executive order then proclaimed a national emergency: 

… I, Franklin D. Roosevelt, President of the United States of America, do declare that said national emergency still continues to exist and pursuant to said section do hereby prohibit the hoarding of gold coin, gold bullion, and gold certificates within the continental United States by individuals, partnerships, associations and corporations.

It concluded by prescribing penalties:

Whoever willfully violates any provision of this Executive Order or of these regulations or of any rule, regulation or license issued thereunder may be fined not more than $10,000, or, if a natural person, may be imprisoned for not more than ten years, or both; and any officer, director, or agent of any corporation who knowingly participates in any such violation may be punished by a like fine, imprisonment, or both.

On April 18, Roosevelt halted the export of gold. A farm relief bill passed on May 12 included an amendment that allowed the president to change the dollar-gold price.

Congress got into the act on June 5 with a resolution that abrogated both government and private gold contacts. It is worth lingering on this for a moment because the move was a frontal assault on the right to contract. Seeking to protect themselves from a long history of governmental monetary usurpations and abuse, many citizens sought the assurance of entering contracts that specified the party’s obligations in terms of specified weights of gold instead of just dollar amounts. As long as $20.67 remained the gold price, contracts could still be settled in the convenience of dollars without one party being fleeced by receiving payment in dollars of reduced value. But the new measure nullified those agreements, allowing debtors including the federal government to ignore the obligations, and pay creditors in cheaper, devalued dollars only. It was a windfall not just for private debtors, but for the federal government. The result was that creditors who had gold contracts were swindled by $3 billion, about $78.5 billion in today’s dollars. Conscientious individuals who had taken measures that were both prudent and common at the time were forced to accept payment in the new and capriciously established value of the dollar.

The dollar has never been the same since.  And if you think that was a calamitous day for American freedom and prosperity, wait until Washington rolls out its new Central Bank Digital Currency.   

That is coming.  Protect yourself while you can with gold and silver.

REAL MONEY FOR FREE PEOPLE tells the entire American gold story in a clear and easy-to-understand way!  And because it is information you need for the challenging times coming our way, we want you to have a copy absolutely free!

Just stop by Republic Monetary Exchange and let us give you a copy of REAL MONEY FOR FREE PEOPLE!

No cost.  No obligation.


Better Watch This!

We are frankly flabbergasted when we see someone, anyone, on national television who can speak knowingly about our current American economic mess.

We remember not too awfully long ago watching Bill O’Reilly of Fox News ask on camera “Who is this guy Keynes that everybody is talking about”  

O’Really?  O’Reilly spent years bloviating (his word, not ours) about economic policies and programs, candidates and officials, and yet had no clue about the reigning economic policy of the US?  

Well, John Maynard Keynes is the man most identified with the spend-our-way-to-prosperity economics that has governed Washington, under Republicans and Democrats alike, for decades.  He is the godfather of mainline, bipartisan fiscal and monetary policy consensus, the one that has the country deeply in debt with high inflation, and a currency that is losing its global preeminence.

That’s why we are in so much trouble.  Because it turns out that a nation can’t actually spend its way to prosperity any more than you can as a householder.

But now we admit ourselves impressed with Tucker Carlson’s opening monolog on his Fox News show on Wednesday evening, April 4.

Our readers will find it all familiar since we have ceaselessly tried to point out the consequences of the way sanctions have become a substitute for foreign policy in Washington.  And pointing out that we are cutting our own throats and undermining the dollar’s role as a dependable global currency.  We have called this the most important monetary megatrend of our times and a powerful reason to own gold.

But let us step aside and let Tucker Carlson explain what is going on with the dollar and the US economy:


Step One: Get Gold

The Panic is Just the Beginning

Gold expert and the author of the best-seller Currency Wars, Jim Rickards, has written a detailed piece for The Daily Reckoning about recessions and financial crises.  They are not, he points out, the same thing.

“Recessions have much in common but financial crises tend to be idiosyncratic and unpredictable,” he says.  

“Existential financial crises really are rare; only two in the past fifty years,” says Rickards, while the combination of the two, recessions and a real financial crisis are extremely rare.

So where are we today?

Citing “powerful” evidence including contracting trade, declining industrial output, and rising interest rates, Rickards says that we are already in a recession.  

As for the existential financial crisis, Rickards looks to Silicon Valley Bank, Silvergate, Credit Suisse, and others, a total of 5 bank failures in 11 days.  “Is the crisis over? Has the Fed done enough to reassure depositors that the system is sound? Has the panic subsided?”

“The answer is, no. The panic is just getting started.”

We agree.   Rising interest rates have slammed the value of bond portfolios at banks, insurance companies, and elsewhere.  But that is not all.  The cost of higher interest rates on US government debt is already showing up, as this chart makes clear.

We think Rickards piece on recessions and serious financial panics, at the above link, is well worth the read.  He concludes that “we may not be able to prevent the crisis, but we can see it coming and prepare accordingly to preserve wealth. Step One is to get gold. That will see you through the storm.”

See us at Republic Monetary Exchange about Step One.


When Gold Outpaces Currency Failure

Gold moves up two quarters in a row!

Hard assets- gold and silver specifically- are the foremost means of protecting wealth in times of inflation. 

But don’t expect gold and silver prices to just compensate for or merely offset the loss of the currency’s purchasing power.  They may do so for a while, but when the realization begins to spread that a financial or currency crisis is developing, gold and silver can far offset the rate of the currency’s loss of value.  Then they skyrocket!

It is reasonable to expect that something like that can happen at almost any time.  We began to see signs of it during March with its wave of bank closures.  They produced a rush of precious metals business at Republic Monetary Exchange from our farsighted friends and clients.  But for all the increased activity, it is nothing like the flood that we may awaken to one day not too far down the road.  

The array of possible triggering events for that day is huge, prospects that we have detailed in these commentaries.  It may be bank holidays, the sudden implementation of a new central bank digital currency, the eruption of a catastrophic war, the widespread outbreak of civil disorder, or the dumping of US dollar positions by foreign nations.  Anyone who follows the news knows that each one of these is growing disturbingly likely.

Although the fallout from the failure of Silicon Valley Bank, Signature Bank, and Credit Suisse is nothing compared to the generalized bank holiday that may be in our future, it is worth noting that gold has climbed for two consecutive quarters, gaining more than 19 percent in that time.

Invest now and avoid the rush!


How Bad is the Banking Crisis?

If only there were a dependable form of money!

We have taken the title for this commentary from a March 20 article published by Market Insider.  

It begins this way:

You know something is wrong when six big central banks from around the world decide to join hands in order to reassure financial markets. That too on a Sunday night….

So, you might be wondering: Just how bad is the banking crisis?

In less than two weeks, three US banks, Silvergate, SVB, and Signature Bank, and a big global lender like Credit Suisse have collapsed, bringing back fears of a full-blown financial crisis.

That sums it up except for pointing out that the Federal Reserve also raised interest rates by another 25 basis points after the crisis hit.

So, the central banks are trying to deal with failing banks and generationally high inflation at the same time.  Dan Denning with Bonner Private Research says that trying to save the banks while also fighting inflation “is like spinning plates on sticks…while jumping up and down on a trampoline…that’s bolted to a roller coaster.”

We are too busy helping our clients acquire physical gold and silver during this crisis to spend a lot of time examining bank balance sheets ourselves.  But thanks to Wall Street on Parade, here is a look at the uninsured deposits of the four Wall Street megabanks:

As of December 31, 2022, Silicon Valley Bank had $175 billion in deposits. On the same date, Signature Bank held $88.6 billion in deposits. Now compare that to the whales on Wall Street: As of December 31, 2022, this is where deposits stood at the four largest banks in the U.S. – all of which also have large risk exposure from their extensive trading operations on Wall Street: 

JPMorgan Chase Bank N.A. held $2.015 trillion in deposits in domestic offices, of which $1.058 trillion were uninsured.

Bank of America held $1.9 trillion in deposits in domestic offices, of which $909.26 billion were uninsured.

Wells Fargo held $1.4 trillion in deposits in domestic offices, of which $721.1 billion were uninsured.

Citibank N.A. (parent, Citigroup) held $777 billion in deposits in domestic offices, of which $598.2 billion was uninsured. But…wait for it…Citibank also held a staggering $622.607 billion in deposits in foreign offices – of which, potentially, nothing was insured according to current law and rulemaking

That would bring total deposits at Citibank in both domestic and foreign offices to $1.4 trillion with potentially only $178.8 billion FDIC insured – or 13 percent. 

There is a lot of exposure there.  Place that against the background of $300 trillion dollars of total global debt, some 3 ½ times total global production.  And then there are derivatives, each one relying on one below it which in turn is relying on the one below it, which in turn relies upon…  All the way down.

Well, you get the picture.

If there were only someplace you could turn, an investment that doesn’t rely on someone else’s promise or performance.  An enduring form of money that isn’t dependent on a counterparty or a criminally corrupt government.  A haven of wealth that has never declared bankruptcy.  One that can’t just be printed digitally or otherwise.  Something that has stood the test of time, not just for a few years, but for thousands of years.  If only… 

If there were, we might name it “Gold.”


Dollar Doom!

Now it is not just us saying it…

We don’t want to try to count how many times we have described de-dollarization, the world’s flight from the US dollar global reserve system, as the number one financial megatrend of our time.  

It is a powerful case for owning gold.

Now we want to let someone else say it.  This is a recent interview with Monica Crowley on Fox News about the dollar’s changing role.  Crowley, a former Assistant Secretary for Public Affairs for the U.S. Department of the Treasury, is mostly an establishment figure.  That is why we want you to hear her concern about the dollar.  By the time establishment and Washington statists concede the problem, describing how catastrophic this change will be, it is pretty late in the game.


Are You Prepared for More Bank Trouble?

You’re not prepared if you don’t own gold and silver

Silicon Valley Bank.  Signature Bank.  First Republic Bank.  Credit Suisse. 

Now we’re hearing rumors of deep trouble at German banking behemoth: Deutsche Bank.  That comes as no surprise to us.  We were writing about Deutsche Bank’s troubles last year, HERE and HERE.

How many more are there like the foregoing?  No one knows.  Federal Reserve Chairman Jerome Powell insisted last week that SVB was a one-off, an isolated event, and not something systemic.

We call balderdash (or something stronger) on that!

Let’s have David Stockman explain the basics.  Between February 2022 and the interim rate peak in October, he tells us, yields on 30-year mortgages and 10-year US treasuries doubled in a matter of months.

Well, of course, they did.  The Fed was embarking on its rate hike program.  Stockman details what happened next:

That caused bond prices to fall sharply and the resulting level of unrealized losses on fixed income securities held by the banking system to literally explode. That’s just freshman bond math, and should have been on the dashboard of everyone who inhabits the Eccles Building, save perhaps for the janitors.

… And then in absolute and utterly predictable lock step with the Fed’s rate raising campaign and the resulting soaring bond yields, impending trouble at the OK corral literally screamed out from SVB’s financial statements. By July last year it was already evident that unrealized losses of $14.2 billion amounted to nearly all of the company’s book equity. And besides that, it also had $150 billion of uninsured and potentially flighty deposits.

Yet these dunderheads spent the weekend wondering what happened?

Yet these dunderheads are also now telling us that SVB, which accounted for just 2.5% of the unrealized losses in the banking system at year-end, was some kind of aberration. And that the rest of the system is sound and healthy.

Well, if they couldn’t see the sequence below as it happened, how in the world do they know what is happening just below the surface in today highly fragile financial system, freighted-down with unprecedented levels of debt…?

Ron Paul says that the new wave of bank failures along with foreign nations ending the dollar’s world reserve currency status are indications that the US economy is either in or on the verge of another serious Fed-caused recession. It looks like “America’s disastrous experiment with fiat money” is coming to an end, he says.

That appears to be the case.  And if it is so, there is no better monetary protection than gold and silver.

As for Powell’s assertion that Silicon Valley Bank’s failure was an outlier, it reminds us of his claim that America’s resurgence of inflation was merely transitory.  That was two years ago.


Gold for the Uncertain Future

Hasn’t it always been part of the American promise, the American Dream, that people were always confident that their children would lead lives that were better than their own?

All that has been thrown into reverse.  Of course, the fake money system is largely to blame.  It’s hard to see how anyone can miss the corollary between sound money and prosperity, but it shines forth clearly in one historical era after another.

Fake money coincides with deteriorating life circumstances.   

Now, to no one’s surprise, a new poll shows American confidence in improved circumstances for the next generation is falling.  A new Wall Street Journal-NORC Poll shows growing skepticism about the future.  Economic pessimism is growing, the perceived value of a college degree is fading, and we are experiencing record-low levels of overall happiness.

Furthermore, four out of five survey respondents rate the economy as not so good or poor.  Almost half think it will get even worse in the next year.  

It is not widely known, but a country built on a currency like the dollar, one that is always in decline, changes people’s time horizons.  It affects their saving habits, their industriousness, and their willingness to work to provide for a better future.

But economic pessimism is not the only problem. Our life spans are shrinking, too.  And don’t let the authorities blame it all on Covid, either.  Our lifespans had been mostly increasing until 2015.  Now that is over.  

One more thing.  IQs are falling, too.  Americans, we read, are getting stupider.

Now, what does this have to do with protecting yourself and your family with gold?  Only this.  Prosperous and free people live longer.  Their nutrition and hygiene are better, as is their healthcare.  And it seems self-evident that well-nourished and prosperous people with adequate health care will be smarter.  We know that schools with parents who value education perform better than schools with parents who don’t.  Part of that has to do with income.  Subsistence earners often don’t have the resources or the know-how to role model educational appreciation and higher IQs for their children.

Less hope for the future,  receding longevity, and falling intelligence.  It’s pretty grim.  The best advice we know of is to insulate yourself from the failures of a declining culture.  And the place to begin is with gold, the money of prosperous civilizations.  Its time horizons are healthy and long, unlike the Federal Reserve dollar.

In times of civilizational decline, people turn to gold to avoid being victimized by a state currency that is also in decline.  Like ours.


Janet Yellen

Is the U.S. Banking System Sound?

“Janet Yellen is one continuous anti-prosperity horror show!”

That’s former US budget director David Stockman’s take on the United States Secretary of the Treasury Secretary.  

It’s hard not to agree.  

Yellen should by now be famous for her long insistence that US inflation was “transitory.”  We are willing to acknowledge that anyone can make a mistake, but Yellen has made a career out of it.  And yet Presidents Obama and Biden appointed her to head the Federal Reserve and the US Treasury, respectively.

Is this the best the United States of America can do?

Don’t answer that!

Here is an account of Yellen insisting in 2017 that there wouldn’t be another financial crisis in our lifetimes:

That kind of cluelessness should be enough to scare the daylights out of you.  Here’s a snippet from ZeroHedge which noted that Yellen has altered a previous statement in which she maintained that the banks are safe.  It must have been obvious that Yellen was protesting too much, and that her track record when she does so is dismal:

Deleted paragraph from March 22:

“As I said last week, the US banking system is sound. The federal government’s recent actions have demonstrated our resolute commitment to take the necessary steps to ensure that depositors’ savings remain safe.”

New paragraph on March 23:

“As I have said, we have used important tools to act quickly to prevent contagion. And they are tools we could use again. The strong actions we have taken ensure that Americans’ deposits are safe. Certainly, we would be prepared to take additional actions if warranted.

But she removed the “US banking system is sound”, sparking total chaos.

And here is Stockman’s dead-on description of the bailout of the crony-connected Silicon Valley Bank and the consequences:

Nonetheless, Janet Yellen and her fellow Washington clowns got themselves warmed-up last week by bailing-out $155 billion of uninsured deposits at SVB—deposits that had been wantonly put in harm’s way by reckless management on a stock-pumping joy ride.

To wit, between 2020 and 2021 SVB’s assets nearly doubled from $115 billion to $211 billion, while the HTM (securities held to maturity) portion of that balance sheet literally exploded from $17 billion to $98 billion. And more than 95% of this massive HTM book had maturities of 10-years or more!

Here’s the thing. These fools massively mismatched their book even without the safeguard of deposit insurance. What in the world is going to happen when deposits are 100% insured?

… So if nothing else, we need deposit flight and bank failures to purge the bad actors, incompetents and reckless cowboys from the banking industry. Yet the de facto policy is now that no depositor can lose money, no bank can fail and no one’s resume should be besmirched.

Whatever that is, it’s not market-based capitalism. And it’s going to lead to massive waste and malinvestment, not bank-fueled prosperity.

We concur.  Yellen and the rest of the Deep State Money Manipulators are an anti-prosperity – and we might add, a currency destroying – horror show.

Time to buy more gold!


Bank Crisis Deepens By the Day

Sampling Notable Observations During the Calamity…

A quick sampling of opinions about the fast-developing global bank crisis, beginning with tweets from our friend Robert Kiyosaki:

“Biden says bailout of SVB Silicon Valley Bank will not costs taxpayers anything. What is he smoking?”

“BAIL OUTS begin. More fake money to invade sick economy. Still recommend same response. Buy more G[Gold], S[Silver], BC. Take care. Crash landing ahead.”

Robert Kioysaki

More from the author of Rich Dad Poor Dad here.

As usual, the Washington bailout of SVB and Silvergate Bank is a windfall for Washington’s cronies, and will destroy the heartland’s banks as you can see in this congressional questioning of the clueless Treasury secretary Janet Yellen:

There is more pain ahead for Wall Street.  Michael Harnett, Bank of America’s chief investment strategist, warned Friday about a deep fall in stock prices.  The market could fall all the way to its October lows, about nine percent from here.

“Stock lows to be tested one last time in the coming months [due to] no equity capitulation and market too greedy for rate cuts – not fearful enough of a recession.”

Michael Harnett

Jeffrey Gundlach, the widely followed bond market icon says Fed inflation is back in play:

“The Fed is broke. The Fed’s balance sheet is negative $1.1 trillion. There’s nothing they can do to fight any problems except for printing money.

They have nothing left. The Fed used to send money to Treasury. Now Treasury sends money to the Fed.

We’re at this point in time where we don’t have any road left to kick the can on our mismanagement of finances and monetary policy.”

Jeffrey Gundlach

“I think gold is a good long-term hold,” says Gundlach, “Gold and other real assets with true value.”

The Federal Reserve’s policies have made clear once again that “there is no such thing as a free lunch.”  Its major policies initiatives all have major costs, from years of unconscionable money-printing and interest rate repression to the past year of interest rate hikes.  

The gold market, which spent February concerned with just how high the Federal Reserve would raise interest rates, now no longer many cares.  With the damage, Fed policies have done to banks and other bond portfolios now out in the open, gold appears to be making up for lost time.

We have warned repeatedly that US policies, from the Fed’s monetary mismanagement to a sanctions-driven US foreign policy, are going to mean the end of the US dollar’s special privilege, the global dollar reserve privilege.  Now billionaire Sam Zell, the chairman of Equity Group Investments, says we are becoming the Weimar Republic, referring to one of the modern industrialized world’s most famous and destructive inflation episodes.  Losing the dollar’s reserve currency status will mean a 20-25 percent reduction in our standard of living, says Zell.  

We at Republic Monetary Exchange are dedicated to helping as many of our friends and clients as possible take refuge from this widening calamity.  No one needs any encouragement to protect their assets from banks, so we are experiencing record volume and your precious metals professionals are returning calls just as quickly as possible.  Thanks for your understanding during this demanding time.


Getting Kids on the Path to Smart Investing

Teach your children and grandchildren well about gold!

Many of Republic Monetary Exchange’s friends and clients add a little something extra to their gold and silver investments to have something to give their kids and grandkids.  

That makes a lot of sense, according to the leading hedge fund manager of all time.  

Most of what follows is from an article on Yahoo! Finance about Ray Dalio, who does the same thing.

Looking for the perfect way to get your kids or grandkids on the path of smart investing

Ray Dalio, the legendary hedge fund manager, has shared that he gives his kids and grandkids gold coins as gifts to start them on their investment journey. Dalio founded Bridgewater Associates, the largest hedge fund in the world by a mile.

According to Dalio, this lustrous metal is the best way to get kids excited about investing. He gives his grandkids a gold coin every holiday and birthday celebration.

Gold coins are an excellent choice for gifts because they are physical assets that kids can hold and appreciate. Unlike stocks or mutual funds, gold coins are tangible, making it easier for children to grasp the concept of investing. The unique beauty and luster of gold only help to capture their interest.

Dalio’s approach reflects a growing trend among parents and grandparents who want to pass on financial knowledge and skills to the next generation. Giving tangible assets like gold coins can be a great way to introduce children to the concept of investing.

By giving the gift of investing, they can set children up for financial success and teach them important life skills that are often not taught in schools.

Another great feature of gold is that it’s essentially timeless. Gold has been highly valued by people from all walks of life for thousands of years, and that doesn’t seem to be changing any time soon. As an investment, gold has also historically been a safe haven during times of economic uncertainty. This factor makes it one of the most popular long-term investments.

Ray Dalio

That is well said.  For a couple of generations now, people have forgotten what gives money value.  Why do people accept little pieces of paper in exchange for real things?  They have forgotten the paper money was supposed to be a claim check or a warehouse receipt for gold and silver.  

Over time people have become conditioned to think that paper is real money.  But all that is beginning to change.  With the failure of banks and high inflation, people are beginning to remember what they have forgotten:  that gold and silver are real money.  And unbacked paper and made-up digital dollars are fake money.

So do what the world’s leading hedge fund guy, Ray Dalio, does, and then teach your children.

SVB (Silicon Valley Bust!)

Gold Surges as Banks Tumble!

The best place to start a discussion about bank troubles is to point out that the financial establishment has been wrong about virtually everything.  

Federal Reserve chairman Powell testified before congress last week.  You would have walked away from his testimony thinking everything looked just fine and without any concern about bank solvency.

Days later, Powell and others gathered to figure out how to save the teetering banking system.

That should not surprise you.  A year ago, the Fed thought inflation was transient.  Now, a year later the Consumer Price Index in Phoenix where we live is rolling along at an 8.5 percent annual rate.

Silicon Valley Bank went under just 14 days after the Big Four accounting firm KMPG gave the bank a clean bill of health.

KMPG signed off on its audit of Signature Bank just a couple of weeks ago, too.  Eleven days later Signature Bank collapsed.

The accounting firm should be embarrassed into next year, but it seems brazen instead.  Here is its statement:  “It’s important to recognize that audit opinions, which only address the financial statements and internal controls of the business, are based on audit evidence available up to and at the date of the opinion.” 

We guess that it is too much to ask them to notice bond portfolios that are billions of dollars upside down.

In any event, conditions are grim enough in the banking industry that Moody’s Investor Services has now downgraded the entire banking system to “negative.”

As for Treasury secretary Janet Yellen this week: 

 “I can reassure the members of the committee that our banking system remains sound and that Americans can feel confident that their deposits will be there when they need them.”

Right.  That is the same Janet Yellen who announced a few years ago that we wouldn’t have another financial crisis in our lifetimes.

Meanwhile, somebody named “Tim” has now been put in charge of the quivering hulk that once was Silicon Valley Bank.  Tim has alerted the bank’s client that there is no place safer than SVB.  Here’s his tweet to clients: 

So, the Fed meets in a couple of days to figure out what to do next.   They will announce their interest rate plans on March 22.  As usual, instead of solving anything they will try to kick the problem down the road for a while longer.  

We have a lot more financial crises ahead of us.

As usual during times like this, gold and silver are the place to be.  Gold and silver never declare bankruptcy!

We urge you to speak with your Republic Monetary Exchange gold and silver professional as soon as possible.  Our phone traffic is high, and we are very busy as you can imagine, but we value our friends and clients greatly and will get back to you right away.


Bank Trouble!

Special Alert Direct From Rich Dad Poor Dad’s Robert Kiyosaki!

My friend Robert Kiyosaki asked me to make sure everybody sees his Red Alert below.  Thanks, Robert, for sharing this crucial information with our friends and clients!

– Jim Clark 

Bank dominos are falling, just as I have been warning you!  Silvergate Bank was first on Thursday.  Silicon Valley Bank was shot down on Friday.  That’s the largest bank failure since 2008.

Will Credit Suisse, the Swiss banking giant be next? 

This is the screaming front-page headline of Friday’s Drudge Report:

The Federal Reserve’s interest rate hikes are starting to exact their toll.  Silicon Valley Bank, the nation’s sixteenth-largest bank, was shuttered by the authorities on Friday morning.  The Federal Deposit Insurance Corporation is now serving as the receiver.

Gold and silver both surged on the news.

That’s because gold and silver are real money.  

The question is whether SVB’s problems will show up elsewhere and cascade throughout the banking industry much like the 2008 meltdown.  Another bank, Silvergate, caught up in the cryptocurrency market, is also closing.  

SVB reportedly took a $1.8 billion loss when it liquidated its $21 billion bond portfolio.  It is worth spending a few minutes on the issue of bond losses.  

Bonds and interest rates can be thought of as two ends of a teeter-totter.  When interest rates rise, the price of bonds goes down.  The Fed’s interest rate increases over the past year mean that bank bond portfolios have losses the extent of which is presently unknown.  

SVB looks like the canary in the coal mine, an early warning of system-wide bank failures.  Don’t be victimized!

Problems like these feed on themselves.  As concerned depositors stand in line to withdraw funds, banks can be forced to sell low-interest-rate bonds for losses.  So not only are the banks losing money on their bond portfolios, they lose depositors as well.  

Here is a chart of a regional bank stock ETF that will make my point clear:

Remember, all this has been foreseeable.  Now it is happening.  Remember that paper is fake money.  Gold and silver are real money!

Good luck,

Robert Kiyosaki


In addition to Robert’s words above, we would like to share with you this video showing how he’s been right many times before!


Singapore Just Bought Tons of Gold

The Central Bank of Singapore Added 1,434,600 Ounces!

Official records show that the Monetary Authority of Singapore (MAS), the central bank of the Republic of Singapore, boosted its gold holdings by 44.6 tons in a single month.

Between December 2022 and the end of January 2033, the central bank’s gold position grew by 29 percent.  In terms of troy ounces, the MAS added 1,434,600 ounces to bring its total holdings to 6,378,041 ounces, or a total of 198.4 tons.

The significance of central bank gold buying can hardly be overstated.  We have called it the most important monetary megatrend of our era.

With the ending of World War II and the Bretton Woods Agreement, the US dollar’s role as the post-war’s international currency reserve was formalized.  It was a privileged position that provided support to the dollar’s international strength, dollar demand ultimately adding lift to the standard of living of the American people.

Now that dollar standard is breaking down.  The evidence is seen in foreign central banks de-dollarizing and building their gold reserves.

This isn’t the first surge in Singapore’s gold holdings.  Two years ago, it added 26.35 tons in just two months. 

Foreign central banks are like the canary in the coal mine.  They are acutely aware of the consequences of money printing because they practice it themselves.  They simply don’t want to be victimized by our monetary recklessness.  Foreseeing a crisis in the dollar’s value, they move to secure their own wealth in gold.  

To underscore the tempo of today’s de-dollarization, we refer you to our recent commentaries “Colossal” Gold Demand from the World’s Central Banks! and China Continues to Dump Dollars!

The world’s central banks see what is coming and you should, too!  

Speak to a Republic Monetary Exchange gold and silver professional today and de-dollarizing for wealth protection.  


High Rates Mean More Bankruptcies

Think of this as a bank shot.  You hit the cue ball into another ball that bounces off the rail and goes into the pocket.  

Fed interest rate policy will drive an increase in bankruptcies, corporate and personal.  But banking off the rail, its subsequent effect is that it will drive people to gold.  

Let us explain.

Led by US monetary policy and the money manipulators at the Federal Reserve, the entire world became dependent on artificially low-interest rates.  But the era of interest rate suppression is over – at least for now. 

Chairman Jerome Powell was explicit in congressional testimony this past week that the Fed would drive interest rates higher than expected in its battle against inflation.  “We will stay the course until the job is done,” he said.  But the higher interest rates have their own knock-on effect:  

Bankruptcies!

Last month ZeroHedge reported on a January spike in large corporate bankruptcies (defined as those with $50 million or more in liabilities): “In the first month of the year, the number of US bankruptcies topped 20, the highest in any other January dating back to 2010,” it said.

Unfortunately, January wasn’t a one-off, says ZeroHedge.  “According to Bloomberg data, one month later – as of the end of February – no less than 39 large companies had filed for bankruptcy in the US so far this year, as February’s pace matches that of January; the YTD total represents the fastest pace of companies filing for bankruptcy since the immediate aftermath of the global financial crisis in 2009.”

That’s not all.  The number of Americans filing Chapters 7, 11, and 13 bankruptcies in January rocketed up 20 percent from a year earlier.  Along that line, we are republishing a chart from last week about rising credit card delinquencies.

At some point, troubles become apparent among banks themselves.  Most recently, Silvergate, a federally insured bank deep into banking Sam Bankman-Fried’s crypto enterprises, has filed a notice of doubts about its “ability to continue as a going concern.” 

Credit Suisse, the global investment bank headquartered in Switzerland, is also a train wreck.

Some major banks are setting aside reserves for the rocky road ahead, but higher rates are like termites eating away at the entire industry.  We presume many financial institutions have mismatched portfolios (since they almost always do), which means they have borrowed short-term money but have made long-term loans.  Now they must pay higher rates in the next round of borrowing that we’re not part of their plan. 

When these problems begin to cascade, to spill over from one bank to another, our troubles really begin.  Things quickly get out of control.  A rising number of bankruptcies and consumer debt delinquencies are a sign that that day is getting closer.  

You will be very glad that you own gold and silver on that day.


Five More Reasons to Buy Gold

We thought we should share with you a couple of more reasons to buy gold and silver.  The list is not exhaustive, but just five of the things in the news that we don’t want our friends and clients to overlook:

#1
A perfect financial storm is brewing.

Economist Nouriel Roubini says a “perfect storm” consisting of a debt crisis, recession, and out-of-control inflation is headed to the markets this year.  In fact, he says the S&P 500 could tank another 30 percent 

Roubini advises owning inflation hedges, and what better inflation hedge than gold?

#2
Exploding US national debt.

The on-the-books national debt has already reached the statutory debt limit of $31.38 trillion.  But look where it is headed!

#3
China is positioned for a crisis.

China added another 15 tons of gold to its currency reserves in January.  Meanwhile, for the fifth month in a row, China continues to dump US treasuries.  

#4
Growing consumer debt/delinquencies.

Look at the growing credit card delinquency rates among Millennials, and Gens X and Z!  Not good!

#5
Inflation remains in the Red Zone all around the world.

Persistent high inflation will drive global gold demand much higher.

Speak with a Republic Monetary Exchange gold and silver specialist today!


The Winds of War

The US State Department advises Americans to leave Russia.  

Uh oh!

What happens next?

Next Russia announces that it will no longer participate in an offensive strategic arms treaty with the US, the last remaining nuclear arms agreement between the two nuclear powers.

At the same time, Putin puts new ground-based strategic systems on combat duty.

In the background is the disclosure by one of America’s most accomplished investigative reporters that it was indeed the US that took out Russia’s Nord Stream gas pipeline in the Baltic Sea last September – an obvious act of war.

China says it is “deeply worried” that the Ukraine war could spin out of control.  “We urge certain countries to immediately stop fuelling the fire,” said China’s foreign minister.

The White House dispatches the Treasury secretary to Kyiv to announce even more taxpayer money will be sent to Ukraine.  (The Treasury secretary?  Seems odd.)

The US announces new sanctions on Chinese companies in response to China’s support for Russia in Ukraine.  China calls the sanctions illegal, and an act of bullying.

China’s People’s Liberation Army complains bitterly about a US Navy surveillance flight through the Strait of Taiwan.

NATO’s Secretary-General warns China against supplying arms to Russia.  China claims the US is creating an endless war by supplying arms to Ukraine.

Russia calls for NATO to hold an emergency summit over the Nord Stream sabotage.

President Zelensky declares Ukraine is preparing to attack Crimea.

Smart investors buy gold.

Russia warns of that continued US dumping of arms in Ukraine could lead to an “apocalypse.”

China keeps dumping US treasury bonds.  December makes five months in a row.

What happens next?  Do countries recall their ambassadors?  An accident in the South China Sea?  A false flag attack?  

We don’t know, but it sure looks a lot like Europe on the road to war in the 1930s.  No wonder central bankers and smart investors are buying gold.  


Trump Chooses the Printing Press

If the Dollar Was Backed By Gold…

What would it take to back the dollar with gold again?

The US dollar is backed by nothing. If it was still backed by gold, the price of gold would be a lot, lot higher!

That is why the Federal Reserve can create trillions of dollars out of thin air with not much more than a few simple computer keystrokes.  There is nothing to restrain them in this act of legal counterfeiting.

In fact, the US dollar hasn’t been backed by anything at all in over 50 years.  And we’re beginning to pay for it.

But suppose anyway, with all that money printing, what would the gold price have to be to back up the dollar?  The answer is it would have to be much, much higher.  Here are a couple of ways to look at it thanks to calculations in a Eurasia Review article called The Great Gold Rush:  Central Banks in a Frenzy.

It would take a gold price of $8,800 per ounce to back all the outstanding US currency with gold.

That is about 5 times today’s gold price.

But we’re only getting started.  Gold would have to be about $32,000 if all the money the Fed has created were backed by gold.  

That is almost 18 times today’s gold price.

That’s far enough.  Backing total US bank deposits or backing total US credit market debt, government, and commercial would require gold prices so high, we don’t even want to mention them.  Suffice it to say that backing the dollar to any meaningful extent would require an explosive move-up in gold prices.

Today’s global currency and monetary situation are more precarious than ever.  The article says, “Record gold purchases by central banks are a red flag regarding the stability of our current monetary system. When central banks embrace gold, it is an indicator that they are losing trust in the current system.”

Today none of the world’s currencies are backed by gold – or anything else.  That is why it is best not to rely on any of them and to back your own wealth with gold of your own.

To learn more about the developing showdown between unbacked paper and digital currencies and gold, the enduring money of the ages, speak with a Republic Monetary Exchange precious metals specialist today.


Stubborn Inflation and a Confused President

Here is a chart showing the percentage change in the Consumer Price Index going all the way back to the Stagflationary 70s and their aftermath.  When people talk about inflation at a forty-year high, they are referring back to the peak inflation of that era.  

Just days ago, President Biden commented on the January Consumer Price Index numbers.  Inflation is coming down, he said:

Inflation in America is continuing to come down, which is good news for families and businesses across the country. Today’s data confirm that annual inflation has fallen for seven straight months. Inflation for food at the grocery store came down again last month. Gas prices are down about $1.60 from their peak last year. And real wages for working Americans are up over the last seven months, delivering welcome breathing room for American families. We are seeing this progress even as unemployment remains at its lowest level since 1969 and job growth remains resilient.  

Did he mention that both the November and December CPI numbers had to be revised higher?  Probably not.

No, definitely not.

It is a good idea to take everything politicians say with a grain of salt.  This is of course especially true with Joe Biden.  So, we decided to turn to Ryan McMaken, the editor of Mises.org for some non-politician straight talk:

This is a rather tortured description of the situation. With the CPI rising both month over month and year over year, it’s a bit of a stretch to say price inflation “came down” in January. It would be more accurate to say that the rate of increase slowed very slightly.

This hasn’t stopped President Biden from declaring that the economy has already achieved a “soft landing” as Politico suggested yesterday.

The markets apparently disagreed… Markets likely fear that—in spite of Biden’s narrative—price inflation looks stubborn, suggesting the Fed will continue to move interest rates up. Wall Street, heavily dependent on easy money, wants to see inflation fall so that the Fed will begin loosening again. If price inflation is seen to be slowing, this could be interpreted as an excuse for the Fed to force interest rates back down and resume asset purchases. If a soft landing were already in the cards, Wall Street would be planning for an acceleration of monetary loosening.

National currencies everywhere are in bad trouble.  Years of money printing are catching up with them.  Like us, Japan is now dealing with its own inflation crisis.  Like ours, it is now the highest it has been in 40 years.

Like our Fed, Japan’s officials are muttering something about this new surging inflation being merely “transitory.”

Right.  Transitory.  

By the way, just a few days after Biden crowed about inflation coming down, the Fed’s preferred measurement of inflation, the Personal Consumption Index, reported that inflation was up for the 12 months ending in January.  For January alone the index rose 0.6 percent.  Even core inflation, which excludes food and energy and is a measure they use to minimize the real inflation rate, rose 0.6 percent in January.  Try annualizing that!

Said the president last week, “Today’s data reinforces that we have made historic progress and are on the right track, and now we need to finish the job.”

Finish the job?  That’s just what we are afraid of for US dollar holders.  When these governments stumble about in confusion, boasting about their fiscal and monetary management without even knowing what is really happening under their watch, one would be wise to stay away from their currencies entirely.  


China Continues to Dump Dollars

An Update on the Biggest Monetary Megatrend of our Time!

China’s holdings of US treasury debt are dropping fast.  

China got rid of 17 percent of its dollar holdings in 2022.  Ten years ago it was America’s largest creditor with more the $1.3 trillion of US government bonds.  Last year it still had a portfolio of more than $1 trillion of US debt.

Now it is unwinding its holdings fast!  In December it reduced its US government debt holdings, for the fifth straight month in a row, to $867 billion.  

Altogether, foreign holdings of US government securities fell by 6 percent.  None of this comes at a good time for the Treasury Department, with skyrocketing government debt that needs to be funded somehow.  Today the US government’s visible on-the-books debt is $31.456 trillion.  That is up more than $100 billion since the first of the year, and up by more than $3.5 trillion dollars in the last two years.

At the same time that foreigners are dumping US dollar debt, the Federal Reserve is doing the same, unwinding its own portfolio of more than $8.4 trillion at the rate of $95 billion a month, or $1.140 trillion a year.

So, if the government must borrow more to keep the lights on and to fund the escapade in Ukraine, not to mention everything else it does, but the available universe of lenders is shrinking, how does the Treasury keep selling its IOUs?  

Simple.  It will have to offer higher and higher interest rates to attract sufficient buying.

And that is what is already happening.  Here is a chart of 1-year US Treasury rates.  From below 1 percent a year ago, the 1-year rate has now climbed to more than 5 percent.

But higher rates put a strain on the Treasury.  Its cost of borrowing rises, which means the debt begins to grow even faster.

Eventually, it will look to the Federal Reserve, the lender of last resort, to help out.  Because keeping the debt paid is an existential crisis for the government, the Fed will have to do as Washington wishes:  PRINT MORE MONEY!

China has figured all this out already.  That is why it is getting rid of dollars and keeps buying more and more gold.

Are you doing the same?


Huge Jump in Credit Card Debt

Another Financial Crisis Showing Up Soon!

 Americans have burned through most of the “stymie” money they got from the government now.  But as Milton Friedman once said, “There’s no such thing as a free lunch.” So thanks to those very government giveaways – and more like them – prices of everything have been rising relentlessly.

Now Americans are increasingly turning to their credit cards to pay for things like food!  

Consumer credit card debt has spiked 18.5 percent over this time last year.  

Oh, and the average credit card interest rate is now almost 20 percent and is poised to move even higher.

As gold expert John Rubino says, “the epicenter of the coming quake is plastic.”

The average consumer balance is $5,805.  Bankrate calculates that at today’s average interest rate of nearly 20 percent, those making minimum payments would spend 17 years paying off their credit card debt.

Meanwhile, more new credit card holders are subprime customers, and delinquencies are rising.  At the same time, Lending Club reports that 64 percent of Americans are living paycheck to paycheck.

With the stars continuing to line up for a recession, Rubino says, “If you own bank, auto, housing, or credit card company shares they’re vulnerable to a consumer-driven bear market.”

We suggest a timely move to gold and silver.  Speak with a Republic Monetary Exchange precious metals expert today.


Big Hitter Says to Own Gold

“You’d be better off keeping your investment reserves in gold at this point.”

That’s the advice from John Paulson.  He’s the head of Paulson & Co., a major investment firm.  He made billions by spotting the housing bubble in 2007.  Wikipedia says he made another $5 billion in 2010 primarily investing in gold.  

With those kinds of numbers, we think we can just call Paulson “a big hitter!”

Now Paulson sounds more serious than ever about gold.  Here are a few snippets from an interview with Alain Elkann earlier this month (transcript HERE).

  • “The amount of money printing the U.S. central bank has done in order to stimulate the economy has also caused doubt. A lot of our growth has been based on fiscal spending that has been financed by the Fed buying the debt of government. The Fed balance sheet has exploded due to ‘quantitative easing’, a polite way of saying ‘money printing’, and inflation resulted. If you had dollars and 9% inflation, this year you lost 9% of your money.”
  • “We’re at the beginning of trends that are going to increase the demand for gold, and inflation and geopolitical tensions will determine the rate at which gold increases. This year gold will appreciate versus the dollar, and also over a three, five and ten-year basis.”
  • “My anticipation is that bond prices, particularly non-investment grade but also investment grade, will decline throughout the course of this year and yields will rise. As that happens, and as the Fed withdraws liquidity, I would expect that the stock market will also correct, and in the second quarter start to decline from current levels.”

And finally, here is the money quote:

“There has been a significant increase in demand from central banks to replace dollars with gold, and we’re just at the beginning of that trend. Gold will go up and the dollar will go down, so you’d be better off keeping your investment reserves in gold at this point. “

We couldn’t have said it better!


Rich Dad Says Giant Crash is Coming

Our friend Robert Kiyosaki of Rich Dad, Poor Dad fame, holds up a gold coin in one hand and a dollar in the other.  “This is real,” he says about the money in one hand, “and this is fake,” he says about the other.

You don’t have to guess which is which.  Robert is a great communicator, which is why his Rich Dad book is the biggest-selling personal financial book of all time.

Now we want to share some alarming recent tweets from Robert.

Robert’s warnings have become more frequent this year.  

There are some rough times ahead.  In the meantime, Robert knows that lower prices are a great buying opportunity!

Is it time to review your gold and silver positions before the crash?  Make an appointment with a Republic Monetary Exchange precious metals professional today!


Social Security and Medicare Crack-Up Dead Ahead!

Protect your future with gold & silver!

Now we know a little about how it felt to be on the bridge of the Titanic.  We are racing to a major financial crack-up and we can’t change course in time to avoid a calamity!

As we wrote recently, “The CBO now projects that the Old-Age and Survivors Insurance Trust Fund would be exhausted in 2033 and the Disability Insurance Trust Fund would be exhausted in 2048. If the two trust funds were combined, the exhaustion date would come in 2033.”  (See our recent post “Senior Citizen Poverty Could Double in the Next 10 Years.”)

The Medicare Hospital Insurance Trust Fund will run out in 2026.

We are not suggesting that Washington will default overtly on Social Security payments.  We believe that they will be paid in “nominal” terms as long as possible… but not in “real” terms.  In other words, recipients will likely get their checks bearing the same face value, but in terms of purchasing power, they will be inadequate.  That is at least the most likely near-term expedient to expect from Washington.

That is something like a slow-motion default.  Printing press money is used to meet expectations of payments, but the printing press money has progressively less and less value.  

The chart on the right illustrates the decline in the purchasing power of the dollar (in green) since the US abandoned the gold standard in 1971, versus the rising price of gold over the intervening years.

That is why we urge our friends and clients to prepare for their future, their retirement, and old age with gold and silver, long-term tools of wealth preservation par excellence

It is often said that the United States has never defaulted on its debt.  Treasury Secretary repeated it as a talking point about the debt ceiling debate just the other day.  But it is not true.

For those that would like to learn something about the US government’s past debt defaults, we refer you to this article by Ryan McMaken of the Mises Institute.  It is called “Yes, the US Government Has Defaulted Before.”


Americans Are Pessimistic of the Economy

Americans Aren’t Too Confident as New Poll Bears What You Already Suspected!

Americans are expecting higher inflation, unemployment, and interest rates, according to a new Gallup poll.  

That’s not all.  They also expect slower economic growth and lower stock market prices.  

“The latest results are from the Jan. 2-22 Mood of the Nation poll, which also found that Americans’ confidence in the economy remains low,” reports Gallup.  “The public’s gloomy outlook for the economy was similarly predicted in a November-December Gallup poll that found eight in 10 Americans thought 2023 would be a year of economic difficulty.”

The poll also found that a record-high percentage of respondents are predicting a stock market decline.  According to Gallup, “A record-high 48 percent plurality of U.S. adults now predict the market will fall in the first half of 2023; 18 percent expect that it will remain the same, while 31 percent say it will go up.”

Most of this assessment strikes us as simply realistic.  A trend in force remains a trend in force until it changes.  Gallup concludes “the public is bracing for a 2023 marked by worsening economic conditions.:

If you are concerned with our monetary and economic trajectory, we suggest you speak with a Republic Monetary Exchange gold and silver professional to discuss a sound plan to protect yourself from inflation, government debt, money-printing and reckless spending.  

There is a reason that gold has been the enduring money of the ages around the world and through the centuries.


“Colossal” Gold Demand from the World’s Central Banks

Central Banks are choosing gold over cash… and investors should follow.

The numbers are now all in for the end of the year, and Central banks continue to look down the road at developing monetary conditions and increasingly opt to hold gold in their reserves.

The World Gold Council (WGC) reports that annual gold demand reached an 11-year high in 2022.  

The WGC characterized central bank gold buying as “colossal!”

Central bank gold purchases hit a 55-year-high, for total acquisitions of 1,136 tons.

Overall gold demand was strong all year, including the finishing quarter.  “Annual gold demand (excluding OTC) jumped 18 percent to 4,741 tons, almost on a par with 2011 – a time of exceptional investment demand. 

Retail demand for coins and bars was brisk in 2022 as well, setting a nine-year high.

The trade association expects investment to rise in 2023.  “Gold ETF and OTC demand – depressed during 2022 – looks set to take the baton held by last year’s strong retail bar and coin demand. Retail investments will likely be lower in Western markets albeit still healthy, as inflation fears fade, but should be robust in Asia on higher growth. However, elevated recession and geopolitical risks will likely sustain interest in gold and present upside potential as the year progresses.”

With failing confidence in the debt state monetary authorities, government debt in the unpayable range, and wars possible on two fronts, accompanied by nuclear saber-rattling, we expect significantly higher gold and silver prices in 2023.  Find out more.  Speak with a Republic Monetary Exchange precious metals professional today for the latest news on prices and trends.


Senior Citizen Poverty Could Double in the Next Ten Years

We hope you are not relying on a pension plan for your golden years.  And that goes for Social Security, too.

Private pension plans like 401(k)s have taken a beating in this market.  And Social Security gets iffier by the day.  In fact, the Congressional Budget Office now says that the Social Security “trust fund” will be drained dry by 2033.

That’s too close for comfort.  That’s why you need to turn to gold and silver for retirement planning. 

To be more specific, the CBO now projects that the Old-Age and Survivors Insurance Trust Fund would be exhausted in 2033 and the Disability Insurance Trust Fund would be exhausted in 2048. If the two trust funds were combined, the exhaustion date would come in 2033.

As we say, much too close for comfort.

Congressman David Schweikert points out that we are on track to double senior citizen poverty in the next ten years.

It is not pleasant, but you should watch this video of Schweikert’s recent House presentation of our fiscal picture… and then speak to an RME professional today to learn how you can protect your financial future.


Fighting Counterparty Risk with Gold

The following is an excerpt from Jim Clark’s important book REAL MONEY FOR FREE PEOPLE: The American Gold Story.

Gold and silver are the only monetary assets that are not someone else’s liability. They are not dependent on someone else’s solvency, promises to perform, or honesty. Their value does not depend on the endorsement, propriety, or honesty of any State or institution. They have no counterparty risk, no risk of rule changes, nonpayment, default, or bankruptcy by individuals, companies, financial exchanges, institutions, and banks—quite apart from being insulated from the risks of the Fed’s fiat dollar as well. 

Order your copy of Real Money for Free People today!

It is a wonderful thing for people’s promises to be reliable, and for institutions to be vigorous fiduciaries of their clients’ interests. The modern world with all its miracles is built on the assurance that people will meet their obligations, fulfill their contracts, and respect others’ property. 

When this environment of trust begins to fray, sophisticated civilization itself is at risk. 

Counterparty risk can pop up anywhere and at any time. Proliferating counterparty risks lead wise investors to the safe haven of gold and silver. But their unique advantage only applies to physical precious metals, the gold and silver coins, and bullion that you own outright and have taken into your own possession. It does not extend to paper gold, stocks, and other representations of gold ownership, commodity contracts, ETFs, or precious metals controlled by a fund, bank, or exchange. Or any other investment vehicle in which State cronies can change the rules in the middle of the game.

In this book we have chronicled the American founders’ wise constitutional provision of real money for free people, its contribution to American prosperity, and how it has been undone, both with the elimination of gold from our monetary system at the hands of Franklin Roosevelt and Richard Nixon, along with the abandonment of silver.

The US dollar has remained unmoored, unanchored, untied to anything real ever since. Unlike fiat currencies that have gone before, the dollar is the ultimate fiat currency. It is global in scope because it is the world’s reserve currency. At the same time, the United States is the biggest debtor in history.

By now you should have realized that central banks and fiat money are managed for the greater glory of the State and for the special advantage of the State’s cronies, and not for the benefit of the people. Inflation is the means by which the State enriches itself by subterfuge, quietly eroding the purchasing power of the currency for its own benefit. And while inflation itself is actually the State’s increase of the supply of money and credit, it is the effects of that increase—higher prices because of the currency’s failing purchasing power—that people call inflation.

The destruction of a currency’s purchasing power is evidence of the currency system’s failure.  It remains only to describe where we are today and how it all ends.


REAL MONEY FOR FREE PEOPLE tells the entire American gold story in a clear and easy-to-understand way!  And because it is information you need for the challenging times coming our way, we want you to have a copy absolutely free!

Learn why the Founding Fathers, to assure a free and prosperous America, built the new republic on a solid monetary foundation of gold and silver.  Learn how later politicians, those of lesser character, have abandoned that foresight by handing America’s future and prosperity over to self-serving bankers and money manipulators.

Want a free copy of the book?
If you are in the Phoenix area, stop by Republic Monetary Exchange for a copy.

Not able to make it to the office? We will send you a copy!

Order your complimentary copy online


The dollar is losing value

Dollar Woes

How much are you willing to lose at the hands of Washington?

Over the years we have mocked reports, repeated like a mantra by the mainstream media, about the strength of the US dollar. 

Sure, sometimes one of the major world currencies is losing value faster than the dollar, and sometimes more slowly, so the dollar can be said to be up or down against the bluro or the yawn or some other unbacked fiat currency.

But just don’t call that strength.  If the dollar buys you less, it is in no way strong.  It is weak.

And as Americans know, the dollar is buying them a lot less these days.  And its not just the price of eggs, either.

Jeffrey Tucker from the Brownstone Institute describes the real living experience of the American people this way:

The bottom line is undeniable: in a mere two years, many of the things you loved, healthy food for your families—I’m not talking about the all-carb diet they want us to adopt—has now doubled in price.

Some is up 50 percent and some is up 150 percent. This damage is absolutely not captured in the CPI, which has huge drawbacks by being calculated on an annual basis and for being a weighted index number that fails to capture the reality on the ground.

The reality you see on the shelves of your local store. The grocery prices tell the truth that you are being pillaged.

The pillaging is not limited to this problem however. And by the way, this is NOT going to improve. It would take a dramatic deflation to restore our living standards. The Fed will never permit that. At best, their intention is to take down the inflation rate to 2 percent per annum. It now stands at about 6 percent, maybe. So even if it happens to fall to zero, all prevailing prices will stick. That means that you have been robbed.

All of this has happened out in the open.  The responsible parties have been hiding in plain sight, says Tucker:

Please understand: this was accomplished not by Putin or greedy corporations but by the Federal Reserve. They have the legal power to counterfeit. They do it by buying government debt with money that had not previously existed. This new money makes its way through the economy, watering down the value of existing money.

… It does not matter that the dollar can buy more foreign currencies than ever. That has nothing to do with anything. What matters is not how much foreign currency it can buy but how many goods and services it can buy. The reason it buys far less traces to the outrageous monetary expansions of 2020 and 2021. That’s the whole reason. At one point, monetary expansion was running 26 percent per year!

They robbed you to fund their outrageous lockdown experiment and put as many businesses and people on the payroll as possible. They might as well have dropped money from helicopters. Now we are paying the price for this monetary malfeasance.

 Of course, it is not the Davos crowd that is paying the price of this malfeasance.  It is the average American family that has lost $4,000 to $5,000 in real-take-home pay in this period.  

So, maybe you are paid in dollars.  Your income is in dollars.  Just don’t be fooled by the mainstream media with their on-again, off-again talk of a strong dollar.  It is not true and you don’t have to save in a wasting currency.

In fact, take a look at your dollar holdings and ask yourself how much you are willing to lose at the hands of Washington.  When you decide that enough is enough, come see us at Republic Monetary Exchange.


Front-Running a Plunging Currency

Financial analyst John Rubino has uttered a real truth for our time.  “Once people start front-running a plunging currency,” he said, “you get the Austrian school of economics’ crack-up boom, which is basically a total loss of faith in the currency.”

“Then it’s game over!”

Let’s define two terms here.  First, front-running.

Investopedia defines front-running as trading stock or any other financial asset by a broker who has inside knowledge of a future transaction that is about to affect its price substantially.

Suppose, for example, a broker knows his client is going to buy a gazillion shares of XYZ Corp.  If he puts an order in ahead of his client, knowing that he will profit when the price rockets higher, he is front-running.  His client is the victim because the client’s price will be higher due to the broker executing an order ahead of the client.

This is obviously unethical.  All you have to do is ask yourself if you would want a broker who acts that way with your account.  You do not.

Investopedia’s definition of front-running goes on to describe a broker using insider knowledge that their firm is about to issue a buy or sell recommendation to clients, one that will almost certainly affect the price of an asset.  In that case, the broker’s firm is the victim.  The firm intended to benefit all of its clients with its buy or sell recommendation, but the broker placed his order beforehand, limiting the clients’ opportunities.  

In the case of the plunging currency, Rubino is describing people who know perfectly well what is going to happen to the US dollar.  It is the same thing that happens to all unbacked, fiat currencies.  It is going to tank.

So there is nothing unethical about being one of the first people out the door on the expectation that the dollar is going to tank.  Some will act on that knowledge earlier and some will act on it later.  But foreknowledge is available to anyone who seeks it out.

Your choice.

Let us give you a real-life example.  At the recent World Economic Forum in Davos, Saudi Finance Minister Mohammed al-Jadaan, said that Saudi Arabia “will consider trading in currencies other than the US dollar.”

This will materially affect the international role and value of the US dollar since OPEC oil is traditionally priced in dollars.  You would be wise to add to your gold portfolio by trading dollars for gold, knowing that this development is inevitable.  In doing so, you are not doing anything unethical.  There is no specific victim.  Every dollar holder is being fleeced by the monetary authorities, but not because someone else beat them to the dollar exit.  

Rubino’s point is sound.  As more and more people begin to realize that the dollar is plunging, their dollar selling will cause the dollar plunge to accelerate.  Which will lead to more selling.

That is where we are today.  Individuals, not to mention foreign central banks, and any others moving out of dollars could be said to be front-running.

Now, the Crack-Up Boom.

We have described this many times.  The Crack-Up Boom is the evocative name offered by the late economist Ludwig von Mises for a moment when the breakdown of a currency becomes clear to everyone: 

If once public opinion is convinced that the increase in the quantity of money will continue and never come to an end, and that consequently the prices of all commodities and services will not cease to rise, everybody becomes eager to buy as much as possible and to restrict his cash holding to a minimum size. For under these circumstances the regular costs incurred by holding cash are increased by the losses caused by the progressive fall in purchasing power. The advantages of holding cash must be paid for by sacrifices which are deemed unreasonably burdensome. This phenomenon was, in the great European inflations of the ‘twenties, called flight into real goods or crack-up boom.

You don’t want to be holding dollars when the Crack-Up Boom hits.  You want to own gold and silver.  

Don’t wait for the Crack-Up Boom.  You can front-run the dollar breakdown without blame.  See us today at Republic Monetary Exchange.


Initial Reports Suggest Record Demand for Silver in 2022

When all of the numbers come in, it looks like silver demand in 2022 will hit a new all-time high!

That’s the news from the Silver Institute, the industry’s trade association.  The Institute forecasts total demand to have surged 16 percent in the just-finished year, to a record high of 1.21 billion ounces.  It cites industrial use, jewelry and silverware offtake, and physical investment.

Purchases of silver coins and bars in 2022 were forecast to jump 18 percent according to the report, to 329 million ounces. “Support was due to investor fears of high inflation, the Russia-Ukraine war, recessionary concerns, and buying on price dips. The rise was boosted further by a near-doubling of Indian demand, with investors often taking advantage of lower rupee prices.”

Other highlights:

  • Industrial demand was on course to grow to 539 million ounces mainly because of ongoing vehicle electrification, growing acceptance of 5G technologies, and government commitments to green infrastructure. 
  • Exchange-traded products, in contrast, were forecast to see the largest annual decline in holdings, totaling 110 million ounces, due in part to silver’s higher volatility than gold, which has made it more vulnerable to profit-taking.
  • Silver jewelry and silverware were set to surge by 29% and 72% respectively to 235 million ounces and 73 million ounces in 2022. This has partly been driven by strong inventory replenishment ahead of the Indian festive and wedding season, following heavy stock depletion in 2021. 
  • The global silver market was forecast to record a second consecutive annual deficit in 2022. At 194 million ounces, this will be a multi-decade high and four times the level seen in 2021.

Speak with a Republic Monetary Exchange specialist today about the silver bull market and adding silver to your wealth protection strategy!


Central Banks Are Still Buying Gold!

We call it the biggest monetary megatrend of our time.  It is a development with long-term implications for the US dollar (not good) and for the price of gold (very good).

The headline from the World Gold Council reads, “Central banks add more gold in November as China joins the fray.”

According to the report, “Central banks bought a further 50 tons on a net basis during the month, a 47 percent increase from October’s (revised) 34 tons.  Of this net total, three central banks accounted for gross buying of 55 tons, while two largely contributed to gross sales of 5 tons, showing the strength of demand.”

“The biggest announcement of the month came from the People’s Bank of China (PBoC). It reported an increase of 32 tons, the largest reported purchase in November and the first announced increase in its gold reserves since September 2019. This announcement is significant given China’s historic position as a large gold buyer, having accumulated 1,448t between 2002 and 2019.

Central banks added a further 50t to global official reserves in November*

The WGC calls central bank gold buying one of the highlights of the year gone by with acquisitions of 673 tones between the first and third quarter of 2022.

Of course, we think calling this a “highlight” understates its importance for three reasons:

  1. Central banks fortifying their reserves with gold are doing so after the evaluation of the US dollar.  They find gold to be a more reliable alternative.
  2. It implies the long-term return of gold to its central place in the world’s monetary system.  We remind our readers along the way that countries that are net acquirers of gold become more dominant in the affairs of mankind.  (That means China.)  Those that are net dishoarders of gold find their global positions marginalized.
  3. Gold held by central banks is gold in strong hands, as opposed to ETF holdings.  Central banks are not holding gold as short-term speculations.  

We encourage our friends and clients to take note of this gold megatrend and participate in the powerful breakout move in gold that has been underway for two months.  Move to the safety of gold.

In the meantime, the WGC promises to make the 2022 full-year numbers available at the end of January.  


Why Wasn’t the Surge in Inflation on the Fed’s Radar?

Neel Kashkari is the president of the Minneapolis Federal Reserve Bank.  

In a new essay, Kashkari wonders why he missed the inflation that is hurting our economy so badly.  He says the Fed and others outside made the same errors.  “First, being surprised when inflation surged as much as it did and, second, assuming that inflation would fall quickly.”

They missed it because they made the same errors.  They missed it because their “tools” didn’t work.  They missed it because their “models” were wrong.

Now that’s a real nothing burger for you.  They missed it because they missed it.

The financial news website ZeroHedge is simply merciless in its criticism of Kashkari, calling him a real “failer-upper.”  We have to agree.  He was a Goldman Sachs man who Hank Paulsen brought along with him to Treasury.  The story about how Kashkari arrived at the $800 billion Bush bailout of the big banks is a classic.  He figured out how to save the economy on his Blackberry.  It turned out to be one of the biggest wealth transfers of all time!

ZeroHedge writes that “market participants are used to broadly ignoring the Minneapolis Fed president’s insights into the monetary policy (not only does he not understand it, but he has been wrong about pretty much everything during his relatively brief Fed career) if only to listen to him for perspective on what will not happen.”

A year ago Kashkari thought the Fed funds rate would be 1 percent in 2023.  It is actually 4.25—4.5 percent.  

We don’t especially fault Kashkari or anyone else for being wrong in their forecasts.  “Predictions are hard, especially about the future,” said the great physicist Niels Bohr.  But we do fault Kashkari and his fellow Deep State Money Manipulators for screwing around with interest rates, imposing their wild guesses on the economy.  In his book about the errors of socialism, Hayek called this the Fatal Conceit.  People like Kashkari and the rest of the Fed geniuses don’t know what they don’t know.  “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design,” said Hayek.

Interest rates are the price of money, and like other prices, they should be set not by bureaucrats and PhDs, but by real conditions of supply and demand.  Otherwise, they create huge distortions in the economy.  Milk prices set artificially high by the government lead to warehouses filled with surplus cheese.  Prices set too low by the government lead to shortages.  That is why Soviet grocery stores were always empty.

And that is why the Fed’s monkeying around with interest rates creates bubbles.  And ruins currencies.

It’s about time we put the Fed out of our misery.  Don’t be victimized by their mismanagement of our economy and the US dollar.  Protect yourself, your family, and your wealth from the likes of Neel Kashkari.  Speak with a Republic Monetary Exchange gold and silver specialist today.  

Remember, they can’t just print more gold!


Wages Fail To Keep Up as Gold and Silver Race Ahead

The $20 advance gold put on with the release of the latest inflation numbers on Thursday, 1/12, was exceeded by a hike of about $23 dollar hike in gold prices the next day, on Friday, 1/13.

Silver marched higher as well, up $0.52 an ounce on Thursday, followed by another sharp gain of $0.46 gain on Friday.  

We have identified central bank gold buying as one of the driving forces of this surge in precious metals prices.  The current move-up began in early November and continued through December and now well into January.  So, you will not be surprised to learn that China’s central bank is reported to have purchased 32 metric tons of gold in November and another 30 tons in December.

That is a total of 62 tons since November which is substantial indeed.  As one new commentator put it, “China is weaning itself from the US dollar.”

Now we hear from sources that we presume are reliable that China’s buying has actually continued, escalating to a recent total of 100 tons.  

Here is an assortment of forecasts for the gold price in 2023 gathered by newsletter writer Jeff Clark:

While gold keeps racing ahead, we thought we should share with you what is happening to the average weekly earnings of Americans under Biden-nomics.

Prices continue to rise, while wages fail to keep up.  Isn’t it time to invest in gold and silver for wealth preservation, retirement security, and profit?  Learn more about gold and silver investing by speaking with a Republic Monetary Exchange precious metals expert today.


The Inflation Story Behind the Story

Near Double-Digit Inflation in Phoenix Metro!

If inflation is surprising on the downside, why does gold just keep marching higher?

Could it be there is more to this story than meets the eye?

As usual, the answer is yes.  

The Consumer price index through December shows prices up 6.5 percent over the past 12 months.

Lower gasoline prices helped keep the overall CPI number from registering higher.  The gas component of the CPI for the month of December was down 9.4 percent from the November level.  Nevertheless, overall energy costs climbed 7.3 percent over the 12 months. 

Food prices registered an increase of 10.4 percent over the year.  The shelter index was up 7.5 percent.

Most alarming may be the increase in services, which accounts for two-thirds of consumer spending.  The services price index rose 7.5 percent, the most in 40 years.

Lower gas prices are a function of lower crude oil prices globally.  Reduced crude demand may be signaling a gathering recession, although China’s reopening of its economy can be expected to push up gas prices higher.

Consumer prices continue to rise at near double-digit rates in the Phoenix metropolitan area.  The Phoenix CPI is up 9.5 over the past 12 months.

In the meantime, real average weekly earning for American workers have now trended lower for 21 consecutive months.

Many analysts and Wall Streeters are calling for the Fed to slow or stop hiking interest rates in response to the lower CPI report.  The next Fed meeting is at the end of January.

Just as it has been climbing fast since the beginning of November, the gold market greeted the CPI news on Thursday (1/12) by racing ahead $20, sharing the expectation that the Fed will pivot to a policy of reduced rate increases and ultimately higher inflation.


The Great Stagflationary Debt Crisis

War leads to larger fiscal deficits, more debt monetization, and higher inflation on a persistent basis!

Nouriel Roubini is an economics professor emeritus at New York University’s Stern School of Business.  But he’s better known to some as “Dr. Doom” stemming from his correct call of the 2008 meltdown.

Roubini warns that wars burden national budgets, exacerbating already high debt levels and inflation.

Here is his assessment of the state of world conflicts today:  

The world is going through a form of “geopolitical depression” topped by the escalating rivalry between the West and aligned (if not allied) revisionist powers such as China, Russia, Iran, North Korea, and Pakistan. Cold and hot wars are on the rise. Russia’s brutal invasion of Ukraine could still expand and involve NATO. Israel – and thus the United States – is on a collision course with Iran, which is on the threshold of becoming a nuclear-armed state. The broader Middle East is a powder keg. And the US and China are facing off over the questions of who will dominate Asia and whether Taiwan will be forcibly reunited with the mainland.

Accordingly, the US, Europe, and NATO are re-arming, as is pretty much everyone in the Middle East and Asia, including Japan, which has embarked on its biggest military build-up in many decades. Higher levels of spending on conventional and unconventional weapons (including nuclear, cyber, bio, and chemical) are all but assured, and these expenditures will weigh on the public purse.

These factors make inflation “secular,” rather than “transitory,”  warns Roubini.  So you should plan on elevated inflation for a long time.  

Roubini at World Economic Forum, 2012. Photo: Moritz Hager

We will only add to Roubini’s description the observation that China’s surge of gold buying in the last two months may be preparation for a forthcoming conflict.  

“A conflict with China, would be fundamentally unlike the regional conflicts and counterinsurgencies that the United States has experienced since World War II, with casualties exceeding anything in recent memory,” warns a new report from the Center for Strategic and International Studies.  “The high losses would damage the United States’ global position for many years.”

In any case, “a great stagflationary debt crisis is upon us,” says Roubini.  And that means high unemployment, high inflation, and a major stock market crash.  

Furthermore, the crisis will be “deep and protracted,” he says.

Is your gold and silver portfolio up to date?  This would be a good time to make sure you are protected from war, crashes, and high inflation. 

Our Fearless Predictions for 2023

Ten Things That Won’t Happen in 2023!

Below are our predictions for the New Year.  Read all ten 2023 predictions and at the end, you’ll discover a little surprise about our list!

10.  The Federal Reserve won’t stop managing the monetary system to benefit the banks that created it to serve their interests in the first place.

9.  Foreign central banks won’t increase their dollar holdings, although they will increase their gold holdings.

8.  Congress won’t reduce federal spending; it won’t stop creating trillion-dollar deficits; and it won’t make a serious attempt to reduce the $31.3 trillion debt.  

7.   The Washington establishment won’t hold most of its members to the same legal standards that it applies to the ordinary people.

6.  Washington Republicans and Democrats won’t stop trying to divide the people to win elections.  They will, however, concentrate their attention on smaller divisive issues while the fundamental issues of America’s freedom and prosperity go unaddressed.  

5.  The establishment’s lapdog press won’t bother to report accurately on the fate of the dollar.  Nor will their reporting on gold be accurate.

4.  The establishment lapdog press won’t blame the nation’s monetary problems on the Federal Reserve and the nation’s money manipulators.  It will blame the people instead.   

3.  While Washington may commission a study, launch a new bureau, or even appoint a bureaucrat, nothing meaningful will be done about the declining lifespan of the American people. 

2.  Monetary and fiscal policy won’t stop shrinking the American middle class.

1.  In a crisis, you won’t see people standing in line to exchange their gold for paper money like dollars.  It’s always the other way around.

Now here is the surprise.  

These are basically the same predictions we made last year, at the beginning of 2022.  And the year before that, at the beginning of 2021.  And at the beginning of 2020.  And 2019!  

Well, actually, they aren’t exactly the same.  As the debt continues to climb, we have to make a change every year to number 8.   This proves the point of the prediction, that Washington won’t stop creating trillion-dollar deficits!

Because these predictions have worked out so well, we dusted them off to reissue them for 2023.  How accurate do you think these predictions will be when we look back on them next year?  

In the meantime, all we can say is buy gold, and have a Happy and Prosperous New Year!


Washington’s Stocking Stuffers

The Capital City’s Corruption is Complete!

The colorful wrapping paper and bright bows had been thrown away, and the trees have come down.  So, let’s see what the Washington people gave themselves with your money this Christmas.

As we survey their stocking stuffers, remember that the end days of any republic are a good time to own gold.  That’s because the governing classes, the power centers, and the cronies steal everything that is not nailed down. And they always debauch the currency – the people’s money, your money – to pay for it.

Here’s one:  Besides the 87,000 new armed IRS agents, Congress is now appropriating money for the IRS Commissioner to have a chauffeur.  

Great!

There is a $45 billion new gift under the tree for Ukraine. Senate Minority Leader Mitch McConnell says these appropriations are good for America’s economy because they create American jobs: “These investments will help expand our defense manufacturing capacity and contribute to an industry that supports high-paying American jobs.”

This is typical of the economic confusion that characterizes Washington.  Without that appropriation, the $45 billion would remain in the pockets of Americans who would spend it on things that actually make their lives better.  McConnell’s work only takes money from the people at large to give to well-connected cronies who can be counted on to make generous campaign contributions to people like… well, people like Mitch McConnell.

So here are some of the other goodies they gave themselves in the year-end omnibus bill, as reported by the always-alert Jim Bovard in a New York Post article.

  • “Monuments to Me” in the bill commemorate politicians’ generosity with other people’s money — including the “Speaker Nancy Pelosi Federal Building” in San Francisco and the “Nancy Pelosi Fellowship Program” for the State Department. Sen. Patrick Leahy (D-Vt.) finagled his name onto the Patrick Leahy Lake Champlain Basin Program. Sen. Richard Shelby (R-Ala.) also got his name on an FBI training facility even though “almost everything in Alabama is already named after him,” according to Scott Parkinson of the Club for Growth. 
  • $3.6 million for the Michelle Obama Trail in DeKalb, Ga. Perhaps the four-mile trail will be a consolation prize for Michelle after her signature “Let’s Move” campaign dismally failed to end childhood obesity. 
  • $200 billion is budgeted for the Gender Equity and Equality Action Fund, part of President Biden’s glorious worldwide crusade for the rights of females. Will that program include sending condolence cards to the women of Afghanistan? Or maybe all the money will be fizzled for zany projects like “Women’s Economic Empowerment through Gender Sensitive Value Chain ­Interventions” in Albania.
  • The bill provides massive subsidies to encourage the continuing tidal wave of illegal immigration while banning spending any funds “to construct border fencing in certain areas,” according to the Heritage Foundation. While scoffing at safeguarding the US border, Congress is sending $410 million for “enhanced border security” to Jordan, Lebanon, Egypt, Tunisia and Oman, according to Rep. Dan Bishop (R-NC). 
  • Congress is dolloping out $1.5 million for the COVID-19 American History Project. That program is more likely to have rows of Anthony Fauci Bobbleheads than to include the sordid details of the Centers for Disease Control and Prevention and the National Institutes of Health browbeating Twitter to censor critics who exposed the deceits of federal policymakers.

Brovard also points out that “to fill the fearmongering void caused by Fauci’s retirement, the omnibus bill creates a new White House pandemic czar.”

Just what we need!

So, it is always a Merry Christmas for Washington’s cronies.  As for us, we can see the dollar going up in smoke, and we will be buying more gold and silver in the New Year!


More Things Worth Remembering About Gold and Silver

Here are a few observations about gold and silver that we have been collecting to share with our friends and clients!

 People are frustrated with the economy, because they worry about how everything is getting much more expensive, and they’re blaming the government and politicians because that’s what they’re being asked about, and they’re not blaming the Fed, because the polls never ask about the Fed, and because many people don’t even understand what the Fed does and how it does it.”

– Wolf Richter

You can’t keep printing trillions of dollars without getting serious inflation. There’s no getting around it.

The people making these decisions know that perfectly well. But thats the secret: They want inflation. In fact, they need inflation. Why? Because they’ve gotten rich from debt. That’s the real economy. Leverage is their entire business model. So for the finance class, inflation is the only way out of all that debt. When money is worthless, you owe less. Meanwhile, hard assets — like upscale real estate on Martha’s Vineyard — will be worth more.

So inflation may crush you, but it will make the people making the decisions richer. Everyone else — regular wage earners, people living on fixed income, every middle-class retiree in the country,  anyone who bothered to live like a responsible person and save money —  will be in serious trouble when inflation arrives. 

That’s not speculation. It’s coming, and anyone who’s paying attention knows it’s coming.

– Tucker Carlson, Fox News

Gold and silver, like other commodities, have an intrinsic value, which is not arbitrary, but is dependent on their scarcity, the quantity of labor bestowed in procuring them, and the value of the capital employed in the mines which produce them.

— David Ricardo
British political economist (1772-1823)

To some it may appear melodramatic to announce that we are at a monetary endgame.  But it is clear-eyed realism that follows from the historical precedents.  And from the hard accounting.

— Jim Clark

Gold is an investment in monetary disorder, which is what we have.

— James Grant

The gold standard makes the determination of money’s purchasing power independent of the changing ambitions and doctrines of political parties and pressure groups. This is not a defect of the gold standard; it is its main excellence.

— Ludwig von Misis

With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people.

— F. A. Hayek

Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked: “Account Overdrawn.”

— Ayn Rand

Gold still represents the ultimate form of payment in the world. Fiat money in extremis is accepted by nobody. Gold is always accepted.

—  Alan Greenspan

The Fed took a dollar and eliminated 98% of its purchasing power and they’re doing that more rapidly than ever but it just hasn’t been fully discounted. When it is, gold is going to be much, much higher.

— Ron Paul

Things Worth Remembering About Gold and Silver

Here are a few observations about gold and the economy that we have been collecting to share with our friends and clients!

The problem, of course, is that the 12 mortals who sit on the FOMC are not clairvoyant, and for the most part not even astute. They have proven over and over again that they have no ability to forecast the course of a $25 trillion domestic GDP, intricately interwoven into a $90 trillion global economy.

David Stockman

60 percent of Americans are living paycheck to paycheck heading into the peak shopping season.

CNBC

A U.S. dollar is an I.O.U. from the Federal Reserve Bank. It’s not backed by gold or silver. It’s a promissory note that doesn’t actually promise anything. 

P.J. O’Rourke

A currency that rises in value over time incentivizes saving and thus investing for the long term.

The late 19th century provided a good example of this. Under the gold standard, money grew more valuable over time, thus rewarding long-term thinking and instilling that outlook in the culture at large.

Inflation has the opposite effect. It punishes saving. It forces a penalty on economic behavior that is future-oriented. That means also discouraging investment in long-term projects, which is the whole key to building a complex division of labor and causing wealth to emerge from the muck of the state of nature. Every bit of inflation trims back that future orientation.

Hyperinflation utterly wrecks it.  

Jeffrey Tucker

Gold still represents the ultimate form of payment in the world. Fiat money in extremis is accepted by nobody. Gold is always accepted.

Alan Greenspan

Gold and silver, like other commodities, have an intrinsic value, which is not arbitrary, but is dependent on their scarcity, the quantity of labor bestowed in procuring them, and the value of the capital employed in the mines which produce them.

David Ricardo
British political economist (1772-1823)

I grew up in a purely urban family. We had no relatives in the country. I’m born in 1944. When I was a baby, my mother could only buy food because she still had some gold coins. Without gold, I would have starved. She always told me that. Therefore, this generation already has a certain gold affinity. In extreme times of crisis, this is one of the few things left to be accepted. Gold was the only thing left to the people of the city at that time. Before the silver cutlery was also traded at the farmer.

Ewald Nowotny
Former European Central Bank governor

The gold standard makes the determination of money’s purchasing power independent of the changing ambitions and doctrines of political parties and pressure groups. This is not a defect of the gold standard; it is its main excellence.

Ludwig von Mises

With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people.

F. A. Hayek

And finally, one more note about gold:

A Dip in the CPI

Don’t get too excited over one good inflation report.  So advised a Bloomberg news headline after the November Consumer Price Index came in a little lower than the previous month!

Everywhere people crowed.  Biden and his economic team rushed to the cameras to take credit.  “What is clear is my economic plan is working and we’re just getting started,” Biden said.

On average, consumer prices paid by the American people have risen 13.8 percent since Biden took office.  Higher prices are costing the average family $5,800 per year according to the Heritage Foundation.  To that higher interest rates must be added.  The average cost of interest rates per family is $1,300, for a total yearly hit of $7,100 under Biden.

The CPI for the 12 months through November was up 7.1 percent.   7.1 percent is down from 7.7 the month before, and down from 9.1 percent in June.

But before anyone gets too excited about a better month, let us take a deep breath and remember that inflation is not like a light switch that can be turned on or off.  The rate of inflation cannot be fine-tuned.  The economy is not mechanical, and prices cannot be engineered by a central authority.

Perhaps some of our readers are old enough to remember the way inflation rose and fell and rose again during the stagflation decade of the 1970s.  This chart captures the annual CPI rates as they were reported during that period.  You can see inflation came in waves.

Price inflation climbed to 10 percent and beyond in 1974, dipping to 5 percent in 1976, before surging to almost 15 percent in 1980.

We wish it were not so, but a couple of good months don’t mean the inflation monster has been slain.


This Special Time of Year

This time of year, with holiday gatherings and celebrations, many of our thoughts center on family.    

Nothing in the lifetimes of many of our friends and clients and their families has matched this period for its financial instability.  The year gone by has been one of serious inflation – rising to double-digit rates in many parts of the country including our own.  The Fed’s attempts to bring inflation under control have been both too little and too late and the dollar and people’s savings and retirement plans have been badly diminished.  

We may be witnessing the end of another fiat monetary system.  

For wealth protection, from generation to generation, nothing endures like gold.  In fact, someone called gold and silver “the superheroes of wealth preservation.”

Gold is one of the least reactive chemical elements;  it does not tarnish or rust.  It is handy to think of that as a metaphor for the fact that gold’s core value is impervious to corruption by the actions of its issuer.  The value of an ounce of gold is not dependent on whose picture or name is inscribed on it.  Nor does it depend on any government; governments come and go, but the value of gold persists.

If you had your choice of putting some government paper money in a box under the Christmas tree, or gold, to pass along to your children and grandchildren, you would be wise to choose gold.  

Gold ownership has traditionally been prized as a means of passing wealth along in families, in discreet, private ways.  

It is the only financial asset that is not someone else’s liability, not dependent on someone else’s promises.  

Gold’s special virtues have been recognized around the world throughout the centuries.  So honored is gold that the wise men who followed a star made it among their gifts to a child born in a stable more than 2,000 years ago.

So this time of year, while so many of our thoughts center on family, choose to protect your family and all that you’ve worked for.  Find out why gold is the money of the ages, and why it makes a perfect gift for family members and loved ones.  

Merry Christmas from all of us at Republic Monetary Exchange!


Must See: Robert Kiyosaki’s Last Warning!

“This Is Very Serious!  We’re In Trouble!”

Our friend Robert Kiyosaki is the author of the number one biggest-selling personal finance book of all time, Rich Dad, Poor Dad.

Jim Clark and Robert Kiyosaki
Jim with Robert Kiyosaki

Rich Dad, Poor Dad has been translated into 51 languages.  It has sold more than 40 million copies.  Robert has written dozens of other books, including two books he co-authored with Donald Trump.

The following video, “Robert Kiyosaki’s Last Warning,” is Robert’s high-level overview of our financial and political position.  As always, Robert is outspoken.  We highly recommend you spend a few minutes watching this warning video.

Can’t see the video? Click here to watch on YouTube.


Uh Oh… Exploding Deficit

What’s Going On in Washington?

Spending.

That’s what’s going on in Washington.  Seriously, it is almost like their disconnection from financial reality has as last become complete.  

And it has.  Here are the facts for November:

Federal spending for the month was $501 billion.

Federal revenue was $252 billion.

You probably already figured out for yourself just how gigantic the November deficit was.  It you thought it was about a quarter of a trillion dollars, you are right there in the ballpark:  It was a record $249 billion.

That implies an annual deficit of $3 trillion.  

This is so far from manageable as to make mature, responsible people break down and cry.  Former US budget director David Stockman (himself a mature and responsible person) asks, “In exactly what universe, therefore, is that not inflationary?

By the way, why did federal spending come in so high, up 53 percent from the same month last year?  The answer is debt service.  As we have all noticed, the Fed has been prodding interest rates higher, and Washington suffers those higher rates just like the rest of us. 

Check out the sharp spike on the far right-hand side of an already skyrocketing chart of Federal interest rate expenses: 

Want more spending news?  Probably not, but here it is anyway.

By a vote of 83 to 11, Congress has now passed a record-busting  $858 billion National Defense Authorization Act.  It is headed to the White House for President Biden’s signature.  

Will Biden sign it?  Of course, he will, even though it is $45 billion more than he asked for.  

By the way, the bill includes $10 billion for Taiwan, which will be used to purchase weapons from US arms manufacturers.  

There’s more.  Ron Paul writes that more money is being shoveled into the Ukraine black hole.  “Senate Majority Leader Chuck Schumer has signaled that the next huge check – nearly $38 billion – will be conveniently hidden in a year-end, must-pass omnibus bill. It’s a way to keep the gravy train flowing while sparing Members the inconvenience of having to face voters.”

Meanwhile, even mainstream news outlets are noticing the popping of the central bankers’ Superbubbles.  He’s a clip from The Hill:  “While recent crashes in British bond prices, real estate in China, and stocks in the U.S. were driven by different catalysts, they all reflect a common cause largely ignored: the popping of a worldwide wealth bubble.”

And here’s a disturbing number from CNBC:  “As of November, 63% of Americans were living paycheck to paycheck, according to a monthly LendingClub report — up from 60% the previous month.”

Doesn’t it just make you want more gold and silver?  It does us, too!


ron-paul-stock-market-bubble

Ron Paul Says The Fed is in a Real Fix!

So the Federal Reserve is slowing down on its interest rate increases.  After raising rates by 75 basis points (3/4 of a percent) at each of its last four meetings, the Fed opted to pull back to 50 basis points this month.

But it hasn’t yet achieved its objective of wringing inflation out of the US economy.  In fact, consumer price inflation remains at a 40-year high.

What gives?  Why pull back before the mission is accomplished?  It is because the Fed is in a jam, between a rock and a hard place.  For a more complete answer, we give the floor to gold and economics expert Congressman Ron Paul who explains the Fed’s bind:

If it [the Fed] raises rates to the levels needed to really combat price inflation, the increase in interest payments will impose hardships on individuals and businesses, as well as raise federal interest payments to unsustainable levels. This will cause a major economic crisis including a government default on its debt causing a rejection of the dollar’s world reserve currency status. Also, if the Fed continues to facilitate federal deficits by monetizing the debt, the result will be an economic crisis caused by a collapse in the dollar’s value and rejection of the dollar’s world reserve status.

The crisis will lead to social unrest and violence, as well as increased popularity of authoritarian movements on both the left and the right. This will lead to government crackdowns on civil liberties and increased government control of our economy. The only bright spot is this crisis will also fuel interest in the ideas of liberty and could even help bring about a return to limited, constitutional government, free markets, individual liberty, and a foreign policy of peaceful trade with all. Those of us who know the truth have two responsibilities. The first is to make the necessary plans to ensure our families can survive the forthcoming turmoil. The second is to do all we can to introduce as many people as possible to the ideas of liberty.

When Dr. Paul says “to make the necessary plans to ensure our families can survive the forthcoming turmoil,” that’s where we come in.  That’s what we do.

Make an appointment with your Republic Monetary Exchange gold and silver professional to get updates and review your own plans for the financial turmoil ahead.


Gold Breaking Out as Wholesale Prices Continue to Rise

Wholesale prices keep on climbing.  And so do gold and silver!

Wholesale prices have risen at a 7.4 percent rate in the 12 months ending in November.

Does anybody think a 7.4 percent hike in the Producer Price Index represents a victory over inflation and that the Federal Reserve Board members can all come out and take a bow?

Probably not.  Remember that wholesale prices are in the pipeline headed toward you as consumer prices.  Consumer prices through November will be reported on Tuesday (12/13/22).  

Then the Fed announces its policy changes the next day, Wednesday.  If it raises its Fed funds rate by one-half percent, it is effectively taking a bow, telling itself that it has done well.  If it doesn’t raise rates more, a possible 75 basis points, it means it is more worried about a general slowdown and is settling for halfway measures on the inflation front.

One of the financial news site headlines called the producer price numbers “a surprise inflation read.”  Seem like the financial press has been surprised by just about everything lately.

Blackrock, the world’s largest investment firm might have a better idea about things right now than the media consensus.  We’re entering a period of heightened instability, it says, and watch out for the stock market: “Equity valuations don’t yet reflect the damage ahead.”  As if to confirm that view, for the week of December 7, US equity funds experienced the biggest outflow in about a year and a half.

gold and silver investments

Blackrock must have noticed as well that the personal savings rate is at a 17-year low, but consumer credit card debt is at an all-time high.

For our part, we notice all the things Washington is going to pay for with money it doesn’t have.  For example, President Biden intends to bail out union pension funds with a $36 billion gift.  And more money for Ukraine again.  Seriously, do they think money grows on trees?

Probably not.  And who needs trees when they can just create the money they need with a computer keystroke at the Fed building?

Walmart probably has a better handle on real consumers that the financial press, and it says consumers remain “stressed” by inflation.

The gold and silver markets certainly don’t think inflation is yesterday’s news, either. From a low in November of $1618, gold has climbed swiftly to around $1800.  

It looks like a breakout, as we said last week in this commentary. 

Speak with a Republic Monetary Exchange professional today.


Have You “De-Dollarized”?

China is getting out of the way.  You better get started, too!

The smart money has begun de-dollarizing.  They see that the future holds a more rapid devaluation of the US dollar.

It is the only way Washington can keep its mega-debt serviced.

The media tells you the Federal Reserve has raised interest rates dramatically, a replay of the Volcker method, designed to once again wring inflation out of the dollar economy.  But the Volcker method involved raising interest rates well above the inflation rate.

The current consumer price inflation rate is said to be 7.7 percent annually.  But the Fed’s targeted policy rate, the Fed funds rate, has only been raised to 3.75 – 4.00 percent, still way below the inflation rate.   The forthcoming December Fed meeting is widely believed to result in throttling back to a lesser rate increase than the prior months. 

Leaving the Volcker job undone.

If you wonder about the Fed’s apparent lack of resolve on the inflation front, we point you to the open secret that rates somewhere below the inflation rate are needed so that the monetary authorities can devalue the otherwise unpayable US debt burden.

We call this an open secret, because other central banks, know the craft of money printing themselves, are moving out of dollars and into gold.  

 In just the last week we learned that China has added another 32 tons of gold to its reserve holdings. It is the first officially acknowledged addition to China’s gold position in more than three years, putting its official reserves at 1980 tons.  

China gold bars
China has recently added another 32 tons of gold to its reserve holdings

The World Gold Council reports that central banks added 400 tons of gold to their holding in the July-August-September quarter this year.  

Central banks have been net purchasers of gold for 13 consecutive years.  

Meanwhile, the WGC, looking ahead to 2023, is in the camp of those who foresee a recession.  WGC noted that gold has seen positive returns during five of the last seven recessions.

“Historically, tightening cycles [such as we are in now] have ended in a recession,” says Juan Carlos Artigas, WGC’s head of global research.  “The more severe the recession, the better gold does.”


Spending More Than You Have Means More Debt!

It’s hard to comprehend just how much money has gone into Washington’s “stimulus” measures.  But this might help.

It compares Biden’s spending measure to other US benchmark spending bills.

Biden’s American Rescue Plan is 2.4 times larger than all the New Deal spending between 1933 and 1940.  The so-called Inflation Reduction Act is 8.5 times the size of the Marshall Plan that rebuilt much of Europe after World War II.  The Bipartisan Infrastructure Law is about the same size as the Inflation Reduction Act.

By the way, all of these costs have been converted to 2020 dollars to make comparisons possible.

You might think that all this spending would generate some red ink.  Well, you would be correct.  

Take a look:

As you can see, the debt problem does not consist solely of federal debt.  State and local, consumer debt, and corporate debt all add up to $64 trillion.  But almost half of that is federal debt.

According to the International Institute of Finance, total global debt has been running about $300 trillion.  That’s about three times the total global production.

We’re not saying that the interest on $300 trillion is nothing but a cakewalk, but it’s a lot more manageable when interest rates are 1 or 2 percent than it is when rates are closer to 5 percent, which is where they are headed.

The problem gets even worse when interest rates are higher and growth falters as it does in a recession.  That means the level of taxable activity falls.  At the same time, government social spending usually rises and deficits get larger.

As always, the Federal Reserve has a printing press (digital, of course) on standby, ready to print however many new US dollars it takes to keep up Washington’s appearance of solvency.

But no matter how hard they try, they haven’t been able to figure out how to print gold!

Have you spoken with an RME gold and silver specialist lately?  With the entire world struggling under an unsustainable and unpayable load of debt, it would be wise to do so!


Looks Like Gold and Silver Are Breaking Out!

We don’t spend a lot of time showing you gold and silver price charts.  But we really think you should see these!

First silver.

This silver chart shows the short-term (50-day) moving average (blue line), and the long-term (200-day) moving average price (red line).  

As you can see, this past week silver has exploded to the upside.  Its price traded down to, and tested support at the short-term moving average a couple of times in November, bouncing off that support line.  Within the day it raced higher and it has now moved convincingly about its long-term moving average.

The gold charts appear to confirm a breakout in precious metals.  Over the last few months, the gold price has run into overhead resistance at the 50-day moving average.  A powerful bull move in the first ten days of November penetrated that resistance.  Now gold has greeted December by closing over the long-term moving average on both trading days.

Charts are an important tool for understanding where we have been and they can indicate momentum and trajectory as well.  But we always like to add some fundamental observations that buttress the technical picture.  In this case, the fundamental news is central bank gold buying that we have discussed often (see HERE and HERE).

Now The Economist has taken note and provides a graphic illustration of the scope of this important megatrend in an article called Why Central Banks Are Stockpiling Gold.

Remember that you can always speak with a Republic Monetary Exchange gold and silver professional to learn more about precious metals investing.


Our Friend Robert Kiyosaki’s Warning

“God have mercy on us all!”

When someone tries to warn you about what’s going to happen and says “God have mercy on us all,” you better believe they’re talking about something very serious indeed.

But those are the exact words of our friend Robert Kiyosaki, warning about what is going to happen to the economy.  And to you.’

Robert Kiyosaki is the author of the number one biggest-selling personal finance book of all time, Rich Dad, Poor Dad.

Rich Dad, Poor Dad has been translated into 51 languages.  It has sold more than 40 million copies.  Robert has written dozens of other books, including two books he co-authored with Donald Trump.

Now, in remarks blasted all around the globe, Kiyosaki says we are in the biggest financial bubble in the history of the world!

Others have called it a Superbubble and the Everything Bubble.  (Learn more here and here.)

Warning of the damage from the popping Superbubble which are markets inflated to unsustainable heights by the Federal Reserve’s money printers, Kiyosaki says, “I would get out of all paper assets.”

The FTX digital exchange bankruptcy and Bitcoin falling from the heights are signs of the air coming out of the bubbles. At the same time, the Fed is now test-driving its own digital currency.

Robert Kiyosaki’s warning sounds serious, and it is serious.  It’s “the biggest bubble in world history,” he says.

If you would like help protecting yourself and your retirement from the bursting of the biggest financial bubble of all time, contact us at once.

Let us show you how to protect yourself with gold and silver.


A Lesson from the Pilgrims

We hope that you can count good health and prosperity as among your greatest blessings in this inflationary year.  Will are grateful for you and all of our friends and clients in 2022.  

Among our Thanksgiving traditions, right along with turkey, family, and even football, is a story we like to tell each year, a story of our country’s founding with a moral that we hope is able to remain a part of the American national character, one remembered each Thanksgiving. 

It comes from the history of the Pilgrims, who arrived on the Mayflower and settled at Plymouth in 1620 in pursuit of religious freedom. 

Within five months of landing, half the company had died of sickness and starvation. 

The sponsors of the enterprise had insisted that for the first seven years the colony would have “all things in common.” This communal organization, socialism by another name, exacerbated the settlement’s woes. 

The pilgrim’s governor, William Bradford wrote that men complained about working for other men’s wives and children without being compensated while the wives thought it a form of slavery “to be commanded to do service for other men, as dressing their meat, washing their clothes, etc.; they deemed it a kind of slavery, neither could many husbands well brook it.” 

Altogether the experience of communal property “was found to breed much confusion and discontent and retard much employment that would have been to their benefit and comfort.”

Eventually, it was decided, wrote Bradford, that each family would be assigned its own parcel of land so “that they should set corn every man for his own particular, and in that regard trust to themselves.” 

The success of the new arrangement was predictable. 

After one year Bradford reported,

“This had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been. . . . The women now went willingly into the field, and took their little ones with them to set corn; which before would allege weakness and inability; whom to have compelled would have been thought great tyranny and oppression.”

The Pilgrims had their religious freedom, but prosperity wasn’t part of their experience until they had economic freedom as well.  In experimenting with collectivized economic organization, they discovered what everybody owns, nobody owns. 

It’s a lesson that mankind has had to learn and relearn after many bitter experiences, from the “starving times” of the pilgrims to the millions of deaths from Stalin’s terror famine in Ukraine, to many millions more deaths from the collectivized farming under Mao Tse-tung in China.  

The result of enforced collective ownership, socialized, or what is often called public ownership, is waste, neglect, and overuse.  

What everybody owns, nobody owns.  This year has seen the advance of collectivization in our national life, the sort of policies that decimated the Pilgrims.  We are among many who see the spread of this philosophy at breakneck speed over the last two years.  It is evident on many fronts but especially seen in the relentless assault on American property rights and in the expansion of the state and its spending.  We hope the new year sees this trend reverse.  

In the meantime, we are grateful for your business and friendship!  Here’s to a free and prosperous America!  Happy Thanksgiving to you and your loved ones!


Move to Gold Ahead of Global De-Dollarization

There is more movement afoot in the US dollar’s global status.   But first, the backstory:

The US emerged from World War II as a mightier powerhouse than ever.  Other leading industrial economies lay in ruins, but not the US.  The US dollar was said to be as good as gold.  Because foreign governments, many of whom were dependent on US aid for rebuilding, seemed to believe it, they bought into the Bretton Woods international agreement to hold dollars instead of gold as their own reserves.

But that was now a long time ago.  In the meantime, as Nixon’s Treasury secretary announced to the world, “The dollar is our currency, but it is your problem.”

It is true.  The dollar is their problem.  It is a growing problem.  Those that are dependent on their dollar reserves see the handwriting on the wall.  If the US can print trillions of dollars in just a few years, the dollar is no place to park its reserves.

And so many of them are moving their central bank holdings away from dollars and into the safety of gold.  We have described this as the most important monetary megatrend of our time.

Three years ago, in a commentary called De-Dollarization: The Global Monetary Mega-Trend, we wrote:

First, if one central bank decides to upgrade its reserves with the world’s most enduring money, it may only represent a political statement.  It is perfectly understandable if a heavily sanctioned state like Iran or Venezuela decides to avoid dollars for political reasons.  (Note, though, that US sanctions have proliferated to so many countries that the US is forcing the world’s turn to dollar alternatives.)

But those jumping on the gold-bandwagon include friendly countries like Hungary and Poland.  Most recently Poland has been ratcheting up its gold reserves, purchasing 125 metric tons over the past two years.  At the same time Poland is repatriating gold.  This week Poland announced that it has brought home to Warsaw 1oo tons of gold that had been held on its behalf by the Bank of England.  This is not a sign of long-term confidence in the post-war dollar reserve monetary order.

Ten years ago, China held more than $1.3 trillion of US debt.  Now its holdings have slipped below $1 trillion to $933 billion.  

But China is not the only country dumping US treasury debt. 

In November 2021, Japan held $1.33 trillion of US treasury debt.  Now, just a year later, it has dumped almost 16 percent of that portfolio.

It is an open secret in the capital markets that the Treasury is having liquidity challenges.  Foreign holders, friends and foes alike, are backing away.  And even the Fed itself, has pivoted from buying US debt to unhoarding its holdings.

This is not good for the US dollar.  It is not good for the US economy, because at some point the treasury will have to offer much higher interest rates to attract buyers for its voracious borrowing.  Along the way, the Fed will try to ease conditions and rates by printing more money.

That’s what it always does.  

It will make gold move much, much higher.  Move to gold now as the megatrend gathers momentum.


Here Comes the Silver Shortage

With the US Mint and other suppliers woefully behind on minting silver coins, coupled with high premiums on popular silver investment products, no one could possibly feel blindsided to hear research reports reveal a developing silver shortage.

Net jewelry and physical investment silver demand will finish 2022 50 million ounces higher than last year, according to a newly released report from The Silver Institute, a non-profit international research and trade association.  

The report attributes the surge to “investor fears of high inflation, the Russia-Ukraine war, recessionary concerns, mistrust in government, and buying on price dips.”

silver bars

Total 2022 global silver demand is expected to climb 16 percent from 2021 for a new record high of 1.21 billion ounces.

Silver mining output is only expected to increase by 1 percent for the current year to a total of 830 million ounces. High inflation, particularly oil and natural gas prices have been a factor in mine production.

Altogether The Silver Institute projects a record silver deficit this year of 194 million ounces.  That would be four times the deficit experienced in 2021 and result in two consecutive years of silver deficit.

The report cites three specifics contributing substantially to surging demand:

Industrial demand is on course to grow to 539 million ounces. Developments such as ongoing vehicle electrification (despite sluggish vehicle sales), growing adoption of 5G technologies and government commitments to green infrastructure will have industrial demand overcome macro-economic headwinds and weaker consumer electronics demand.

Silver jewelry and silverware are set to surge by 29 percent and 72 percent respectively to 235 million ounces and 73 million ounces this year, mainly thanks to an unprecedented rebound in Indian demand. This has partly been driven by strong inventory replenishment ahead of the festive and wedding season, following heavy stock depletion in 2021.

Additional details are available at The Silver Institute.


Double-Digit Price Hikes Slam Phoenix Again

Consumer prices climbed 7.7 percent during the 12 months through October, according to the Labor Department.

While administration officials celebrate the October report because it was down from the 8.2 percent rate reported a month earlier, residents of the Phoenix metropolitan area- where Republic Monetary Exchange is located- had no reason for celebration.  That is because consumer prices continued to climb at double-digit rates for Phoenicians.

The Phoenix metro Consumer Price Index for the 12-month period clocked in a 12.1 percent.  

Meanwhile, the technical picture for gold and silver prices has turned bullish.  Gold displayed a breakout above its lows just above $1,630 that were touched just briefly in the prior three months.

Gold has now moved decisively above its 50-day moving average (the blue trend line), and may be preparing an assault on the 200-day moving average (the red trend line), currently just over $1,800.  

Silver has also moved well above its 50-day moving average and has now penetrated its 200-day moving average as well.

Keep current on this volatile economy.  Speak with a Republic Monetary Exchange gold and silver professional and create a sensible plan to protect your wealth and your family.


Ready for Hyperinflation?

Inflation is bad enough.  But hyperinflation is something else again.  It is the ruin of entire nations and cultures.  Now at least one credible observer says hyperinflation is on its way.

Time to get ready!

Paul Singer is the founder and president of Elliot Management which the Financial Times calls a “prominent” asset manager.  That’s one way to describe it.  It is one of the largest asset managers around, responsible for some $56 billion. 

In a private letter to their clients, Singer and Elliot Management are warning that the world is “on the path to hyperinflation.”  This could lead to “global societal collapse and civil or international strife”.

They are advising clients who have already experienced the stagflation of the 1970s, the dot com and housing bubbles collapse, not to think they have seen everything, but warn of “frightening and seriously negative possibilities” and a “seriously adverse unwind of the everything bubble.” 

So, what is hyperinflation?   Well, it is just what the name implies.  It is a lot of inflation!

People who write and talk about these things try to come up with a fixed inflation rate to qualify as hyper.  But those definitions are wholly arbitrary.  Measuring inflation is a sketchy challenge anyway, with criteria that are constantly changing.  We have consumer price inflation, core inflation, producer price inflation, personal consumption index, and the core personal consumption index.  And so it goes.

We think the best way to describe hyperinflation is that it is the point at which the public finally concludes that it isn’t simply a matter of prices going up, but rather that it is the currency itself that is losing value.  That’s when the Crack-Up Boom hits.

The Crack-Up Boom is the evocative name offered by the late economist Ludwig von Mises for that moment: 

If once public opinion is convinced that the increase in the quantity of money will continue and never come to an end, and that consequently the prices of all commodities and services will not cease to rise, everybody becomes eager to buy as much as possible and to restrict his cash holding to a minimum size. For under these circumstances the regular costs incurred by holding cash are increased by the losses caused by the progressive fall in purchasing power. The advantages of holding cash must be paid for by sacrifices which are deemed unreasonably burdensome. This phenomenon was, in the great European inflations of the ‘twenties, called flight into real goods or crack-up boom.

You don’t want to be holding dollars when the Crack-Up Boom hits.  You want to own gold and silver.  

Singer and the firm are explicit that their warning is for “a set of outcomes that would be at or beyond the boundaries of the entire post-WWII period.”  To blame for the state of affairs, says the client advisory, are policymakers who have been “dishonest” about the real cause behind rising inflation, and of not taken responsibility for the part central banks played in creating it.

We would not have said it much differently.  For more information, speak with a Republic Monetary Exchange gold and silver professional today.  You don’t want to be holding dollars when the crack-up boom arrives.


More Bidenflation

Is there any doubt that the surge in Washington spending is instrumental in the surge in consumer prices?

If there are any doubters, the folks at the Committee to Unleash Prosperity have provided a graphic to make it more clear.

It charts cumulative new spending beginning in December 2020, after Biden’s election. It begins with a $900 billion COVID package that President Trump and Speaker Pelosi agreed to that month.   And it just keeps stacking up from there.  As you can see from the yellow bars, the cumulative spending increases now total $4.5 trillion.

That’s a lot of new spending.  

Meanwhile, the blue line tracks the Consumer Price Increases over the same period.  The CPI was running below 2 percent when Biden came into office.  Soon it had climbed to 5 percent, and then month after month over 8 percent.

As Stephen Moore writes, “The latest White House spin is that inflation isn’t their fault. It’s just an act of nature or something like that.  But Bidenflation didn’t happen as the natural course of events.  Stop us if you’ve heard this many times before on these pages, but inflation sprang to life when the multi-trillions of ‘stimulus’ money drenched the economy.” 

We don’t think a lot more convincing is needed.  By the way, unhinged spending is not limited to the US.  It is a global phenomenon and so is high inflation.

And with that in mind, we repeat our previous report that central banks bought 399 tons of gold in the third quarter this year, almost double the previous record gold purchases.  And when they buy gold, remember that they are doing so in preference to holding US dollars.  

We think they are on to something.


Will Powell Save the Dollar?

Don’t bet on it!

It doesn’t take long to ruin a currency.  A little run of double-digit inflation soon has people looking for a better store of wealth.

Like gold and silver.

Look no further than at the other central banks of the world.  They know the money-printing game as well as Federal Reserve officials in the US do.  They run the exact same scam on their own citizen.  Take a look at inflation rates in a few other countries:


And those aren’t even the banana republics.  Those are what are thought of as the Western bloc nations (yes, including Japan).  The inflation rate in Turkey is 83 percent.  That’s the highest among the G20 nations.  We can’t even be bothered to keep up with the inflation rate in Venezuela.  It was somewhere around 120,000 percent, but last year it issued a new currency after knocking six zeros off the old one.  So now it may have an inflation rate of 120 percent.  But who knows?

It is because central bankers everywhere from Argentina to Zimbabwe know the money printing game so well – they run the scam on their own people all the time – it is because they know the game themselves that they don’t want to be victimized by us running it on them.

Which is why there is an international movement away from the US dollar.  Central banks bought 399 tons of gold in the third quarter this year according to the World Gold Council.  That’s almost double the previous record gold purchases.  

But isn’t Powell serious this time about wringing inflation out of our monetary system?  Well, first of all, he has no intention of ending the practice.  He simply wants to destroy the dollar’s purchasing power at a fixed and sustained rate.  (By the way, we don’t mind predicting here that the Fed’s target rate for inflation will probably be raised from 2 percent annually to somewhere around 4 percent annually.  That will help devalue the otherwise unpayable US national debt.)

Think about it this way.  It has been eight months since the Fed saw the light and realized that inflation wasn’t transitory.  It’s been eight months since the Fed began raising interest rates.  And it has been eight months of Hamlet-like soliloquies and halfway measures from Powell.  But inflation rages, nonetheless.

Indeed, Powell’s record of money-printing puts all the prior Fed chairmen to shame, as David Stockman describes:

When Powell was sworn in as Fed Chairman in January 2018, the Fed’s balance sheet stood at $4.439 trillion, the work of 15 chairmen over 104 years.

When he finally blinked in March 2022 and began to reluctantly raise rates from the zero-bound where they had been hideously impaled, the balance sheet stood at $8.937 trillion.

So the math of it speaks a thousand words. The gain during Powell’s first 50-months was $4.298 trillion, a figure larger than the money-printing total of all of his predecessors combined!

It makes no more sense to think that the chairman who oversaw a lightning-like doubling of the Fed’s balance sheet will now get it all under control than it does to believe that the wolf who has been raiding the henhouse has suddenly become a vegetarian. 

It doesn’t take long to ruin a currency.  That is why central banks are selling dollars at today’s highs to buy gold at today’s bargain prices.

We recommend you do likewise.  To learn more, speak with a Republic Monetary Exchange gold and silver professional today.


The Fed Sows Confusion, Chaos

Mixed Messages Mess with Markets!

It seems strange that the mighty capitalist markets should be constantly waiting for the next pronouncement of a small, grey band of mostly unknown bureaucrats, most of whom – if not all – showing little evidence of having created any wealth in their own lives, sitting around conference tables in the Marriner Eccles building in Washington, to issue diktats about where interest rates must be.

But we go through this several times each year.  And now we have just gone through it again.  The Federal Reserve Open Market Committee met in the first two days of November, a meeting culminating with the announcement that it had decided to raise its influential policy rate, the Fed funds rate, by 0.75 percent effective immediately.

This is the latest in a series of Fed rate hikes that began in March when the central bankers finally and reluctantly confessed that inflation was not, after all, transitory, effectively confessing as well that they didn’t understand inflation or really know what they were doing.  So, they began hiking rates: 0.25 percent in March, 0.50 percent in May, and 0.75 percent in June, July, and September.

And now once again in November.  The target range now for this Fed policy rate is 3.75 to 4.00 percent effective immediately.

Wall Street – both debt (bond) and equity (stock) markets – follow this action as a matter of life and death.  They know that by driving rates lower (by inflating the currency or money supply) for decades, the Fed’s manipulations were stove-piping money their way. 

Oh, life was good.  Very good.   

But inflation having risen and begun to irritate the people, the Fed finally fell under some pressure to get it back down.  This terrifies Wall Street which understandably doesn’t want to see its good thing come to an end.  So, the Fed’s pronouncements are a very big deal.  Wall Street watches for the least sign the blasted rate hikes will stop and that their happy days of free printing-press money will soon return.

The Fed concludes its meetings, issues a statement about its latest decision, and then shortly after the chairman, Jerome Powell answers the questions of a sycophantic corps of journalists assigned to the Fed beat.

We assigned a hapless member of our crew to follow the action on Wednesday and this is what he reported on the sequence of events. 

On the release of the Fed statement, he watched in real-time as all the markets moved up.  The real-time charts on CNBC were all awash in green.  That is because the Fed’s statement read in part, “In determining the pace of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”  That was all it took.  It must mean that the Fed was going to slow down its hikes, maybe before long stopping altogether, and even begin easing again.  

The markets were exuberant.  The Dow was up over 400 points.  And when Powell took to the podium, they remained that way.  

Until…

Until Powell spoiled the party, saying that they will continue “to look for compelling evidence that inflation is coming down.”  Uh oh!  Because there is no such compelling evidence to be found.  Powell even went on to say, “Another unusually large [rate] increase could be appropriate at our next meeting.”

Well!  That wasn’t supposed to happen.  And with that short observation, the markets turned as one.  They went south.  Euphoria left the room.  The buzz was killed.  All the lines on all the charts turned red, the color of red ink.  

After the markets closed, the Wall Street Journal swept up the debris with this headline:

Stocks Sink After Powell Signals Need for More Rate Rises

Fed chairman says rates will likely need to end higher than anticipated

So, by the end of the day, the Dow was down 500 points, the Nasdaq fell 366, and the S&P500 was off almost 100 points.

Not quite what Wall Street hoped.  

Just another day in the fiat money and fake interest rate economy.  As for ourselves, we think interest rates should be determined by real conditions of capital supply and demand.  That would prevent distortions and malinvestment and the constant booming and busting cycles in our economy by artificially jiggering rates.

And we think gold is real money.  Since it is real and can’t be printed, there is no need for the central banking apparatus that has spent more than a century destroying the dollar and bailing out its cronies.  

But that’s just us.


Biden, Biden, Biden!

When the truth takes a backseat!

It is one thing, and a very sad one indeed, to see anyone addled and losing their ability to think clearly.  But it is more than sad when the affected person’s inability is felt in the realm of policy and in our civic life.

It is a danger.  

President Biden’s confusion has gone far beyond fodder for cable news commentators.  And it seems that his befuddlement is compounded by even the written remarks his staff prepare for him, because they have developed a supreme and wanton indifference to the truth of the things they write for him to say.

Stephen Moore writes that at a recent stop on the campaign trail in New York, Biden took credit for the gas price dropping to $3.39 a gallon.  That is “down from over $5 when I took office,” said the President.

Not even close.  Moore points out that when Biden was inaugurated, the average gas price was $2.42.  And even as Biden spoke the price of gas was 10 percent higher than he said.  

Then Biden went on to explain that $7 gasoline “has always been the case in California.”

Again, not even close.  Sure, gas briefly hit $7 in Beverly Hills and in a couple of other spots, but in simply has not “always been the case.”  

Actually, the salient feature of this California retail gas price chart is that gas prices began their relentless climb shortly after Biden’s inauguration.  That’s no surprise.  Biden cancelled the Keystone Pipeline on his inauguration day.  Seriously.  On inauguration day.  

The President also recently came up with this one:  “Today, my administration announced that this year the deficit fell by $1.4 trillion — the largest one-year drop in American history.”

We’ll let Moore respond to that one:

“Joe Biden has spent and borrowed more money in his first twenty months in the White House than any other president in history. He’s already increased spending over the next 10 years by well over $4 trillion.  

“We went back and looked at what the Congressional Budget Office baseline was the month Biden left office and compared that to Biden’s fiscal results so far.  The first chart below shows he has ALREADY added just shy of $900 billion to the amount the feds would have spent and borrowed if he had simply done nothing.”

There are so many more.  Remember the one about the economy having “zero percent inflation in July… Zero percent!”  

C’mon man!

You can see the work of a clueless staffer who sent a clueless man out to meet the press with that one.

We don’t intend to go any further.  We are not going to curate Biden’s material misstatements of economic reality.  But if someone wants to, fine.  It’s a growth industry!  There’s room for everyone!

As for us, we prefer to insulate ourselves from the foolish and fraudulent in Washington.  That’s why we own gold.  And why we recommend that you do, too.  

Speak with a Republic Monetary Affairs gold and silver professional today.  


Halloween Prices are Scary

In covering inflation it is almost expected that we report on the cost of the traditional Thanksgiving dinner.   And we probably will in a month or so.

But we just happened to notice the rising cost of Halloween candy.  This year it is up by an unlucky 13 percent.  

Consumer prices in the Phoenix area just happen to have risen 13 percent over the past year as well.  It’s our bad luck here that that is the fastest inflation rate in the entire nation.

The Labor Department says that this year’s increase in candy is the largest ever.  According to the Wall Street Journal, it boils down to “surging labor costs and skyrocketing flour and sugar prices.”

The National Retail Federation says that the average household will spend about $100 on Halloween items this year.  That includes candy, decorations, and even costumes.  In 2015, that amount was only $74.

But back to candy. “Starburst and Skittles have had the biggest price increases—35 and 42 percent, respectively, since last year, reports the Journal.  “Crunch and Butterfinger bars saw the lowest price increases of 6 and 7 percent respectively.”

But the worst trick in buying a treat is the incredible shrinking candy bar.  That is the one that keeps getting smaller each year, but is packaged with a lot of cardboard to make it appear the same size as before.  

So, what explains it all?  Whatever did happen to the nickel candy bar?  

We think you know the answer.  It’s not that candy has gone up in price so much as it is that the dollar is losing purchasing power.

The chart above shows the decline in dollar purchasing power since the US severed the thin link of the currency to gold in 1971.  The dollar has been down ever since, and it is not going up.

And that is why people buy gold!


Inflation on Display

The US 12-month inflation rate as measured by the Consumer Price Index has been over 8 percent for 7 months in a row, since last March.  It has been raging along over 5 percent for 14 months in a row.

The pain is not evenly distributed across the county.  As you can see in the following graphic, inflation has hit hardest in the Mountain West region and in the West South-Central region.

The highest inflation rate by far has been in the Phoenix Metropolitan area.  Their consumer prices have risen at a 13 percent annual rate.  The next closest is the Atlanta metro at 11.7 percent, followed by the Miami and Tampa regions and Baltimore, which are registering double-digit inflation rates.

To round out the picture here is a breakdown of the increase in food and other costs over the past 12 months.  You will note the home heating oil is show the greatest price increase of all the items, just in time for the high-demand winter months.

And finally, we think it is time to include one of the most revealing graphs of this era.  It is a long-term trend chart showing the gold price against the declining purchasing power of the US dollar. 

For more information about adding gold and silver to your wealth preservation and profit strategy, speak with a Republic Monetary Exchange specialist today.


Why Are Americans So Down on the Economy?

The New York Times Has to Ask!

A recent New York Times “think piece” (that’s what they call them!) asks why Americans are so down on the economy.  

Seriously?

One easily wearies of the Times tendentious and partisan analysis.  The piece is sprinkled with nonsense like this tweet from someone described as the founder of the Center for Economic Policy and Research: “Think of where Biden would be if the NYT, WaPo, CNN, NPR and the rest weren’t doing everything they could to trash his performance on the economy.”

There are psychological reasons that inflation might have a depressive effect on the national mood, explains the Times.

 Right.  If the reality of Bidenomics and inflation itself is too much for the Times editors to process, we can hardly expect them to expand the scope of their inquiry to include the collapsing retirement hopes of the people.  But consider, as the Times crosstown rival reported recently, Americans’ 401(k) retirement plans have lost $2.1 trillion just since the first of the year!  

The average 401(k) retirement plan has lost 25 percent of its value in less than a year.  Traditional pension funds are getting crushed, too.  (We thought this important enough to pass along in our RME radio messages.)

That is Bidenomics.  Those losses are not just psychological.  They are real.  But one searches the Times piece in vain for even the word “stocks,” “retirement,” or “savings.”

It grieves us to think that the New York Times is considered the newspaper of the intelligentsia.  We trust all the senior White House and Fed officials read it.  And take it seriously.

If that is so, it confirms what we have long suspected.  The blind are leading the blind.  As long as they are, you need to protect yourselves for they are about to stumble into a very deep ditch, taking the whole country along with them.

Buy gold.


Revisiting the Gold and Silver Shortage

(And a bill to restore the gold standard!)

We have written several times of late about the recent shortages of gold and silver and the way prices in the “paper gold” or gold-substitute markets have decoupled from the prices of real, physical gold and silver coins and bars.

In essence, the question is how can the international benchmark prices (spot market prices) for gold and silver be lower while, due to rising premiums reflecting thin supplies, the real market prices of silver coins and bars are higher. (See our October 3 post Market Condition Alert! Gold and Silver Shortages!)

Republic Monetary Exchange’s trading department still has gold and silver in stock for immediate delivery for many items, although we are experiencing strong demand and we cannot guarantee that this crisis is only temporary. 

While premiums are high, worsening conditions may mean that no physical gold and silver will be available at any price.  

These market conditions have been noticed in Washington, and have provoked one congressman to demand answers.

In a September 2 post (Explain the Silver Shortage:  Congressman Demands Answers from the US Mint and Treasury Secretary!), we reported on Congressman Alex Mooney’s (R. -WV) attempt to get answers. In light of the Mint’s statutory obligation to provide sufficient coinage to meet market demand, Congressman Mooney wants to know how this shortage has been allowed to happen, driving premiums on American Eagle US silver coins to such heights, and what the authorities intend to do about it.

Due to keen interest in this story from many of our clients, here is a link to Congressman Mooney’s letter to Treasury secretary Janet Yellen and US Mint Director Ventris Gibson.

Meanwhile, we note with both interest and enthusiasm that just two weeks ago Mooney introduced H.R. 9157, the “Gold Standard Restoration Act.” 

The legislation calls for the U.S. Treasury and the Federal Reserve to publicly disclose all gold holdings and gold transactions within 30 months, after which time the Federal Reserve note “dollar” would be pegged to a fixed weight of gold at its then-market price. Federal Reserve notes would become fully redeemable for and exchangeable with gold at the new fixed price, with the U.S. Treasury and its gold reserves backstopping Federal Reserve Banks as guarantors.

“The gold standard would protect against Washington’s irresponsible spending habits and the creation of money out of thin air,” said Congressman Alex X. Mooney. ”Prices would be shaped by economics rather than the instincts of bureaucrats. No longer would our economy be at the mercy of the Federal Reserve and reckless Washington spenders.” 


Real Money For Free People!

We want to give you a signed copy!

The following is an excerpt from Jim Clark’s important book REAL MONEY FOR FREE PEOPLE: The American Gold Story.

Both Fed money-printing and federal debt are evidence of severe character deficiencies among the American governing classes.

Fed money printing is a slap in the face of normal, healthy human interactions. Civilization is built on the implicit understanding that one may achieve his own ends by serving others. The butcher does not eat all that meat himself. The baker does not need all that bread. The candlestick maker has no use for all those candles himself. The things people in all their diversity want in satisfaction of their personal objectives are most readily achieved by the earnings they derive from providing goods and services others want, giving fair value for value received. But the proponents and beneficiaries of money printing are involved in a brazen attempt to take something for nothing, to acquire purchasing power by monetary manipulation, for which they provide nothing in return.  

It is much the same with government debt. It allows for present consumption while shuffling the bill off to future generations. Normal, healthy people try to leave something to their children and grandchildren. The framers of the Constitution wrote that their aim was to “secure the Blessings of Liberty to ourselves and our Posterity,” for those to come. But a perverse generation burdens little children who have no say-so in the matter with debt that they must bear all their lives at the expense of their own prosperity.

The founders created the conditions for an explosion of human prosperity. Our governing classes and monetary authorities are their opposites. They have created the conditions for an explosion of impoverishment. They are the big spenders and reckless borrowers of both parties. They are the grand councilors and academic advisors of the almighty State. They and their statist epigone and media servitors are the inevitable offspring of connivers like Franklin Roosevelt and Richard Nixon, who stole the people’s gold and betrayed the nation’s good-as-gold dollar. They are a generation of trousered apes who do not know the difference between ditchwater and champagne, and of like-minded Fed officials who conflate empty paper promises with the real, enduring monetary wealth of the ages, who trade the real money of free people for a mess of monetary pottage.

By their own logic, there is no turning back. They must now continue to print money until the system crashes. It is the endgame of their folly.

REAL MONEY FOR FREE PEOPLE tells the entire American gold story in a clear and easy-to-understand way!  And because it is information you need for the challenging times coming our way, we want you to have a copy absolutely free!

Learn why the Founding Fathers, to assure a free and prosperous America, built the new republic on a solid monetary foundation of gold and silver.  Learn how later politicians, those of lesser character, have abandoned that foresight by handing America’s future and prosperity over to self-serving bankers and money manipulators.

In this book, I pull back the curtain to reveal what the mainstream media conceals:  how the unsustainable and reckless policies of the Federal Reserve are destroying the dollar and your savings.

Just stop by Republic Monetary Exchange and let us give you a copy of REAL MONEY FOR FREE PEOPLE!

No cost.  No obligation.


Why We’re in the Mess We’re In

This Explains a Lot!

The Fed doesn’t understand inflation. Janet Yellen has even apologized for the Fed’s cluelessness.  The Fed has missed all the biggest financial calamities of our time, like the dot com bubble, the mortgage meltdown, and the return of inflation to levels last seen 40 years ago.

How can this be explained?

Clearly, the monetary authorities don’t understand the stabilizing role of an honest precious metals currency.  Congressman Ron Paul once asked a Fed chairman in congressional testimony if gold was money.  No, replied the chairman.  Well, asked Paul, if it’s not money, then why does the Fed keep so much of it?

The chairman’s non-explanatory explanation:  It’s traditional.

Whatever.

And now with inflation running hot for at least 20 months, and over 8 percent annually month after month, the Fed still hasn’t gotten a handle on things.

So maybe this explains things.  

A study from Independent Review finds that Fed board members are heavily tilted to the left.  The ratio of Democrats to Republicans is 48.5 to 1.

It is a trend that keeps on trending.  According to the study, among the Fed’s countless PhDs, the younger economists are even more likely than the older ones to be Democrats.

But here’s the kicker.  The study’s examination of papers and speeches by Fed officials came to this woeful conclusion:  “Research and speeches by the Fed economists are increasingly focusing on climate change, gender, race, and inequality.”

That explains a lot.

Climate change.  Gender.  Race.  Inequality.

Or as summed up by the Unleash Prosperity Hotline, “The Fed can’t stop inflation, but they CAN change the earth’s temperature.”


Serious Inflation

It was only a year ago that the Federal Reserve was insisting that inflation was a transitory malady.  Yet it is still with us.  Big time!

The government likes to refer to so-called “core inflation” which excludes food and energy prices.  (Like who would need either food or energy?)  The core inflation rate for the 12 months through September is up 6.6 percent.  That is the biggest increase in more than 40 years.  

So, the Fed hasn’t made a dent in inflation.  As David Stockman observes, “the Fed has raised interest rate by 300 basis points in the last six months, yet the upstream inflationary pressures embodied in the producer price index have not even budged.”

As for the overall consumer price index, it was up 8.2 percent for the 12 months through September.  That is seven months in a row that prices have risen at a rate of 8 percent or more.  Wage earners find their hourly earnings up 4.92 percent which means that with prices rising faster – 8.2 percent – they simply aren’t able to keep up.

When the hot inflation reading came in, San Francisco Fed President Mary Daly said, “ “It does show the data not cooperating.”  

Right!  That darn data!

Have you spoken with a Republic Monetary Exchange gold and silver specialist to find out how precious metals can protect you from reckless governments, their unhinged spending, and their monetary folly?

Call today and make a no-obligation appointment!


How Inflation Really Works to Make You Poorer

More About the Government’s Shell Game!

The inflation numbers for September are in and they are running red hot!  They also provide a perfect opportunity to shine a light on the government’s inflation and cost of living shell game.

Consumer prices (CPI) are up 8.2 percent from a year earlier.  Wholesale prices (PPI) are up 8.5 percent.  Meanwhile, gas prices have been rising this month so it is likely that next month’s consumer price index will be even higher.

Groceries were up 13 percent year-over-year.

The Social Security cost of living increase for 2023 will be 8.7 percent.  But recipients have been paying these higher prices for a year.  The benefits increase lags what people have been spending just to stay even.  For example, at the beginning of 2022, beneficiaries received a 5.9 percent cost of living increase.  That number was calculated from a price increased in 2021, but it was inadequate for the sharply higher prices in 2022 as inflation raged much higher through the year.

Stated differently, retirees pay higher prices all along until those prices are used to calculate a benefit increase that will be made months from now.  So, the cost of living outruns the increases.

Oh, and by the way, our Phoenix-metro clients will remember that their prices have risen 13 percent.  So, they are slipping even further behind. And that is without counting the brutal hit that many have suffered with stocks and bonds in their savings or retirement accounts.

For those who take a long-term view of wealth preservation and know the history of inflationary periods throughout history, gold makes perfect sense!


Ben Bernanke Predicts

Nobel Prize for Inflation?!

Helicopter Ben Bernanke recognized for… for what exactly?  Spreading around free money!

 The Royal Swedish Academy of Sciences has awarded its 2022 Nobel Prize in Economics to former Federal Reserve Chairman Ben Bernanke.

We don’t mean to be churlish with our headline calling it an award for inflation.  We just mean to be plain-spoken.  Inflation is exactly what Bernanke’s stewardship has gifted us.  Anyone looking at the bailout of the banksters in 2008-9, the double-digit increases in food prices, the rip-roaring higher energy prices and the everyday cost of living today has Ben Bernanke to thank.

It is not just we who are saying so.  Michael Shedlock headlines the award story this way:  Former Fed Chair Ben Bernanke Wins Nobel Prize For Wrecking the Economy.

Not to be outdone, The Committee to Unleash Prosperity newsletter puts it like this:   Ben Bernanke Wins Nobel Prize For Being Wrong On The Subprime Housing Crisis.  

That works, too.

In fact, we should expect just such awards from the Nobel judges.  The newsletter from the Committee to Unleash Prosperity points out that, “most winners of the Nobel prize in economics have been awarded to big-government Keynesians.  And most of the medal winners have an abysmal record of predicting the future. Remember, more than 14 Nobel laureates in economics wrote a joint letter in the New York Times last year assuring us that Biden’s policies would NOT cause inflation.”

David Stockman’s take is equally full of disdain:  “Oh, puleese! Ben Bernanke got the Nobel Prize for his early 1980s work on, well, why banks exist! That’s right. What all students of banking knew 100 years ago—-that banks are inherently risky because they lend long and borrow short—got gussied up into a fancy theory of ‘maturity transformation.’”

Shedlock imagined up a spoof interview with Bernanke that would go something like this:

Shedlock: Why do you think you won the Nobel Prize? 

“To learn how to save the economy, we first had to wreck it. That’s the real reason I won the prize,” said Bernanke. “And boy did we wreck it.”

“I expect to win another prize in 2025,” added Bernanke. 

“I paved the way for the Powell Fed to learn from my mistakes. QE and bank bailouts created an even bigger housing bubble under Powell than I created.”

Bernanke shares the prize with theorists Douglas W. Diamond and Philip H. Dybvig “for research on banks and financial crises.”  We don’t know them or their work, and we’re not going to look it up.


Silver’s Monetary Role

The extreme divergence in the world markets between “paper” precious metals and real physical gold and silver continues. “Paper” precious metals are nothing more than the purported paper title to gold and silver that promise to deliver at some future date.

The high premiums on physical silver suggest that in our present economic circumstance of high inflation the world is once again awakening to silver’s role as a monetary commodity.  Often, especially in normal times of growth and economic resiliency, the industrial demand for silver dominates its dual role as money as well.  Silver has actually been used as money in more times and places throughout history than gold itself.  

See our recent post Market Condition Alert! Gold and Silver Shortages!

The graph of gold and silver demand from pre-pandemic 2019 shows investment accounts for 19 percent of silver demand.  But during times of economic distress, silver’s monetary role grows more prominent.

And that is exactly what the divergence in paper silver prices and real physical silver prices suggest, that investors want silver for protection from state currency mismanagement and fraud.  And they are willing to pay for it.

Meanwhile, a new report designed to examine its long-run benefits ratifies the view that silver belongs in one’s investment portfolio.  From a news release by the Silver Institute, an international non-profit trade association:

OPTIMAL INVESTMENT PORTFOLIO SHOULD INCLUDE 4-6 PERCENT SILVER ACCORDING TO NEW REPORT

Silver Can Be a Strategic Asset Within Efficient Multi-Asset Portfolios

(Washington, D.C. – September 29, 2022) – Silver as a distinct asset class should be considered as a strategic investment allocation within a global multi-asset portfolio, according to new research by Oxford Economics, a leading independent economic advisory firm. The firm finds that investors would benefit from an average 4-6 percent silver allocation within their portfolio, significantly higher than current holdings of silver by most institutional and individual investors.


The entire report can be read HERE.

Silver’s volatility is storied.  Many remember how dramatically it outpaced gold during the last stagflation decade.  When the world turns to silver for monetary protection, its performance can be stellar.