The Most Perilous Time in American History

29 Oct

The Most Perilous Time in American History

The Left and Right Agree About Only One Thing: Printing More Money!

Today’s commentary is drawn from observations by hedge funder David Einhorn of Greenlight Capital.

In a rather dramatic announcement, Einhorn says that we have seen the top of the stock market.  It has been a bubble, one drivne by technology stocks, and that bubble has burst, he says.

You may have heard the story about Joe Kennedy who decided it was time to get out of the market when he got a stock tip from a shoeshine boy.  Einhorn shares a similar anecdote.  He says he recently received a job application from a 13-year-old who wrote, “I’m young, but good at investments.”

Here’s a link to a story describing some of Einhorn’s more substantive reasons for calling a top in the market.

We’re not surprised by his identification of a market top.  We put out our own warning two weeks ago, describing the stock market and the social order as equally wobbly:

“But it’s not just stock markets that are wobbly.  The social situation in this country is wobbly as a well, thanks to the Fed’s cronyism.   The November election will very likely bring more of our national instability to the fore no matter who wins.”

So while we find Einhorn’s argument about the stock market persuasive, it is his other comments – mostly overlooked – that we deem even more important

Between the pandemic, the social divide, and civil violence, Einhorn writes, “This may rank among the most perilous times, absent war, in modern American history.”

“It isn’t difficult to envision this tempest exploding after the election, no matter which side wins,” he says.  “According to Politico, 44 percent of Republicans and 41 percent of Democrats believe there would be at least ‘a little’ justification for violence if the other party’s nominee wins the election. A poll by Rasmussen Reports found that 34 percent of likely voters believe a civil war is likely in the next five years. While this is probably too pessimistic, it likely reflects a rising tail risk.”

As the poet Yeats wrote, “Things fall apart; the center cannot hold.”  

Einhorn agrees.  “The only common ground between the two parties seems to be money-printing. Over $3.3 trillion has been printed year-to-date, which represents nearly 22 percent of all U.S. dollars in existence at the end of 2019.”

And with that, Einhorn concludes, “Unsurprisingly, gold is outperforming. Investors who have argued against gold for decades are now buying some.”

Yeats’ poem continued: “Mere anarchy is loosed upon the world; The blood-

dimmed tide is loosed.”

We think this is an exceptionally important time to speak with one of Republic Monetary Exchange’s gold and silver specialists and get some sound, actionable advise on protecting yourself in these times with gold and silver. 

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