IS SILVER & GOLD MIRRORING 1999 TO 2011 AGAIN?

March 28, 2020
Chris Vermeulen
TheTechnicalTraders.com

"...Today, we are writing about a pattern our research team is seeing in the Gold/Silver ratio which is correlated to the price movement of Gold.  What does this mean and how can we profit from this setup?  Let’s get started trying to explain this chart pattern/setup...."

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James Grant | “Nobody Knows Anything”

James Grant, editor of Grant’s Interest Rate Observer

Recorded: March 24, 2020

[This introduces the possibility of everything that gold bugs have been praying for.

INTERVIEW TRANSCRIPT (EDITED)

Albert Lu: It’s another day of volatility for investors, as hope for a government stimulus package pushes the Dow Jones Industrial Average back above the 20,000 point mark. But how long will [it] last?

Joining me now is the editor of Grant’s Interest Rate Observer and the author of several books, including The Forgotten Depression: 1921: The Crash That Cured Itself.

Jim Grant, welcome. It’s a pleasure to have you on and I promised you just now that I will not require you to answer that question but I’m sure we’ll have plenty of things to talk about. How are you?

James Grant: I’m fine. Thank you, Albert.

AL: Something tells me that the story of 2021 is going to be a little bit different than that of 1921. So, where shall we begin?

JG: How about 2020?

AL: [laughs] Okay. What are your thoughts on what’s going on [over] the past week or so?

JG: Well, it is a light show. I guess the big question is whether Mr. Market has ceded operating control of finance to Uncle Sam in the shape of these quite gob stopping interventions and, in the face of things, it looks as if that were possible. Only September, before the pandemic, the Fed intervened in response to a kind of anomalous, unscripted spike in the so-called repo rate. That’s the rate at which you can borrow against the apparently spotless collateral of the United States Treasury. But on that particular day — was it September 7th maybe? — in early September that rate spiked above 9[%] and got close to 10[%], and that was a cue for, what was then seen as, a rather sizable succession of Fed intervention to tamp down that rate and to facilitate the continued funding of our outsized boom time, then boom time, Treasury deficits.

So what has happened in the past two weeks has been the most outsized and stunning succession of interventions in the history of modern central banking. You know, it’s not unprecedented that central banks do unconventional, even radical things, in the face of extreme turbulence. In 1825, in England, there was a very, very severe depression and financial panic, and the Bank of England did all manner of unconventional things — actually lent against physical merchandise, which was an extreme step — mortified the more orthodox among the directors of the Bank of England.

But in six hearings in 1832, I guess, one of the directors [of] the Bank of England was asked about this. How does he explain what had happened? And this guy, named Jeremiah Harman, a long-serving director, said that, “We lent … by every possible means, and in modes that we never had adopted before … seeing the dreadful state in which the public were, we rendered every assistance in our power.” And he added that, “we were not upon some occasions over nice.”

I love that: over nice. So one could invoke that historical precedent as kind of a calming fact to dampen one’s anxieties about the apparent federal takeover of price discovery. One could — I just have, I guess to a degree — but I myself am not mollified. I think what has leapt out of Pandora’s box of intervention will not be so easily returned there.

AL: Jim, how different is the Bank of England’s approach to lending against physical goods to what, apparently, the Fed is going to do with a mainstream lending program or the relaunched Term Asset-Backed Loan Facility where they’re going to try to get money and credit into the hands of merchants?  Isn’t that essentially the same thing, maybe with some …

JG: Well, no, but it’s never [the same], of course, one cycle to the next. One episode of financial improvisation to the next, it’s never exactly the same thing. I don’t mean to be pedantic; you didn’t mean it was exactly the same thing. Certainly the spirit of innovation is comparable, one cycle two hundred [years] ago compared to this one. You know, another point of comparison is the Bank of England then was, in part, a commercial bank; it was doing its own commercial discounting of trade bills and the like. It was lending and taking deposits.

So the Fed, with these interventions, has become, or is becoming, a kind of commercial bank, right? It’s undertaking direct credit infusion into the economy rather than through intermediaries. It is also acting with unimagined hundreds of billions of dollars to buy more or less everything that’s not nailed down: commercial mortgage-backed securities, residential mortgage-backed securities, [backstopping] commercial paper money market funds, Treasury securities themselves, ETFs, [housing] investment grade bonds. It takes a while to get used to it all, but it is a fact.

And, you know, in my country, in America — I think you are calling from Canadia [sic] right? Aren’t you, Albert?

AL: I’m calling from California.

JG: Okay, that’s a different country too, you know, in some of the ways. But Bernie Sanders is evidently no longer even a low possibility for the Democratic nomination of presidency, but his ideas seem to be winning today, certainly his ideas in finance. Among those ideas of course is so-called Modern Monetary Theory, which is that body [of] thought which holds that the government will do no lasting harm if it monetizes deficits directly — if the central bank prints lots of money — as long as those obligations are not owed except internally, and if there is no inflation at the checkout counter. That’s the basic bare-bones proposition of Modern Monetary Theory which Bernie Sanders endorses and would implement.

But what are we doing if not that? We were doing that really in effect before. The Administration’s program was to borrow and spend, without let or hindrance, with no thought at all to orthodoxy and conventional Republican fiscal practice and mores. The other term for Modern Monetary Theory is functional finance. If it works, that’s great. No remote consequences of these improvised actions. So that program was in progress, in fact if not [in] name, and with the Fed’s actions this week, my goodness, it almost seems as if it were here. All we need is another press release called Modern Monetary Theory, right?

I’m fully aware that the provocation is that of, seemingly, an act of God or at least a viral mutation or something so we ought not to begrudge the Fed its humane impulses. But how do you not mobilize every single possible tool in your kit or bomb in your arsenal next time there’s a downturn in anything? I think this introduces the possibility of everything that gold bugs have been praying for. Are we going to talk about gold? I can’t wait.

AL: But one point though, I wasn’t meaning to imply that it was exactly the same thing … but what is the actual difference in reality and function of the central bank directly purchasing something and, instead, putting it in some kind of special purpose vehicle and buying that instead or buying asset-backed …?

JG: Oh, I think there’s not much difference functionally. I think it’s the Fed conforming to the letter, if not the spirit, of the Federal Reserve Act and to the somewhat restrictive legislation put in place in the aftermath of the last crisis, the Dodd-Frank Act. But as to outcome, I’m not sure there’s much difference.

AL: What about the practice of buying BBB- credits that are, perhaps, soon to become junk and just buying junk? It looks like we’re falling into that trap as well.

JG: This is another nicety. Is the Fed going to blow these things as soon as there’s a downgrade or is it going to lean on Moody’s and S&P not to downgrade the things it has purchased? We are so far down this road already, especially in Europe. The ECB has been monetizing corporate debt for many a fiscal quarter and in doing so has utterly corrupted, as far as I’m concerned, the very point of the pricing of credit, the very point of interest rates, which is to allocate capital. These interest rates, both on our side of the Atlantic and theirs, have been suborned into the public service. They have been commandeered.

So these prices, which ought to be discovered, I say, in the marketplace are, instead, administered. And they are administered for the very purpose of instituting a desired financial outcome. This goes back a long way but it goes back from one important observation point to 2010.

Remember November 4, 2010, when Ben S. Bernanke, PhD, published in The Washington Post an op-ed in which he said the following. I have it right here, Albert, because I’m a prepared kind of guy. Here it is. He’s talking about QE, then novel QE.

“Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment and higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending.”

So that was the great asset lift. That was the portfolio balance channel approach to central banking in which they would manipulate asset values higher [and] thereby induce happy outcomes.

Well, it turns out that many outcomes were perhaps unintended. One of these outcomes was to impoverish state pension funds which have discovered what Ben S. Bernanke, PhD, no doubt knew, at least in the back of his mind, which is if you beat down interest rates and if you do that you require much more capital to generate a given stream of income. At 5% per year, a $1M earns you $50,000 but at 1% a year you need $5M to generate that same $50,000 of interest income. So it’s kind of chasing your tail a little bit. So you make it on the asset appreciation but you lose it on the liability side — balance sheets having both liabilities and assets.

So one of the other unintended consequences of this 10 years of suppressed interest rates and predictable financial interventions by the Fed, well they’ve given us near record-high equity valuations — they did about 15 minutes ago until it ended or at least paused. We don’t know. They gave us, perhaps, more corporate debt for unit of corporate earning power than ever before, and much of this debt is very low quality. They have given us unicorns. They have given us zombies. They have given us all manner of things, some pleasant to be sure but many corrosive.

What they have not given us is any economy wide or political community wide new revelation into the dangers of the manipulation of the most sensitive prices and capital, namely interest rates. That’s my hobby horse but I think it’s a very dangerous road. We haven’t even talked about inflation. Nobody talks about inflation, right?

Imagine we were even in this conversation, like 35 or 40 years ago, when inflation was still at thing, and I said, Albert, what do you suppose the consequences might be of an immense infusion of new bank credit and to the fiscal program that is likely to reach 10% of GDP? How will you guess that would affect the price level?

And you would think to yourself, that idiot. And you would say, because you’re polite, Jim, I suspect that might lead to above higher inflation. But today no one thinks that. You can look at the futures curve and various interest rate derivatives that reflect current thinking on the likely course of rates and inflation and they’re flat.

Nobody is anticipating any adverse inflationary outcome from this, which I find is a remarkable commentary on the complacent thinking. You’re not thinking of complacency with, on most days, VIX readings at 75 and 80. But with respect to inflation and its prospects, there is certainly complacency rampant[ly] so.

AL: My suspicion, Jim, is that people who manage money have more urgent matters that they’re dealing with right now. One of them is a topic that I wanted to discuss with you. You asked about what is to be done in the face of extremely low interest rates — I think leverage is another thing that people have discovered that is helpful in bringing yields up. If you look at the commercial mortgage market right now, it’s melting down. The Fed pledged to begin purchasing agency MBS but that hasn’t been enough.

So what are your thoughts on that market? What’s happening there, and what’s going to happen if people stop paying their rents?

JG: Yes, exactly what we think is going to happen, and that something is more. Once you have said, without let or hindrance, we’ll do all we have to do, there is no check, is there? I mean Chairman Powell cannot now say a $5 trillion balance is making me a bit queasy. Yeah, I think we’re going to just lay back the oars here for a few weeks to see what … no, no, well that’s not going to do it. So if the announced scale of operations to tamp down [commercial MBS] … and besides that it’s residential mortgage-backed securities that are also in trouble. These mortgage real estate investment trusts, one or two of them, forcible had to deleverage and sell assets. So if what they had done and announced is not enough, there will be more. And, again, precedents are being set.

AL: The white paper from the chairman of Colony Capital suggesting familiar things, actually. When you hear things like systemic failure colliding with mark-to-market and margin calls, the solutions are often similar, which is suspend mark-to-market, freeze assets in their place, extend liquidity.

I’m just wondering if we do it again where is this all going to end?

JG: Well that’s a great question. Where does it end? And, unfortunately, it’s a great rhetorical question because we don’t know. We have our conjecture as we gold bugs — I used to count myself as a gold bull because I thought gold bug was just a little bit undignified for such a dignified fellow as myself. I’ve just come to throw my lot in there with all the other guys. You know, alright, alright, fine — gold bug. But where were we? — bemoaning leverage, yes.

Well, the invitation to borrow and lend at interest rates pitched below the rate of inflation and with the assurance that those rates would not be meaningfully adjusted higher, that state of affairs has called forth all sorts of networks of leverage, the existence of which we are discovering day by day, to the company of the sound of popping rivets, you know our finances. And you can hear those rivets pop in the residential mortgage-backed securities market. You hear it pop in CMBS. We can hear it, of course, in corporate bonds. And it is most disquieting and, also, it is most out of the intellectual tradition of sound finance which the word, sound finance, of course, the modernist disparage.

I’m going to read you something [from] Graham and Dodd that speaks to the very nature that’s one great corporate bond, I think. This speaks to the shock value of the state of the corporate debt markets now, the investment-grade market in particular, and the shock value that these securities should be kind of bid wanted, that the discontinuity should be as great as they are, that … Anyway, the spread should be gapping so much.

Okay, so here is Graham and Dodd on the nature of bonds.

“The soundness of straight bond investment can be demonstrated only by its performance under unfavorable business conditions. If the bondholders needed prosperity to keep them whole, they would have been smarter to have bought the company stock and made the profits that flow from prosperity.”

So it’s adversity that tests the merits of a bond, not some debt-fueled, leveraged, enhanced, modern central banking jive, boom. And Graham and Dodd published the first edition in 1934. So they were writing at 1931, ‘32 and ’33, which by the way was a great feat of moral courage because Graham was, himself, getting blown out of the water in his own leveraged partnership during the Depression.

AL: It seems like in this situation, in the most trying circumstances, we will really not get to see our grade on that test because we’ll never get to that point — the bailout will come first.

JG: I guess, yeah. I don’t know how there is no bailout. We have demonstrated this week that it is possible, who knows we’re speaking on Tuesday. But market is up 10% or something. So maybe that’s the bottom. We can’t know. I don’t think so but sure could be. So if that is the demonstrated efficacious use of amassed central bank power without, supposedly, any adverse consequence awaiting us, that, I think, solves mankind’s age-old dilemma of scarcity, right? If this is possible, if you can conjure, without adverse effects, trillions of dollars of new credit and everything is better because of that, net better, you know? Wow, I suppose we wish that had been discovered in the Iron Age. We would be a lot richer by now.

But, as you can tell by my sarcastic tone, Albert, I do not believe that’s the case. I do not believe that this is consequence free or adverse consequence free and I think it’s time for people to give some thought to that topic in finance which is paradoxically given almost no attention, namely what’s money and who says so? That is the fundamental question. These billionaires go around talking, begging the Fed to do these things, and there are many of them, including some professed libertarians.

Well, what’s their wealth dominated in? Are they not concerned, a little bit, about the nature of the money that is holding their own life’s work? That’s what it amounts to.

AL: I know that you’re not in the business of prescribing things but the suggestion box is wide open [with] all kinds of people giving the President advice on what he should be doing and what the Fed should be doing. Like it or not, we are in this situation.

So given where we are, what is, in your opinion, the best course of action for the fiscal authority and the monetary authority?

JG: I don’t know. I think the country ought not to be shut down. I think that that life goes on and that the order to stand still, to suspend commerce is probably ill-advised. But that’s not the question you posed. I was on CNBC a while ago and somebody asked me this and somebody said, there’s no trade-off between health and commerce. Of course there is. We suffer, collectively, 40,000 deaths a year on the highways. We could reduce that substantially by posting a 20 mile an hour speed limit. We don’t do that, not because we’re callous but because we live our lives. We take chances. You get up in the morning, you’re taking a chance.

I speak, as few talking heads do speak, with certifiably no epidemiological knowledge at all. I skipped that course entirely. So I don’t pretend to speak from anything more than newspaper reading prejudice on this matter. But I think that the go-hide-in-a-hole approach is probably not well advised.

AL: What about bailouts?

JG: No. There is a bankruptcy system and if the airlines have levered themselves up to the point of vulnerability, they can’t survive this well. They can file. I don’t think they should get direct infusions from the state.

The cost of the direct infusions will be the greater socialization of business activity. I’m not sure what Boeing, the stockholders, will have left over if they take the government’s money. But I really have got no advice for the President and that’s the reason I’m not elected to Congress.

I think the job for investor is not so much to prescribe an enlightened course of action — we all have our ideas I guess, even if we don’t want to talk about them — but I think the thing you do is take the measure of the policies in place, take the measure of the precedents that are set, and ask, if you are in the business of speculating and money, to ask what is going to be the strongest monetary asset in which to house your wealth?

That to me is the question, not what President Trump ought to do.

AL: So let’s answer that question then.

JG: Gold!

AL: We’re back to the beginning of the interview. Gold has performed well but it’s not acting as if the Fed’s balance sheet is headed quickly to $10-$15 trillion. So, is patience in order here for the gold investor?

JG: Yes, yes. Patience is absolutely in order and also gold is … you know, I confess I’m a gold bug and I blurted it out — gold — before you even asked the question. Yes, but it’s not to the end of emulating Scrooge McDuck. That’s not the point.

The point is to have liquid wealth available when opportunity presents itself. Gold is many things but it’s not regenerative. And there’s nothing as an investment like a well-priced, successful, profitable well-financed business. So what you want is gold for opportunities. You also want it, not so much as a hedge against monetary disorder because we have that, you want it as an investment in monetary disorder. That’s a second reason. So I guess that’s a little bit of Scrooge McDuck reason but I hold it for those two reasons. I think that it’s going to be helpful for both.

I look forward to liquidating some of my gold bullion, as modest as that stack of coins is. I look forward to, at some point, liquidating that, if I have the nerve and the opportunity to accumulate something that is going to be yielding dividends and cash flow. But the other portion, well I think, I hope, I’ll never sell — that’s the bottom dollar: an investment in the evident tendency of monetary affairs. The arc of monetary evolution points to greater and greater interventions, more radical policy which begets still more radical policy, financial repression and more of that. We got more QE this week than they did under the Bernanke Fed.

So to me the arc of this is very clear and you want gold, both for the inevitable spills in the market for financial assets as well as for the seemingly inevitable destruction, or certainly impairment, of the government-issued money. Those are my reasons.

AL: Every crisis is a little bit different. I’m wondering, over the last few weeks, has anything surprised you? Has this crisis taught you anything that you didn’t know going in?

JG: I’m thunderstruck. So many things are new. I was just on the phone with Russell Napier who wrote a book long ignored but now so timely. Russell is a student of the dynamics of bear markets. He studied the one of 1920, 1921, 1932, 1949 and I guess a couple of others, 1982. And he reflected that the very speed of this, the violence of it, is something new under the sun. The scale of government response is something new. So these things are unprecedented and so one must be very careful about drawing lessons from the past. And Russell is indeed careful about doing that.

But for me, the lesson I have learned, or reinforced, is that …  I’m going to quote a screenwriter from Hollywood. You’re in California, right? So you know all the screenwriters. William Goldman, who I think wrote Butch Cassidy and Sundance Kid, apropos of the predictability of box-office receipts, William Goldman, from his lips fell one of the great quotations pertaining to all attempts at forecasting and prognostication.

“Nobody knows anything.”

We can know tendencies. We can observe patterns of behavior. We can project. So what the events of the past, the violent events of the past two weeks, have reinforced to me is the necessary humility to stay relatively diversified, relatively liquid and to choke down any thought that begins to resemble certitude. We can’t be immobilized by our ignorance of the future.

We can understand how complex the future is and how predictably, indeed predictably, it can surprise you.  

Gold Miners Will Become the Next Proxy for Gold Price

Gold Price Discovery of Post-QE Infinity: Gold Miners Will Become the Next Proxy for Gold Price

March 25, 2020
Interview with Peter Spina
http://GoldSeek.com
http://SilverSeek.com

“It’s a very unique time and period in history but it’s good to take some action right now and don’t wait. I don’t think this is a time to be waiting for everyone else to take action because when they do you see how supplies get raided very quickly and disappear.” – Peter Spina

Don't miss our in-depth interview with Peter Spina, President and CEO of Goldseek and Silverseek, ranked in the top, most visited gold and silver investor websites in the world. Hear his insights on today's global economy and the current state of the dollar and the precious metals market."

 

How the Global Financial System Could Shut Down, According To Jim Rickards


We are potentially entering an “Ice-9” situation where the entire world may “freeze” over economically, said Jim Rickards, best-selling author of “The Road to Ruin” and “Aftermath: Seven Secrets of Wealth Preservation in the Coming Chaos.”

Rickards is using a metaphor, alluding to a Kurt Vonnegut book, “Cat’s Cradle.” In the book, a vial of “Ice-9”, a liquid that has a freezing point of room temperature, leaks into the streams and rivers and turns all water into ice, effectively covering the planet in an ice age and wipes out all life.

Something similar may be underway, financially, when markets halt trading activity, he said.

“If you shut down the New York stock exchange, and I can’t sell stocks and get cash, I’m going to sell my money market funds or redeem my money market funds. Then you’ve got to shut down the money market funds industry, and then people say ‘ok, I’ll go to the banks or the ATMs,’” he said. “And then you’ve got to shut down the banks so the point is, it spreads from exchange to money markets, to brokerage accounts, to banks, and you end up shutting down the entire system.”

At the end of an Ice-9 scenario, the entire global financial system shuts down, and any Federal Reserve intervention may no longer be effective.

Rickards noted that contrary to conventional economic thinking, now is not a bad time to own gold.

“People say that gold does well in inflation, and you don’t want to have gold in deflation, and we may be looking at deflation, that may be coming, but the point I make is the greatest period of sustained deflation in U.S. history was 1927 to 1933 and in that period, gold went up 75%,” he said.

Gains in gold in today’s condition would be even higher, Rickard said, since gold was fixed in 1933, which is no longer the case today.

Additionally, Rickards said investors should store their gold “a bicycle ride” away so that in the worst case scenario, it would become accessible should people need to evacuate cities by bicycle, which would be more effective during a gridlock than cars.

Stop the Bailout Rip-Off – Kerry Lutz

 

by Kerry Lutz
Financial Survival Network

Dear Readers,

As usual, the American Taxpayer is getting the short end of the bail-out stick. Since we’re already running trillion-plus deficits, the taxpayer won’t be directly picking up the tab for the latest round of corporate welfare transfer payments. Rather currency holders, savers, bond holders and society will at the cost of seeing their assets debased by inflation. And for what? Flashback to 2008, when the nation’s banks and investment houses were caught flat-footed by the mortgage meltdown, a crisis of their own making. They were given trillions in cash with virtually no strings attached. Large portions of the bailout went towards these unworthy titans to finance bonuses.

The very same scam is happening yet again. This time the Congress intends buy middle class votes and acquiescence to this fraud by doling out $1200 or more per person. They’ve learned their lessons from the universal outrage at the 2008 financial crisis and resulting bailout. Wall Street got its rescue package and the middle class was left to twist in the breeze. Worst of all, none of the banksters ever had to account for their malfeasance. They kept their jobs and their escalating bonuses and the public be damned. Unfortunately for Congress, this pittance or crumbs as Nancy Pelosi would call it, is not nearly enough. We estimate that they will wind up giving at least $3500 each in an effort to buy us off.

Boeing, among many other companies and industries, is currently seeking $60 billion in loan guarantees and other benefits from Uncle Sam. If they had had sound management, they would be swimming in cash and wouldn’t require a bailout. Since 2012 Boeing has spent over $45 billion buying back its shares. Share buybacks benefit no one but management and its Wall Street lackeys. They squander company cash, increase interest expense when borrowed funds are used and weakens the company balance sheets. It artificially increases a company’s per share profitability, thereby helping management achieve earnings per share targets that trigger massive bonus payouts. In the case of IBM, this happened even though top line revenues cratered and net profit was in serious decline. For nearly a decade the country’s largest and most distinguished businesses have been engaging in this massive fraud.

Boeing was so busy buying back their shares that they forgot how to build quality reliable aircraft. Boeing’s major blunder came earlier in the decade, when it chose to upgrade the 1960’s vintage 737(MAX), instead of replacing it with a plastic or composite successor. The billions saved were then applied to share buybacks. All the while management was raking in overly generous compensation. Fired CEO Muilenberg, who was ultimately responsible for the 737MAX fiasco, received a golden parachute valued at $80.7 million, after earning $30 million in 2018 and $18.5 million in 2017. Let’s keep rewarding incompetence and self-dealing, what can possibly go wrong.

The airlines are clamoring for their piece of the bailout pie. Since 2012 they have squandered $43.7 billion buying their shares. This took place at the same time they were cramming more seats into their planes, nickel & diming the public with unfair fees, charging for food, dramatically increasing management’s already obscene pay and generally treating their customers like Covid 19 victims.

According to Wolff Richter from 2012 the S&P 500’s cumulative share buybacks topped $4.5 trillion. When I attended college (a very long time ago I confess), we were taught that a company’s surplus cash should first be reinvested in the company to improve its products and competitive position. Any remaining surplus could then be paid out in a special dividend. As a rule, a company’s shares would never be bought back, unless they were trading well below book value.

We can quibble over the extent of the bailout and the eventual payments to average Americans, but we can’t allow a 2008 repeat performance. Here’s a running list of strings that need to be attached to any company bailout, whether by the US Congress or the Federal Reserve. Please feel free to add to this list and pass it on to your corrupt congressman or senator and anyone else who you think might care.

The Taxpayer Bailout Bill of Rights

Any company receiving a government or Federal Reserve Bailout must agree the following:
1 – Immediate termination of top five members of management (who presumably got them into this mess;
2 – Perpetual prohibition on all stock buybacks;
3 – Permanent ban on all lobbying of Federal, State and Local governments;
4 – Termination of all golden parachutes to senior management;
5 – Withholding of management bonuses for 5 years;
6 – Prohibition on linking management compensation to stock price;
7 – Bonuses only allowed on increases in company profitability and free cash-flow, the way Warren Buffet does it;
8 – Cessation of all social welfare programs and benefits by company until loans are repaid;
9 – 50% claw back of past three years of management bonuses.
10 – No contribution or sponsorship of any political activities and a complete prohibition on payments to PACs.

We find ourselves in the current economic situation because our leaders have endorsed and benefitted from policies that not only accept, but encourage misbehavior by corporate management and Wall Street. While no one could have predicted the exact occurrence of the Coronavirus and the ensuing havoc it’s exacted upon the global financial system, the past decade saw red flags popping up all over the place. While many of us were out there like Paul Revere sounding the warning (see www.FinancialSurvivalNetwork.com) we were often laughed at and dismissed as doomers and financial Cassandras.

Now is the time to rethink our entire government, economic and legal systems, before the next meltdown, which may well be the final one. For nearly a century, we have been following a policy who’s end result is economic doom. If we don’t turn back soon, any semblance of our great country will surely be lost.

Regards,
Kerry Lutz

The Coronavirus Hoax

 

 

 

 

 

March 17, 2020
By Dr. Ron Paul

Governments love crises because when the people are fearful they are more willing to give up freedoms for promises that the government will take care of them. After 9/11, for example, Americans accepted the near-total destruction of their civil liberties in the PATRIOT Act’s hollow promises of security.

It is ironic to see the same Democrats who tried to impeach President Trump last month for abuse of power demanding that the Administration grab more power and authority in the name of fighting a virus that thus far has killed less than 100 Americans.

Declaring a pandemic emergency on Friday, President Trump now claims the power to quarantine individuals suspected of being infected by the virus and, as Politico writes, “stop and seize any plane, train or automobile to stymie the spread of contagious disease.” He can even call out the military to cordon off a US city or state.

State and local authoritarians love panic as well. The mayor of Champaign, Illinois, signed an executive order declaring the power to ban the sale of guns and alcohol and cut off gas, water, or electricity to any citizen. The governor of Ohio just essentially closed his entire state.

The chief fearmonger of the Trump Administration is without a doubt Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases at the National Institutes of Health. Fauci is all over the media, serving up outright falsehoods to stir up even more panic. He testified to Congress that the death rate for the coronavirus is ten times that of the seasonal flu, a claim without any scientific basis.

On Face the Nation, Fauci did his best to further damage an already tanking economy by stating, “Right now, personally, myself, I wouldn’t go to a restaurant.” He has pushed for closing the entire country down for 14 days.

Over what? A virus that has thus far killed just over 5,000 worldwide and less than 100 in the United States? By contrast, tuberculosis, an old disease not much discussed these days, killed nearly 1.6 million people in 2017. Where’s the panic over this?

If anything, what people like Fauci and the other fearmongers are demanding will likely make the disease worse. The martial law they dream about will leave people hunkered down inside their homes instead of going outdoors or to the beach where the sunshine and fresh air would help boost immunity. The panic produced by these fearmongers is likely helping spread the disease, as massive crowds rush into Walmart and Costco for that last roll of toilet paper.

The madness over the coronavirus is not limited to politicians and the medical community. The head of the neoconservative Atlantic Council wrote an editorial this week urging NATO to pass an Article 5 declaration of war against the COVID-19 virus! Are they going to send in tanks and drones to wipe out these microscopic enemies?

People should ask themselves whether this coronavirus “pandemic” could be a big hoax, with the actual danger of the disease massively exaggerated by those who seek to profit – financially or politically – from the ensuing panic.

That is not to say the disease is harmless. Without question people will die from coronavirus. Those in vulnerable categories should take precautions to limit their risk of exposure. But we have seen this movie before. Government over-hypes a threat as an excuse to grab more of our freedoms. When the “threat” is over, however, they never give us our freedoms back.

Dudley Comments On The Market Collapse

By Dudley Pierce Baker
Founder - Editor
http://CommonStockWarrants.com
http://JuniorMiningNews.com

The last week to 10 days has been devasting for many investors and particularly those of us in the precious metals sector. Many would have believed that gold, silver and miners would have performed well but we have been subjected to massive selling and no one is happy, unless you have lots of cash.

Cash has been king and the selling of stocks, gold, silver, etc. has been a flight to safety and that has lead to the rise in the U.S. Dollar at the expense of virtually everything else with the exception of bonds.

I want to share with you my weekly audio which I send out to my paid subscribers on March 14, 2020. I share some personal stories as well as frank market comments and encourage you to listen and if not a current subsciber, consider a subscription to my services.

Dudley's Weekly Audio - March 14, 2020

Other Great Articles For Your Reading:
Frank Holmes - Should You Buy The Panic?
Sprott Money - Global Monetary And Fiscal Authorities Are About To Open The Floodgates Of Liquidity
Peter Schiff - Fed Stimulus Will Light 'Fire Under Hard Assets'
Rick Rule - Sprott Media - Gold Stocks Are Stocks; In A Panic, All Stocks Sell Off

We will all get through this turmoil, so make sound decisions and not panic out of quality positions is my advice.

Dudley

Are Financial Markets Starting To Feel, “The Burn” Of Bernie Sanders?

February 25, 2020
By Dudley Pierce Baker
http://JuniorMiningNews.com
http://CommonStockWarrants.com

"Are You Feeling The Burn?"

Some are starting to believe that the market selloff on Monday, February 24th, which took the Dow down over 1,000 points is partly due to the rise of Bernie Sanders in the Democratic Presidental polls. As I write this article this morning, the Dow is off an additional 400 points.

While the prime reason for the drop was the continuing scare of the coronavirus spreading around the world but an open mind must consider if there is another reason for the markets weakness.

Whether you like Bernie or not is a personal decision but with Bernie rising in the polls, tonights Democratic Presidential Debate will surely be a bloodbath with attacks coming from all of the other candidates.  Should be a fun evening.

Our friends at TheTechnicalTraders.com are beginning to factor in the possibility of "The Bernie Burn".

"...Bernie Sanders has been dominating the Caucus events in the US as a Socialist/Progressive candidate.  For many Americans, this is a frightening concept.  Even early into the Caucus voting cycle, it appears Mr. Sanders has taken a very clear leadership role headed into the 2020 Presidential election event.  Business and global investors are not going to like the concept of a Socialist/Progressive US Presidential candidate.  This is going to cause investors and business owners to avoid engaging in projects and opportunities until after the November 2020 elections.

Add into this fear contagion the fact that the Coronavirus event may continue to add to the global fear component of the US and global economy.  How much more risk is involved because of the spread of this virus over the next 12+ months and how will this concern complicate the concerns related to the US Presidential electing event?..."

To read this latest article addressing the coronavirus and Bernie Sanders, just link on this link below:

HAS THE EQUITIES WATERFALL EVENT STARTED OR A BUYING OPPORTUNITY?

 

 

 

GOLD RALLIES AS FEAR TAKES CENTER STAGE

February 21, 2020
Chris Vermeulen
TheTechnicalTraders.com

 

Note from Dudley - These Guys Are Good:
Chris and his team are providing investors with a great road map for the direction of the markets, which is why I am also a paid subscriber to TheTechnicalTraders services and encourage you to consider a subscription as well, The ideal service to supplement your other subscriptions as well as my CommonStockWarrants.com.

"....The one thing all skilled traders must consider is the longer-term fear that is building in the markets.  Many traders are concerned about the global economy with the Coronavirus spreading economic worries throughout Asia, Japan, and Europe.  We believe this fear will push precious metals continually higher over the next 24+ months with a real upside target above $2100 eventually...."

GOLD RALLIES AS FEAR TAKE CENTER STAGE

 

 

 

 

Investors don’t forget the great opportunities available with stock warrants which will increase your potential gains and greatly decrease your investment cost by at least half.

E.B. Tucker with Casey Research, recently referred to Dudley as ‘the top expert in the field with over 40 years of experience‘ with stock warrants.

“I also encourage you to check out the work from our friend Dudley Baker. Dudley is the founder and editor of Common Stock Warrants. He’s been trading warrants for 40 years and has developed an exclusive database of all stock warrants trading in the U.S. and Canada. We’re paid-up subscribers as well.”

Jeff Baker
Senior Analyst – Admin/Web Developer
B.Sc. Geological Sciences (UTEP)
Common Stock Warrants & Junior Mining News