A growing list of esteemed market analysts are labeling U.S. markets – and especially its tech giants – for what they really are: the greatest equities Ponzi scheme in history.
It doesn’t help to dispel this conclusion when the tech giants themselves act like their own stocks are Ponzi schemes.
A rather famous scribe famously characterized such behavior.
The lady doth protest too much, methinks.
- William Shakespeare, Hamlet
In long form, the
more money Apple borrows to
buy back its own shares to
attempt to give its P/E a veneer of legitimacy, the more it looks like a pump-and-dump.
What should a responsible corporation do when its share price soars to an irrational high that is not supported at all by market fundamentals?
It should do what responsible corporations have always done in such circumstances. Provide the market with a reality-check.
It issues a press release saying that there is “no material reason” for the recent move in its share price. Investors are warned: the stock is overvalued.
Much cheaper (and better for shareholders in the long run) than
borrowing $14 billion to buy back its own grossly overvalued stock.
But that is not a part of Wall Street’s perma-cheerleader playbook.
In the fantasy realm known as “U.S. equities markets”, when the share price goes up, it means the market is “rewarding” that company for (supposedly) good news.
What good news? U.S. corporate profits have been stagnant since 2011 with the exception of the one-time boost from the Trump Tax Hand-Out.
For nearly 10 years, U.S. bubble-markets have risen based upon two words: “beat expectations”. And it doesn’t matter how
low those “expectations” are set.
U.S. markets have evolved from a massive pump-and-dump to a full-fledged Ponzi scheme thanks to the
TRILLIONS of dollars that the Federal Reserve has recently dedicated directly to pumping up asset prices.
If the hyperinflationary infusions of Fed funny-money into U.S. markets ever cease for any significant interval, this Ponzi scheme will implode.
Ka-boom! Game over for Ponzi-scheme markets.
If you are one of the lemmings currently invested in U.S. Ponzi-markets, you are running toward a cliff – at top speed.
Where can investors seek shelter if they don’t want to be a lemming?
U.S. real estate markets are seeing one, final frenzy of demand – as millions of Americans
flee the cities.
Americans leave large cities for suburban areas and rural towns
A combination of the coronavirus pandemic, economic uncertainty, and social unrest is prompting waves of Americans to move from large cities and permanently relocate to more sparsely populated areas. The trend has been accelerated by technology and shifting attitudes that make it easier than ever to work remotely. Citizens of all ages and incomes are moving in record numbers to suburban areas and small towns.
That’s not a healthy sign for U.S. cities, real estate markets, or the U.S. as a whole.
After that exodus? Nothing but supply-side pressure on prices.
Tens of millions of over-leveraged house and condo owners seeking to downsize or simply unload their real estate. No buyers.
Ka-boom! Game over for urban real estate bubbles.
Fortunately, one safe haven asset class has stood the test of time, for 4,000 years: precious metals. Gold and silver.
As economic chaos has descended upon us in 2020, precious metals have been the best-performing asset class. Not NASDAQ bubble-stocks.
Gold and silver are not going higher because morally bankrupt central banks are pumping up valuations. They are rising on genuine demand – and extreme scarcity.
Western central banks openly and proudly act in concert to pump-up equities markets. But they only suppress the gold market (and the gold price).
“…central banks stand ready to lease gold in increasing quantities should the price rise.
- Chairman Alan Greenspan, testimony to the Federal Reserve Board,
November 1998
Bullion “leasing” is a surreptitious and illegitimate method used by Western central banks to drive down the price of gold.
Because precious metals markets are not inflated 24/7 with central bank money-printing, gold and silver markets recently suffered an extreme “correction”.
Gold and silver prices suffered their largest percentage losses in 7 years for no reason whatsoever. And then prices immediately began recovering.
Precious metals bulls are now shrugging off such banker-led attacks on bullion markets.
Why? Because the price-rigging operations by Western central banks and the Bullion Banks in precious metals markets is almost at an end.
In yet
another Western Ponzi scheme,
the futures markets for gold and silver bullion are less than 1% metal and more than 99% paper.
This reverse Ponzi scheme (keeping markets permanently/extremely suppressed) has continued unfettered for over 20 years because the vast majority of traders in these futures contracts always chose cash settlement for their futures contracts. The Ponzi scheme operators rarely had to provide any metal to back up the paper trading (shorting).
Now, after global bullion markets already experienced
an extreme supply shock in March, unprecedented numbers of traders are “standing for delivery” in futures contracts – they are demanding the bankers provide them with physical bullion.
In markets that have always been 99% paper, the bankers could pound markets at will – with their own (infinite) supplies of such paper.
In markets where significant percentages of contracts are now being satisfied with physical metal,
the bankers have limited ammunition.
They just expended a massive salvo with last week’s assault on gold and silver markets. How much additional buying will that stimulate, as bullion bulls take advantage of this sale on gold and silver?
From the perspective of the Federal Reserve, time is running out.
- The time is running out on how much longer it can keep pumping up U.S. equities bubbles
- Time is running out on how much longer it (along with the Bullion Banks) can continue to hold down gold and silver prices
- And time is running out for the U.S. dollar itself – before the Federal Reserve finishes its destruction of the dollar via hyperinflation
For precious metals investors, time is also running out.
At the least, time is running out to buy gold and silver at only a small fraction of the fair-market value.
Given extremely tight supplies of both gold and silver, time may also be running out to find any bullion to purchase – outside of private auctions.
Investors don’t need to exit equities entirely. Gold and silver mining companies are still relatively cheap in relation to metals prices. As gold and silver prices continue to rise, these stocks are certain to outperform.
Central banks have ruined our economies. They have perverted our markets. And they have hyperinflated our fiat currencies to the point where they are on the cusp of oblivion – the fate of every fiat currency.
In suppressing the price of gold and silver, the bankers have (inadvertently) made these assets even better shelters for wealth.
Not only will gold and silver continue to shelter the wealth of the holder, they are positioned for absolute capital appreciation – relative to nearly every other asset class.
Real value. Real security. Real assets.
