With my “Guiding Principal” (above) in mind, I offer my thoughts with respect to some of the major asset classes.
I read the following two articles from Zero Hedge:
“Mystery” Central Bank Buyer Revealed, Goes On Q1 Buying Spree
Bank Of Japan “Bought The Dip” Over Half The Time In The Last 4 Years
Zero Hedge concluded that while they doubted the central bank stock buying will be investigated with stocks at all-time highs, the central banks are foolish and will eventually be blamed for creating the biggest asset bubble the world has ever seen.
My conclusion differs, because my guiding principal says that the owners of the central banks know exactly what they are doing. They are essentially using printed money to buy up all the assets of the world. They are taking advantage of the deflationary forces of over- indebtedness, to minimize the inflation caused by their asset buying spree. The globalists knew that the fiat currency end-game would provide them with an auspicious time to commence their asset purchases. I guess that the globalists should control most of the world’s assets by the time WW III comes around sometime next decade.
The compromised patriot shills like Alex Jones work with the globalists to deceive and scare the crap out of their listeners, so the central banks can continue to work their magic. They are buying sovereign debt, stocks, corporate debt, and our mortgages. This is not nationalization; this is the world’s largest-ever leveraged buyout. The US Treasury nationalized GM and Fannie Mae after the last globalist-planned stock market collapse. In contrast, the central banks are privately owned. They are buying up the world’s assets for their owners. This is a big distinction. It is all being carried out under our noses while the alt-media screams of collapse.
Bottom line: As long as a large percentage of the population are not participating in the stock market and the central banks are gobbling up global equities and corporate debt, stocks will continue to levitate and move higher.
I came across a real estate “expert” on Twitter. Here is his link:
Mr. Hanson research conflates with Zero Hedge, Alex Jones, and the rest of the alt-right shills, and proclaims real estate is already collapsing. He illustrates with all sorts of data and studies. Unfortunately, his confirmation bias precludes him from ever seeing anything different. He will quote how rent roles on one and two bedroom luxury apartment buildings are falling and that the party is over. For instance, Mr. Hanson shows data to indicate how rents are down about 7-8% in Washington DC luxury apartments.
As a licensed Realtor in Fairfax County, Virginia, I was confused as to how he obtained his data, because it did not match with what I was seeing. I even corresponded with him about it, but did not receive a satisfactory answer. Around the DC Beltway, the real estate market here is performing normally, and in some measures can be considered a very fair deal. The median household incomes of Loudon and Fairfax Counties are the first and second highest in the nation, according to the Census Bureau’s American Community Survey (https://en.wikipedia.org/wiki/List_of_highest-income_counties_in_the_United_States) and houses are priced about 50% lower than in the bay area of California.
So, a $500,000 mid-range home is not that expensive when incomes are considered. Rents are up about 3-4% year over year, and prices are creeping up mid-single digits. Moreover, we are still about 5-10% below last decade’s top – even with a good local economy. Many condos are still selling for 50% of peak values. But these “experts” with their confirmation biases cherry pick data to conform to their preconceived conclusions – and their followers eat it up and sit on the sidelines for years waiting for a lower entry point. They miss out on all that rental income and amortization.
Bottom line: Real estate in many areas is doing just fine. Rents are not out of line with historic norms, and a conservatively managed portfolio of rental properties can be a winner in the intermediate to long-term. Before investing, just crunch some numbers. I can determine capitalization rates and Internal Rates of Return in a couple minutes and so can you. I would not manage properties in places like LA, San Francisco, Toronto, Miami, etc., as prices there are too high when analyzed by these traditional measures. So, if you wish to invest in rental properties, just do your homework and invest in stable areas. These areas comprise 70% of the country’s markets. Even areas in Washington DC have pockets of places for new investors to get going. Think independently and act accordingly. Real estate is still a great way to create real wealth.
The US dollar will continue to remain supreme. The US has the best performing and most stable large economy. In the US, fiscal and monetary policies are determined on the same level. Trillions of foreign debts are denominated in US dollars. Some estimates show that half of all physical US dollars are held overseas. Every US dollar ever printed is still legal tender; there have been no currency recalls. As you can see, no other currency can claim these distinctions.
One more thought; the United States is now one of the world’s largest oil producers. The world needs the US dollar to buy our oil. The whole irony is that the silly talk of the US petrodollar has actually been dollar supportive.
Bottom line: I have been a US dollar proponent for a few years now, and have written about it in my previous articles. Nothing will change over the next year or two. The dollar may eventually collapse – not from weakness, but from strength. Do not bet against it.
GOLD AND BITCOINS
One should own gold as an asset shield. An owner of physical gold essentially removes that percentage of his wealth from the system. Gold should not be viewed as an “insurance policy” for collapse or as an inflation hedge, since it has performed poorly and counterintuitively in times of economic and market stress. Recently there has been a new competitor to gold – cryptocurrencies like Bitcoin. I have come across two articles that illustrate this point:
Bitcoin hits a record high, but can it rival gold as a safe haven?
MIT Professor believes Bitcoin or other crypto-currencies could save financial system
I do not have any true answers about the actual origin of these virtual currencies, but I make three observations.
- Bitcoin serves the globalists well in their war on gold
- Central banks and large money center banks around the globe are developing block chain technologies and virtual currencies of their own.
- These virtual currencies are receiving a great amount of mainstream and alt-right media coverage.
My guess is that any new global currency will possess many of the characteristics of digital currencies such as Bitcoin. Thus, I have to conclude that on some level these currencies were developed by the “Deep State.” In theory, these types of currencies with their technologies provide governments with efficient means to tax and trace users.
If I wanted to discreetly own an asset it would be gold and not Bitcoin. The IRS has already forced a Bitcoin exchange to divulge information. Moreover, if the SEC allows the formation of Bitcoin ETFs to proceed, Bitcoin owners must have to concede that reporting requirements of some form may eventually be on the horizon.
Bottom line: Continue to slowly accumulate gold as you earn income, but do not listen to the promises and predictions of GATA, and King World News. Do not speculate in gold, as most will lose. I see gold rising over time, but the cryptocurrencies have begun to diminish its attractiveness. However, gold is more liquid than most believe it to be, and one can buy or sell it quickly. I do not recommend silver, as the elites own gold. They do not own silver.
THE BRIC CHALLENGE to USD
I know that the dollar haters have been hyping the rumors about the creation of a gold back yuan and a BRIC-nation cooperative payment system. This system would transition bilateral trade away from the US dollar and would emphasize their individual currencies plus gold. I have been following this topic for a while. I remember reading this stuff 12 years ago, but nothing ever seems to come to fruition. The problem with China and the BRIC nations is that their credit markets lack the sophistication and liquidity to conduct trade in an efficient matter. Plus their currencies have to be centrally managed to help control volatility. This is a large negative with respect to the yuan. If China decided to convert their currency to some sort of gold backing their economy would crumble, as their internal debt burden would instantly become too great. I have to believe that China is only saying this to try to strengthen their anemic currency. China cannot just switch from centrally planned fiat to gold backing. There would not be enough yuan to service outstanding debts. Even if China announced they now have 10,000 tons of gold in reserves, this does not mean the yuan has gold backing.
The problem with Russia is that it has relatively small and illiquid financial markets, and the size of bilateral trade between Russia and China is only about 10-12% the size of the trade between the US and China. Moreover, at current gold prices there is not enough gold to transact bilateral trade. If I were an exporter in a BRIC nation would I want to deal with Rupees, Reals, or Rubles? The answer is the same as 12 years ago – no.
Most in the alt-media community have a hard-to-break confirmation bias. There is little difference between them and the viewers of CNN or FOX. Each group is a slave to their confirmation bias. The patriots are in the worst shape, because they continue to believe collapse is just around the corner and have not participated in the asset inflation of the past six to seven years. The sun is shining and they are not out there making hay.
The global rulers have real time access to all the internet traffic data and know with great precision what each of us are doing most of the day. We may think we know our adversary, but they know us much better. They control all the media and have built a totally false reality for most people. The all-seeing eye has not overlooked the alt-right and patriot media. We need to think for ourselves.
Also by Thomas Beecham