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written by reader Jim Rickards` Impact System

By markly, May 4, 2015

Is anyone familiar with this new pitch from Jim Rickards? He says it is a new way to make money that does not involve forex or stock trading!

This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.

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maddogdne
May 4, 2015 1:21 pm

My question as well. Is there any reason to believe that this is anything other than buying options on currencies, and getting it right one in three or one in four times? When you do get it right, payouts can be big, but overall you have to kiss a lot of capital goodbye to get to the winners – so if you don’t take every trade, there’s a chance that you only pull the trigger on the dogs, and you can do nothing but lose, lose, and lose some more. Jeff Clark [a Stansberry author of The Short Report] was apparently hot until I became a subscriber, which seemed to catalyze his worst year ever!

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Uncle Albert
Member
Uncle Albert
May 5, 2015 9:18 am
Reply to  maddogdne

Agreed…was wondering if the illustrious Gumshoe had had a chance to delve into this mystery since his return from Omaha, NE?

Travis Johnson, Stock Gumshoe
May 5, 2015 9:45 am
Reply to  Uncle Albert

Haven’t looked at that one in any detail, but from my recollection he had a laundry list of a dozen or so things to do to prepare for currency armageddon — so he’s bound to be right about a few of them, even if the currency doesn’t really collapse.

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gaffgolf
gaffgolf
May 5, 2015 1:21 pm

Travis, hope you will be looking into this or some reader can confirm that it is options trading.

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Jake
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Jake
May 5, 2015 9:01 pm
Reply to  gaffgolf

I looked into it and it is basically buying long-term puts or calls on ETFs or stocks that will be affected by currency appreciation/devaluation and then getting out of them after a month or two if all goes well (you’re usually assured of at least a 200% gain in two months). These ETFs can be direct currency plays like USD/YEN, or something like an ETF that is leveraged in Lira and turkish banks that have high dollar reserves. They give you the type of option, the strike price and what to pay for it, just got it so will let ppl know if it’s worth it in a bit. I’ve always been interested in currency plays and now seems like a good time to do it but I don’t want to get leveraged in forex. Much easier to buy a simple call or put, and if it starts to go bad get out pronto. Yet having knowledge of what’s going on, and central banks all weakening their currencies, oil going up or down, and the dollar ready to be trounced by the Yuan, seemed like an easy way to make money at a time when the market could do who knows at any time. Hope that helps.

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Mike
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Mike
May 17, 2015 2:16 pm
Reply to  Jake

Hope you do well. I have been contemplating subscribing but it costs a whopping 1500! That’s a high price for a skeptic.

Jon
Jon
May 24, 2015 12:26 pm
Reply to  Jake

Evaluating whether to subscribe to Rickards’ IMPACT or SMPI from Simon Black/Sovereign Man/Seraph. Very different strategies, it seems. Might just do both. Jake, really curious to hear your take on the IMPACT service.

Jean-Paul
August 15, 2015 12:03 am
Reply to  Jake

Hi Jake, I’m completely new to the stock market and don’t want to loose my shirt over it. So any advise you can give me is much appreciated. If you have had the opportunity to use this Impact Software System would you recommend it to someone that’s a complete new starter in the stock market period. I’m just worried that the price of $1’750 is pretty risky for not being able to utilize it properly. Also how is your experience so far using this system and have you been able to profit from it as they claim you can? How user friendly is it and would you recommend it?
Your advice is very much appreciated, thank you,
Jean–Paul

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Green tip
Guest
Green tip
October 24, 2015 12:47 pm
Reply to  Jake

Hi, I saw your post on http://www.stockgumshoe.com about Jim Rickards impact system. I was just curious how it has worked out for you? Any insights would be appreciated.

Thanks

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Robert
Guest
Robert
April 1, 2016 3:26 am
Reply to  Jake

Hello. It’s been since May 5, 2015 since you posted that you were going to try the Rickards IMPACT system/email newsletter. Any success?

macavity
Member
macavity
May 21, 2015 4:03 pm
Reply to  gaffgolf

I’m looking forward to an update by Jake.
I read Jim Rickards two books ‘Currency Wars’ and ‘The Death of Money’. I respect the man’s scholastic work but the sales pitch on the Agora Financial Web site touting Rickard’s IMPACT system sounds like they are selling snake oil. They throw around statements about “potential 1000% returns”; “think how these returns could change your life”; “Play these moves correctly and they could make you rich”. When you click on the Subscribe Now button a clock ticks down to add a sense of urgency.
If the IMPACT System is so profitable, and I hope it is, why do they need the hard sell?

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CKN
Member
CKN
September 23, 2016 8:21 pm
Reply to  macavity

If Jim Rickards had a legitimate investment business, then we would he send out ridiculous emails with all sorts of annoying scare tactics and sales pitches? That alone is more than enough to raise a red flag. The BS that he emails dish out, I can barely get through them.

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backoffice
Irregular
January 13, 2016 4:36 pm

He’s also plugging AIG warrants that the government sold as a reward from bailing out AIG
Now I know where the President’s private stock exchange story came from. The warrants
are selling at roughly $22 and have a long expiration so he figures AIG will continue rising in price and so he views this as a bargain right now.

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Travis Johnson, Stock Gumshoe
January 13, 2016 7:11 pm
Reply to  backoffice

Lots of folks have liked the AIG warrants over the last few years — they expire in 5 years with a $45 strike price, so they’re $12 in the money with AIG at $57.

Most bullish analysis scenarios for the warrants rest on AIG trading closer to (or at a premium to) book value over the next five years — book value now is something like $75/share, I think. If AIG gets to $75 you’d have a 24 percent gain in the shares (57 to 75) but probably well over a 30 percent gain in the warrants ($22 to $30 if the gain happens right near expiration, more if there’s still time value left before warrant expiry).

I’ve been tempted by those warrants in the past, but don’t own them. Five years is still a lot of time value, long term warrants on non-natural resources companies are rare.

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dukeoneil
May 6, 2015 11:48 am
Reply to  maddogdne

I experienced the same thing with the Short Report!! I got in…and it went DOWNHILL.
🙂

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MachineGhost
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MachineGhost
June 1, 2015 10:02 pm
Reply to  dukeoneil

Never short a bull market. 😉

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rew2
Member
rew2
June 3, 2015 4:24 am
Reply to  MachineGhost

The Short Report is Jeff Clark’s option trading newsletter from Stansberry. Despite it’s name the recommendations are calls at least as often as they are puts. Jeff Clark is a swing trader, he tries to guess when a dog of a stock is about to finally go up, or when a market darling is finally gong to swoon. He’s wrong most of the the time, and I’ve found The Short Report to be an excellent way to lose money. Of course options being what they are there is the occasional triple or quadruple that Stansberry can parlay into months of advertising.

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MachineGhost
Member
MachineGhost
June 3, 2015 9:40 am
Reply to  rew2

Yep, it seems that Clark was too trigger happy on buying gold miners, hence a disastrous 2014 for The Short Report. I’d say his biggest problem is in using outdated technical indicators that have been in the public domain for decades. Hence his win rate (on non-Short Report picks) is only around 60% at best from what I’ve seen. Hardly matches the hype or praise.

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JFK
Guest
JFK
July 31, 2015 2:13 am
Reply to  rew2

Simple solution. When recommendation comes out do the exact opposite. I have done that with some success using other services I think the big money players get these ideas and sabotage them. No guarantees but worth a try. Just one mans opinion

archives2001
archives2001
August 18, 2015 2:36 am
Reply to  rew2

MachineGhost, you are SOOO RIGHT!
‘Pumpers and dumpers’ are part of the play too!!!

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archives2001
archives2001
August 18, 2015 2:39 am
Reply to  rew2

JFK~ SPOT ON!
‘Pumpers and dumpers’ are part of the play too!!!

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Robert
Member
June 19, 2015 10:51 pm
Reply to  dukeoneil

If anyone would like to receive significant insight into Rickard’s IMPACT trading/investment approach, ( at least as stated in the aforementioned ) I believe one should be capable of ascertaining a marked understanding by simply delving into his most recent book “The Big Drop”. I believe at completion of the book, one will have a much clearer and knowledgeable understanding of the IMPACT System and its impact (no pun intended) on investing and/or investment.
Respectfully,
Robert

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Lawrence Taylor
Member
Lawrence Taylor
October 23, 2015 3:06 pm
Reply to  Robert

The IMPACT system is something I read about and bought last night. It’s all about buying and selling call and put options. He gives his reasoning and suggests a choice.
So…I looked at their current portfolio, it is down 121%. on about 15 positions. I understand long term options, but everything I’ve ever read from Stansberry and Agora over the years has been hyped and just silly. They are selling hope. If a ‘system’ is so good, why not just keep it to yourself. I do that with silver futures, and I won’t say to anyone what I’m doing.
Best, LT

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Lawrence Taylor
Member
Lawrence Taylor
October 23, 2015 3:10 pm

I forgot to mention I’m returning the IMPACT currency trading ‘system’. I really don’t have much respect for their products, and I new better but I thought maybe, just maybe this will be different. NOT.

Des
Guest
Des
January 10, 2016 7:29 pm

Silver futures? So, will you tell someone who asks respectfully?

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craig
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craig
April 12, 2016 5:19 pm

I think why they say what they’re doing is that if they develop a record of even partial success, then they can sell subscriptions to their trading reports, that’s a form of income to offset their own trading losses. If you now how to do something why not teach that knowledge to other people for a price. There’s a lot of fish in the ocean and those fees add up. I wonder whether some of these advisors are front-running their recommendations although many of them will say they are not. For instance, recommending a put or option up to a certain price and then jumping in ahead of the crowd and profiting from any volatility resulting from thjeir recommendation.

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Just Paid My Fool Tax
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Just Paid My Fool Tax
December 20, 2015 3:03 pm
Reply to  Robert

One would be wasting one’s time.

dukeoneil
May 6, 2015 11:56 am
Reply to  maddogdne

Thanks Jake. Looking forward to seeing how it goes.

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financial newsletters
Guest
financial newsletters
June 1, 2015 2:01 pm
Reply to  dukeoneil

My question is if financial newsletters can generate huge returns such as the Impact system why tell anyone about their exclusive returns. I assume that the owners of these newsletters are not people who care about spreading the wealth. They could accumulate great wealth without having to sell a newsletter.

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MachineGhost
Member
MachineGhost
June 1, 2015 10:04 pm

Far easier to get paid predictable income from selling subscriptions than unpredictable, sporadic trading income.

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Michelle
Guest
Michelle
December 20, 2015 10:12 am

Amen

D
Member
D
December 20, 2015 9:43 pm
Reply to  Michelle

True 🙁

Rickards has some interesting ideas, but his big calls since 2008 have been totally wrong. The dollar bottomed in 2008, then started drifting higher, entering a bull market in 2011 that won’t end for another couple years, maybe longer.

The yuan kept appreciating for a while. But pegged to the dollar, it’s now overvalued to keep China’s export machine going. It’s almost certainly going to devalue for a couple years. Without deep, open capital markets in yuan, it can’t become a significant reserve currency.

mattbTownX
Guest
mattbTownX
June 16, 2016 3:24 pm

Exactly, this IMACT system was advertised just like all the other similar ‘videos’ (although he claims at beginning it wasn’t ‘one of those long videos’. But it is. its just written out in 3 foot long scroll down on smart phone with pitch after pitch after pitch. By the end, I was hopeful to be honest. Thinking you never know, maybe they did find the best formula. I almost paid $1,500…after all, they were only accepting 1% of their current customers. They proclaimed so many times that there were limited spots available for this $1500 subscription. Whenever someone then says “we are not trying to pressure at all by limiting the subscriptions”…THATS EXACTLY what he is doing. Blatant lie. Its a tactic to speed up your order before you talk yourself out of it. He is using classic sale tactics all the way down his pitch. Classic psychology 101. There are many hints throughout that I picked up on as red flags. Now knowing people who bought the $1500 and are demanding refunds because it is NOT so true..I feel better that I didn’t miss out. He said that he has this secret system the CIA uses and that he cannot get in trouble using it this info out “as long as he doesn’t tell too many people”. And of course if we as subscribers go and share the secret with anyone including our friend, family or pastor of our church, then we will pull our subsctiption” Seriously his pitch for IMPACT says something to this affect. I trade FOREX and I love it. He rips on everything including forex b/c of course he wants us paying him 1500. I thought about using his program and finding out which currency trades he recommends and then using them to my advantage in FOREX. I figure half the battle with forex is predicting pair currency movements based on economic news. Hi system is using economic moves and happenings in countries to predict currency wars. But, I declined to still buy program. YES< I agree with most of the intelligent people on this thread. If this man's program of IMPACT is so very successful with 1,000% returns and turning $5,000 investment into 67,000 in less than a year…then why would he be taking the time to sell this stupid subscription? Power in numbers is the reason. First, he doesn't make as much money as he claims for himself. Second, he is banking on 100-1000-2000 new subscribers to feed him 1,000 X $1,500 price= 1.5 million a year. IN a country of 300million people of which 30 million invest…1,000 people to cleverly manipulate for 1500 is real possible. PLUS, this is residual income for him!!! He automatically charges your card 1500 every single year. You do the math. Self taught is the only way to go. Use tools when you can, but to pay someone for advice goes against investing in general because fact is NO ONE knows, what is going to happen. NO ONE. Luck plays the biggest role.

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newstockgumshoeuser
Member
newstockgumshoeuser
May 31, 2015 4:27 pm
Reply to  maddogdne

What Rickards has said I don’t see in any of the responses here. To the point he says, “Investing the IMPACT way is easy. Remember, IMPACT is not shorting stocks. It is not ETFs. And it is not forex trading.”

No one here has made a point of this, and some have alluded to what Rickards says is NOT involved, but they in fact say they suspect it is.

I view all of what comes out of Stansberry Associates as snake oil. I signed up for a free trial, but requested that I not continue. I will evaluate all claims for the next year to see if any of them are true. The way Richards presents his Impact strategy is pure snake oil. You must sign up for the “free” trial, which requires providing a credit card to receive the reports. I think they are banking on enough buying into their strategy without fully analyzing it. Then you can say goodbye to your money when things turn out to be not as advertised.

From the beginning of Richards’ sales pitch he promises to reveal his strategy. I have a much different view of what he terms “reveal” than what his hard sell presents to potential clients to his news letter. I expect to have him provide the latest predictions of what he expects to be the next big opportunity presented, without signing up for anytrhing. If he doesn’t he has lied to get money from those stupid enough to buy into his sales pitch without evaluating it, and without having to present a credit card to take advantage of whether his strategy is as good as he says.

I don’t think Rickards has anything better to provide than what most here, from what I’ve read, already have done without Richards’ advice.

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barbrarh
June 7, 2015 11:35 am

Jake has said he bought the newsletter and it is options

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Jake
Member
Jake
July 2, 2015 11:37 pm
Reply to  barbrarh

sorry for the late reply, haven’t read all of the posts about the IMPACT system so it may have already been covered, but yes it is buying puts or calls on ETFs that are plays (directly and indirectly) on foreign currencies like the Yen, Euro, etc. The ETFs he’s recommended are EMA (Malaysia), FXY (Yen), and one for Turkey, can’t remember the name or symbol, Santander for the Euro exposure, and a few gold plays on GDX and RGLD. The gold plays have it going up quite a bit through JAN 16 but I didn’t buy any of those as I buy bullion and own RGLD shares. I did buy puts/calls on Malaysia, the Yen, the euro, the Lira, and my own play on FXI (China) as I (luckily) thought China was shaky and have owned A Shares ETFs for about a year (insurance). In all honesty the only trade he recommended, I bought, and that I’m down on is on the Lira, but I didn’t buy all of his recommendations so I can’t give you a success/failure rate. I know his gold plays would be hurting right now. Even though I cancelled my subscription as the price tag is too rich for me and the amount of money I can speculate on, I found his thesis for the trades to be insightful and his thoughts on currencies to be right on all but the Lira. For the future he believes the Euro will strengthen against the dollar to about 1:1.18 despite Greece, which he says will stay in the Euro. And he believes China will keep the RMB closely pegged to the dollar to gain entry for the RMB into the IMF’s SDR basket. Basically China will play nice with regard to the Yuan, not peg it to gold, devalue it, etc. With their economic slowdown and market insanity we’ll have to see on that one. Hope that helps, and sorry again about the late reply. Haven’t been on in a minute, hopefully someone covered the whole currency wars business. I need to become an irregular, love the site.

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johnkenko
johnkenko
August 8, 2015 6:07 pm
Reply to  Jake

Thanks for your comments, Jake

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archives2001
archives2001
August 18, 2015 2:46 am
Reply to  Jake

THANX JAKE!

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fossten
Member
fossten
August 20, 2015 6:22 pm
Reply to  Jake

I’ve followed his advice since June and I’m up 30%, and that includes my cost of trades. He does seem to know how to pick winners. I’m on pace to cover my costs for his service and still double my money for the year.

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jozsika
jozsika
August 25, 2015 12:42 pm
Reply to  Jake

Thanks for this writeup.

Since early July (when you wrote this), the Euro dropped but it is up again. We’ll see.

Greece is still in the EU.

China did devalue the RMB.

GLD dropped like a rock and still didn’t bounce back.

Shall we track him more or this is it?

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Robert
Member
September 22, 2015 9:46 am
Reply to  Jake

Jake,
I agree with you on the yuan being pegged to the USD after an agreement with the US (I believe sometime in August). Their not being pegged to the gold is misunderstood by many due to China’s “alleged” purchase of very large amounts of gold and publicly stating thus. However, the amount of gold purchased over the last 5 years or so could never be factually proven through legitimate financial documentation; quite typical of China and their historic Modus Operandi.

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D
Member
D
December 20, 2015 9:47 pm
Reply to  Jake

Yes, and now that the IMF has put the yuan into the SDR, the yuan peg to the dollar will continue to be loosened, and the yuan will sink further. (December 2015)

Michelle
Guest
Michelle
December 20, 2015 10:16 am

Lmbo

Gary Stoltz
Irregular
June 4, 2015 1:07 pm
Reply to  maddogdne

The same happened with me when I went with Hillary Kramer, Promised double digit winners but gave me double digit losers, 3 of them plus charged me $202.00 because I cancelled after 30 days.

John McDade
Member
John McDade
September 18, 2015 11:23 am
Reply to  maddogdne

jim Rickards has sold himself to Agora Finacial, what a pity he was credible not so long ago. Now we have to dump him in with all the others, dishoestly trying to suck our money out of us !!!!!
Isn’t it infuriating getting these regurgitated messages 4 or 5 times a week, IMPACT SYSTEM, etc, all lies !!!!!
Then no explanation of THE SYSTEM until you have paid your money, a lot of money !!!
If it was that good why do they need us to subscribe ???? A question one should always ask ones self !!!

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John
Guest
John
October 27, 2015 6:40 am
Reply to  John McDade

Bought it just to see. Was misrepresented. Got my money back less 10%. He is smart and gets some trades right but was not honest it the way it was presented and sold. If he realty had the answers he claims he would not be selling snake oil at $1500 a pop. He is guessing. Just watch watch what he says about SDR ‘s and The US dollar. He is way off the mark.

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Bob
Guest
Bob
June 8, 2016 8:35 pm
Reply to  maddogdne

Yes, it is nothing more than buying put & call options. So far, on paper, I’ve lost 45% I figured he knows more than I , and I love his books; but I have no more capital to allocate so I’ve stopped adding positions. My last expiration is Jan 2017. Then, win or lose,I’m through with Agora. I’m not optimistic, but, hey, it was my decision. With options, of course, you “can’t lose more than you put in” but to make money you have to be right AT EXACTLY THE RIGHT MOMENT. I wouldn’t sign up for anything like this again.

But I WILL let you know how I make out. Maybe I’ll be happy by January !

Actually, I am surprised a man of Jim’s stripes hooked up with these guys. And now David Stockman??? Do you think they’re doing it for the money?

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Patricia Vasquez
May 7, 2015 7:18 pm

I don’t have time to worry about who’s doing what. My question, and I’m serious, if the stock market is going broke, do you sell everything or do you keep the long term stock. When the stock market busts;, the dollar plummets too. I don’t get it. What do you do with the money you have, you can’t buy all metals. Any good answers out there?
Thanks in advance.

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hendrixnuzzles
May 7, 2015 9:10 pm

Patricia, I wish I had the answer. The best advice I can give is to diversify and be ready for anything. Don’t buy anything you don’t understand and believe in…and be ready to change your mind once in a while. Not every day, once in a while.

These investments are supposed to give us peace of mind.
So if I have a position that doesn’t add to my peace of mind, I GET OUT.
If I am not comfortable and confident, I GET OUT.

The assets needed for inflation are just about the opposite of what is needed for deflation. And no one knows what is going to happen and in which order. We might get them both, one after the other. So some cash is good, it is easier to invest it when you have it, compared to raising it in the middle of a panic when everyone else is headed for the exits at the same time.

Or we might just muddle along. If you think all the noise is paranoia, and things are going to go along pretty much as they have been, our publisher Travis has a very good commentary in his recent thread on the trip to Omaha.

My conclusion is that whatever occurs, you want real assets that will be worth something. And we need to be psychologically prepared for anything.
Most pressing to me is some protection against a financial meltdown,
since financial instruments and real estate, and biotech for that matter, are in a bubble created by zero interest and tax policy.

My asset biggest holding is residential income property, although this could suffer another severe price downturn if interest rates rise. I have a mortgage on one property (not my home) but it is not for leveraged profit, it is more as a hedge against the dollar and high inflation. I do have a line of credit, unused, against my home for flexibility; the government wants us to open these and they are making it very easy to get 4% money.

Although real estate is not so liquid, these properties have value no matter what happens and they produce some income.

It looks to me that the Authorities will inflate like crazy to keep deflation away. It is possible they will fail, or completely wreak the currency while trying. Most everything could deflate except the stock, bond and real estate markets…sort of what we have now. We are really in uncharted waters on this. The bankers wants everyone to think they know what they are doing, but I do not think they themselves know what the outcome will be. They just have unlimited authority to borrow or make dollars out of thin air, so the bets will just get larger and larger. More and more bets in the casino, unlimited chips for the favored high roller bankers and investment houses.

In more conventional investments I do have a sizeable position in precious metals and related investments…maybe 25% of investable assets, which is way beyond what most advisors and investor will suggest. Hey, Harry Dent is a successful newsletter writer who has predicted that gold will be at $ 250 tomorrow or next week, so my view is not unanimously held. I have some physical metals and coins, but they do not dominate my holdings. The “related investments” are in royalty companies, miners, producers, and speculative junior miners. These match up to my convictions, which may be totally wrong, that the currencies they are denominated in are all being debased and inflated as fast as the central banks around the world can manage, and that ultimately this will result in significant nominal price appreciation of monetary metals and other physical commodities. No one has accused me of being a “gold bug” and I would object to being labeled as one; to me that label is for someone who owns a great proportion of physical gold, to the exclusion of other investment vehicles.

There are also many powerful interests who have no use for the US or our dollar and would like to undermine it. Let me see…China, Russia, and Iran come to mind. These parties also happen to believe in precious metals as a store of value, along with more non-aligned groups like 900 million Arabs and one billion Indians.

Just recently diversified strongly into biotech, with many of the thoughtful and persuasive recommendations of Dr Kss.

I also have some utilities, tech stocks, and other assorted securities…would like a little more in consumer staples, oil, gas and energy. Love uranium, I’m long uranium miners and producers.

Just opinions. Hope you find an approach that works for you and protects your assets.

Best wishes

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archives2001
archives2001
May 16, 2015 1:11 am
Reply to  hendrixnuzzles

Wow H N! VERY comprehensive!!
Much appreciated!!

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archives2001
archives2001
May 16, 2015 1:14 am
Reply to  hendrixnuzzles
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foxx
Guest
foxx
May 18, 2015 12:17 pm
Reply to  hendrixnuzzles

“diversifying recently into biotechs”??? You mean to say, after the sector went parabolic, you jumped into it?
If you call that ‘diversification’, perhaps you should think about the kind of diversification you really intend to enter into. me thinks, jumping into one of the most high-beta, momentum- and hope-driven sectors isn’t exactly a receipe for wealth conservation, especially after it had such a massive run-up already. Not saying it can’t rise another 100 % just pointing out that this is another big speculative position, rather than a ‘diversification’.
gl anyway.

hendrixnuzzles
May 21, 2015 6:07 pm
Reply to  foxx

Point taken. Look, most investment sectors are interest rate dependent and will suffer hugely when rates rise. Let me ask you, is it any safer entering a sky-high bond market that will collapse on a comment by Janet Yellen ? Is my investment in an income property any less of a speculation that biotech or gold mines ? Real estate…Utilities…consumer goods…financials…and stocks in general, for that matter, could all implode with rising rates. What about oil and gas ? Well, I had big positions in XOM and CVX, the bluest of the blue chips. What happened ?

In biotech, my decision to invest in the sector had nothing to do with its recent run-up.
On the contrary, the recent performance was a negative to me, insofar as I worry about the Fed-driven asset bubbles collapsing. My thinking was based on what I perceive to be expert opinion, available here at Stock Gumshoe; a very interesting discussion group by
concerned and intelligent individuals; and my own opinion that the demand for medical services will continue to increase, based on the inherently unlimited demand of individuals for the services, advancing technology, and the current state of political, social and financial interests in the United States. All of these factors are positive.

Best regards

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hendrixnuzzles
May 21, 2015 6:08 pm
Reply to  foxx

…and may I ask, what do you suggest ?

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medicare
Guest
medicare
June 1, 2015 1:46 pm
Reply to  foxx

Medicare is going bankrupt has a result of the high costs of healthcare. Cost of drugs is a significant part of the total cost. How long can medicare and medicaid continue to pay these high costs. Medicare under law can not negotiate lower prices from the pharmaceutical companies. Foreign countries pay much lower prices for the same drugs.

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MachineGhost
Member
MachineGhost
June 1, 2015 10:16 pm
Reply to  medicare

Foreign countries pay much “lower prices” from the same drugs because:

A) They have price controls.

B) They don’t foot the FDA regulatory costs to bring a drug through the approval process which now costs several billion and over 10 years.

In other words, they’re getting a free ride off the American taxpayer,

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Greg1985
Guest
Greg1985
July 23, 2015 8:13 am
Reply to  MachineGhost

Ahhh you really speak confidently about something you know very little about..The Reason medications are cheaper in other countries is because they are subsidised. Average Joe generally pay a significantly larger amount of tax than you would in the US.

Hospitals, non elective surgery and general practitioners are 100% free here in Australia. You even get paid to have children.

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financial newsletters
Guest
financial newsletters
June 10, 2015 3:40 pm
Reply to  medicare

Pharmaceutical companies continue to claim very high costs to develop drugs. The drugs are typically very toxic and very expensive. Typically there are non toxic alternatives that cost much less. Why don’t the pharmaceutical companies publish the cost to develop each drug if they are not hiding the cost? The cost are not difficult to determine. It is known as adding time and materials.

archives2001
archives2001
August 18, 2015 2:58 am
Reply to  medicare

Greg1985: Are you a pharmaceutical Troll?
Do u understand that it costs HUNDREDS OF MILLIONS
of dollars just to get ONE DRUG through the FDA?
Just WHO do u think pays for THAT ??
What Turnip Truck did you fall off of ???

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D
Member
D
December 20, 2015 9:52 pm
Reply to  medicare

Drugs and technology are about 20% or so, maybe a little more, of US health care costs. 70% is the services-labor side, and administration is about 10% or a little less. Most of the cost inflation comes from the labor-services side.

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rambotrader
Member
rambotrader
June 26, 2015 9:35 pm
Reply to  hendrixnuzzles

A couple of responses:
1. cash may not be all that safe either. Most prudential regulators around the world already have clauses in their documentation whereby the big banks can LEGALLY steal your money if they run into trouble. The Cyprus solution coming to a country near you.
2. gold for $250 an ounce. Tell me where, I’m buying.
3. countries have no use for the US dollar? You need to take a larger view. America has duded most of the world for the last century. I find it deplorable that hedge funds are (legally) allowed to destroy currencies of their smaller trading partners. And then American money comes in and buys the deflated values of prime companies. Is this criminal behaviour or what? So don’t get me going about the poor $US. What come around goes around and nobody will feel sorry if the $US dies.= given the monopolistic behaviour over many decades and the financial poverty farmed out to rich nations whose valuable assets are then taken over. Sorry if not playing your tune. Fair is fair!
I do like most of your post. You are very knowledgeable. Always good to learn from others.

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John McDade
Member
John McDade
September 18, 2015 11:32 am

Patricia,
lets assume the US wil feel much more pain than China, etc. Assuming you have your 20 or 30 % in silver and gold, I would look to Asian Investment trusts. There will likely be a double whammey there. A currency benefit and capital appreciation. A 3 rd benefit is if you look at Trusnet you can see, at times, these trusts selling a significant discount to net asset value. Pick trusts that wil be less effected by a crash or downturn. The beauty of the Trusnet website is you can see the rusts that have performed well over, 3 months, 6 months, 1,3 and 5 years. and a sector ranking. Not certain they will continue doing that but quite likely. All the work is done for you. If you need any more isnsight feel free to contact me. Oh I am a private investor, not a salesman. John

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Robert
Member
September 22, 2015 10:10 am

Besides a reasonable amount of gold and silver (preferrably more silver than gold), one will require things for sustenance/survival. We will immediately transform into a bartering society. Value will be defined by what we will require to survive: i.e. water, unperishable foods, fruit and vegetable seeds, cooking stoves, propane, forget generators which need gasoline- however, a generator with a Tesla like design would be preferrable. Other things of value: lighters, matches, H2O filtration systems, H2O anti-bacterial/viral products such as bleach, clothing , blankets, etc. I believe one gets the point. These things among many others like drinking alcohol, prescriptions like antibiotics, cigarettes, etc. will be of the greatest value. Would you trade drinking water for gold if your drinking water stash for you and your family has become extremely low? These are dilemnas which will definitely arise in such a situation. What will you and your family do under such circumstances?

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rdbck
Guest
rdbck
May 11, 2015 4:51 pm

Today I just finished reading “The Death of Money” by James Rickards. It should be available in your public library. It is a book that needs to be read slowly and again. I might be incorrect in my interpretations below and may adjust my opinion as I reread it. I want to be fair to both the author and to those who read this comment. To respond to some of the above comments, even though deflation and inflation are both possibilities, Rickards seems to think that the government(s) will do everything possible to sustain inflation because they cannot function in deflation (p 278). Even the IMF has a policy statement that it will issue SDR’s in such a way as to avoid deflation (p 213) There is an entire chapter of inflation/deflation (p 243). He also cautions against purchasing gold except in a form in which you physically own it and do not store it in a bank. He references the small print in purchasing gold that allows for “early termination” and “cash settlements” instead of bullion. Most “paper gold” is unallocated (p 275) and, since more 10 times as much physical gold is sold as is stored, it is unlikely that you would be able to take possession of any gold that you think you own on paper. The ratio of gold in paper contracts to physical gold is 100:1 (p 285). Before 2016, China will probably have enough gold reserves to be included in reforming the monetary system. (p 281) This means that it is possible for a new international reserve currency to be established, a SDR basket of currencies (p 265. p 288) but he feels that the collapse of the dollar could happen before this system is ready. The last chapter deals with seven warning signs of a collapse and recommended asset allocation to survive any scenario. Briefly, he suggests 20% gold (physical), 20% undeveloped land, 10% fine art, 20% alternative funds and 30% cash. It is necessary to read this chapter to get details on the specific investments recommended.

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archives2001
archives2001
May 16, 2015 1:09 am
Reply to  rdbck

Great report RdBck! …Thnx a lot!
China will probably be included in the SDR by late Oct.
If it occurs, the Dollar will probably take a big hit!

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archives2001
archives2001
May 16, 2015 1:15 am
Reply to  archives2001

I forgot to give you this link:
http://www.silverdoctors.com/tag/ted-butler/

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hendrixnuzzles
June 1, 2015 11:30 pm
Reply to  archives2001

Even if China gets in, they may play nice and not play up the gold angle, so that all the governments can control their fiat money. In other words, there could be a deal that enables big governments to continue their financial charades. Or they could say FU
and make the yuan gold backed, or just start their own club.

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hendrixnuzzles
June 3, 2015 11:03 pm
Reply to  hendrixnuzzles

By the way, the AIIB, China’s version of the IMF, has received support from our friends the British and Europeans; and Christine Lagarde is saying publicly that inclusion of the Yuan in a basket of “SDR” is just a matter of time…”when, not if”. It still is not a foregone conclusion that terms will be agreed to for Chna’s inclusion, either side might get intransigent. But the Chinese move is gathering strength and either way, the yuan will gain a lot of ground and the dollar will lose. And I’m not so sure we should be enthusiastic on a new “world currency”…more fiat money is not what the world needs.

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MachineGhost
Member
MachineGhost
June 3, 2015 11:39 pm
Reply to  hendrixnuzzles

Money being fiat isn’t a problem, its debt backing it. We need to outlaw government from ever issuing it.

archives2001
archives2001
August 18, 2015 3:11 am
Reply to  hendrixnuzzles

” But the Chinese move is gathering strength and either way, the yuan will gain a lot of ground and the dollar will lose.”
Well so much for that prediction, hn.
So far three Yuan devaluations and probably more on the way.
The Dollar remains VERY strong and may even go up considerably MORE after
the probably collapse in Sept/Oct. And I suspect Harry Dent may come thru
in spades with his prediction of gold continuing to PLUMMET, even after the
crash, at least short/mid term.
Long term, yes the Dollar eventually has to drop and gold has to go UP UP UP!

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Sargam
Guest
Sargam
August 26, 2015 12:26 am
Reply to  hendrixnuzzles

What is the real “impact” of gold “backing?” I can’t see currency being backed by gold in the real sense, where cash or debts are exchangeable for the hard stuff, either by the public or just limited to foreign central banks – even in a world where credit gets wiped out in a depression worse than the Great. Imagine what the price would have to be. Even in a complete hyperinflationary collapse, the closest we might come to that would likely be backing by a basket of commodities? How did Zimbabwe recover from its bout? They didn’t introduce gold-backing, however they dd it. Isn’t gold just another asset the Chinese government owns that they could sell off in an emergency, that they have locked onto because western governments have artificially lowered the price for political reasons? Their priority, like every government’s, is to encourage employment at the expense of currency strength; weak currency even helps them export. Their savers get shafted but which government cares about that?

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MachineGhost
Member
MachineGhost
August 26, 2015 11:05 am
Reply to  Sargam

The impact of gold-backing money would be incredibly deflationary and austerity imposing. Hypothetically, gold-backing money is suppose to limit government deficit spending. That works only as long as politicians choose to follow it and there is no deflation with its social costs and human suffering . And then the gold-money peg is finally broken and economic recovery commences. Greece is the latest example of what a “gold-backed” monetary system used to be like. Same for China with its incredibly overvalued Yuan-Dollar peg.

Zimbabwe recovered by giving up issuing currency and adopting the U.S. dollar, sort of like Ecuador. But that was just a de jure act to label what was already long occuring de facto among the general public. No one just sits by and lets incompetent and corrupt government bureaucrats confiscate their income, wealth and standard of living. Even if it’s just a matter of degree (i.e. the fixed income elderly and disabled certainly don’t have very many practical options). Zimbabwe is a pretty extreme case of hyperinflation brought about by an unholy mix of cronyism, racism and socialism. Venezeula will be the next domino to fall for similar reasons. Once the ruling class destroys the productivity capacity of a nation, hyperinflation is all but guaranteed. Argentina’s Kirchner has only survived so long by being less effective than Venezuela and Zimbabwe.

Now after such a monetary crisis where confidence has been lost in government money/debt, there can be a role to play in backing a newly issued currency with tangible assets. But that has far more to do with restoring confidence and not any inherent magical properties of gold or real estate. I’d argue that it is far better to back money with productivity assets than a useless pet rock. That could even be cryptocurrency.

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hendrixnuzzles
May 21, 2015 6:12 pm
Reply to  rdbck

…My problem with his strategy is in the farmland/undeveloped land, and fine art. I’m not the kind of person who can buy an Old Master at Sotheby’s, and investments in farmland are pretty awkward to make also.

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MachineGhost
Member
MachineGhost
June 1, 2015 10:21 pm
Reply to  rdbck

The core problem with Rickards is there’s too much gold bug doom porn conservative ideology in his thinking, so that colors his asset allocation recommendations. While not as bad as Peter Schiff or Harry Dent, its of the same ilk.

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hendrixnuzzles
June 1, 2015 11:25 pm
Reply to  MachineGhost

…but Dent is on the other side, forecasting $ 250 gold…. which will sure shock a bunch of us

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Steverino King O' Pain
Member
Steverino King O' Pain
June 15, 2015 6:08 pm
Reply to  hendrixnuzzles

I read Gld. could drop to 700.00 in his newsletter (Dent). Of course that would be with a deflationary period. No ?

hendrixnuzzles
July 2, 2015 10:25 pm

Yes it would be deflationary; or rather, one can imagine it happening easily in a deflationary environment.

We already have severe price drops in many industrial, material, foodstuffs, and commodity prices, so I suppose one could make an argument that gold will follow as well.
Since gold isn’t “useful”, one could argue it is due for a fall, since iron ore, zinc, coal, crude oil , natural gas, wheat, corn, etc etc ad infinitum are all depressed, gold should follow, right ?

I am not of that opinion, although it could happen. I will be very, very surprised if gold
drops below $ 1000 for any extended period. Because gold is valuable as money, and all the readily available currencies are being inflated to death.

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JFK
Guest
JFK
July 31, 2015 2:18 am

Dent could be right this time because he has been wrong for the past 5-6 yrs and he is due for a correct prediction , even broken clocks are correct two times per day

Robert Estes
Member
Robert Estes
October 28, 2015 11:38 am
Reply to  hendrixnuzzles

Harry knows that fear sells books and newsletters. He has preached this his entire career. Just a heads up.

hendrixnuzzles
June 1, 2015 11:32 pm
Reply to  MachineGhost

Hi Machine Ghost. Have you read Rickard’s books ?

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MachineGhost
Member
MachineGhost
June 2, 2015 3:21 pm
Reply to  hendrixnuzzles

I read the introduction and conclusion chapters to The Death of Money but couldn’t make it past those due to the eye rolling about the doom porn. He doesn’t understand the operational realities of our modern financial system. To be fair, this is a very widespread problem, even among those highly educated and arrogant PhD pricks such as Paul Krugman. Keeping ideology and bias out is the best way to perceive reality objectively.

hendrixnuzzles
June 2, 2015 4:10 pm
Reply to  MachineGhost

If you wanted to be fair, you would have read both books before passing judgement
on them. As it is, you have read only the introduction and conclusion of one of them.

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MachineGhost
Member
MachineGhost
June 2, 2015 4:51 pm
Reply to  MachineGhost

True, except I’ve read the exact same kind of doom porn over and over throughout the years, that there’s nothing new under the sun. It’s predictable. And it’s an industry.

I mean, seriously, the answer is ALWAYS the same: buy hard assets. Do you know how much you would have lost in wealth (either actual or opportunity) over the past 35 years listening to these doom porners? Rickards is just more respectable about it. It doesn’t mean he is right any more than a broken clock is right twice a day, 730 times a year and 7,305 times a decade… it’s all in the timing.

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archives2001
archives2001
August 18, 2015 3:17 am
Reply to  MachineGhost

Schiff thinks gold may stay down for awhile but he says it will SKYROCKET!
Dent’s the $250 gold guy. I don’t think it will sink that low but $700 is a
distinct possibility, crash or no crash in Sept/Oct which I’d say is a pretty good bet!
Research Jonathan Cahn & Mark Biltz on youtube.

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Robert Estes
Member
Robert Estes
October 28, 2015 11:40 am
Reply to  archives2001

Harry knows that fear sells books and newsletters. He has preached this his entire career. Just a heads up.

minuteman333@live.com
Guest
minuteman333@live.com
June 3, 2015 3:43 pm
Reply to  rdbck

Rickards and others deliberately ignore the elephant in the room and that elephant is the now public revaluation of the Iraqi Dinar which is now in process. Obama stated in his state of the union address that half of the US Debt has been paid off. How did this miracle occur? The only way I feel this could happen is the back room trading of trillions of the US reserve currency which is the Iraqi Dinar. The quantitative easing that is occurring is really the death throes of the old financial system which is cashing out the wealthy families that own the Federal Reserve System (147 Corporations) and their 86 central banks. The new BRICS oriented banking system will be online soon. Perhaps holding one’s position until the markets adjust to the new reality which is barely being made public in the alternative non-corporate media is the way to go for now. Since the US Federal Corporation can legally fiddle with the US financial markets and create whatever desired outcome the US Oligarchs desire, is it really wise to be heavily invested in Wall Street? Perhaps looking East to Asian Markets or to the ISX is prudent.

hendrixnuzzles
June 3, 2015 11:09 pm

My understanding is that the Federal Reserve is owned by the banks, with the big New York banks calling the shots; and that it tries to present the illusion it is a government agency and that the twelve members have somewhat equal standing, which is completely false.

May I ask, where did you get your information about Fed ownership (“147 corporations and 86 banks”)

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MachineGhost
Member
MachineGhost
June 3, 2015 11:49 pm
Reply to  hendrixnuzzles

It’s not an illusion. It’s a public-private hybrid as a political compromise for the original private and decentralized system. Congressional meddling has actually neutered the Fed’s intended effectiveness. All member banks are shareholders of one of the 12 regional banks and vote on various aspects of membership. About 95% of the Fed’s profits are returned the U.S. Treasury each year.

hendrixnuzzles
June 4, 2015 12:15 am
Reply to  MachineGhost

Who owns it

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MachineGhost
Member
MachineGhost
June 4, 2015 9:04 am
Reply to  MachineGhost

Each of the individual member banks symbolically own it, but they don’t control it.

hendrixnuzzles
June 6, 2015 3:01 am
Reply to  MachineGhost

The Fed is owned by the member banks and they get 6% a year (.5% a month) for their services, executing policy. That is, the banks get .5% per month, which is divvied up among the member banks. And of course they make enormous amounts on their own accounts. They execute national policy, but the Fed is owned by the member banks.

The New York district looks like only one of twelve , but the New York banks control and call the shots. The other districts are administrative, they may speak up but the New York Fed also does over half the volume… and all the international stuff is done through the New York Fed, and the New York has the direct pipe to Washington. New York decides. The power positions are usually from the big Wall Street/NY banks and the key players are alums of Goldman, Citi, etc. .

It is not in the interest of the government or the banks to give anyone a real picture of
what is going on. Why do you think you cannot find out precisely who owns it ?
When push comes to shove, you can be sure that in executing policy, the Fed will take care of their own, the member banks.

The twelve districts are administrative. Most of the appointed board positions are window dressing to obscure who really controls the thing, which is Wall Street. Occasionally someone from another district will let out a leak that he disagreed with a Fed decision…surely with some political risk to himself. But in the end, it is not a democracy.

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MachineGhost
Member
MachineGhost
June 6, 2015 11:45 am
Reply to  MachineGhost

You can find a list of all member banks by going to each of the twelve Federal Reserve district websites.

I reiterate… ownership does not mean control! The seven member Board of Governors in D.C. controls the Federal Reserve System; the Executive branch nominates a member of that Board for 14-year terms. And the NY district has the most day-to-day operational power due to close proximity to Wall Street.

There’s no conspiracy to be seen here (other than ignorance or hucksterism).

MachineGhost
Member
MachineGhost
June 6, 2015 11:51 am
Reply to  MachineGhost

And there’s no conspiracy to suppress dissenting positions on the Board. Not every governor agrees with everyone else. It’s the Chairman’s perogative to take each of the governor’s opinion and arrive at a final decision. If anything is wrong here, it is the Politiburo-style groupthink and outdated economic theories/models among the governors.

archives2001
archives2001
August 18, 2015 3:23 am
Reply to  MachineGhost

” About 95% of the Fed’s profits are returned the U.S. Treasury each year.”
Where did u get this from, MG…The Fed Govt?…LOL!

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MachineGhost
Member
MachineGhost
August 18, 2015 10:59 am
Reply to  MachineGhost

It’s public information. The Fed pays its member banks a 6% dividend yield on their stock and transfers the rest of their annual profits [back] to the Treasury. Legally, the Fed is a federal instrumentality and the Board of Governors is a federal agency.

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Sargam
Guest
Sargam
August 26, 2015 12:43 am
Reply to  MachineGhost

@ Machineghost: “There’s no conspiracy to be seen here (other than ignorance or hucksterism).” If that’s the case, why is the Fed – which has a monopoly on issuing money – uniquely immune from audit?

And few bother to think about how countries which espouse capitalism, which depend upon competition as its primary principle of operation, forbid internal competition for money issuance, the substance which is at the very heart of the economy. Scotland had a reasonable working system of money competition during the 18th. and first half 19th. C. before being forcibly abolished by England, whose central Bank continually boomed and busted. That’s the whole motive behind the suppression of gold.

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MachineGhost
Member
MachineGhost
August 26, 2015 11:33 am
Reply to  MachineGhost

@ Sargam: “If that’s the case, why is the Fed – which has a monopoly on issuing money – uniquely immune from audit?”

The Fed doesn’t have “a monopoly on issuing money”. They’re a very small potato of our entire debt-based monetary system and there is no transmission mechanism to the real economy anyway. Anyone can create issue debt and create money; whether or not that money is useful for paying down debt and taxes is up to legal tender laws. Issuing coins and currency, however, is certainly a monopoly of the U.S. Treasury enforced by the Secret Service. You have to understand that the links between the Treasury, the Fed and the Primary Dealers are all an infrastructural anarchronism from the fixed-exchange rate (“gold-standard”) era. The dog and pony show that they all go through is completely redundant under a floating exchange rate system. In Japan, they don’t even bother with the Primary Dealers charade. Their central bank can and does buy their Treasury’s debt directly (and also stocks and ETF’s, but thats another subject).

Beats me, though! The Fed’s accounting records are public information and readily available. Maybe they’re afraid the usual government bureaucratic incompetence will be revealed? Or maybe they’re worried about political influence? We’ve already seen how that has neutered the Fed’s effectiveness not too long after it was formed.

@ Sargam: “And few bother to think about how countries which espouse capitalism, which depend upon competition as its primary principle of operation, forbid internal competition for money issuance, the substance which is at the very heart of the economy. Scotland had a reasonable working system of money competition during the 18th. and first half 19th. C. before being forcibly abolished by England, whose central Bank continually boomed and busted. That’s the whole motive behind the suppression of gold.”

We had a pretty grandiose experiment with “free banking” in U.S. history. It was an unmitigated disaster. Most of the impetus for the Federal Reserve was to prevent regional money imbalances that would cause or be caused by bank runs as well as acting as a lender of last resort when a bank refuses to lend to another bank during a crisis… such as during 1929+ or 2008+. It’s just human nature to act as a deer in headlights when confidence collapses. That’s a market failure. What do you propose to do when the market itself fails if you’re relying on the market for orderly transaction clearing? That’s a tautology. Remember, the market is composed of nothing more than emotional and imperfect human beings.

What I disagree with is the Fed’s employment and third mandate that I forget (real estate?) that was politically inserted into the Act by socialists of the time. Even though the unemployment mandate has been long since been neutered (they were to directly buy corporate bonds not Treasuries). Since reserve requirements were abolished for all but checking accounts in the early 1990’s, the Fed has had an increasingly decreased impact on the real economy except via Wizard of Oz psychology.

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Lawrence Taylor
Member
Lawrence Taylor
October 23, 2015 3:57 pm
Reply to  MachineGhost

I forgot to mention I’m returning the IMPACT currency trading ‘system’. I really don’t have much respect for their –Agora– products, and I new better but I thought maybe, just maybe this will be different. NOT. That’s all for my commentary. LT

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rambotrader
Member
rambotrader
June 26, 2015 9:42 pm
Reply to  rdbck

Thanks for the run down. I will get the book and read it.
I believe that Rickards is on the money. Japan has not been able to stop inflation but banks will do everything they can to prevent this from happening. There are some things beyond their control though.
I also agree with physical gold rather than paper gold. The problem with paper gold is that you may have nothing other than a piece of paper which is worthless and which no amount of court action will make anything other than it is: a piece of paper.

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Trevor
Guest
August 23, 2015 10:27 am
Reply to  rdbck

Get back to basic fundementals, the value of money is based on the land, goods and services that back it. The US has the most amount of economically viable land per capita in the world, the worlds most advanced and sharpest minds live or frequently travel and spend most of their time in the US, every human on the planet wants a piece of the US, not hard to figure why the dollar remains strong. US debit, robots, computors,3D tech, Graphene tech all causing the US job market to shrink well thats another whole debate, as for gold if you want a piece of the US then you better have gold cause everything else we need is right here in The USA.

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mjj777
May 29, 2015 1:53 pm

Anyone have recent experience with this trading service? I am curious but it is pricey.

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mjj777
May 31, 2015 6:17 pm
Reply to  mjj777

My guess is that this is an options trading service. Even if they have good ideas, won’t the opportunities get diminished by too many people chasing too few options chains? Also, I seem to remember reading about some traders betting against the recommendations of some services and doing quite well betting against the “newsletter bump” phenomenon.
Any thoughts would be appreciated. Thanks!

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hendrixnuzzles
June 1, 2015 11:18 pm

Rickard’s….hi all. There are really different things that need to be separated.
First, is Rickard’s analysis of the situation, and his take on what might or might not happen.

Second, if his analysis has merit, how closely will the future conform to the imagination ? And then, what specific investments, and what timing, will be profitable ?
One can be right on the political and economic macro events, but there will surely be unforeseen twists in what occurs; and one can make serious errors in forecasting what investments will do well or poorly even if the basic prognostication is correct.

Third, there are the claims and efficacy of whatever system he is selling, and whatever
promotional copy the marketers are putting out to get you to subscribe.

Concerning point #1, I have read both books Death of Money and Currency Wars.
Frankly I saw nothing in either one that was not reasonably persuasive and fairly well thought out. It is easy to spot headlines every day that support Rickard’s analysis.

Concerning Point #2: Inflation and deflation are both possible, but the best investments in these cases are completely different. We might get deflation first, then inflation; we might get them in reverse order; we might get neither, and just muddle along.
And worse, unforeseen political events might change what the optimal investments are.
Gold could zoom and the government might impose confiscatory taxes on it, or laws
forbidding its possession, like they did once already in 1935 or so.

Rickard’s general asset recommendations are: cash, US and foreign; precious metals; and the very best bulletproof stocks. He also recommends undeveloped land, especially farmland. And he recommends fine art. Neither of these last alternatives are for me, but
I am looking for ways to invest in agriculture. Instead of fine art I look for great stock ideas here at Stock Gumshoe.

In the end, his specific investment recommendations may or may not be the best ones for the circumstances. On the other hand, it’s tough to be hurt too bad with cash, gold, and a few great stocks. You aren’t gonna get wiped out.

Concerning Point #3: Hey, they are trying to sell you a newsletter and a service.
They gotta make it sound good or you won’t pony up. I take a few newsletters just to get ideas. They’ll all try to step you up for more and more. If I were a publisher, I’d do the same. But you are smart. You subscribe to Stock Gumshoe.

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mjj777
June 2, 2015 12:49 pm
Reply to  hendrixnuzzles

Good points. And yes, they are trying to sell a service of course. This service seems to be options on either stocks or maybe indexes of some sort as he mentions “built in leverage.” Options can be lucrative occasionally but as someone questioned “how many losers do you need to endure before you get to the big wins?” They don’t really mention win ratios or how to hedge or how much should be allocated to each trade or what amount you should expect to start with, how many open positions to expect, etc. Maybe that is in their trading book.

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rambotrader
Member
rambotrader
June 26, 2015 10:22 pm
Reply to  hendrixnuzzles

Your cash solution: have a close look at the prudential provisions of the financial system. Nearly all first world countries have introduced (hidden in the documentation) provisions for the confiscation of bank deposits should the banks get into trouble. A very nice little private deal between Central banks which NO TAXPAYER WAS ASKED TO VOTE ON.

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hendrixnuzzles
June 1, 2015 11:23 pm

For those interested in a terrific book from someone not trying to sell you a newsletter:

The Big Reset…War on Gold and the Financial Endgame
by Willem Middelkoop, U of Chicago 2014

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hendrixnuzzles
June 3, 2015 10:55 pm
Reply to  hendrixnuzzles

Middelkoop also has a blog with updates on the international monetary rest that is on the way, alluded to in many newsletters

http://www.thebigresetblog.com/index.php/china-joins-talks-for-reconstruction-of-international-monetary-system/

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archives2001
archives2001
August 18, 2015 3:28 am
Reply to  hendrixnuzzles

Sounds like he’s paralleling Harry Dent’s prognosis.

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hendrixnuzzles
June 2, 2015 2:21 pm

DEFLATION AND INFLATION AT THE SAME TIME…hi all. Before going further, I admit my bias towards hard assets, though I would resist efforts to label me a gold bug or a fanatic.

I was thinking about the macro issues today and I had an observation that I’d like to share. I have not followed the thought through completely, but I think it is relevant as we are all trying to understand what the hell is going on, so we can protect ourselves at the least, and make some money and grow wealth at best.

My thought is, that we are experiencing inflation and deflation at the same time.

INFLATIONARY SECTORS Because of Fed and central bank policy in the US and most of the other major governments, there is clearly inflation in financial instruments such as stocks and bonds, most real estate, debt levels, and the supply of money. So in these sectors, our dollars aren’t going very far; and we have the contradictory result that fixed income instruments (bonds) are giving record low yields, which in an inflationary environment is the opposite of what should be occurring. We have record highs in stocks. We have high real estate prices. We have tons of debt. However, the goal of the Powers That Be to create inflation in the rest of the economy are failing. The
money is not finding its way there. Money velocity is low, really low. The money created is recirculating in the financial, real estate and bond markets.

DEFLATIONARY SECTORS In general, deflation is good for the consumer. We get more goods for less money. And before our eyes we can see the sectors that are deflating or have deflated. Commodities and basic have basically deflated. Copper, coal, uranium, silver, iron ore, wheat, corn, soybeans…you name it, the prices are low. Really low. There is also deflation in manufactured goods of all kinds. Industrial output and technology are delivering incredible values in nearly every sector of consumer manufactured goods.
If you have any doubt about this, check out what kind of new car you can get for $ 30K, or
what kind of used car you can buy for under $ 20K. (And bad credit is no problem ! No interest !) Or go to Walmart and see the big screen TV you can buy for $500, or check the price of clothing at TJMAXX. Look at the drop in cellphone rates. Go online and shop around. Prices are really low.

And what about energy ? Oil and gas just recently deflated in a major way, this was not a minor price move. And the price of energy It will affect everything in the economy….anything that is moved by transport, anything made of plastic or hydrocarbon chemicals, all the gasoline we by at the pump, our utility costs…all going lower. Average wage levels are decreasing because the majority of jobs being created are for unskilled labor. For the average person, we prices are deflating.

So I submit to you the observation that despite every effort by the central banks, there is deflation occurring on the ground right now. Efforts to characterize what is happening as “inflationary” or “deflationary” will be inaccurate, because some sectors are inflating in dollar terms, while others are deflating. We’ve got a bi-polar situation with inflation and deflation occurring at the same time.

WHAT’S GONNA HAPPEN ? One thing we can consider likely is that the governments will choose the path of least resistance, and continue their attempts to “stimulate the economy” with easy money. The bubbles will continue to swell, because there is no limit to the amount of fiat currency they can issue. So I think we are on solid ground to expect continuation of governmental methods and policies.

On the other hand, we know that these policies do not work, are not working, and worse, they eventually must result in the erosion or even the destruction of the value of the currencies. While we have deflation in the consumer and commodity sectors now, at some point in the future, eventually, these prices will inflate dramatically in dollar or currency terms. And I stress, eventually. How will we see it coming ?

What I think is likely to happen is that there will come a point when dollars in the financial sector, which are able to command less and less value, will start to shift to the real, hard asset classes. If you look at the ten year charts on agricultural commodities, or mining, you will see what I mean. Right now the prices on a beaten down commodity stock like TCK or BHP or SCCO has a dividend yield that is comparable to any dividend stock. At some point, these out-of favor companies will have yields that make them attractive vis-a-vis traditional dividend stocks or bonds, and lots and lots of money will move over there. This makes sense because the dollars in the financial sector really aren’t worth a lot intrinsically, and the financial assets they can acquire are really expensive.

To me, a meaningful rally and change of direction in the commodities and materials,
or a strong move up in precious metals, will signal the beginning of a lack of investor confidence is the fiat currencies, and the onset of real concern for the value of the dollars we have worked to accumulate.

Long many commodity stocks

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MachineGhost
Member
MachineGhost
June 2, 2015 3:37 pm
Reply to  hendrixnuzzles

The Fed has been ASSET SWAPPING, not “printing money”. There is no transmission mechanism from the Fed to the real economy. Logically, there then cannot be any inflation, right? Correct, there isn’t any.

Inflation is merely an excess of demand relative to supply. You can have YIELD CHASING BEHAVIOR that prompts excess demand relative to supply for anything, including financial assets such as stocks and bonds.

If people lose CONFIDENCE in U.S. debt, then it will look for private sector alternatives to place their value. Bitcoins, cash, stocks, gold, collectibles, etc. But, you better be ready for the rest of the world’s financial assets to implode from a loss of confidence first long before U.S. debt does.

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hendrixnuzzles
June 2, 2015 4:41 pm
Reply to  MachineGhost

Hi Machine Ghost,
Don’t want to get into a controversy with you, I doubt that either of us will change our minds and it is not likely to be productive. But I take issue with some of the main points in your post above:

1. I didn’t say the Fed was “printing money”; but the “asset swap” involves a huge and inflationary increase in the money supply, which will eventually work its way into the real economy in an uncontrolled manner that cannot be clearly foreseen at the present.
It will be inflationary. The link to the real economy of this money creation is what is delaying the inflationary impact of the policies. Because this transmission is less effective than the wishes of the Fed does not mean there can be inflation.
2. I flat out disagree that “inflation is an increase in DEMAND relative to the supply (of goods and services). ” Inflation is the increase of the MONEY OR MONEY UNITS available relative to the supply.
3. Again I disagree with your statement in yield chasing, that DEMAND causes inflation.
If the money supply is not variable, an increase in DEMAND will cause a price increase, but this increase is not inflation; it is a change in the price of the target commodity.
When the supply of money or money units increases, there will be inflation.

I did not understand your last paragraph about confidence. But it would not be terribly surprising to me, given the collaboration of many governments and their central banks, if there was a widespread loss of confidence in many currencies at the same time; which would be a new and dark chapter in economic history.

Cordially

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MachineGhost
Member
MachineGhost
June 2, 2015 5:19 pm
Reply to  hendrixnuzzles

No need for controversy, I was just correcting some of the myths people commonly have about how our modern financial system actually works.

1. The Fed doesn’t control any broad-based “money supply”. It only controls what is known as “base reserves”, which is internal accounting debits/credits and created on demand to swap assets with its member banks, i.e. swaps their Treasury reserves with “base reserves”. It has no direct effect on the real economy other than perhaps to change the form that the general public can hold its savings in from Treasuries to currency, i.e. if a bank buys your bonds and swaps it with the Fed, you’re “crowded out” and left only with currency as opposed to Treasuries (but the Treasury can always issue more, so its a moot point). There is no inflation in this system because all of the internal “base reserves” is not chasing a limited supply of goods/services out in the real economy; it was an asset swap and the quantity didn’t change. “Base reserves” isn’t used as money in the real economy; that function is left to the private money created on demand by private banks.

2. If you narrowly define inflation only as excess monetary units aka Monetarianism, then you will not understand why the system has been non-responding for the past seven years, despite all the “money printing causes inflation” monetary policy dogma.

3. Behaviorial effects are far more important than reality, which is why the inflation issue is now framed as “inflation expectations” after the late 1970’s and its failure of Monetarism. Anyway, the money supply ITSELF responds to both inflation and deflation. Think about it. You could have a decreasing supply of money (deflationary) and increasing supply of goods/services (inflationary) and and bingo: nothing changes.

4. No confidence, no borrowing, no private money creation, muted to no inflation. Seems familiar? Well, since we have a debt-based monetary system, apply that lack of confidence to the Treasuries that act as savings accounts for the private sector and yowza! Where will all that capital go???

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hendrixnuzzles
June 2, 2015 8:15 pm
Reply to  MachineGhost

Machine Ghost…

point 3. Increasing amounts of goods and services is DEFLATIONARY. So it’s not bingo, nothing changes; it’s bingo, DEFLATION.

point 4. The capital in the Treasuries goes straight to Money Heaven when rates go up.
That is, the value is vaporized… gonzo..disappeared, ’cause your beloved treasuries will be worth a fraction of what they were when interest rates were zero or one percent.

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MachineGhost
Member
MachineGhost
June 2, 2015 8:32 pm
Reply to  MachineGhost

3. You got me! I meant to say a DECREASING amount of goods/services. My point was that inflation and deflation affect money itself, not that “inflation is always and everywhere a monetary phenomenon” to quote Friedman. Inflation and deflation are two sides of the confidence coin. Proverbial example: It doesn’t do much good to print up $1 billion in money if all you do is shift it from your left pocket to the right pocket. That is essentially what the Fed does with its internal proprietary “bank reserve” money. It was not always this way nor the original intention, but the idiots in Congress couldn’t keep its hands out of corrupting the institution to support World War I.

4. Treasuries have 100% guaranteed principal; the value isn’t “vaporized” just because interest rates go up. If the real value is lower at maturity then that’s due to inflation.

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rambotrader
Member
rambotrader
June 26, 2015 10:32 pm
Reply to  MachineGhost

Huh? The Fed has tripled the money supply in 5 years and this is not a serious problem?

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MachineGhost
Member
MachineGhost
June 27, 2015 9:06 am
Reply to  MachineGhost

mick ja,

The Fed hasn’t “tripled the money supply”. It’s swapped bank reserves for U.S. Treasuries and Freddie/Fannie mortgage bonds. Net effect to private sector: nil. Don’t confuse QEternity with lowering the cost of credit indirectly via the Federal Funds Rate, which do have behavorial ramifications due to psychology and contract pegging, i.e. yield chasing behavior.

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rambotrader
Member
rambotrader
June 26, 2015 10:31 pm
Reply to  hendrixnuzzles

I always thought of ‘inflation’ as the increase in prices of commodities of all sorts. This increase in prices can come from one of 2 drivers. First, because the returns on capital are very good. Second, because the value of the $ is falling in the bank for whatever reason: inflation, lack of confidence in the financial system, etc.
Maybe the above is a simplistic view. I leave that for others and history to decide.

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hendrixnuzzles
June 27, 2015 1:38 am
Reply to  rambotrader

Hi Mr. Rolling Stone,
My economics courses were a long time ago, but my understanding is that inflation is the increase in prices that is caused solely by an increase in the money supply, or currency units in circulation. (Academically, significant increases in money velocity may also be considered inflationary, though I don’t remember for sure. )

If there is a price increase in an item, without an increase in the money supply, that is just a price increase in the item. But it is not inflationary per se. It is only inflation if the price increase is strictly a result of an increase in the money supply.

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MachineGhost
Member
MachineGhost
June 27, 2015 9:11 am
Reply to  rambotrader

Inflation is demand that exceeds supply. This can be in currency units, real assets, financial assets, etc. However, when it happens to the currency unit, all things priced in that currency unit will adjust upwards if currency unit supply is higher than demand. The best way so far to visualize demand for currency units is the velocity of money, even though it is flawed and imperfect.

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MachineGhost
Member
MachineGhost
June 2, 2015 3:43 pm
Reply to  hendrixnuzzles

And BTW, don’t try and forecast anything. Have a neutral portfolio, i.e. 25% equity, 25% treasuries, 25% cash and 25% real assets. Making an ideological bet on a specific outcome is not investing or wealth preservation, its speculating.

hendrixnuzzles
June 2, 2015 4:01 pm
Reply to  MachineGhost

There’s no ideology in my analysis, other than to express skepticism at the prevailing ideologies that are driving policy; and my admitted preference for hard assets.
Just observing what is really happening.

Your suggested allocation plan may be good for many people, but it is not for me.
I am much higher in real assets and equities, though I do not put this forth as a recommendation to anyone; it is simply what I am comfortable with.

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archives2001
archives2001
August 18, 2015 3:36 am
Reply to  hendrixnuzzles

Hope u’ve bailed from your commodity stocks by now hn!
I’d say they will continue their downward spiral til at least
the Sept/Oct probable crash and very possibly quite a ways
beyond before they start up.

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hendrixnuzzles
September 16, 2015 6:14 pm
Reply to  archives2001

Haven’t bailed out on any of them

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Uncle Albert
Member
Uncle Albert
June 2, 2015 2:43 pm

Jeez-O-Pete, hendrixnuzzles!…nicely done!…very cogent and accurate analysis of where we are right now…caught on the horns of the dilemma, inflation and deflation…what is a Mother to do?…I struggle with these two potentials and realities, daily as I allocate my own investment resources, looking out ahead…thanking you immensely

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hendrixnuzzles
June 2, 2015 3:43 pm
Reply to  Uncle Albert

Hi Uncle Albert,
Over the last year I lost quite a bit in commodities. It’s amazing I didn’t lose more.
In investing, right and too early is still wrong. However, I am still in a lot of base positions, there’s just a not a lot farther for them to fall !

It got to a point that I figured I’d just use the mantra of the advisors…”It’s a long term investment !”

On a lot of them, even though I got beat up trying to pick bottoms, I’m getting tempted again. I mean, some of these are lower than they were after the 2008 crash. One example is VALE, a big South American miner. This is a big company with tons of real assets.
At $6.75, it has a price to book of .75. It has a price to sales ratio of 0.90. It has a dividend that annualizes at 9.58%. It is priced below its levels after the 2008 meltdown. You wonder how far lower the bottom can be.

Long $VALE and thinking about adding more

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canihepu
canihepu
June 2, 2015 5:00 pm

I’m going to start paying attention to you all more closely. I did the Rickards IMPACT program and am hoping the investment will be worth it. They do throw out a fair amount of decent tips, most that made sense to me. Here are a couple examples, Call FXE Jan 16, Buy GYEN. What I see them doing is multiplying a couple variables mixing stocks, currency and gauging trends. They do not see a good near future for the Yen. They like mixing gold/silver in their recommendations.
With that I get a lot of the Agora stuff. This is how I happened upon you all. My story is over at the Stansberry thread. I thought the Dan Ferris hype about the one stock(Altius) he would buy info could be out on the web. Same with the deal about ARAY, which does interest me, but haven’t made a move.
Here is my current bottom line and I suppose it is not all that different from most of you all. I sense there could be near-term trouble. It seems to pop up near the end of a President’s term, when he has far less power to affect events. Having these things happen might help out one of the candidates. So, the “powers that be” might feel okay to let some “things” happen, as I feel happened in 2007. I do think it could get very messy, but, what the heck. It’s going to have to happen, so why not this year? (Wow, is this sounding cynical…)
I wish to position ourselves as good as possible, have a plan for when the shiite hits the fan and maybe even profit from the turmoil. (Wow, does that sound optimistic….)
Back to Rickards and IMPACT. So far, I have no buyer’s remorse, but no way would I pay an additional $7.5K for a 200-member exclusive gold invitation gathering in Baltimore.

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Olwreckdiver
Olwreckdiver
June 2, 2015 5:23 pm
Reply to  canihepu

$7.5K x 200 – members = is just a million five RIGHT INTO THEIR POCKETS!
See my comment below.

hendrixnuzzles
June 9, 2015 11:53 pm
Reply to  Olwreckdiver

I’m not one of them, but there are a lot of people for whom $ 7500 actually is chump change. If you were a founder or officer geek of a tech or .com or biotech company that just got bought out and suddenly have $ 5 million or $50 million to invest, why not spend a few days and a couple grand ? There are lot of people spending over $ 100,000 on a car.
The high end market needs to be served and Rickards is doing it. They are out there and
Rickards doesn’t need many of them to bite to make a killing.

Doesn’t mean his recommendations are good or bad, of course.

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macavity
Member
macavity
June 3, 2015 3:17 pm
Reply to  canihepu

Thank you, canihepu, for the IMPACT update.
If IMPACT returned a fraction of the percentages of profit they tout, their $2500 buy in would be chump change. But they provide zero evidence that their system works. Creating a system that works on past data is easy. Applying that system to the present/future is another story. The only credibility I see in this system is Jim Rickards. His use of Baysian Networks and data mining in his books was sound. I can only guess he has incorporated these techniques to his IMPACT system.
I, for one would appreciate an occasional update regarding your experience with IMPACT if you would be so kind?
Thanks,

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chow
Member
June 5, 2015 5:35 pm
Reply to  macavity

Mac ,
hope I’m not butting in but I was convinced that Jim Rickards had something to offer so I subscribed: I observed that of the 3 plays(puts/calls) that he recommended for 2015 (options that had ended) his win loss rate was one win two losses.
Also, a high percentage of the option recommendation still in play were going in the wrong direction (a turnaround may be possible) I expected that the impact system would give me an edge but apparently not- I did not see the value in Jim’s Impact system so I asked for a refund of 90% -still waiting ……..

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macavity
Member
macavity
June 5, 2015 8:35 pm
Reply to  chow

Chow, thanks for sharing your experience!

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Scott Black
Guest
Scott Black
June 13, 2015 4:29 pm
Reply to  chow

Did you receive that refund yet?

diane
diane
August 16, 2015 11:09 pm
Reply to  Scott Black

Mac, Chow, Scott —
On May 29 I received an email from Dan Mills who, in the first paragraph, identified himself as “VIP customer care director for Agora Financial,” thanking me for taking the time to view Jim Rickards’ IMPACT strategy and offering the subscription at $425 per quarter, satisfaction guaranteed. Mr. Mills stated in his email, “Not only that, but by taking this offer, you’re still fully protected by the same 60-day “no questions asked” refund policy you just read about.” (As I recall, the video presentation mentioned a “restocking” or “handling” fee of 10%.) I subscribed on June 5 but in the interim made two (2) phone calls, a couple of days apart, to the number provided in the email if I had any questions. On both calls I requested Information regarding the number of positions Mr. Rickards had open at one time. Both calls were answered by different sales representatives. On the first call the sales rep said “about 10.” On the second call, a different rep said “about 4 to 6” positions were open at one time. Obviously two different responses should have been a red flag, but . . . I subscribed and finally gained access (denied unless you are a member) to Mr. Rickarts’ previous plays and to the current holdings. From what I could ascertain, there were considerably higher losses than gains and at that time, there were thirteen (13) open positions — not 10 and certainly not the 4 to 6 represented by the salesmen over the phone. I requested a refund on June 11 or 12, and the subscription charge, less 10%, was refunded June 15. Shame on Agora for outright lies to potential customers and then charging them 10% when the customer cancels the service. Agora has great copywriters but IMHO they’re people to stay away from.

Good luck with your refunds, or with the service if you’ve stuck with it.

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Steverino King O' Pain
Member
Steverino King O' Pain
June 15, 2015 6:31 pm
Reply to  canihepu

Hah ! I found another person that say’s ” The Shiite hit the fan !.”lol

Olwreckdiver
Olwreckdiver
June 2, 2015 5:18 pm

When I look at how many newsletters these guys offer and how much they charge for them,
especially Agora, I realize they don’t need to invest in stocks at all!
1,000 subscribers at only $2500 = $2.5 MILLION!
And they keep offering more “NEW’ “SECRET” “DIFFERENT”(and expensive) services almost daily.
Anybody else agree?

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hendrixnuzzles
June 2, 2015 6:12 pm
Reply to  Olwreckdiver

Totally. It’s a great business. That’s why there’s so many newsletters.
And in todays electronic world it costs nothing to publish.
But to get your attention, the claims have to get more and more outrageous !
And they will withhold the really, really good ideas to trade you up to the Gold elite ultra.
That’s the business.

I allocated a modest amount to newsletters, they do have good ideas sometimes.
But Stock Gumshoe is the best investment of all of them…

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zbig niew
Guest
zbig niew
August 16, 2015 9:27 pm
Reply to  Olwreckdiver

bingo. magic bullet not. obviously buying options. only as good as the trades. sucker born every minute. now the big question. gold vs dollar euro etc. us stocks bonds vs euro chinese emerging markets. probability capital flight into us capital markets into 2017 then debt contagion.hits us markets.
dow 30,000 bubble busts like 1929. inversely gold sub 1000 possibly 700
and silver sub 10 possibly 5 rock.bottom. only big banks and goldbugs hold and buy more. then dollar dow debt notes crash and dow to gold goes from 50:1 to 1:1 in full on meltdown. big banks. and goldbugs are covered. survivalists are vindicated. years to recover and new tech and political economy parsdigm shifts post shtf decade.

any questions?

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zbig niew
Guest
zbig niew
August 16, 2015 9:28 pm
Reply to  Olwreckdiver

bingo. magic bullet not. obviously buying options. only as good as the trades. sucker born every minute. now the big question. gold vs dollar euro etc. us stocks bonds vs euro chinese emerging markets. probability capital flight into us capital markets into 2017 then debt contagion.hits us markets.
dow 30,000 bubble busts like 1929. inversely gold sub 1000 possibly 700
and silver sub 10 possibly 5 rock.bottom. only big banks and goldbugs hold and buy more. then dollar dow debt notes crash and dow to gold goes from 50:1 to 1:1 in full on meltdown. big banks. and goldbugs are covered. survivalists are vindicated. years to recover and new tech and political economy paradigm shifts post shtf decade.

any questions?

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zbig niew
Guest
zbig niew
August 16, 2015 9:46 pm
Reply to  zbig niew

us capital market bubble into 2017 at earliest since elections over new president and congress in office. bust in 2019? no way to know as alternative futures emerge. dont ocd on exactitude. sept thru oct 2015
likely to see a pre shtf shock crash averted bears burned. 2017-19 could be a decade early but not two or three early. if you dont see it your kids will. do you care about them?

MachineGhost
Member
MachineGhost
June 2, 2015 5:32 pm

There’s only a fixed number of services that they remarket over and over with different copywriting. Occasionally they will come out with a new service by a new advisor, but the odds of it surviving are very low and eventually it gets folded into another service, changes strategy or sometimes shuts down for good. I’d be surprised if IMPACT makes it to its first birthday. I saw no evidence that Rickards or the team he put together has any real world trading experience (if they did, wouldn’t they trump it in the copywriting?)

Generally, Oxford has the best services, followed by Stansberry and then Agora itself which seems to be quite late to the game. Beyond this three you get into hucksterland, i.e. Philips Publishing and other second and third tier publishers that I wouldn’t touch with a ten foot pole. I think Forbes may have bought them all out by now!

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MachineGhost
Member
MachineGhost
June 2, 2015 5:34 pm
Reply to  MachineGhost

To be clear, I’m referring to advisory services. Newsletters themselves are a dime a dozen as anyone that follows Hulbert knows. Calling IMPACT a newsletter was not good copywriting.

hendrixnuzzles
June 2, 2015 7:59 pm
Reply to  MachineGhost

Hi Machine Ghost,
Speaking of Oxford, I just got 2 unsolicited mailers soliciting my $ 49 each,
one from Oxford Resource Explorer and one from Oxford Income Letter.
Since I’m a hard asset devotee, I was attracted to the 16 page glossy Resource publication, with a burning US dollar across the top with the headline: “DEATH OF KING DOLLAR !” Just the kind of bait I normally snap at.

The spiel in it is that the yuan is about to become a secondary “petro currency” and its implementation by those bad Saudi-Chinese-Russian-Iranian-Venezuelans will cause a world dump of US treasuries. It says the Saudis are pissed off at us and are about to do this nasty thing. The immense tsunami of supply of treasuries will drive the price down, causing interest rates to shoot up, and there will be a huge wave of dollars coming back at us from central banks that don’t need our greenbacks anymore. So you better look out and subscribe !

Now in one of the professional looking bar charts in the ad, he shows the stack of greenbacks held as petrodollars by foreign central banks. The total is roughly 6 trillion; compared to 2.9 trillion US money supply—not sure if this is cash, or M1, or what–
but his implication is that there could soon be up to twice the amount of US money sloshing around here in The Land of the Free. This could mean, roughly, that prices
could double. To say nothing of the harmful effects of high interest on all the asset bubbles like stocks, bond, and real estate.

I am not sounding the alarm that this is going to happen. But I suppose it could.
And it does relates to our conversation, insofar as inflation here in the US could be triggered in a way that is outside the power of the Fed to control at the discount window. It would be an externally initiated, inflation-causing event with huge repercussions that no one in the US would be able to control.

Have a great evening !

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MachineGhost
Member
MachineGhost
June 2, 2015 8:51 pm
Reply to  hendrixnuzzles

But you have to consider: is it in anyone’s economic self-interest to dump their Treasury securities and start a snowball effect of capital gains losses begetting capital gains losses? That would only happen if there was a complete loss of confidence in “Rome”. And since the USD is the world’s primary reserve currency, we’d be the last man standing after everyone else first blows up their sovereign debt first. So there would be plenty of time to take action. Just watch Japan and Europe closely. Japan is a currency issuer whereas Europe is a currency user, so Europe has no ability to do what the Fed or MOF does (i.e. repair their member banks balance sheets by swapping the toxic debt for “bank reserves” created out of thin air).

I believe the beginning of the end for the petrodollar hegemony will start in October once IMF adds the renminbi to the other eight reserve currencies. But this will be a gradual process and you have to be aware that if other country’s sovereign debts start imploding, all that scared capital will flee into the USD which will not be good for commodities because of how they are priced. I’m on the fence about Treasuries…. there’s 100 trillion in unfunded liabilities on a GAAP basis (future tax revenue + future liabilities). The Treasury may not ever face solvency issues, but there can be a credibility perception problem especially since the vast majority of people do not understand how the modern financial system actually works. Perceptions is reality, even if false.

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MachineGhost
Member
MachineGhost
June 2, 2015 8:54 pm
Reply to  MachineGhost

And The Oxford Resource Explorer has been nothing but a sea of red ink since inception. It’s not a smart idea to target sectors or industries for a broad equity allocation, because !@#% happens.

hendrixnuzzles
June 2, 2015 9:02 pm
Reply to  MachineGhost

I think it is in the interest of the Chinese to have the yuan in the IMF basket, or be accepted
as a second reserve currency; and while it is true that a devaluation of the dollar
will hurt the value of their US holdings, they have plenty of time to reduce their exposure.
Also it will be in the interests of many other countries politically and economically to throw the USD under the bus. Granted, Western Europe and Japan are not in that camp.
But their are a lot of other countries and interest groups that will have no trouble ditching the dollar.

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hendrixnuzzles
June 4, 2015 3:17 am
Reply to  MachineGhost

Hi Device Spirit,
As a matter of fact the Chinese have already lost confidence in the dollar, they stopped aggressively buying our debt a few years ago and have been steadily reducing their holdings in US securities. Plus they have been busy bees arranging trade agreements with everybody and their brother to conduct trade without our beloved greenback. Plus they have been aggressively buying natural resources…I’ve stumbled into Chinese ownership on some surprising hard assets. Plus they have been buying gold like crazy.

We’ve been trying to isolate the Russians, so I wouldn’t be expecting too much help from them on our currency. And the Saudis and Iranians don’t like us a whole lot, either.
So we’ve got a few friends left, Canada, Mexico, and the Eurozone. But even the Brits joined the new Chinese international development bank, and head of the IMF is saying publicly the Chinese Yuan must be admitted as a reserve currency.
So which currency is going to make the most room at the table for the new guest ?

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hendrixnuzzles
June 4, 2015 3:32 am
Reply to  hendrixnuzzles
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zbig niew
Guest
zbig niew
August 16, 2015 10:38 pm
Reply to  hendrixnuzzles

the best guess is that like five mafia familes at war yet at the same table trying to work out a deal us uk eu russia china or the fed the boe the eurobank boj pboc all agree that the fiat system must give way to a neo gold standard asset based trading platform. the proverbial rothschilds and their proverbial arch enemy call it the former combloc aka brics are cooperating as they compete for control over whos new world order will prevail in the future. the annual imf meeting in lima peru oct 9 to 11 will likely include the chi rmb in the sdr because the agendas are not mutually exclusive think orwells three superstates oceania eurasia east asia and the disputed territories. rothschild aka fed bank of england etc. has gold too and wants china to initiate neo gold standard just as red china revolution was sponsored by rothschild bankers to be the best enemy you.control yourself as per machiavelli.

rothschild is a term for bankster elite not jews or the rhetoric would be about zionazi israelis etc. rothschild means megabanks as china means emerging economies. the agenda is global but not necessarily orwellian.’its up to you new york new york!’

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archives2001
archives2001
August 18, 2015 3:57 am
Reply to  hendrixnuzzles

zbig: “its up to you new york new york!’
NY probably has a lot to say about everything but the
Euro Rothschild/IMF/BIS clan has even more imo.
(Even considering the IMF is HEADQUARTERED IN THE US!)

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hendrixnuzzles
September 16, 2015 6:30 pm
Reply to  MachineGhost

Three months later: China reduces USD holdings by 30 billion in one month, a record;
and Belgian holdings, thought to be Chinese money, go down a whopping 52 billion.
With the strong dollar, a good time to dump, er, rather reduce exposure. At least that’s what the Chinese are saying with their actions.

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SoGiAm
June 2, 2015 6:11 pm

ALAQ-Forms 3 and 4 here: http://ir.alliqua.com/all-sec-filings Long Best2ALL!-Benjamin

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hendrixnuzzles
June 2, 2015 7:33 pm

NEWSLETTERS 101
How can you tell a good newsletter from a bad one ?
–The ones you made money on are good. The ones you lost on are bad.

Why are newsletters like streetcars ?
–Because there’s another one coming by every fifteen minutes.

What’s something you can pay for, and not get ?
–A good recommendation from a newsletter.

When do not not lose money on a newsletter ?
–When you don’t subscribe.

What’s the most important date to put on your calendar ?
–The last day you have to cancel your subscription and get a refund.

What’s the difference between a newsletter and an advisory service ?
–An advisory service charges more for equally bad advice.

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Gary Stoltz
Irregular
June 4, 2015 12:51 pm
Reply to  hendrixnuzzles

The Chinese just invested 150million to construct a large ferris wheel on Staten Island.

hendrixnuzzles
June 6, 2015 2:17 am
Reply to  Gary Stoltz

Yeah…very day you can find something like that. While the Europeans wrangle over Greece
and we listen for Yellen to say “boo”, the Chinese bought a gold mine in New Guinea from Barrick, probably with dollars they want to get rid of. They were the only bidders.

https://ramumine.wordpress.com/2015/05/24/chinese-the-only-bidders-for-barricks-troubled-porgera-mine/

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zbig niew
Guest
zbig niew
August 16, 2015 10:42 pm
Reply to  hendrixnuzzles

you are paying attention

archives2001
archives2001
August 18, 2015 4:00 am
Reply to  hendrixnuzzles

WOW, hn, you said a mouthful there, saving a lot of folks here a LOT of money!
THNX!

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XANDER FARRAR
Guest
June 3, 2015 2:54 pm

I’d like to just make a few comments about some of the above, confessing that my knowledge of investment issues is scant. First of all, I think everyone should take the opportunity to watch the video interview of Jim Richards, called “Project Prophecy”. I have the impression that he probably knows more than just about anyone on the planet, including all who have posted, postulated and pontificated on this website, about the state and future of the global and national economic situation.
Regarding Rickards’ IMPACT strategy, it does have a 60-day money back (less 10%) guarantee. I am very tempted to give it a try.
As regards the info on the Gumshoe website is concerned, I have never found it to be a source for good investment opportunities, rather mostly just Thinkolater discoveries of rerun stock pitches. It will be interesting to revisit these ideas come January first, as well as election day 2016, to see if there will really be an election, instead of martial law. I give it about a 50-50 chance. Good luck to us all.

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hendrixnuzzles
June 3, 2015 11:17 pm
Reply to  XANDER FARRAR

Rickards is a persuasive and entertaining writer. This doesn’t mean his recommendations will work, or his predictions will come to pass; but if you go along with his thesis and observations, the recommendations are understandable and logical conclusions, although some of them I do not find suitable for myself.

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Rosenmeyer
Rosenmeyer
June 4, 2015 2:15 am
Reply to  hendrixnuzzles

I have not posted on this thread before but I just read many posts & am impressed-of course I was already biased to like it since my good pal HN is posting here & I have the highest regard for him-I have been mostly on the bio thread. operating on fumes so I will tease with this-the credit boom caused by pensions having to go way out on the risk curve to make their nut which is impossible with traditional investments for them due to low rates has supported this market by increasing buybacks & enhancing M&A-this impact is often ignored or not appreciated to the degree of its impact-no signs of it abating but when it does-& the credit boom turns into a credit crash-batten the hatches

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hendrixnuzzles
June 4, 2015 2:59 am
Reply to  Rosenmeyer

Hi George, the M&A activity is certainly fueled by the credit landscape, but I think it is
a symptom and not a cause of the problem. Same with corporate buy-backs…the real estate boom…the coming sub-prime car loan wreck…the student loan defaults…zero and negative bond rates…explosion of social welfare transfers, and government dependence…etc etc.

All these things are a result of the central bank policies trying to achieve inflation in the face of a deflating economy, or government policies that favor their pet constituencies, and the past irresponsible behavior of our elected officials. And the disease has spread nearly worldwide…US, Canada, Western Europe, and Japan. India and China are in decent shape though China has a serious banking/real estate bubble like we do.

Financial asset bubbles galore. Debt bubbles galore. Something’s gotta give.
But no one knows exactly what or when.

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MachineGhost
Member
MachineGhost
June 4, 2015 9:29 am
Reply to  hendrixnuzzles

And BTW, the real disease here is outdated, ineffective and Ivory Tower economic models (as well as kooky conspiracy theories) rather than observing and dealing with how the real world actually works. So we have idiots running the asylum. Clueless economists are now trying to outlaw physical cash just to try to get rid of the “zero lower bound” which prompts bank runs and currency hoarding and somehow think that unlimited negative rates of interest will finally “stoke the flames of inflation”. Idiots.

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MachineGhost
Member
MachineGhost
June 4, 2015 9:20 am
Reply to  Rosenmeyer

Don’t conflate monetary policy with fiscal policy. The public debt (not taken away by the Fed) is a result of fiscal policy and some of the private debt is a result of a free rider problem in the case of student loans or treating your house as an ATM machine during the subprime bubble to keep up with the Joneses, etc.. As I’ve mentioned before, monetary policy has no transmission mechanism to the real economy so all it has done is endear yield chasing behavior by starving investors, widows and orphans. The Fed only has the ability to change the cost of money charged by member banks to each other to patch up their legal reserve requirements after creating private money, or to provide liquidity as last resort lender through the discount window.

MachineGhost
Member
MachineGhost
June 4, 2015 9:24 am
Reply to  MachineGhost

Besides from direct monetization which is what QEternity was. Technically, the Fed engaged in illegal and unconstitutional behavior by swapping bank reserves for subprime mortgages. It’s not within their legal charter to do that. But you have to consider that the Fed’s primary goal is liquidity and solvency of the banking system, so they will do whatever they can to allow member banks to repair their balance sheets and stick the cost onto all currency users. It’s very similar to what happened after the S&L crisis in the early 90’s.

hendrixnuzzles
June 4, 2015 2:35 am
Reply to  hendrixnuzzles

RE: rdbck, post #3 & Rickards recommendations

Rdbck gave a good outline of Jim Rickard’s recommendations from Death of Money, which I would like to expand on a little for those who have not read his book.
Rickards admits that the sequence of events is uncertain and unpredictable. He does not specifically predict hyperinflation, deflation, or social unrest…but he thinks something very serious in one direction or the other is certain to occur, and soon.

1. GOLD- 10 to 20%, physical. No remote storage, own it.
2. LAND 20%…he recommends undeveloped prime land or farmland.
3. FINE ART 10%
4. ALTERNATE FUNDS 20% He likes hedge funds and private equity plays that
emphasize energy, transport, precious metals, hard assets, water. He does not like
financials, emerging markets, debt, and credit oriented securities. He admits selection
of an appropriate fund is tricky.
5. CASH 20-30% He likes cash before a calamity so one has flexibility whatever happens.
He likes US, euro, Singapore, and Canadian. That’s CASH, not gambling in forex.

While I like his analysis, I cannot closely follow his recommendations. I agree on the gold; I have residential real estate, not raw land; I cannot do fine art; I have US stocks instead of hedge funds; and I have less cash on hand than he recommends.

These ideas are from Rickard’s book; but if anyone subscribes to his service and is willing to share the ideas, I’d like to hear what he is thinking.

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MachineGhost
Member
MachineGhost
June 4, 2015 9:10 am
Reply to  hendrixnuzzles

Basically its a very real asset heavy (40%+) portfolio so any deflation or tight money will kill it. So it’s hardly an agnostic portfolio about which way the wind will blow, which is why I am/was so critical about Rickards being ideologically biased. Since he’s conservative politically, he probably doesn’t realize his biases are shaping his expectations.

I do like his analysis too, so long as you watch out for his biases. Eventually it will come to bite him in the ass.

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Travis Johnson, Stock Gumshoe
June 4, 2015 10:24 am
Reply to  MachineGhost

Good point, deeply ingrained biases kill portfolios — “knowing” the Fed will create hyperinflation in 2009 and 2010 would have had you shorting bonds and putting everything in precious metals, and if you convince yourself that you “know” what will happen at the macroeconomic level then you’re going to skew your portfolio dramatically without even noticing it.

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Travis Johnson, Stock Gumshoe
June 4, 2015 10:38 am
Reply to  hendrixnuzzles

Those are reasonable things to consider, but they’re also quite similar to what seemed reasonable five years ago. The opportunity cost of NOT investing in businesses that can compound the value of your money is huge. Land, fine art, gold and alternative/private equity funds are all at risk of being quite illiquid if markets turn sharply — as we saw in the last crash, when people are high on margin debt and they are forced to sell, they might sell everything.

These ideas are generally more appealing as “wealth preservation” ideas — rich folks can opportunistically buy up art and land, they’re worried about maintaining their status if things go a bit south, not about saving enough for retirement… and they like hedge funds not because they beat the market (most don’t, and aren’t even really trying to), but because they (traditionally) don’t lose much when the market falls and they want to maintain a steady positive performance. Preserve and maintain, not grow.

For most small investors, who very much need to grow their nest egg, I think this kind of “what to do if we’re in a panic and the social fabric breaks down and you don’t have a farm” planning distracts from the key concerns… which are that they need to save more, maybe a lot more, and they need to invest in long-term, value compounding businesses (like the large global companies who make up most of most indices) and not gamble too much. If you’ve saved up $100,000 and you’re expecting to retire in 15 years, which is about the position the average 50-year-old finds himself in these days, this kind of advice is probably going to hurt you more than it helps you in my estimation.

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dukeoneil
June 4, 2015 11:43 am

Travis, this is a great point! Those that are not millionaires and dont have discretionary cash to buy art and land can be misled by these theoretical solutions. more importantly, it can paralyze a person into non action.

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canihepu
canihepu
June 5, 2015 10:15 am
Reply to  hendrixnuzzles

I am a subscriber to IMPACT. So far, I can not say I have buyer’s remorse. Latest trade suggestion was to sell the July 17, $39 puts on Euro STOXX Fund (FEZ). I passed on this. I’m telling you all this as an example. Don’t really think it is fair to just blab everything all the time. So that gives you an insight into where IMPACT goes.

There is a book by Porter Stansberry called “America 2020 – The Survival Blueprint”. It echoes several directions mentioned about “The Death of Money.” It basically outlined several steps one might take to prepare for bad outcomes. Also, it devoted a lot of time towards sensible investment strategies. For example, he thinks Hershey (HSY) is a great long term investment because they sell something that people are almost addicted to and the cost of growing requires less expensive capital investments. He also loves good insurance companies. They are the only business that gets their money upfront. Success depends on good underwriting.

I have been a passive investor up until now. So, I’m trying to be careful about wasting my time on minutia as I start to look at my investment package going forward. I, quite frankly, expect some bad things to happen between now and November 2016. That means i proactively want input and am willing to invest some money in reports, advisors, etc. that will help us not come out of whatever crisis in bad shape. I have not bought MREs or a standby generator. Basically, I am starting to listen more closely. And, my various businesses will be affected by these events as well.

Bottom-line I am okay with IMPACT so far. I think Jim Rickards is really trying to leverage his situation right now and I do not fault him for doing this. It just makes me think he’s not so stupid. $7.5K for a gold invitation weekend! That is a gutsy play!!

Another guy I like is Dr. David Eifrig. So far, I have heard nothing from him that was not well thought out, interesting and useful. He’s over at Stansberry.

I signed up with you all because I could see you had the spirit to look behind the curtains concerning some of the more persistent touts from a Dan Ferris or a Paul Mampilly. So, I’m listening.

Hope these comments were helpful….

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mjj777
June 5, 2015 10:50 am
Reply to  canihepu

Yes. Thanks for your input. And I agree that it wouldn’t be fair to blab all the trades for any service. That is unfair to paying subscribers. More simply, I have been curious which services people are happy with (i.e. making money!). And cheers to Travis et all for teasing out some of the hype that is out there. No one service is going to be right for everyone. Some need to be really conservative and others are open to speculation for the potential bigger gains.

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hendrixnuzzles
June 5, 2015 9:25 pm
Reply to  canihepu

$FEZ Hi David Hertel, from the recommendation to sell FEZ puts we can infer that Rickards likes the euro medium-term, and is probably expecting something of a European stock asset bubble coming from ECB policy.

If he likes the euro he is bearish on the dollar, which is consistent with the views he expressed in his book Death of Money. My guess is he is also bearish on the yen.

I agree with these assessments. whether these are the views he explicitly states in IMPACT, or not. I am not a subscriber.

I have a position in FEZ; Linde, a German industrial company; and Arcelor Mittal, the world’s largest steelmaker, all taken to get some exposure to the euro.
None of these positions have changed a lot since my entry.

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archives2001
archives2001
August 18, 2015 4:09 am
Reply to  XANDER FARRAR

XF: “As regards the info on the Gumshoe website is concerned, I have never found it to be a source for good investment opportunities, rather mostly just Thinkolater discoveries of rerun stock pitches.”
I totally disagree! There is much new info to be gleaned if you spend a little time.
Also, you should spend some time reading the comments. Many of these folks are very
brilliant seasoned investors.
If I had my choice between Wharton and Gumshoe, I’ll take Gumshoe, thank you very much!

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hendrixnuzzles
September 22, 2015 8:35 pm
Reply to  archives2001

Wharton $ 49,000 per year.
Stock Gumshoe $ 49 per year.

Bought both of them.

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Rosenmeyer
Rosenmeyer
June 4, 2015 2:18 am

they also often leverage their investments-almost always in bonds-they do not mess with stocks normally. next my favorite gold stock is SA as I said will try to participate more here

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tomt
tomt
June 4, 2015 2:24 pm

Travis,
Your response is a good synopsis , Rickards personal investments were predicated on the fact that he cannot legally invest in US stocks, and as you mentioned, were wealth preservation recommendations. While you are correct to suggest the fine art and land markets may become illiquid, so will all assets during a sell off.
Making sense of current conditions to make reasonable forward looking investment decisions is at best a guess, even for the investing legends. I don’t have any confidence 20-20 hindsight assumptions about our markets will apply in the future, and prefer investing in non dollar businesses, those global corporations you mention are good bets, particularly those that provide the necessities of life.
BTW I picked up 50% gain on one of Rickards recommendations in 2 weeks.
Best of luck to all, we’re going to need it.

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mjj777
June 4, 2015 2:41 pm
Reply to  tomt

tomt

Was that 50% gain a buy / sell signal from the Impact service? Still toying with allocating a smallish dollar amount to such speculation. Maybe $5000 or so total. Then splitting up into 10 bets and hopefully rolling the winners forward.

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hendrixnuzzles
June 5, 2015 9:26 pm
Reply to  tomt

Why cannot Rickards legally invest in US stocks ?

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shaya4
June 5, 2015 10:46 pm
Reply to  hendrixnuzzles

Inquiring minds want to know!

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hendrixnuzzles
June 5, 2015 9:17 am

Travis, I agree with your take on Rickards in that he seems to be addressing large asset
readers who are concerned with preservation over growth…hence the fine art, hedge fund, and undeveloped land recommendations.

I also agree with your take on distractions for the smaller asset person…first thing is to save more, cut credit debt, buy growth stocks. Reduction in credit card debt gives a sure 20% return !

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hendrixnuzzles
June 9, 2015 8:46 pm

Hi Machine Ghost,
I reviewed our conversations in this thread, and decided to re-read Death of Money.
So I’ve now read it twice. In my opinion, there is nothing doctrinaire in his book, he is as agnostic politically as you are with your investment allocations. And I can tell you, who have admitted to not reading the book, that the material in it is quite unusual, so as for you “having heard it before”, I say you are mistaken.

Perhaps your past experiences with gloom-and-doomers makes you jump to conclusions about others who, for reasons good or bad, come to favor hard asset decisions.

Concerning our perceptions of the Fed, you have cautioned a couple times not to confuse
ownership with control. The fact is that the bankers own the Fed, the member banks take their .5% per month cut, and execute “national policy”. Your point is moot because for all practical purposes, “national policy” is more and more congruent with the big banking interests. There is certainly no real, independent bank that would have exchanged real money for billions of dollars in toxic and uncollectable mortgage securities, for example.
So the member banks collect their cut, and national policy is carried out, and the Treasury will bail them out. Two sides of the same coin. The bankers are running things,
and no matter what fig leaves they want to put up, the New York Fed calls the shots.

Concerning our dialogue, you have many valid points, but there are many others that I disagree with, but it would be tedious to debate them in detail. Let me just say that I do not feel that anything I have written needs to be retracted, nor do I feel you have successfully rebutted my assertions.

I have not changed any of my opinions, and I imagine you have not either.
That’s OK, I enjoy the repartee.

Cordially

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MachineGhost
Member
MachineGhost
June 9, 2015 9:03 pm
Reply to  hendrixnuzzles

That’s good to hear about Death of Money. I shall read the entire book then. I really couldn’t stomach any more doom porn.

I never said the Fed was independent. It’s been compromised politically and by Wall Street ideology. But it reeks too much of the loony conspiracy theory baloney to claim that Wall Street directly commands the Board of Governors! Reality is a little more subtle and non-melodramatic than that.

Everything I mentioned about the Fed was the operational reality of how the Fed-Treasury-Primary Dealer system actually works in the real world. You don’t have to believe in any of it to believe the current system is flawed, but it does help to prevent sad situations such as “QEternity is gonna fan the flames of inflation!” and help you not take a bath by being overexposed to real assets. A lot of people have lost a lot of money following such bad advice from the guru hucksters over the past six years.

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hendrixnuzzles
June 9, 2015 9:34 pm
Reply to  MachineGhost

Hey Ghost. YOU are mentioned in Death of Money.
Get back to me when you find the reference !

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tanglewood
June 9, 2015 9:33 pm

Hi hendrixnuzzles; I am curious about your largest asset holding, residential income property. I think that this is a great way to diversify but it sounds like a lot of work. If this is a personal question don’t answer. What percentage of your assets would you estimate that to be? Do you use a management company? What is the average holding period of your properties?

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hendrixnuzzles
June 9, 2015 10:31 pm
Reply to  tanglewood

It’s personal stuff but this is an anonymous forum,
so I’m glad to share some information.

Over half of my net assets are in residential property. Most of it is unmortgaged,
although I do carry a little mortgage debt as a dollar hedge (short) and a credit line (=cash flexibility). I do not have a big empire, total properties are in single digits.
I do not use a management company, although I will use an agent to procure tenants.
I started this three years ago, and have only divested myself of one property.

About residential real estate, let me say a few things from my experience.

1. I enjoy it. I like looking at houses and neighborhoods. Don’t do it unless you enjoy looking at houses and have a good understanding of where you are buying.
Buy property you will be happy to have, even if it is unrented for a short time.

2. My feeling is that it is very important to be in an area with strong future growth prospects, and in a low tax jurisdiction. I do not recommend it as a strategy in the Northeast, for example. You might do OK there, of course…a lot of people have made a lot of money there. But going forward, and as a new area for diversifying, I think it is and riskier getting more difficult…high prices, taxes, declining or flat demographic growth, etc.
Less margin for error and higher costs.

3. Be very patient looking for the right property, and be tough on the price. Look at foreclosures and situations where the seller is susceptible to a good deal.

4. I am very concerned about a rise in interest rates that will depress housing prices.
But my thinking is, that if I own an income-producing property,
then a general housing price drop is not going to affect me directly, because I am
not looking to sell the property. Whatever happens, I own a real asset that is going to have significant value. If I get some appreciation, that is a plus, of course. But I am not playing the leveraged-gain-on-a-small-down payment game.

5. About risk. As I said, it is entirely possible that higher rates will have an adverse affect
on pricing. It is also possible that severe economic conditions could make finding a suitable paying tenant hard to find. And local jurisdictions can always raise taxes.
For these reasons I want as little debt and carry costs as possible.
But in whatever scenarios I can imagine, people are going to need a roof over their heads, and unless the country deteriorates to an unimaginable extent, having title on real property is about as secure as you can get. And all those petrodollars and reserves in US currency are coming back here…what are the holders gonna want to buy ?

5. Thinking of moving ? ….Several years ago I started thinking about retiring, and much of my travel was directed at the dual purpose of relaxation and scouting out places I might want to move to, or have a second home in. This formed was the basis for my decision on where to start looking. I suggest that if you are interested in residential real estate,
that you do it where you are, or where you would like to be; although if this is not practical, I suppose you could have a management agent, if the property is not close to you.

Just remember, the transaction costs are deadly, the lead times are long, and mistakes are expensive. Better have conviction on what you buy.

Kind regards

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Philippe
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Philippe
June 10, 2015 12:20 pm

Yes, this sounds like hard sale which is never a good think.
Personally I perfer to invest in self sufficiency, producing my own food, heat, water, electricity… This way, it doesn’t matter to me what happen in the stock market, forex, bond, oil, taxes, inflation, banks, politics and give protection against our complex interelated society, pandemic, wars… I can hold my money in the form of good quality tools needed to make a living with. It isn’t a cheap path, it does take a lot of capital to establish (but this can be spread over several years) and time but it gives me a lot of peace of mind and low stress.

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hendrixnuzzles
June 10, 2015 10:03 pm
Reply to  Philippe

Wow, Philippe, so you are a “survivalist ” ?
May I ask where (generally) are you located, and what concrete steps have you taken to ensure your own food supply ?

Best regards

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Philippe
Guest
Philippe
June 11, 2015 6:29 am
Reply to  hendrixnuzzles

We moved to Berkshire 6 years ago and bought a property with a large garden. In term of food production, so far I have setup vegetable patches around the size of a standard allotment at the end of our garden. We aso have 2 good quality greenhouses on dwarf wall, around the size of 5 standards greenhouses. We keep a dozen of chicken on another part of the garden with a cockerell so we get eggs and meat by producing our own chicks. We have a couple of active beehives plus another two to go. We bought a woodland last year, just 2 minutes walk from our house, and I am progressiviely transforming it into a forest garden. I have put a couple of hundred of nuts and fruit trees, including soft fruits and some other editable perenials, it also produces the wood to run our wood burning cooker in the winter (we cook with electricity in the summer from our solar panels) . We also have a half size allotment from the council to complement but mostly be part of the gardener association and learn from veteran gardenders. We plan to keep rabbit in the near future and probbaly a few goats in a few years time. It is a different way of life, more in relation with nature, the kids love it and the veg tastes much better than supermarket bought!
It is very difficult to be 100% self sufficient but anyone can take steps to get more sufficient. Our food bill has decreased considerably and we all the other steps we are taking, a small income will be sufficient to keep us going in the future. This means that we will pay less income tax, less vat and less middleman so I profit more of my own time, it is a bit being your own boss part-time. All these protect us against currency war and high inflation too.

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hendrixnuzzles
June 12, 2015 12:22 am
Reply to  Philippe

That’s really great, I admire you for having the courage of your convictions.
I have no aptitude for farming, so I think the path you are on is not practicable for me…
but I completely agree that it’s a good thing to batten down the hatches. Maybe I can start small with a garden in the back !

About finding and managing residential property…it’s a lot less work than raising livestock and gardening !

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arch1
June 12, 2015 1:07 am
Reply to  hendrixnuzzles

HN Farming on a small scales involves “doing the work that Americans won’t do” a high dollar investment for probably less than 5% after expenses and more general knowledge
than nearly any other field, You survive by growing your own food,being non wasteful, resourceful and innovative . If you succeed in holding long term you may be well rewarded in land appreciation. It can be a great life if you like hard physical labor and love nature and is a great beginning for children to experience reality and seeing the world as it is. Husband and wife both must love the lifestyle or disaster awaits.
I was 16 years old before we had electricity,running water or indoor plumbing so I too know all the survival skills but no longer have the strength to do what is needed.
The mottos of my youth were Waste not want not,,,and Use it up Wear it out,,Make it do or do without.. Old habits die hard so my wants are few and my needs far less. I learned early that it is far easier to save a $ than make one and hold onto it.

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hendrixnuzzles
June 12, 2015 1:29 am
Reply to  hendrixnuzzles

Archuno…agree with you…you’d better like it a lot and enjoy the lifestyle.

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Dr. Shizz
June 12, 2015 1:59 am
Reply to  hendrixnuzzles

Thanks for sharing Frank. You were taught well!

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