LAWRIE WILLIAMS: Buy gold and save yourself! Lewitt

From time to time I am sent copies of financial commentaries from friends who subscribe to them which help give me a more balanced view of what’s really going on in the global economy than the absolute bs put out by politicians, central banks and their economist lackeys, and nowadays in many cases by companies themselves, in this era of spin.  If one can make the world think things are OK then they will be seems to be the mantra of the politicians and central bank economists.  Meanwhile the so often misleading interpretations of relevant data put out by corporate entities to their shareholders tend to be entirely self-serving and perhaps more attuned to preserving obscene executive pay packages than letting investors know the true financial positions of the companies involved.

One of the most interesting such newsletter I have been so sent is the latest March edition of The Credit Strategist expressing the viewpoint of Michael Lewitt – www.thecreditstrategist.com – whose views are always prescient, outspoken and highlight so many of the economic issues which, if one tries to get behind the spin, are really key to our financial futures. One may not agree with all Lewitt’s commentary, but overall his comments lay bare the huge anomalies between financial fact and fiction being perpetrated on the general investment public by the economic establishment.  It makes for sobering reading.

The 10-page letter goes into some detail regarding many of the misleading, supposedly positive, political, economic and corporate data being continually thrust upon us by a compliant (or perhaps ignorant) mainstream media.  It highlights many of the economic and geopolitical pitfalls which lie ahead for the investor as central banks continue to debase their currencies through the promotion of enormous debt which almost certainly can never be repaid.

So how can the investor protect his or her self from the financial reset which must lie ahead.  (Lewitt believes U.S equities have been in a bear market since 2014 while setting, in our view, a fairly modest, but significant, initial downside target level for the S&P 500 in the U.S. of around 1650-1750 (it’s currently at a around 1980, down from a high of over 2100).  While the US dollar remains strong – as perhaps the best of a bad bunch of major global currencies - he sees little chance of a near term recovery in either U.S. or global equities.  However the break in the seemingly relentless 5-year rise in equities has at least caused investors to consider out of favour asset classes like gold as offering some kind of financial insurance.

Indeed Levitt ends his letter with the following comment on the yellow metal:

“Gold has finally caught a bid in 2016 as investors grow increasingly concerned about monetary disarray and global instability. Gold mining shares, which I also recommended in January, are also doing well. Gold remains the antidote to central banks’ deliberate policies to destroy fiat currencies. Recently, both Mario Draghi and Haruhiko Kuroda promised to do whatever they can to destroy their currencies regardless of the consequences to financial stability, comments that would have gotten them fired in a saner era; today, these idiocies win them cheers from global investors intent on committing financial suicide.

“The hierarchy of global currencies remains Gold/USD/Euro/Yen, but as noted above just because the dollar is better than the others doesn’t change the fact that its value is being actively debauched by Janet Yellen and her colleagues. We are also seeing the British pound get pounded (sorry) to under $1.40 as investors fret about a possible Brexit. This publication is read by people around the world and my closing advice applies to citizens in any country with a central bank: buy gold and save yourself!”

All in all the latest edition of The Credit Strategist offers some sobering reading for the prescient investor and in our view is right on the button in most of the points made.  An annual subscription to Lewitt’s service costs $425.  A worthwhile investment we would think for those who want to see behind the misinformation which serves as much of the world’s mainstream investment advice nowadays. 

03 Mar 2016

About the author

Lawrence Williams

Lawrence (Lawrie) Williams is a well known London-based writer and commentator on financial and political subjects, but specialising in precious metals news and commentary. He is a qualified and experienced mining engineer having graduated in mining engineering from The Royal School of Mines, a constituent college of Imperial College, London - recently described as the World’s No. 2 University (after MIT).

e: lawrie.williams@sharpspixley.com