LAWRIE WILLIAMS: Trust in Gold
Reading Michael Lewitt’s The Credit Strategist newsletter is like a breath of fresh air as it cuts through the bs in most of what qualifies as investment advice nowadays and in hugely outspoken terms.. Lewitt is undoubtedly a right wing Republican, but also no great lover of the intellectual capabilities of the current U.S. President and brings an unusual degree of what appears to this observer to be undoubted common sense – unfortunately not followed by many political commentators around the world.
To get an idea of Lewitt’s views I’m publishing verbatim the opening paragraphs of his latest Credit Strategist newsletter. I hope he forgives me for copying his utterances v erbatim, but it sets the scene for the rest of my commentary below. Well here goes:
Lewitt writes “Government by tweet and investing by ETF represent the death of thought, responsibility, and moral action. Investors must resist these falsehoods. Technological demagogues convince people to surrender their freedom, to believe that the world is binary and capable of capture in 140 tweets. Free people must reject these tyrannies. Monetary charlatans tell citizens that it is prudent to print trillions of fiat dollars to bail out governments and businesses from their inability to competently manage their affairs. Citizens must reject these delusions.
Rather than solve problems, those in power exacerbate them and leave the world buried under debt and bullshit piled so high that it crushes common sense and good judgment and reduces once respected voices to babbling idiots. Only in such a world could ideas such as negative interest rates, quantitative easing, and tariffs thrive and businesses not only profit by stealing our privacy and advertising every conceivable kind of crap but receive the highest valuations in history. Living among “this complete indifference to the life and death of each of us” becomes more trying every single day as life inflicts madness on us all.
If you think about some of the miserable ideas foisted on us by people in high places, you cannot escape the conclusion that the world is losing its mind. What are negative interest rates but another attempt to reduce the value of debts that can never be repaid? Or quantitative easing but a way of cannibalizing government deficits? Central bankers are creative geniuses when it comes to destroying the value of money and keeping the global Ponzi scheme going as long as possible. But the only thing scarier than what they are doing is that they refuse to acknowledge the truth to themselves. (In June 2017, the Congressional Budget Office (CBO) forecast a $689 billion federal deficit for fiscal 2019. Now the Office of Management and Budget (OMB), part of the Executive branch, projects a $1.09 trillion deficit for that year. Two years ago the CBO was calling for a $20.7 trillion federal deficit by 9/30/29; now the OMB pegs that figure at $22.8 trillion. These numbers understate the real deficits, which are growing during a period in which the economy is ostensibly healthy. Those deluded enough to believe that there will be no more recessions are going to be shocked when annual deficits grow to $2 trillion or more when the economy and tax receipts slow down)
The problem with these regimes is that they are hollow. They are intellectually and morally soulless and incapable of managing human affairs on a sustainable basis in a material world that brooks no quarter. We still live in a physical universe with limits set by forces more powerful than mankind. Those banking on governments printing infinite amounts of money without consequence are thinking about a world that only exists in their imaginations, just as leaders who try to manipulate their citizens with short language bursts befitting teenage girls lack all authority and respect.”
Strong words indeed, but totally justified in the eyes of this writer and it somehow supports the premise behind the latest ‘In Gold we Trust’ report from Incrementum AG from Liechtenstein which leads off with a treatise on Trust – or a lack of it with respect to politicians, the media and, dare I say it, many so-called economists.
The common theme of both the above publications is that one should put one’s trust in gold which has stood the test of time. Fiat currencies and investments may wax and wane but gold goes on as a consistent store of one’s wealth of hundreds, if not thousands, of years. It may not offer the rapid gains of some alternatives like bitcoin, but these are just as prone to collapses which can wipe out paper gains in a matter of days or weeks. Gold is, and always has been, the ultimate financial insurance. (Michael Lewitt has a persistent mantra repeated in almost all his Credit Strategist newsletters – ‘Buy gold and save yourselves’, while Ronni Stoerferle and Mark Valek, authors of the impressive 340 page ‘In Gold We Trust’ report as adherents of the Austrian School of Economics say much the same thing, but supported by a myriad of charts and statistics.)
[To download a copy of the full In Gold we Trust report free of charge, click on the link]
29 May 2019