June 10, 2020
The Miles Franklin Newsletter
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Gary Christenson-Contributing Writer For Miles Franklin
Three Strikes and We Are Out
 
Miles Franklin sponsored this article by Gary Christenson. The opinions are his and are not investment advice.
 
STRIKE ONE: The Lockdown.
 
The closer came off the bench and threw “high heat” at the economy. Regardless of who created the COVID-19 virus, infection rates, actual virus-related deaths, our bungled management, and the ulterior motives that affected the pandemic and response, individuals and the U.S. economy must live with the consequences.
 
Strike one delivered:
 
a)    40+ million newly unemployed American workers in three months. A disaster!
b)    Thousands or millions of devasted businesses. Another disaster.
c)    Bankruptcies for small and large businesses and individuals.
d)    Late (or no) payments for rent, auto loans, mortgages, and credit cards. Foreclosures are coming.
e)    Commercial real estate crash. Shopping malls, office buildings and more.
f)      Lost revenue, crashing GDP, massive new debt.
g)    Crushed state and local budgets. Lower tax revenues.
h)    Pension plans falling into insolvency.
 
But the NASDAQ 100 hit an all-time high on Friday, June 5. Profits are great for the political and financial elite who own 90+% of stocks and bonds that have been levitated by the Fed printing $3 trillion in a few months.
 
Those new highs were not confirmed by the DOW, S&P, Transports, or other indices. But never count Fed levitation out for short-term market manipulation.
The Fed can’t print wealth, prosperity, gold, silver, or happiness, but they will print digital currency units. The political and financial elite have Fed support backing them. However, the lower 90% get unemployment, bankruptcy, overdue credit cards, unpaid car loans, late mortgage payments, and a belief that “something is wrong.”
STRIKE TWO: The riots.
 
The closing pitcher threw strike two, a vicious curve ball that looked like an inside fast ball but curved over the plate and dropped to cross the outside corner at the batter’s knees. Strike two caught most of the U.S. by surprise. The forces of chaos waited for an opportunity and then struck. Riots were organized, police reacted, protestors were violent and peaceful, and moral outrage overwhelmed the media. People marched in the streets, ignored social distancing, and created chaos in hundreds of cities.
 
Businesses that survived the COVID lockdown, social distancing, and phased re-openings were destroyed in the riots. Vandalism and arson ruined pawn shops, offices, retail stores, and Wal-Marts. Bricks were suspiciously planted in convenient locations for use by violent rioters. Some riots were planned and professionally organized.
 
Strike two was deadly for businesses and people. The ugly consequences will extend far into the future.
 
STRIKE THREE:
 
The closer is preparing to throw his third strike and make the final out. Will it be another fast ball, a nasty slider, or an unexpected curve ball that fools the populace?
 
We can almost guarantee the following:
 
a)    The Fed will create trillions of digital dollars, buy Treasuries, buy bonds and ETFs, and bail out banks, hedge funds and the financial elite. [Already happening.]
 
b)    Politicians will promise giveaways, and assure people their vote will improve employment, social services, infrastructure spending, racism, the economy, unwinnable wars, and so much more. [Always happens.]
a)    Politicians will accept “donations” from the political and financial elite. The elite receive helpful legislation in return. Money buys political protection and “favors.”
 
b)    Politicians will spend, approve bailouts, and promise goodies for the people. What has worked for 2,000 years will be successful in 2020.
 
c)    Debt, debt, and more debt.
 
Creating currency units is so easy, people might ask:
 
a)    If the Fed can create dollars to bail out big banks, why can’t they create more dollars, so individuals don’t pay income taxes to the IRS?
b)    The Fed “prints” trillions of dollars. What is the purchasing power of those dollars in 2020 and how much less will they be worth in 2024, after massive devaluations?
c)    Do I trust the Fed? Do I trust politicians? Has the economic system that benefits the elite failed most people? Protect your savings with silver and gold.
From Robert Heinlein (author)
 
“A managed democracy is a wonderful thing… for the managers… and its greatest strength is a ‘free press’ when ‘free’ is defined as ‘responsible’ and the managers define what is ‘irresponsible’.”
 
 
THIRD STRIKE POSSIBILITIES:
 
What about a third strike that blindsides the economy and American public? Possibilities include:
 
  • Stagflation - 1970s style, when prices rose rapidly, wages lagged, and investments fell. Where is Paul Volker when we need him?
 
  • Deflation like in the 1930s, when most assets crashed. The dollar was tied to gold in the 1930s so the Fed could not create $3 trillion in a few months. The 2020 Fed wants to avoid deflation, so they print, print and print.
 
  • Inflation, where prices rise rapidly as the newly created dollars circulate through the economy.
 
  • Hyperinflation, where the Powers-That-Be choose to hyperinflate the currency. People lose faith in the currency, the Fed, and the government. “Spend it before it becomes more worthless.” It has happened before and could again.
 
  • Hyperstagflation: The worst of hyperinflation and stagflation.
 
  • A wave of corporate bankruptcies and huge write-offs. Coming!
 
  • More nasty virus scares in the fall. Who will benefit?
 
  • A derivatives disaster. Bailouts for big banks.
 
  • War, a “false flag” attack, a real attack, another “perfect storm,” dollar collapse, a gold backed foreign currency, the truth about Fort Knox gold holdings, political chaos, an “October surprise,” or another “black swan.”
Thoughts, courtesy of Robert Carrillo:
 
a)    Scare people with a virus. Place them in quarantine. Count the number of dead every second of every day in every news headline. Close all businesses. 40,000,000 out of jobs. Peak unemployment. [Create fear.]
b)    Remove entertainment: Parks, gyms, bars, restaurants, sports. No dating. No touching. Mask people. Dehumanize then.
c)    Close temples and churches. Create a vacuum. Let depression, anxiety, boredom, and desperation set in . [Add drug abuse, child abuse, suicides, addictions, domestic violence, and cabin fever.]
d)    Then...ignite hatred and civil war. Civil unrest.
e)    Undermine the law. Loot. Attack law enforcement. Tell government to order them [police] to stand-down.
f)      [The saga continues. Who benefits in an election year and who pays the protesters?]
 
From Alasdair Macleod: “ Orphaned silver is finding its parent .”
 
The global economic and monetary situation is dire, due to both the coronavirus and because the credit cycle was already turning down in late-2019. The amount of monetary debasement deployed by central banks in an attempt to save their economies promises to be unprecedented to the point where total monetary destruction will be an increasingly likely outcome.”
 
CONCLUSIONS:
 
  • The damage has been done. It will take years to recover.
 
  • A rising stock market does not mean “all is well.”
 
  • Bailouts will be ongoing and occur often. The dollar will fall in purchasing power.
 
  • Dollars will be created by the trillions. Prices for consumer goods will rise, perhaps hyperinflate. More bailouts and larger federal and state debts are inevitable.
 
  • Confidence in the Fed and government will decline, as it should.
 
  • The rich will get richer and the lower 90% will clamor for crumbs, a UBI, and bailouts.
 
  • The problems created by 40+ million unemployed workers will not disappear soon.
 
  • As the Fed devalues the dollar, prices for gold and silver will rise, or possibly explode, higher.
 
  • How far gold and silver rise depends on the quantity of dollars printed, the loss on confidence in the dollar, and the virulence of economic stupidity that invades government and the economy.
 
  • THREE STRIKES AND WE ARE OUT! A nasty curve ball is streaking towards us.
 
Miles Franklin sells gold and silver bars and coins—real money. Both metals fell hard this past week. However, they will cost far more in devalued dollars by election day. Call 1-800-822-8080.
 
Gary Christenson
 
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Miles Franklin was founded in January, 1990 by David MILES Schectman. David's son, Andy Schectman, our CEO, joined Miles Franklin in 1991. Miles Franklin's primary focus from 1990 through 1998 was the Swiss Annuity and we were one of the two top firms in the industry. In November, 2000, we decided to de-emphasize our focus on off-shore investing and moved primarily into gold and silver, which we felt were about to enter into a long-term bull market cycle. Our timing and our new direction proved to be the right thing to do.

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