August 27, 2019
The Miles Franklin Newsletter
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From The Desk Of David Schectman
David's Commentary (In Blue)

In today’s newsletter I am featuring an article recently written by Bill Holter. The Holter-Sinclair collaboration and Miles Franklin work very closely together. I have followed Jim Sinclair for nearly two decades and Bill Holter worked for Miles Franklin for several years before moving onto his relationship with Jim. His premise is straightforward and you cannot afford to get this one wrong. If Bill is correct, and the evidence supports him, we have run out of time.
Jim Sinclair coined the phrase "QE to infinity" back in 2009. Few at the time really understood what he meant but then came QE 2, Twist, and QE 3. The premise was that the Fed (central banks in general) could never really tighten credit or monetary conditions in the future without imploding financial markets and ultimately the real economy. Now that the tightening cycle has been hastily aborted (for exactly the reasons Jim originally laid out), the world is right back to where it left off with QE 3 ...QE to infinity is already here!
As it stands now, every central bank on the planet is in "easing mode". The easing has already brought forth something that 20 years ago was unthinkable ...negative interest rates. I have written several past articles on the topic of negative interest rates, they are archived for your review. The world currently ex US has seen sovereign bond yields average drop below zero for the first time ever.
It seems as if this is only the beginning!
I say only the beginning because it is clear the doubling down efforts by central banks has not worked. The global real economy is again sputtering even with central bank's life support efforts. Liquidity is again quite tight which should not be the case while central banks bid for credit, but why? Even though central banks have flooded auctions with bids, the real economy is not generating the necessary cash flows needed. Tariffs and trade wars have arisen for the simple reason the "economic pie" is no longer expanding and in order to service the now gargantuan debt requires each player to have a larger slice of the stagnant (shrinking?) pie. China's retaliation today is just a small reminder of such.
Now that the fallacy of monetary policy can cure all is discredited, what's next? The winds of fiscal policy deficit spending have suddenly begun to blow because "zero" has been breached! No matter how big and important sounding the words are to describe and cheerlead negative interest rate policy ...everybody knows. Everybody knows that negative rates are a complete joke and in fact a perfect illustration that the currencies themselves have no value. It is by no coincidence gold is trading at all time highs in no less than 73 major currencies. It will not be long before "73" will be replaced with "ALL" currencies!
So fiscal stimulus is next? There are a few pesky questions without valid answers that allow "infinity" to enter the equation. First, sovereign balance sheets were not exactly pristine back in 2008 but they are disasters now. 100%+++ deb-to-GDP ratios litter the globe now. 20-years ago,100% debt-to-GDP was the entry portal to Banana Republic status. Today, 100% is considered "clean"? Hardly!
The real rub is this, who exactly will purchase the debt offered by sovereign treasuries? Let's look at the US. The US Treasury is already running $ trillion annual deficits, fiscal stimulus will only increase this number and probably substantially! Will China fund our deficit as they had since 2008? Does Japan even have the ability? Does anyone on the planet have the ability to fund US deficits ...not to mention all the other sovereigns coming to market? The answer of course is no, the only entities with the ability to fund the coming credit issuance are the various central banks. In a word - MONETIZATION! Not just behind the back monetization; what comes is in your face monetization that cannot nor will not be hidden. Even the common man will understand central banks are creating new currency out of thin air and thus diluting (to zero) already issued currency.
QE to infinity is no joke. It is very real and it is already here and just getting started. Think about how much credit issuance will be needed to backstop the existing debt, not to mention the cesspool of over $1 quadrillion worth of derivatives? "Infinity" is an unfathomable number but the best way to understand it is to look at and define/understand its opposite. The opposite of infinity is "0". Most everyone knows and can understand "zero" as a concept. In the real world, infinity is not what people will understand. What they will understand is the value of their fiat currencies approaching and eventually reaching zero value or purchasing power.
I will leave you with something to think about. Societies are based on currencies used to perform business transactions. Currencies are also the base for savings and pension arrangements. Many things financial can and have been swept under the rug for many years. Failing currencies cannot be hidden because the common man uses them every day. The common man will immediately see and feel if his currency is failing. How can central banks monetize insolvent treasury debt without destroying the issued currency? And what does that mean for all things denominated and saved in said currency?
The end of the monetary fiat road is not nigh folks is already here! I have tried to illustrate and explain over the years how all monetary roads lead to gold. It looks like "liability capital" will all now merge in to a super highway leading directly to gold and silver ...where no liability exists!
This article was originally posted for subscribers at  
Standing watch,
Bill Holter
Holter-Sinclair collaboration
I ask a simple question: Why would anyone go toe-to-toe with their banker? Is this not insane? This is a fight no one can win but what we seem to have here is a President whose hubris will not allow compromise - and a country with a long-standing tradition of always saving face. There will be no “Last Laugh.” There will be no winner. This is just more “fuel” for the issues Bill Holter addressed in his article, above.

"China’s will to defend the core interests of the country and the fundamental interests of the people is indestructible, and will not fear any challenge. History will prove that the side on the path of fairness and justice will have the last laugh."
More and more evidence that Bill is correct shows up on a daily basis
Everything the alternative media has warned about for years; all the outcomes other people have called "conspiracy theory", will soon be treated as "common knowledge"... 
The following article by Sprott agrees with my premise that inflation is necessary and they can never stop printing dollars. The stage is set for the dollar to tumble and lose a great deal of its purchasing power. He goes even further, pointing out that the debasement is in all currencies as we are now embroiled in a global currency war. This is another article that parallels Bill’s view.
Egon von Greyerz

How far down the rabbit hole will the world go? It seems that just like in Alice in Wonderland, things are getting more strange by the day. If it continues at this speed, the rabbit hole will soon become a black hole without a bottom.

Bonds cost money to hold, currencies are soon worth nothing and gold will reach at least $7,000 before it reaches $700.

Bubble bond markets are getting bubblier by the day as the $16 trillion bonds with negative rates grow to soon $50 trillion when the US, with its $22 trillion, joins the bond interest rate race to the bottom and below.

And most currencies are already almost at the bottom, having lost 98-99% since 1971 and 80% since 2000. Stocks will soon join as they collapse from dizzy heights.

Greg Hunter

Trump Fights Fed, Buy Gold, More MSM Propaganda
If you think the latest stumbles in the U.S. economy were caused by the so-called trade war with China – think again. The reason why the economy is sputtering is the Federal Reserve. It raised rates only 2 times during the 8 years of the Obama Administration. In the first 2-½ years of the Trump Administration, it raised interest rates 7 times. On top of that, the Fed started what it calls “quantitative tightening” (QT) during Trump’s first few months in office. QT takes liquidity out of the economy. At its peak, the Fed was burning $50 billion a month that businesses and consumers could no longer have access to. So, when you hear the President blame the Fed for economic troubles, rest assured he is correct.

The gold bandwagon is filling up with some of the biggest names in the investment world. Ray Dalio, who manages the biggest hedge fund in the world, is telling people to “buy gold.” Now, former Franklin Templeton ($28 billion) money manager Mark Mobius is telling people to “buy gold at any level.” What do rich money managers see coming?

The mainstream media (MSM) has basically turned into a propaganda machine for the Democrats and the New World Order globalists. The most recent confirmation of this is leaked audio of the brass at the New York Times discussing dumping the fake hoax of the Russian Trump collusion narrative for a new narrative—Trump and his voters are racist. This, of course, is yet another propaganda lie the MSM is telling to stop President Trump in the 2020 election.

Join Greg Hunter as he talks about these stories and more in the Weekly News Wrap-Up.
Quotes of the Day
We have no special insight into the impact of negative interest rates on future valuations for traditional asset classes such as stocks, bonds and real estate. But as we stated earlier on, we believe that for gold this is the real deal and we suspect things are just getting started. Trey Reik

My questions are simple. If rates continue to fall then how do pension funds, insurance companies, banks and others relying on dependable sources of income survive? If a bank (like in Denmark) is forced to offer a negative interest rate mortgage I’d like to know how they make a profit lending out $100,000.00 and getting back $99,000 over 15 years. That would be like someone wanting a loan from me and saying, “if you give me $10,000.00 today, I’ll pay you back $9900.00 over 10 years- can you lend it to me?” I would have to be awfully benevolent to make that loan- something the banks most assuredly are NOT. So, tell me again how negative rates help the economy? It appears to me to be a dagger to the heart of the real economy. Take the profit motive out and commerce will come to a standstill- as all the charts are showing is already happening.

How will pension funds hit the 7-8% bogey with negative interest rates? Will they rely on an ever-expanding stock market or forever lower rates to produce the gains? Good luck with both!

If insurance companies earn less on their investments expect insurance premiums to rise. Again, causing another negative impact to an already reeling real economy.

The only thing propping up this illusion is ever expanding and increasingly risky DEBT.

For those who don’t trust bonds and want to buy stocks- I implore you to look at their debt load. The first casualty in a default is the common stockholder. The first person to stop getting dividends is the common shareholder. There is a greater possibility of gains but also a greater risk of loss.

After seeing what is happening in the real economy and watching the central banks across the globe taking emergency actions while trying to pretend “all is well” I can only ask “Do you feel lucky?”

This is no time to rely on luck and it is no time to stick your head in the sand thinking that the central banks have our backs. Where were they in 2000? In 2008? Where will they be when the third bust follows the third boom in the last 20 years? So many have forgotten already.  

I don’t pretend to know how this will all end. I am just sure that it will. When it does those who have prepared will likely be in far better shape than those who are anticipating that the next 10 years will be like the last 10 years. To me, that is EXTREMELY unlikely.

As a matter of fact, since the central banks bought 571 tons of gold last year and are buying far more this year- year to date- it doesn’t appear they expect the next 10 years to even resemble the last 10. The major banks, hedge funds and many billionaires are also following this lead. Are you astute enough to see what is happening here? – Mike Savage

At the time you receive this Trend Alert, the Dow closed down over 600 points and Gold spiked nearly $30 per ounce at $1,528 per ounce, up from $1,332 an ounce since my 6 June Gold Bull Run forecast.

Rest assured, central banks, over 30 of which have already lowered interest rates this year, will continue to lower them, even as they dip lower into negative territory in many nations. And governments across the globe will continue to announce aggressive “stimulus measures” to boost sagging economies.

The monetary methadone cheap-money injections to prop up the addicted equity Bull and stimulus measure to lift sagging economies will push governments deeper in debt, further worsening economic conditions when the Greatest Depression hits.

I maintain my gold forecast of over $2,000 per ounce on the upside, and $1390 on the downside.

The worst is yet to come. Prepare-Prevail-Prosper. Gerald Celente
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About Miles Franklin

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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