Insider
by
charleshughsmith
Executive Summary
- Is it better to hold cash in savings/checking accounts, or securities accounts?
- Where will the dollar likely from here?
- What will likely happen with retirement accounts?
- Ways to diversify your cash risk
If you have not yet read Part 1: The Cardinal Sin Of Investing: Permanent Impairment Of Capital available free to all readers, please click here to read it first.
The Role Of Cash In The Informal Economy
In stagnating formal economies burdened by over-regulation, high taxes and financialization, one of the few bright spots for employment and entrepreneurism is the informal or cash economy. The more stultified and elite-dominated the economy, the larger and more vibrant the informal economy. In some highly regulated, high-tax European nations, up to 30% of the economic activity is underground/cash.
The elimination of central bank currency will not eliminate the informal economy. Rather, the participants in this sector will adopt non-central bank issued forms of cash—precious metals, coins, other nations’ paper money, perhaps even digital currencies such as bitcoin or its gold-linked cousins (Bitgold, etc.)
Those with little income often do not have bank accounts, as the fees are costly. Eliminating cash will hit the poor who earn money in the informal economy especially hard. Though the poor are essentially powerless in our influence-is-auctioned-to-the-highest-bidder system, this could change once the working poor who benefit from the cash economy are pushed even deeper into poverty by the banning of cash.
That might spark…
Smart Strategies For Building & Managing Your Cash Savings
PREVIEW by charleshughsmithExecutive Summary
- Is it better to hold cash in savings/checking accounts, or securities accounts?
- Where will the dollar likely from here?
- What will likely happen with retirement accounts?
- Ways to diversify your cash risk
If you have not yet read Part 1: The Cardinal Sin Of Investing: Permanent Impairment Of Capital available free to all readers, please click here to read it first.
The Role Of Cash In The Informal Economy
In stagnating formal economies burdened by over-regulation, high taxes and financialization, one of the few bright spots for employment and entrepreneurism is the informal or cash economy. The more stultified and elite-dominated the economy, the larger and more vibrant the informal economy. In some highly regulated, high-tax European nations, up to 30% of the economic activity is underground/cash.
The elimination of central bank currency will not eliminate the informal economy. Rather, the participants in this sector will adopt non-central bank issued forms of cash—precious metals, coins, other nations’ paper money, perhaps even digital currencies such as bitcoin or its gold-linked cousins (Bitgold, etc.)
Those with little income often do not have bank accounts, as the fees are costly. Eliminating cash will hit the poor who earn money in the informal economy especially hard. Though the poor are essentially powerless in our influence-is-auctioned-to-the-highest-bidder system, this could change once the working poor who benefit from the cash economy are pushed even deeper into poverty by the banning of cash.
That might spark…
by
Chris Martenson
IMPORTANT NEWS
The live version of this webinar took place on Sep 13, 2017. It was excellent.To purchase access to the replay video of the event for $25, click the blue button below:
or
Given that a month’s subscription to PeakProsperity.com is only $30, you may want to give serious consideration to enrolling instead. It’s only $5 more, and gives you access to the webinar PLUS all of the premium analysis, webinars, reports, podcasts, alerts and events that PeakProsperity.com has to offer. That’s a pretty screaming value for an additional five bucks.
In this webinar, featured experts Grant Williams and Lance Roberts dove deep into the structural fragility of today’s financial markets and the many reasons why economic growth will remain constrained for years to come.
The excessive build-up of debt in the system — and the absolute dependence on its continued expansion to keep the economy from imploding — is, of course, seen as the prime risk to future growth.
As Lance demonstrates here with several of his excellent charts, so much leverage has been taken on that its servicing is increasingly stealing capital that would otherwise go to savings, consumption and productive investment. Going forward, the demands of the debt service will simply result in less and less capital available left over to grow the economy:
As financial assets are (supposed to be) valued on future growth prospects, lower forecasted growth demands lower valuations. Grant calculates that, should the US see another decade of 2% average annual GDP growth (and it has averaged less than that over the past decade), stock prices should be roughly half of what they are today to be considered fairly valued:
And Lance builds further on this, explaining how this moribund growth, coupled with America’s aging demographic trend, will simply savage the nation’s (already troublesomely underfunded) pension and entitlement systems:
But there are a number of other destabilizing risks to fear beyond our terminal debt addiction. One that Grant believes is not getting enough attention right now is the de-dollarization trend becoming notably apparent across a number of America’s strategic trading partners:
To watch the full 1.5 hours of this excellent webinar, purchase it by clicking on the blue button above.
WATCH NOW: Dangerous Markets Webinar
PREVIEW by Chris MartensonIMPORTANT NEWS
The live version of this webinar took place on Sep 13, 2017. It was excellent.To purchase access to the replay video of the event for $25, click the blue button below:
or
Given that a month’s subscription to PeakProsperity.com is only $30, you may want to give serious consideration to enrolling instead. It’s only $5 more, and gives you access to the webinar PLUS all of the premium analysis, webinars, reports, podcasts, alerts and events that PeakProsperity.com has to offer. That’s a pretty screaming value for an additional five bucks.
In this webinar, featured experts Grant Williams and Lance Roberts dove deep into the structural fragility of today’s financial markets and the many reasons why economic growth will remain constrained for years to come.
The excessive build-up of debt in the system — and the absolute dependence on its continued expansion to keep the economy from imploding — is, of course, seen as the prime risk to future growth.
As Lance demonstrates here with several of his excellent charts, so much leverage has been taken on that its servicing is increasingly stealing capital that would otherwise go to savings, consumption and productive investment. Going forward, the demands of the debt service will simply result in less and less capital available left over to grow the economy:
As financial assets are (supposed to be) valued on future growth prospects, lower forecasted growth demands lower valuations. Grant calculates that, should the US see another decade of 2% average annual GDP growth (and it has averaged less than that over the past decade), stock prices should be roughly half of what they are today to be considered fairly valued:
And Lance builds further on this, explaining how this moribund growth, coupled with America’s aging demographic trend, will simply savage the nation’s (already troublesomely underfunded) pension and entitlement systems:
But there are a number of other destabilizing risks to fear beyond our terminal debt addiction. One that Grant believes is not getting enough attention right now is the de-dollarization trend becoming notably apparent across a number of America’s strategic trading partners:
To watch the full 1.5 hours of this excellent webinar, purchase it by clicking on the blue button above.
by
Chris Martenson
Executive Summary
- Controlled markets can't be controlled forever
- Confidence is beginning to fail, even at the top
- The leading indicators to monitor closely
- The reason to get excited about gold & silver again
If you have not yet read Part 1: Who’s Going To Eat The Losses? available free to all readers, please click here to read it first.
As we recently covered in this week's special webinar, the geopolitical tensions across the world, alone, should have created some sort of ‘risk off’ response in the equity markets. With China, Russia and North Korea all increasingly at odds with the US for a wide variety of reasons, it’s very hard to make a case that Everything is Awesome!
Instead, it’s very easy to make the case that the world is on the brink of a period of destructive trade wars, if not actual 'hot' wars.
Again, that alone should be introducing some uncertainty, some ‘risk off’ behaviors by which we mean some sort of a selloff in equities. But that’s just not the case.
In fact, the current stock ramp-up is the second longest without even a 3% sell-off in all of US equity history.
It's my firm belief that these calm markets do not represent the collective wisdom of millions of independent traders and investors. They are instead the result of both direct and indirect support of said markets by monetary authorities and their proxies. That is, the central banks and the big banks they actually represent and look out for.
But this lack of volatility will have a very painful cost some day. No different than in a political crisis where an oppressed people finally rise up, the suppression of market volatility will spill over and…
How To Deal With Our Dangerous Markets And Failing Future
PREVIEW by Chris MartensonExecutive Summary
- Controlled markets can't be controlled forever
- Confidence is beginning to fail, even at the top
- The leading indicators to monitor closely
- The reason to get excited about gold & silver again
If you have not yet read Part 1: Who’s Going To Eat The Losses? available free to all readers, please click here to read it first.
As we recently covered in this week's special webinar, the geopolitical tensions across the world, alone, should have created some sort of ‘risk off’ response in the equity markets. With China, Russia and North Korea all increasingly at odds with the US for a wide variety of reasons, it’s very hard to make a case that Everything is Awesome!
Instead, it’s very easy to make the case that the world is on the brink of a period of destructive trade wars, if not actual 'hot' wars.
Again, that alone should be introducing some uncertainty, some ‘risk off’ behaviors by which we mean some sort of a selloff in equities. But that’s just not the case.
In fact, the current stock ramp-up is the second longest without even a 3% sell-off in all of US equity history.
It's my firm belief that these calm markets do not represent the collective wisdom of millions of independent traders and investors. They are instead the result of both direct and indirect support of said markets by monetary authorities and their proxies. That is, the central banks and the big banks they actually represent and look out for.
But this lack of volatility will have a very painful cost some day. No different than in a political crisis where an oppressed people finally rise up, the suppression of market volatility will spill over and…
by
Chris Martenson
Executive Summary
- How bad will "bad" get?
- What will happen to world supply and prices?
- Who is most vulnerable?
- How quickly could this occur?
If you have not yet read Part 1: Why The Shale "Miracle" Is Becoming A "Debacle" available free to all readers, please click here to read it first.
How to Position Yourself
Okay, here’s the summary so far. The shale companies are burning cash and they’ve done so every year. At every oil price point. And there’s nothing in the data to suggest that will change this year, or next.
So the first question to ask is: When will investors wake up and stop funding these companies?
This should be immediately followed by: How much financial and economic damage will then result? And how soon afterwards?
Well, if the companies stop drilling because their funding dries up, the decline rates of the various shale basins would translate into the immediate and sudden loss of a huge amount of oil production.
How much?
According to the EIA the decline rates each month for the three biggest shale fields would be between 53,000 and 158,000 barrels per month.
Taken together, one month of not bringing any new wells online for these three fields would result in a drop in oil output of -314,000 barrels. And a similar (but slightly smaller) drop the next month. And the month after that, the same thing. And so on.
After just 3 months the US would be down more than -1,000,000 barrels per day when all the other shale fields are taken into account.
Now that’s extreme, and it’s very unlikely that drilling would just suddenly stop one day. But the point here is that…
The Coming Shale Debacle
PREVIEW by Chris MartensonExecutive Summary
- How bad will "bad" get?
- What will happen to world supply and prices?
- Who is most vulnerable?
- How quickly could this occur?
If you have not yet read Part 1: Why The Shale "Miracle" Is Becoming A "Debacle" available free to all readers, please click here to read it first.
How to Position Yourself
Okay, here’s the summary so far. The shale companies are burning cash and they’ve done so every year. At every oil price point. And there’s nothing in the data to suggest that will change this year, or next.
So the first question to ask is: When will investors wake up and stop funding these companies?
This should be immediately followed by: How much financial and economic damage will then result? And how soon afterwards?
Well, if the companies stop drilling because their funding dries up, the decline rates of the various shale basins would translate into the immediate and sudden loss of a huge amount of oil production.
How much?
According to the EIA the decline rates each month for the three biggest shale fields would be between 53,000 and 158,000 barrels per month.
Taken together, one month of not bringing any new wells online for these three fields would result in a drop in oil output of -314,000 barrels. And a similar (but slightly smaller) drop the next month. And the month after that, the same thing. And so on.
After just 3 months the US would be down more than -1,000,000 barrels per day when all the other shale fields are taken into account.
Now that’s extreme, and it’s very unlikely that drilling would just suddenly stop one day. But the point here is that…
by
charleshughsmith
Executive Summary
- The Destructive Practices To Stop Doing
- The Regenerative Behaviors To Do More Of
- Getting The Foundational Pieces In Place
- The Payoff, For Both You & Society
If you have not yet read Part 1: We Need a Social Revolution available free to all readers, please click here to read it first.
In Part 1, we compared non-hierarchical, bottoms-up secular social revolutions with hierarchical, top-down political and technological revolutions managed by the state and corporate sector. Next, we surveyed the erosion of social connectedness and social capital, and asked who benefited from this fraying of the social order. While certain players derive some benefit from political divisiveness and from the sale of technologies that undermine authentic connectedness, it seems that much of the social-order decay is collateral damage—destruction that wasn’t intentional.
How can we strengthen or repair our own connections and social fabric in such a disintegrative era?
There are two basic approaches: stop participating in destructive dynamics, and assemble the foundational pieces of a connected social life.
How do we as individuals and households foster and nurture the social bonds that are fast-eroding in civil society?
The basic strategies are not difficult to understand, though they are extremely difficult to put in place in modern-day America:
- Strip out busyness to free up enough time and energy for social life and connectedness.
- Live in a place with short commutes to friends, family and public social spaces.
- Recognize (and then…..
Rescuing Our Future
PREVIEW by charleshughsmithExecutive Summary
- The Destructive Practices To Stop Doing
- The Regenerative Behaviors To Do More Of
- Getting The Foundational Pieces In Place
- The Payoff, For Both You & Society
If you have not yet read Part 1: We Need a Social Revolution available free to all readers, please click here to read it first.
In Part 1, we compared non-hierarchical, bottoms-up secular social revolutions with hierarchical, top-down political and technological revolutions managed by the state and corporate sector. Next, we surveyed the erosion of social connectedness and social capital, and asked who benefited from this fraying of the social order. While certain players derive some benefit from political divisiveness and from the sale of technologies that undermine authentic connectedness, it seems that much of the social-order decay is collateral damage—destruction that wasn’t intentional.
How can we strengthen or repair our own connections and social fabric in such a disintegrative era?
There are two basic approaches: stop participating in destructive dynamics, and assemble the foundational pieces of a connected social life.
How do we as individuals and households foster and nurture the social bonds that are fast-eroding in civil society?
The basic strategies are not difficult to understand, though they are extremely difficult to put in place in modern-day America:
- Strip out busyness to free up enough time and energy for social life and connectedness.
- Live in a place with short commutes to friends, family and public social spaces.
- Recognize (and then…..
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