Hi Do, Here are Todd’s latest fun picks to take your financial skills to the next level... I want to create a unique experience for you today.
I've been sharing educational resources for 2.5 years to get you in front of the curve on epochal change.
Knowledge is power, and this new epoch is such a dramatic change from the past that you need to be in front of it to manage risk and profit.
Today is different...
You're going to directly experience how epochal change is unfolding in front of your eyes... right now.
The first resource (see links below) explains the unraveling of the French Assignat inflation starting in 1789, as written by a Cornell University professor in 1896, augmented with cheeky images from today.
While the message is clear - the early stages of serious, systemic inflation are already occurring in the U.S. right now - I want to be equally clear that there's much more to this picture.
History rhymes, but it never exactly repeats. The French Assignat example is informative, but there's more to know. Which is where our next two resources come in...
Grant Williams is interviewed in one podcast, and he's the interviewer in the second. Each podcast episode covers very different, but closely related topics, to paint a complete picture of the rapidly developing inflation (and deflation!!) problem.
What you'll discover is the incentive structure driving government policy down the ugly path they're pursuing.
The Fed is now backed into a corner and is no longer able to choose what it wants. Instead, it is choosing from least-bad alternatives. For example, did you notice that gold is regularly hitting new all-time highs despite positive real interest rates and a strong dollar? Both of those fundamentals are almost universally negative for gold, except in special situations. Something very different (epochal change) is going on. It's important, and you need to understand what's driving it. Similarly, did you notice how the stock market is hitting all-time highs while the economy dances on the brink of recession, world economies are already in recession, and the commercial real estate market is in the first innings of collapse with trophy properties in prime locations trading at 30 to 50 cents on the dollar of values just a few years ago. The stock market used to be connected to the underlying economy, but not now. What's different? My suggestion is you read the top resource (see below) about the French Assignat inflation first. This shows you what the early signs of serious inflation look like and where we are today in the journey. It's an eye-opener.
While you read that article, take note how central banks around the world are acquiring record amounts of gold while liquidating Treasury securities. This is the opposite of what they did in the last epoch. What do they know that you don't?
Then, listen to the two podcast episodes for a solid overview of the incentives driving this situation forward.
This new epoch is a titanic battle between our government desperately trying to reflate in an effort to stave off collapse thus driving asset prices higher using the only tool it has - excess liquidity.
U.S. Government debt is increasing at astounding $1 trillion dollars every 100 days while $70 trillion dollars of financing must rollover every year for the next five years. They have one top mandate, and it's not fighting inflation like the media headlines proclaim.
(FWIW, the term "trillion" has lost meaning, but it's an astoundingly large number. For perspective, a trillion seconds ago was 31,709.8 years - or 30,000 BC! The pyramids of Egypt didn't exist, and it would be 10,000 years before the ancient cave paintings in France would take form. That's a trillion seconds - not days - but seconds! That makes a trillion dollars an unconscionably large amount of debt to accumulate in just 100 days.)
The truth is the government must assure sufficient liquidity to manage all of that debt. That means inflation and the dollar will take a back seat to the real priority.
On the other side of the battle are the equally titanic forces for deflation. Technology is always deflationary, and the A.I. revolution is rolling across the economy faster than any technology revolution in history. Combine that with the enormous commercial real estate collapse expected over the next 5 years with trophy properties in multiple cities already trading hands at 50%-70% losses, and you have an epoch battle for massive change...
...in completely opposite directions!!!
The real estate collapse and A.I. revolution are massively deflationary, and the government mandate to reflate at any cost (the current winner in the battle) is massively inflationary.
So read the top resource below to see how the government has already got us deep into inflation. This isn't a future problem. It's now, and it's systemic.
And then listen to the two podcasts below to see how all the incentives are lining up to drive us deeper, and at an accelerating rate, down this road.
Just know that in the background lurks massive deflationary uncertainty to assure that history will only rhyme, but not be identical. The government is following a clear playbook for inflation and the game is progressing according to their rules. Their stated goal is controlled inflation, but stagflation is the most likely outcome. We have clearly crossed the Rubicon into a new economic regime with new investment rules. The epoch has changed.
We know with certainty some things, and the writing on the wall is clear, but there remains large risks for temporary derailments that are diametrically opposite.
As stated numerous times for the past 2.5 years, the absolute best solution for managing your portfolio through all of this uncertainty and expected volatility is here. You must have a solid offensive investment strategy because inflation is destroying your portfolio purchasing power, and that offense must be coupled with a solid defensive investment strategy to manage the expected volatility risk and uncertainty. Conventional passive, buy-and-hold won't cut it. There's only one solution I know of to reliably negotiate conditions like this, and it's here. I've been promoting it since I announced epochal change 2.5 years ago, and it has managed the process admirably in real time. It's still not too late.
Enjoy the educational resources below, and please consume them in order from top to bottom to get the full experience of how the puzzle pieces fit together. They were all brought to my attention first inside my Expectancy Wealth Planning community filled with smart, savvy investors. You would be wise to be a part of that community. "As with Zimbabwe, we learn that the worse things seem to get, the more the market rises (sound familiar?!?). It’s another example of the Bad is Good theme. So what were some of the signs along the way from France’s slide? It always starts the same way. Business is slow and the government is looking for a shortcut." This article is critical to your understanding the obvious - that rising asset prices are always welcome at first, but are actually a dangerous sign when decoupled from underlying fundamentals. Government is now driving everything that occurs... until they're not. The context provided by this article will set you up for the next two resources below where we look at government incentives going forward to understand how this situation will likely develop... This private webinar with Grant Williams is publicly accessible on YouTube right now. You might want to grab a listen while you still have access. Grant does a great job of explaining how the Fed no longer enjoys the luxury of pursuing optimum outcomes. Instead, it's operating from a new framework of avoiding worst outcomes. That means "higher for longer" inflation must be tolerated to support real estate, inflate asset prices, and provide the liquidity required to roll over the $70 trillion dollars in debt that must be refinanced annually for the next five years. The game has changed, but few understand. It's a new epoch. Grant's podcasts are usually by paid subscription only, but this one is accessible. However, you may have to search for the podcast and episode in your favorite app because the link is janky. Luke explains how China needs to de-dollarize its oil imports and commodity imports to avoid a currency crisis, which is driving the de-dollarization of global oil markets and how gold becomes the replacement currency in this process. The price of gold is no longer determined in the U.S. because China needs gold to work in order to improve its standards of living and avoid a crisis. This is a game-changer on several levels. Luke believes gold will continue to rise in price, and that the pace of events is accelerating towards a US fiscal crisis with a trillion dollars in debt growth every 100 days. The lack of price-sensitive buyers for its treasuries means the Fed’s choice is no longer inflation or deflation, but rather sacrificing the dollar and the the long end of the yield curve. This is my recommended solution to manage your investment risk and pursue positive expected returns through the crazy market changes coming your way.
Onward and upward!
Todd Tresidder
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