PARIS – “We’ve never seen Paris so dead,” said the bookstore clerk.
“The tourists don’t come because they think it is dangerous. And the locals have left for the month of August. There’s no one left. It feels kind of eerie.”
You can see how dead the city is by looking at this photo:
Quiet Paris streets
That lonesome figure on the left is your editor, alone in the Café Vavin (usually packed with people) as he writes this Diary.
City of the Dead
It felt like everyone else knew something we didn’t.
Were there missiles on the way to destroy the city? Was an army of zombies marching down the Champs-Élysées? Was there something in the water?
We didn’t know. But let’s leave the City of the Dead for a few minutes and return to the world of money…
U.S. stocks were flat yesterday. The press reports that investors are “braced” for today’s jobs report.
But what difference will it make?
Good jobs numbers are supposed to encourage the Fed to “tighten” – that is, raise interest rates.
This would further strengthen the dollar… and push Treasury yields higher.
It would also dampen investors’ appetites for stocks – which would, at least according to theory, become relatively less attractive compared with higher-yielding bonds.
Disappointing jobs numbers would set the dominoes falling in the opposite direction. Central banks all over the world would be forced to redouble their efforts to push stock prices higher.
Or is it the other way around?
Yesterday, the Bank of England got in on the game.
Worried about the effects of Britain’s decision to leave the European Union, it announced a major new “stimulus” program.
It cut its target lending rate from 0.5% to 0.25%…
…announced a £100 billion ($131 billion) “bazooka” to force banks to pass on lower rates to their customers…
…and promised to up its QE program by £60 billion ($79 billion) over the next six months.
In the U.S., stocks are off their all-time highs, but not by much. And in the event of a serious sell-off, investors are confident that the Bank of Yellen will come to their rescue.
We don’t know what will happen. But we know what won’t happen: There will be no voluntary return to a “normal” economy with a normal interest rate policy.
Most of the world now depends on abnormal policies – including the reputations of its policymakers… the fortunes of its Establishment Elite… and the fate of its rogue Republican presidential candidate.
A return to a “normal” financial world – with real money, real savings, and a 4% real “risk free” rate on the 10-year Treasury note would be very good news for the common man.
But it would be very bad news for the insiders.
The insiders are supported by cheap credit; fake money makes it possible to shift trillions of dollars to the cronies and to buy off the zombies with spare change.
So, the authorities continue their desperate efforts to keep the music playing and the liquor flowing.
Investors continue to speculate about what they will do next… and what it will mean for asset prices.
And most everybody talks about the aforementioned Republican candidate.
Crook or Clown?
Donald Trump is as “yuge” here in Europe as he is in the U.S.
People don’t know what to make of him. Some wonder how such a man could exist, let alone be a few votes away from the most powerful position in the world.
“The whole world is rattled by this guy,” says former Republican congressman from Minnesota Vin Weber.
Trump fascinates people. He divides opinions. Nobody gets more searches on the Internet. Nobody sells more TV ad space.
“You either love him or you hate him,” say the papers.
You believe he will make America great again… or that he will ruin it completely.
Here at the Diary, we are undecided. Dear readers seem to heavily favor Mr. Trump, but if forced to vote, we don’t know which way we’d go.
The crook or the clown? The hack or the huckster? The fool or the knave?
It’s a tough choice.
Someone Else Did It First
We came up to Paris to meet friends. While we were there, we stepped into our bookstore.
Many years ago, we bought a tiny publishing company in Paris. The idea was to use it as a foundation stone for our expanding empire.
We must not have been thinking clearly. There was no real connection between publishing books in Latin and Greek, on the one hand, and publishing financial analyses and recommendations on the other. The two hands were not on the same animal.
Nevertheless, we developed an affection for the misshapen beast. And today, we can’t enter the bookshop on Boulevard Raspail – where it has been for almost a century – without leaving with a book or two.
Yesterday, we walked away with a history of the barbarian invasion of Europe in the 4th and 5th centuries.
The classics are a valuable source of perspective. They show us that there is no program so goofy and preposterous that someone 2,000 years ago didn’t give it a whirl.
The Romans tried it.
Stir up the people against the “barbarians” and “outsiders”?
Invade foreign countries.
Build a wall?
No matter what Monsieur Trump or Madame Clinton come up with, you can be sure there was some ambitious demagogue or addled emperor who thought of it first!
By Justin Spittler, Editor, Casey Daily Dispatch
At Casey Research, we encourage most investors to put 10% to 15% of their wealth in gold…
Once you own enough gold for safety, consider buying gold stocks for profit.
Gold miners are leveraged to the price of gold, so a small move in gold can trigger an explosive rally in gold stocks. This year, a 27% jump in the price of gold has caused the VanEck Vectors Gold Miners ETF (GDX), which tracks the performance of gold stocks, to soar 129%.
After a huge run like that, you might be thinking you missed the boat on gold stocks. But the average gold stock gained 602% during the 2000–2003 bull market. The best ones rose more than 1,000%.
Doug expects even bigger gains in the coming years. According to him, gold stocks are in the early innings of a “true mania.”
That’s why, to help you take advantage of this incredible opportunity, Doug is sharing the “Casey Method” to picking gold stocks for the first time. You can learn more about this proven money-making strategy by watching this short presentation. As you’ll see, there’s never been a better time to own gold stocks.
And it’s not just us who are saying it…
To paraphrase what “Bond King” Bill Gross recently said, the debt-fueled economy is running on fumes right now. When the average investor wakes up to this, they’ll dump stocks and bonds and take cover in gold.
Editor’s Note: Doug’s presentation on his “Casey Method” is unlike anything you’ve ever seen. It’s a sneak peek at the secret formula he’s used to make huge profits in every gold boom since the metal began trading in 1975. Watch here now.
Mussolini’s Great Monetary Experiment
Benito Mussolini is known for having been a horrible warmongering fascist dictator. However, he was also responsible for a major failed monetary experiment – the so-called Battle of the Lira.
Bonds Will Eventually Fall, Right?
Legions of market savants have been anticipating a crash in the bond market. So far, they’ve all been wrong. But bond prices have to fall at some stage… don’t they?
How to Play the Coming Digital Currency Boom
One investing expert says he just uncovered a surefire sign that a digital currency boom is about to begin. More importantly, he goes on to explain the best way to play it.
Bill’s “bedtime story” in yesterday’s Diary – “How You End up With a Fake Economy” – went over well with readers.
The fake economy bedtime story has a strange parallel in history.
Spain’s focus on getting gold and silver from the new world destroyed the Spanish economy; they placed an artificial value on the metals, and used up resources to acquire them. Then all of a sudden they had lots of gold and no resources; the price of resources had escalated to the point that they didn’t have enough gold and silver to recover.
Central planning at its worst.
– Ernie B.
Many, many thanks to your preternaturally knowledgeable grandson James for his brilliant use of the Socratic Method to help the rest of us dullards understand the concept of phony money.
Does he do speaking tours? If so, when will he next be up in Canada?
I’m prepared to be up all night in the ticket line as I expect a line-up of Harry Potter dimensions, considering the utter lack of competition.
– Dave H.
James needs to know the truth about Alexander Hamilton, who started us down the dead-end trail leading to where we are now. (It’s never too early.)
I know you have a lot to cover with him, but please put it on the agenda.
– Tom W.
Yesterday’s and today’s issues will keep me awake thinking through my long-term plans and strategies. Good thing I bought gold, silver, and bulk ammunition over the past few years.
By the way – great allusion to Nero, fiddling away as Rome burned. I expect that is appropriate as central bankers continue following the current path, as the value of my money and my income decreases.
Maybe I should buy some chickens and hope they will lay enough eggs to keep me going when my stack of thousand dollar bills won’t buy breakfast at the local inn.
– James P.
So how should I think about the price of gold? It was only 15 years ago that I was buying gold at $275 an ounce and today’s $1300 is up much more than inflation would justify. According to the CPI gold should be about $385 today.
– Phillip M.
In Case You Missed It…
Bill’s friend and business partner, Doug Casey (a man who once booked an 86,900% gain on a gold stock), says you could make five times your money this year by investing in gold.
But he has some crucial advice he wants you to hear before you even think about touching gold.