Note to Fed: The Laws of Math Still Apply
January 25, 2022
Hosted by Jay Taylor
John Rubino, Patrick Highsmith and Chen Lin return. The big Keynesian fantasy that a country can forever become wealthy by consuming more than it produces has seemed believable to Americans because we have owned the world’s fiat reserve currency. That meant for the past number of decades that the Federal Reserve could create fiat money out of thin air to enable Americans to buy foreign goods rather than Americans earning income through export sales to pay for their consumption. But alas, the Federal Reserve and America cannot defy the law of mathematics because money isn’t actually created out of thin air at all. Fiat money is manufactured with debt. So, as decade after decade, America continued to consume more than it produced, its debt relative to income has risen to the point where the U.S. is now insolvent. Because of excessive unearned money creation by the Fed, America is now facing double-digit levels of inflation akin to 1980. But unlike 1980, when a 20% Fed Funds interest rate was required to break the back of a double-digit inflation rate, America’s debt load is so large that not even a ¼ of 1% Fed Funds rate, or a 2% 10-year Treasury rate, can occur without triggering the next stock market crash and U.S. recession. With the entire American economy now dependent on rising stock prices rather than rising GDP, the only likely option for the Fed is to continue with the money-creating Keynesian fantasy leading to hyperinflation and very possibly a global currency reset. John will opine on America’s precarious economic state and how we should prepare for what is to come. Patrick will update us on the exciting prospects for Firefox Gold’s exploration project in Finland and Chen will share his thoughts on the emerging precious metals markets and his top biotech ideas.
Turning Hard Times into Good Times
Tuesday at 12 Noon Pacific Time on VoiceAmerica Business Channel
Jay Taylor’s show will explain the real underlying causes for plunging stock prices, plunging home prices and growing unemployment. By correctly diagnosing the cause of America’s economic decline, rather than listening to excuses from Wall Street and Washington, Jay will offer winning investment ideas to protect and increase wealth.
Topics to be discussed will include the cause of the decline of: our monetary system and our economy, the housing markets, the equity markets, and commodities, Why gold and silver are rising in value and how investors can profit from the direction of these markets through specific stocks, ETF’s and precious metals will also be discussed. Turning Hard Times into Good Times is broadcast live every Tuesday at 12 Noon Pacific Time on the VoiceAmerica Business Channel.
Jay Taylor has been able to more than double his newsletter’s model portfolio from 2000 to the present even as the S&P 500 was in the process of losing 50% of its value!
The insights provided to Jay came from a history professor in 1967 who advised Jay that when countries go off a gold or silver standard, hard economic times are sure to follow because nations begin to think they do not need to work hard and save to enjoy a better life. Indeed there is no free lunch and a gold standard reminds people of that every day.
Jay watched his professor’s prophetic words come true when in 1971, President Nixon completely detached the dollar from gold. Not surprising to Jay, the price of gold skyrocketed in the late 1970s as inflation wiped out vast amounts of wealth from average Americans. To protect his own wealth Jay began to invest in gold and gold mining shares and in 1981 he began sharing his success and insights in his newsletter. In 1981 Jay began writing a subscription newsletter that has earned his subscribers countless thousands of dollars over the years.
Jay’s insights as to the real cause of our problems has enabled him to find investment strategies that work. Diagnose a problem correctly and you have a chance for success. Diagnose a problem incorrectly as the establishment does and you are sure to fail.