December 22, 2017
Increasing questions regarding the big financial institutions and mainstream media platforms that cover them (such as CNN, MSNBC and the New York Times) are highlighting the importance of looking elsewhere for investment ideas.
To help, we propose a subjective list of ten top Alt-Fin posts during 2017. There is no guarantee that this collection of geniuses, eccentrics and quacks will be any more accurate than the big guys.
But in a world in which governments measure progress in fiat dollars whose value changes daily, financial statistics must be regarded as little more than manipulated approximations.
The best ideas are thus more likely to be found “out of the box” than in.
We have deliberately chosen more video presentations than written articles, as many of the themes raised are strategic in nature and are best reflected upon away from work.
So put on your hats. Because “we’re not in Kansas anymore.”
1. Grant Williams: A World of Pure Imagination
Grant Williams, in A World of Pure Imagination, highlights the emergence of huge stock, bond and real estate bubbles sparked by world governments that have grown their spending, borrowing and money-printing at a faster pace than GDP for five decades.
Williams, whose charm and humor belie the deadly seriousness of this cold insight, doesn’t use the words “Ponzi Scheme.” However, the implications of trends he identifies will affect all investment decisions during the coming years.
If you watch one economic presentation this year, this should be it.
2. David Stockman: Free markets are dead
Like most Alt-Media,Contra Cornerr author David Stockman is highly skeptical of current economic data, debt levels and bubble-like asset valuations.
His unique contention, outlined in a presentation to the Mises Institute earlier this year, is that free markets no longer exist. According to Stockman, huge spending power in Washington (which he calls “the Imperial City”) and the Federal Reserve (the “monetary policy politburo”) are so distorting price discovery that valuations can’t be trusted.
Stockman’s credentials are impeccable. His 1986 classic The Triumph of Politics, penned shortly after he first came to prominence during his stint as Reagan’s budget director, foreshadowed almost all current developments.
3.Spengler: Who is China having for lunch?
The key global macro trend for gold investors to watch during the coming years will be China’s rise and the yuan’s growing share of the global reserve currency balances. It’s a zero-sum game: the faster those balances rise, the faster the US economy will implode.
David Goldman’s extensive work in Hong Kong (where long-time Asia Times readers know him as “Spengler”), has provided him with unique insights into the Middle Kingdom, many of which he shared in a recent presentation to the Westminster Institute.
Goldman, contrary to consensus, is bullish. He argues that Westerners seriously underestimate the importance of Chinese historical traditions, entrepreneurism, work ethics and the millions of Chinese STEM and music students.
4. Harry Dent: It’s the transmission mechanism, stupid
Forecasting is a brutal world. No one has been more severely punished for being right than Harry Dent, whose deflationary collapse theory was first outlined in his 2011 work The Great Crash Ahead.
Dent’s biggest readers appear to have been central bankers. Shortly after the book appeared, governments began printing unprecedented amounts of money, in part to boost stock prices. This has obliterated the timings of Dent’s initial stock crash thesis (which draws extensively on Robert Prechter’s 2002 work Conquer the Crash).
Still, in an interview with Peak Prosperity, Dent said the strategy won’t work due to their reliance on large financial institutions to lend out and expand the money they print—a process hampered by worsening demographic trends. Many in the precious metals community doubt Dent’s thesis that a coming collapse in asset prices will affect gold. But everyone listens to him.
5. Jeff Berwick and Doug Casey: A Bitcoin of wisdom
Renegade thinkers Jeff Berwick, publisher of the Dollar Vigilante newsletter, and Doug Casey, founder of Casey Research, made the year’s most spectacular investment call: buy Bitcoin.
Berwick’s broad philosophy, which he outlined at the Texas Bitcoin Conference, is that Bitcoin—which is backed by an existing blockchain, database and user community—has many of the qualities of traditional currencies. Casey, an early crypto-currency sceptic, outlined his thinking about why he reversed course at the Nexus Embassy Conference in September.
Note: the sheer success, timing and apparent brilliance of Berwick’s and Casey’s calls would normally have rated them much higher rankings. However, Bitcoin’s opacity, and the fact that neither expert has issued a full “sell” call, mean that this story is not yet over. We’ll be more than happy to update their rankings if they get out with their skins intact.
6. MK. Bhadrakumar: Is India a BRIC or a card?
MK. Bhadrakumar, an India-based blogger and former diplomat, has been far ahead of the curve in analyzing the return of balance of power politics, in which weaker nations—such as Russia, China and Iran—are increasingly banding together to protect themselves from larger predatory powers.
India, which will soon be the world’s most populous nation (and possibly one day its biggest economy), will be crucial in determining how the global chess match will unfold.
Current thinking is that the US should play the “India card,” to form an alliance against China (similarly to the way that it played the “China card” against the Soviet Union during the Cold War). Others think that India will lean towards a BRICs alliance.
Indian politics, which are currently dominated by the religious/conservative Modi regime, are incredibly complex, and Bhadrakumar is not a big YouTube guy, so it is hard to point to one particular presentation. But his blog is required reading.
7 . Alasdair Macleod: America’s use of the dollar for financial war
Macleod, a long-time favorite of hard money proponents, hit the nail on the head with his America’s Financial War Strategy blog earlier this year, which outlined the country’s use of the dollar as a weapon. In it, Macleod identifies a crucial presentation by Qiao Liang, a senior Chinese government official, which characterizes America’s abandonment of the gold standard in 1971 as the most important development of the century.
8. Bill Gross: Correlated asset classes magnify risks
Gross, the former head of bond giant Pimco and a major player in the bond world, was promoted to Alt-Fin status in 2015 after he was ousted from the company he founded.
In his last blog of 2017, Gross reminds us that with interest rates so low as we approach a recession, central banks won’t be able to protect investors as much during the next market crash. (During previous economic implosions, declines in stock prices were offset by rises in fixed income securities, as central banks responded to events by cutting interest rates).
9. Gordon T. Long: Will central banks nationalize the economy?
Veteran investment analyst Gordon T. Long’s video posts and interviews (many of which are with fellow bloggers Charles Hugh Smith and Mish Shedlock) are among the Alt-Fin world’s most under-rated. Long’s modus operandi is to lay out current economic developments and macro-trends in a shy, matter of fact way, through charts and graphs, which leave little room for argument.
One of Long’s more compelling recent theses is that the US Federal Reserve and the ECB could do as the Bank of Japan and Switzerland’s national bank are—by buying stocks and/or ETFs (directly or indirectly) to artificially keep prices up and thus mask the scale of economic decline.
10. Doug Noland: Is credit the new form of money?
Doug Noland, author of the Credit Bubble Bulletin, whom we profiled last month, is a long-time favorite of precious metals investors. Money is notoriously hard to quantify, says Noland, and thus a better way to understand the amount of liquidity in the system is to track credit.
One of Noland’s unique contributions has been to highlight the crucial importance of the US Federal Reserve’s Z.1 Flow of Funds Report. Noland’s quarterly analyses of the Z.1 (which lists the progress of all of the debts in the economy—not just individual government, business and household portions, as do mainstream media) is required reading for serious precious metals investors.