PodCasts Archives - McAlvany Weekly Commentary

Politicians replace central banks with "Fountain Pen Money" A potent cocktail: Inflation & Financial Repression Inflation is a tax on the poor   The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick From Helicopter Money To Fire Hose Favoritism April 27, 2021 “Bureaucrats in D.C. and in Brussels and in London, in Berlin, they’re inclined to focus the flows of cash to constituencies that will ensure enduring power for years to come, inflation was once considered dead. Now, you see politicians, you’d say, “Inflation, be damned. There’s an opportunity here to harness the taxing power to lessen the burden of debt while simultaneously buying votes via the direction of credit and credit guarantees to every pet project on the planet.” — David McAlvany Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick, along with David McAlvany.  David, in 2002, Ben Bernanke talked about something called helicopter money. Honestly, I thought that that was the first time that was used, but it was doing a little bit of research, and Milton Friedman, all the way back to 1969, used it as an example of just spreading money generally to the public. Now, you and I have lived this helicopter money for the last, oh, 10, 12 years since the global financial crisis. Now, it’s starting to look like it’s not going to be helicopter money anymore. It doesn’t look like just spreading it over a wide path works. I’m thinking fire hose money. What are you thinking, where it’s now going to be directed to whoever is the privileged few? David: Well, I think in the age of Amazon where everything is delivered to your doorstep, maybe we call it drone money instead of helicopter money. It’s not dropped equally on everyone, but it’s delivered to a particular address. We know who you are, we know where you are, we have all the data on you and we’re going to get you just what you need. Kevin: It sounds to me because of the COVID accident, the politicians are the ones that will be sending those drones. David: Yeah. When I think about inflation and the nature of monetary delivery, whether it is a drone or a fire hose, it’s like we have NASA saying, “Houston, we have a problem.” Only instead of Houston, we have a problem. It’s “Houston. We have a transitory problem.” Kevin: Isn’t it amazing how they use the word transitory when they don’t want us to think that this is actually a real issue? David: It’s going to go away. The definition is that it is non-permanent. Kevin: Well, World War II was transitory. David: That’s right. Kevin: Yeah. David: What is not transitory, but in the age of big data, when more granular details can be analyzed and integrated into big conclusions, we have the Fed choosing to downgrade its information flows. This is not for the first time they’re doing it again. The first major move was in 2006, March 9th, 2006. The Fed said this, “M3 does not appear to convey any additional information about economic activity that is not already embodied in M2 and has not played a role in the monetary policy process for many years.” That last point I’m sure is the case, but they said, “Consequently, the board judged that the cost of collecting the underlying data and publishing M3 outweigh the benefits.” Kevin: I just wonder if that’s propaganda costs rather than actual costs. I mean, these days, the cost of gathering data is not that expensive. David: Well, the Federal Reserve stripped out repurchase agreements from the money supply data. That was one of the main ingredients in M3 and one of the main ingredients within the global financial crisis and the meltdown that we saw in 2008 and 2009. The Federal Reserve takes out repurchase agreements from th...

To register for the McAlvany Wealth Management Tactical Short Q1 Call Click Here Is debt "for the common good" even more noble? The new morality - equal pay with no work Cryptocurrencies react to regulatory vulnerabilities   The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick Modern Monetary Practice: The Alluring Tree In The Garden April 20, 2021 “Our tree is an infinite provider. The fruit will always be in reach. All our protectors have to do is harvest and eat and share with us if we’re good and not evil by the new definitions. Never again will politicians be limited by resources. Any number of promises can be made and all promises will be kept because we have access to the infinite. This is the theory of the infinite money tree.” — David McAlvany Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick along with David McAlvany.  Well, gosh, I can’t believe we’ve already gotten through quarter one, Dave, but one of the nice things about a quarter ending is those who want to hear Doug Noland and you talk about what’s going on in the markets, they can tune into the Tactical Short call because you do that each quarter. David: Well, and of course, Doug writes the Credit Bubble Bulletin every weekend, and that is a treasure trove for those who are interested in not only the credit markets, but the financial markets in general, getting you very much granular detail on what has happened in the preceding week. Kevin: And that’s free to tune in on mwealthm.com. So if you just go to mwealthm.com, you can tune in. And actually, Doug is somebody that you and I, Dave, have read for decades before he came on staff. David: Yeah. So join us for the Thursday Tactical Short quarterly call, contemplating an inflection point. It’s 2:00 PM Mountain Standard Time this Thursday. And as Kevin mentioned, you can register for that at mwealthm.com and submit your questions there as well. Kevin: One of the things you’ve brought out over the last few years, Dave, is this incredible technology of blockchain, which of course is in the form of Bitcoin, Ethereum, those other currencies. Ken Rogoff, yeah, he said what was obvious. And that is, it’s not the kind of thing that will ensure independence for long. It’s almost like it’s been tested in the free market now. The governments, who see the monopoly of their own money creation being threatened, now we’re starting to see it take over. It’s intriguing to see Bitcoin come under pressure this week. And there’s a number of reasons that were given if you read Bloomberg. David: Yeah, certainly rumors of the Treasury Department pursuing financial institutions for money laundering using cryptocurrencies. We had Bitcoin down 15% over the weekend, not an incidental or small amount, but you also had reports suggesting that it was instead an electricity blackout in Xinjiang, a region in China, and that the Bitcoin miners in that space were hit. So cryptocurrency markets then followed suit.  What is not conjecture is the USM position of sanctions on Russia, including Russian-linked Bitcoin addresses, which we read about at nasdaq.com. We could skip right past that, but I’m still trying to fathom US-targeted sanctions on something that’s supposed to be anonymous. Do you see what I’m getting at? Kevin: Yeah. And it just shows me the vulnerabilities right now of cryptocurrency. I mean, you mentioned money laundering as being one of the possibilities, the crackdown on that. You mentioned electricity blackouts. You mentioned sanctions on Russia. And then of course regulation. That’s something that you’ve brought up in the past as well. Regulation in the various countries is coming. David: Yeah. Certainly,

Timing is everything - Russia builds troop forces towards Ukraine Asia heats up with military sabrers rattling at sea Presidential personal interests play no role in pipeline politics - right...   The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick Pay No Attention To The Digital Yuan, Taiwan, & Ukraine April 13, 2021 “In a world where no one cares about US carrots and the US cannot meaningfully use its sticks as sort of an enforcement mechanism. I wonder where we think the US dollar is going here. I think it is to some degree delusional to think that the status quo can be maintained where we are in a massive social restructuring on a domestic basis with a currency that has been a pillar of strength primarily reflecting weakness everywhere else.” — David McAlvany Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick along with David McAlvany.  David, your dad’s back in town and you guys are talking geopolitics. And I was just thinking what a wonderful thing when McAlvanys start talking about geostrategy, geopolitics. And there’s plenty to talk about right now, not just in Asia, but in Europe. David: Of all the things that hit the news headlines, nothing raises my blood pressure like my dad being in the same room with me. I love him dearly, but you have to know him to know just what kind of an impact, what kind of a whirling dervish he can be. Kevin: He’s in from the Philippines. David: Yeah. There are a few risks that are difficult to model. And the two things that come to mind, one, we get the South China Sea and the Taiwan Strait. There is Russia’s move with their troops into the Ukrainian border and the US responding by sending in military hardware. And why are we interested in either one? I mean, clearly the fact that you’ve got a Naval fleet of warships there in the Taiwan Strait in the South China Sea, my parents are keen on that as they’re just a few miles away in what may within months be a hot zone.  Covid-related lockdowns and the growing likelihood of martial law in the Philippines have both my mom and dad back in the United States for a little while. Actually, the first time we’ve seen him in almost two years. So we’re very glad to have him. Kevin: One of the things that you’ve brought out, Dave—and your dad for the three and a half decades that I’ve known him—is that war looks very different in geostrategy, and geopolitics looks very different if you look at it from a financial standpoint. And I know why Taiwan is particularly interesting to you. Your parents are over there, but you were talking about the digital yuan last week. And so you have military moves, but you really can’t do things with currency changes unless you’ve got the military to back it. David: And which comes first, the chicken or the egg? Things of a geostrategic nature or of a monetary, economic nature? We covered some of the macro, monetary, and economic considerations last week in talking about the digital yuan. By the way, Bloomberg covered the Chinese digital currency story again, but from a different angle over the weekend. And the conclusions were fascinating. The central bank digital currency is not a workaround for sanctions, that there are no concerns on toppling the dollar as the world’s reserve currency, that it is not a threat to the US dollar as a reserve asset or as a currency in use for trade settlement. I mean, as I read through it, Kevin, basically the things that Bloomberg covered in a very dismissive tone shined a very bright light on all the issues of particular concern. It was the real issues. But the two most disturbing aspects of that article from Bloomberg over the weekend were Yellen’s discussion on financial inclusion, which is basically a commitment to kill the use of cash in th...

Will government enforced blockchain lead to Orwellian control? Dollar reserve currency status: Future in question? What can the FED learn from the French Revolution? Read The Wallstreet Journal Article referenced in today's show: CLICK HERE     The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick China Government Introduces Its Own Digital Currency April 6, 2021 "As we reflect on the Democratic prerogative to spend trillions—and frankly they’re just adding to the GOP’s own fiscal version (fiscal and monetary sins, as Jacques Rueff would’ve called them)—we’re hastening the day where we encounter a dollar crisis and US debt market implosion. And the real difference this time, is that an alternative in the form of the cyber yuan exists even if in a nascent form."     — David McAlvany Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick along with David McAlvany.  Global currency reset. That seems to be a topic that I’m hearing an awful lot about. And I was looking back, Dave, at the 1870s when Otto von Bismarck reunited, or united, Germany. It was Prussia and the other regions against France. And I was thinking about it. One of the first things he did was he, well, he tricked France into declaring war against Prussia. And then, as soon as they defeated Napoleon III, which was Napoleon Bonaparte’s nephew, as soon as they defeated him, they took over 40 million ounces of gold from France and created a currency that actually was quite sound for almost 50 years, the German mark. And I thought about it: It can take years of discipline to trust a currency for worldwide trade, but you can ruin it in months, weeks, even days. Look at what happened to the mark back in the 1920s. David: Well, yeah. So the journey from 1872, 1873 to just 1922. Yeah. It doesn’t seem like that long. And actually, a lot of that chaos occurred just in the 1919 to 1922 period. Only a few short years. Kevin: You look at the chart of inflation in Germany, and actually it started a little like ours; 3%, 4%, 5% then you started to see the curve steepen. And, of course, that’s what I was talking about. You can actually, in a matter of days, destroy a currency. David: There’s an academic at the Booth School of Business, this is University of Chicago, who a decade ago was writing about inflation and how you’ve never had an issue of major inflation/devaluation that wasn’t preceded by some fiscal debacle. That currency stability is tied to fiscal stability— and to the degree that you get out of control in terms of fiscal management, or should we call it mismanagement, then and only then do you really see major inflationary or devaluation periods. Kevin: Well, and you’ve been talking about the cost of building materials, that type of thing, going up, but now we’re starting to see it in services. So, it’s not just the physical products that are going up in price. David: This week, we have the ISM services stronger than expected with the notable prices paid component, the highest since 2009. Kevin: And that’s measuring the service sector. David: That’s right. So, that was the last period of significant commodity moves, if you go back to that 2008/2009 period, major price inflation just prior to the global financial crisis. We also have the ISM manufacturing PMI, Purchasing Managers Index, it stands for them. It came in at 64.7, and Goldman Sachs makes the observation, thanks to Liz Ann Sonders from Schwab for pointing this out, that since 1980, every manufacturing PMI print north of 60, so 64.7 is obviously higher, and stocks were negative the following three to six month period. Yeah, this time could be different by degree, but you think about the amount of leverage that’...

When "Con"-fidence reigns, credit flows freely for years Implosion occurs the second confidence is lost Physical gold is immune to leveraged, systemic implosion   The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick Remember LTCM, Bear Stearns, Lehman? You’d Better March 30, 2021 "Ultimately, a financial asset that is not on someone else’s list of assets and liabilities? It’s a rare thing. It’s a beautiful thing. Gold has long been that kind of asset, where the ownership merits— they speak for themselves, right? And they’re not the kind of merits that other financial products have. As chaos increases in the months ahead, I think these are simple qualities that will be back in high demand." — David McAlvany Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick, along with David McAlvany.  David, before we came into the studio, I literally got off the phone with the son of a client that I’ve had for over 30 years. He called and he was just looking— he’s owned gold. He’s looking at Bitcoin and he’s looking at other things that are rising quicker right now. He was saying, “Hey, should I be selling my gold and maybe going into the stock market right now or Bitcoin?”  Since I knew his dad, and since I understood the legacy mindset that his dad had, I knew he had it too. We just had to talk again. So we drew the triangle. We talked about the place that gold has had, how you can pass, generationally, wealth from son to grandson to great grandson, and where speculation actually should be held in a portfolio. By the time we got done, he was so thankful to realign his thought process to what his dad had already taught him, which was legacy, looking for the future generations.  Now, Dave, I set that up for this reason. We have so much leverage right now. We’re all, as a country and worldwide, running on massive debt. Isn’t debt taking the wealth from our kids, our grandkids, and our great-grandkids and moving it into today and using it today? Isn’t that the opposite of legacy? David: I think you’re right. I sat with a gentleman who is in the leadership at one of the local tribes. It was a fascinating conversation because he recounted how, in his family, he knows seven generations that came before him, their names, their stories. What a storyteller he is, an absolutely fabulous storyteller. His stories were about the past, but every decision that he makes is about the stories that will be told about him, about his generation in the next seven generations. Kevin: What an amazing thought process. David: It’s the seven that preceded and it’s the seven that come next. It’s a different way of managing the decisions that you have. It certainly takes focus off of self and personal needs and gratification. It positions you, in some respects, as we did in the book The Intentional Legacy, as a steward of resources in a particular timeline. You’re just one point in a longer timeline. And to manage those resources from the generations that came before for the generations that come next, that’s how we think, but that’s not how politicians think. It really is extraction for today, maximizing benefits for the immediate, with the priority being on political survival. Kevin: Well, I wonder if sometimes you get so far into debt that there’s no way out. We talked last week about Turkey and Erdogan and how the central banker that was brought in actually was stabilizing things. Erdogan obviously didn’t like that and fired him. Fortunately, he didn’t assassinate him like we’ve seen in the past, but he did fire him. David: Yeah. Not in Turkey’s past, but in other countries past, where— Kevin: Czechoslovakia? David: Exactly. Alois Rašín. Well,

Turkish Central Bank Head gets pink slip & Lira collapses Putin challenges Biden to a debate - White House says he's busy Bubbles Everywhere, $1.9 trillion in penny stock transactions last month   The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick Necessary Discipline In Central Banking Will Get You Fired March 23, 2021 “Gradually what we’re seeing is credibility called into question and central banks will do what they have to do unless they’re muzzled. When the system has been abused, the currency has been abused, budget deficits have been abused, the hard road is regaining credibility. One of the tests that we have over the next 12, 18, 24 months is to see if in fact central banks can remain independent from the political pressure that we’ve brought on them as they are forced to respond to market realities.” — David McAlvany Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick along with David McAlvany.  David, I know that Thanksgiving normally is in November, but why don’t we talk Turkey here in March? Because what we’re seeing— and we talk about perception management an awful lot, and the central banks sort of being caught in the corner between controlling inflation and trying to do it without scaring people. David: Erdogan’s been in a tight spot as he’s seen the Turkish lira in decline, and there was a change of power last year. Naci Ağbal was brought in, appointed central bank governor in the fourth quarter. And sure enough, this is a guy who not only talked tough, but actually acted tough too, and— Kevin: A little bit like Volcker did back in the early ’80s, he was raising the stakes. David: Exactly. He was raising rates to tame inflation. And the reality is central bankers who raise rates, they’re not popular. Yes, it buffers inflation. Yes, it stabilizes a currency, but it’s not politically popular. It’s not a fun experience for the public, nor is it fun for the politicians who are beholden to the public. So the more democratic the place is, the harder it is to deal with. So— Kevin: Well, do you remember? We had a guest one time who worked for Reagan in the economic side of things, and they hated Volcker because when Reagan came in Volcker was raising rates and trying to keep the dollar from failing. I would imagine Erdogan has absolutely no patience for something like that. David: And so this weekend he fired the central bank president, and sure enough, the Turkish lira went into free fall. It was precisely what we said on Friday of last week in our Hard Asset Insights. You either have central bank discipline, as we had in Turkey, or you have bond market discipline, what we would refer to as the bond market vigilantes, who are bringing about a discipline of sorts into the bond market, raising rates. And if those disciplines are abandoned or if there’s control introduced into the equation to suppress rates, the foreign exchange markets show it very obviously. And so the Turkish lira literally went to hell over the last three days. Now it’s not the only thing that has suffered because the credit markets in Turkey have also shown that stress. Five-year credit default swaps jumped 155 basis points, the most ever, to 460 basis points total— Kevin: Which is sort of— that’s the cost of insurance of something going wrong, right? David: That’s right. So, first thing this week in our asset management conversation, it’s where do we see stress? Well guess who holds a lot of Turkish paper? European Bank. So European Bank suffered a lot more earlier this week than any other financial institution, and it’s because of their Turkish exposure. Turkey has a lot of dollar-denominated debt. So as the Turkish lira declines, the hurdle to pay back that dollar-denominated debt or euro...

Perception Management overrides hard science in monetary policy Bank of England states "QE Not Ideal In Longer Term" Rented a VHS video lately? Blockbuster up 53% in a week   The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick Absolutely Original, Blockchain Secured, Digital Art—Only $69 Million March 16, 2021 “It’s impossible to call the top, but when the side effects of dysfunctional policy are all around you, it’s worth pausing. Maybe it’s worth shorting the markets, maybe that’s the answer, but it’s certainly worth recognizing, like the health officials in Europe, if the consequences of continuing on are grave, in some instances literally grave, perhaps we reconsider our next steps and only take actions with prudence and respect.” — David McAlvany Kevin: Welcome to the McAlvany Weekly Commentary, I’m Kevin Orrick along with David McAlvany.  Dave, we read a lot of books, and it’s not always about interest rates and bonds and that type of thing. You and I both share a really good book that was written called Magic and Showmanship, and it’s really how does a magician manage perception of the audience? And as we look at what’s going on today, with perception management from the Federal Reserve, or perception management with getting people to either take the vaccine or be fearful of the vaccine, or COVID, what have you, seems that there’s an awful lot of perception management and very little hard science. David: Well, that’s right. When you look at public policy and you look at Central Bank policy, and you look at the social reactions to the things that are said, there is a lot of managing of perceptions. And that’s an important thing that happens. It’s one of the reasons why we’re interested in a book like that to say, “What’s really going on here?” Kevin: And the hard sciences guys feel very, very pressured to write their papers with a certain paradigm in mind. If you were writing papers 600 years ago about what body does the solar system circle, you would write a paper on Earth. Otherwise, you’d be burned at the stake. They had to manage perception. David: And that’s the case today, you have the sort of dominant themes, the dominant players, the dominant narratives, the dominant paradigms. And if you diverge from that at all, there’s very little toleration, which is suggestive of a lack of— I would suggest it’s a lack of integrity within scholarship, because there’s an inability to even have a conversation and consider something that might actually challenge the status quo in the current paradigm. Kevin: Okay. Like with the dollar. As long as everybody agrees that you can print unlimited amounts of dollars and borrow unlimited amounts of money, then we all can play the game. Or later, I’d like to talk a little bit about this new piece of artwork that sold for a whole lot more money than I’ll probably ever see. But okay, so let’s look at the practical side of perception management. Let’s say everybody panics and the dollar no longer has value. That’s a problem if you’re a central banker. David: There’s consensus that that’s not going to happen. We’ve sampled the economists, they all come from good schools, the PhDs speak for themselves. And therefore we don’t have to worry because as we, the children in the crowd, the children in the audience, look to the adults, those with the PhDs, they’re not afraid, we shouldn’t be afraid. Kevin: Vaccines are the same type of thing. Are we accurately going to see how the vaccines affect us? And for perception management alone, you would have to be careful what you say. David: Side effects from the AstraZeneca COVID vaccine have caused more than a dozen health agencies in as many countries across Europe to temporarily suspend the use of that partic...

The stealth bear market that dressed like a bull Could we see a repeat of 1968-82? Inflation + Bear Market Sentiment Index Indicator says accumulate gold now   The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick Tech Stock Boom Fears Antitrust Bust March 9, 2021 “The only thing that our academics within the central bank community know how to breed is every form of volatility, the stated goal to reduce volatility, introduce price stability, and it’s the exact opposite. What they’re breeding is social discontent and volatility, political volatility, economic volatility, and I think in significant ways this year, incredible market price volatility.” — David McAlvany Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick along with David McAlvany.  David, on Tuesday mornings I meet with a group of guys early in the morning and one of them, a friend of both of ours, he spoke this morning and I didn’t really know the detail of how he started out here in America. But he was Cuban, and his family in 1961 fled Cuba. They had been land owners there, and then of course, the great leveler came in, communism. And their land was taken away from them, their farms, they came to America with virtually nothing. And it struck a chord because we’re starting to hear about wealth redistribution right now, and top-down management of who gets what, and when. David: Well, there’s a lot of great things that come from Cuba. But— Kevin: I’m not talking cigars. David: No, I think it’s a reality we quickly forget that maintaining flexibility with the resources that we have, and having some ability to move and restart. None of us wants to ever imagine that. I don’t think we have to. But in this case, we have a friend whose family was devastated by revolution. It wasn’t war, precisely, but it was just a change in ideology and there was more of an extractive nature. Well, more of, there was a completely extractive nature. For anyone who is a landowner, you were considered a part of the problem, and the new solution was going to create equality. Kevin: It’s interesting when we look at what creates inequality. A lot of times it comes from sources that people have absolutely no idea is happening. It seems like it’s a political thing, what happened in Cuba, but really when you see what’s going on economically, Dave, you and I have talked, especially over the last eight or nine years, of the distortions that are created in wealth distribution based on the fact that you’ve got two players in this world. You’ve got those who have to earn their money and those who can print it freely. The problem is, for those who print freely, you can create an amazing amount of distortion that later turns into a political action that you may not want to see. David: Many of our private conversations going back to the period of Occupy Wall Street included this idea that the political spectrum from far right to far left is not sort of a straight line where you have the extremes, and language kind of fits far right on the spectrum far left on a linear line. But actually bend that line and you find that the far right and far left are very close to each other. And I always wondered why the conversation never came to cause. What is the issue with inequality? What is the issue with corrupt politics and public policy? And what you find is the enabling function of central banks. When you have loose credit, you’ve got a lot of other things that get real loose as well. Kevin: When my daughter lived in New York, I went out during the Occupy Wall Street thing, and I went down to Occupy Wall Street when it was happening. And I just talked, I walked around, and I talked to the people who were camping right there in Wall Street. And I told you the story,

Jerome Powell downplays the rapid rise of money in the system Is the rise in commodity prices justified by supply & demand forces? F-35 Jet has 416 kilograms of strategic rare earth minerals - mainly from China   The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick How To Spin The Tale On Inflation March 2, 2021 “It’s fascinating, isn’t it? That the most obnoxious and hated president in recent memory was the only one in a 30 or 40 year stretch to not start a war or increase our military commitments. In fact, he pulled troops from Syria on day one. And the big guy who’s in the Oval Office now is dropping bombs in that place. And we haven’t even heard the State of the Union yet. Of course, we’re thinking maybe Kamala might be indulging us on that one.” — David McAlvany Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick along with David McAlvany. Dave, I’ve been reading C.S. Lewis, and there was a quote about storytelling. And he said, to break a spell, you have to spin a better tale. And I thought that was interesting, because we all have a storyline, you and I’ve talked about this, you can take the same facts, the same circumstances. And you can tell a completely opposite story. And we’ve talked about how the press does that. And actually how social media can actually alter the story that’s being fed to you. David: There’s some nights that my mind spins on an idea enough that I have to get up and work on it. Because I think maybe if I just roll over, it’ll go away. It never does. So going back to sleep isn’t an option unless I work it through. So earlier this week, the question of commodity prices and inflation relentlessly was pressing my brain, and I re-looked at current supply demand figures for gold and silver and for copper and for nickel and for zinc and iron ore, fascinating. The industrial commodities have moved impressively in price. And the first thought is that inflation is returning. And so it may be. You look back in the last major run up in commodity prices reached peaks in 2007, 2008. You had at that time corn prices, precipitating the tortilla crisis in Mexico, running short of chips. I would protest, too. And actually the price of corn was high enough that it was just getting too expensive. You had oil at 140. That was in June of 2008. And you hit Hubbert’s peak again, becoming sort of a popular explanation, peak oil, then by 2010, the impact of rising costs, they pass through a sort of, call it social insecurity and despair into the masses. And you had the primary cause of the Arab Spring that year, was the increase in commodity prices. Kevin: Yeah, Out with the old and in with the new. We talked about that at the time. We talked about, inflation may affect our pocketbook here in America, but starvation sets in some places, when food prices go up 10%, 15%. David: And we’ve also referenced the role of social media platforms and technology in a new way as well. Grassroots popular unrest was like a wildfire. Kevin: Yeah, spinning a different tail. They’re breaking the spell by spinning a different tail. David: It’s electronic. It’s digital, it’s telephony. And in that early stage, social media fanning the flames of frustration. Again, it came back to the burden of inflating food prices and the impossibility of feeding a family. So in that case, you had politicians blamed, and a series of dynasties came to end. And I think that’s one of the things that is a challenge for policymakers. When people experience inflation, they don’t necessarily know who to blame. But the ire gets expressed and policymakers face career risk. Kevin: Remember when we read Adam Ferguson’s book, and later you interviewed him. The book The Death of Money, he wrote that back in the 1970s, but it was actually about the hyperinflation in the 1920s. And of course,

Inflation fears showing up in government bonds How liquid is your ETF when everyone wants out? Biden's "most radical departure from prevailing economic policies"   The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick Broken Promises & Unforeseen Events February 23, 2021 The reality is we don’t learn from our mistakes. We just move on and hope the next time is different. Texas had four million people in the dark just a few years ago. And the only thing that is really different today is the scope and scale of the crisis, and I think that’s basically what we’re looking at in terms of the financial markets. We haven’t learned much. All we’re looking at is repeating, but with different scope and scale in view. — David McAlvany Kevin: Welcome to the McAlvany Weekly Commentary. Now, I’m Kevin Orrick, along with David McAlvany.  Just watching the news and just listening to the chatter right now, I’m thinking there’s an awful lot of promises being made. Promises are fine until promises are broken. David: And sometimes promises are not broken in a nefarious way. They can just be an expectation that was created and then not completely fulfilled. Kevin: I was looking up from the Cambridge English Corpus, actually it was on the internet, but it says, “The fault may lie in a broken promise, not in the promise keeper’s intention, but the unforeseen event beyond the promise maker’s control.” I think about unforeseen events, we can build a very large dependent infrastructure and immediately when it gets a little cold or a little icy in an unexpected way, it can shut everything down. Yeah. I think about our friends in Texas. David: Yeah. And family too. It was a stressful week full of uncertainty and raw exposure to extraordinary challenge. Kevin: Did your father-in-law lose any of his cattle? David: Yeah. Unfortunately there was a little bit of that. So the Texans that we know are a tough lot and they tend to take loss in stride. My in-laws did lose some cattle, but as always the vulnerability concentrates, it seems, at the far ends of the life spectrum. Kevin: Well, and Texans are about as close to Alaskans as they come. Remember when we went up to Homer, Alaska? It seems like every day these guys are facing some sort of event, and it doesn’t matter, liberal, conservative, it really doesn’t matter the bent, these people are very independent. Now Texans have a little bit of that too. David: Yeah. I mean, resilience, independence, an ability to take care of themselves. I mean the independent streak across the state in Texas reminds me of many of the friends I have in Alaska. Except my friends in Alaska seemed to expect every day to be a direct struggle with some aspect of nature and its ferocity and its intensity. Kevin: They’re pretty resilient people. David: Last week’s energy debacle was a wake-up call for anyone mindful of areas of system dependency. And ironic, perhaps that Bitcoin was making new highs even as the lights went out across the second largest state in our country. Kevin: Isn’t that amazing. It really doesn’t seem to apply right now to the news. There still is that greed impulse that’s going on in a lot of the markets. David: Well, and of course it’s a solid reminder that infrastructure has its vulnerabilities and frailties, along with anything that is sort of next in line or dependent on that infrastructure, even when it’s well engineered. Kevin: I think sometimes we forget the cost, when there is an emergency, of things that we just take for granted. David: Well, you got a decline in power supply that hits the energy spot market. And if you own that fabulous electric vehicle, thinking of a Tesla,

Powell says now's not the time to worry about spending Biden's Plan - A giant all-in bet to "run it hot" Cancel culture lion may just turn on its own master   The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick Seat Belts & Inflation: A Second Too Late Is Still Too Late February 16, 2021 “The idea that culture wants to define what an appropriate conversation is, or who adds value to that conversation on the basis of intersectionality or some other absurd criteria, it pisses me off. But what colleges and universities caved to a long time ago, is going mainstream and I’m going to protest that. If you’re limiting your inputs, I think that ultimately has a devastating impact on your outputs.” —David McAlvany Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick, along with David McAlvany. Last week we talked about skiing in powder, and it was beautiful, it was warm, compared to what you did this week. Which is the contrast to running something hot, you were running cold. How cold was it in Montana? David: They started at negative 17, and warmed up to negative nine. It gave me the sense of being in Germany with negative interest rates. Like you think, where do you go from here? Cold, colder, coldest. Kevin: We’re sitting in the studio and you used to have a nose. David: I know. Kevin: Now it’s black and part of it has fallen off. But given temperature changes and some of the things that are going on, I looked at what’s going on in Texas right now, Dave. And this morning we were on a call, a man in Dallas, and he said, “You know what’s happened? A neighbor of mine. He’s got a swimming pool, a heated swimming pool.” David: Heated swimming pool. Kevin: And it’s iced over like an ice rink. So, things are not running hot in Texas, either. David: No. Well, and we’ll get back to running hot in just a minute. Kevin: Speaking of that, because we’ve been talking about inflation and the inflation numbers, we’ve for years looked at it and said, “Well, how do you really calculate inflation?” We were talking about hot dogs last week and chocolate, things that affect our lives. But when CPI comes out, a lot of times it doesn’t tell the whole story. Look at the rents, the delinquencies and rents affecting the CPI number right now. David: Well as you consider the world, you have the developed and developing, if you want to put it in those terms. In the developing world, most of the money is spent on housing and food. Reuters pointed out this last week that through a mix of currency depreciation, rising commodity prices and then coronavirus disruptions, food inflation soared 14% last year in Latin America’s largest economy. And they said that was the largest increase in two decades, with the headline figure masking the hikes in the big staples. 76% jump in rice and a doubling in soy oil prices. Again for us, it’s not as big a deal because maybe in the developed world, we spend a little less as a total percentage of our income on housing and food. But Bill King pointed out that due to mortgage delinquencies and moratoriums, even the part of CPI here in the United States, which factors in rents. In fact, it’s about a 40% contribution to the core CPI calculation, very understated this last time. What he pointed out is there’s a 3% discrepancy between effective rents and asking rents, which depresses the rents calculation in BLS, the Bureau of Labor Statistics, CPI calculations— Kevin: This is because of delinquencies, right? Right now the rents are not caught back up, the COVID year, whatever it is. David: That’s right. So when renters become current, effective rents as a part of CPI calculations will rise significantly enough to push the inflation here ...

Other People's Money, by the millions, billions, trillions... Larry Summers doubletake: This is gonna trigger inflation Income starvation forces good money into really bad decisions   The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick Stimulus Fever: To Infinity and Beyond! February 9, 2021 Gold is not a gamble. It’s not a GameStop roll of the dice. Pure and simple, it is insurance. We’ve talked about it as stupidity insurance because we know who is managing the money back on the East Coast because this administration’s agenda comes at a high price. And you have change in the pipeline, spare change. Because maybe that’s all you’ve got at the end of this saga. — David McAlvany Kevin: Welcome to the McAlvany Weekly Commentary. Now, I’m Kevin Orrick along with David McAlvany.  David we’re recording at night tonight because you just got back from Aspen. You took the family, you don’t necessarily do all the fondue restaurants when you’re there, but when you go with families, and I think you went with another family, you tailgate at Aspen. Tell us a little bit about the powder turns and the tailgating. David: Unbelievable. We had the best snow that Aspen’s had all year long. Kevin: Right. David: And we did these passes called the mountain collective passes, where you end up with two days at 20 different locations around the country. Kevin: And it forces you to travel all over Colorado and Utah, right? David: Yep. Colorado, Utah. We may make our way to Wyoming, we’ll see. Kevin: Okay. David: But Aspen was what we chose this weekend. And with COVID, most of the restaurants are closed anyways. So we brought food to tailgate, and we’ve got our fire ring and camp chairs, which was fantastic. But 20 inches of fresh powder the day before we get there. And most of the terrain we’re interested in skiing is closed for avalanche mitigation. So we get fresh tracks. Unbelievable. Kevin: See, that’s the thing. You told me that you were on a slope with the boys that was over 40 degrees as far as the steepness. Now we unfortunately, not to darken the mood here, but we have lost a number of people here just over the last week to avalanches. And so you really have to know your limits when you’re skiing a steep slope. You all waited until they pulled the ropes back. What were you, the first 20 people on the top of Aspen Mountain? David: That’s right. Yeah. They had been working on avalanche mitigation for a couple of days. Kevin: Right. David: And finally opened it up and we just happened to hit the top of the lift as they’re dropping the rope. And it’s a mad dash to see who can get in line and up to the top as fast as you can for the freshest of tracks. Kevin: But you as a dad, it hits you when you were going down the slope. It’s like, “Wait a second, my boys are with me.” David: Well, actually when we were going up the slope because they’ve never done an hour hike to get to where you’re going to ski. We did some backcountry skiing last year and it was a lot of work for a little reward. This was a lot of work for a reward they will never forget. Many runs you’ll forget in your life as a skier. This is one they will never forget. I won’t either. Kevin: One of the questions you have to ask yourself though is, how much is too much? When you’re going back there and there’s avalanche danger, there’s an attitude. And as we shift to the markets, the Treasury, you just wonder if they’re not playing with avalanche danger right now. They continue to think that they can push it just a little bit more or actually trillions more. David: You’re on the line of what you can handle at around 40 degrees.

Front running is illegal - but not for everyone Are we watching Reddit disestablishmentarianism? Silver's bigger than Gamestop - can the "short" be broken?   The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick When Trading Is Free, You’re The Product February 3, 2021 The McAlvany Weekly Commentary covering monetary, economic and geopolitical news events. David: It’s the big guy who’s already figured out how to use this system opportunistically to his benefit. And I don’t necessarily point a finger at the big guy who is smart enough to figure out how broken the system was and how to use it or leverage it, but now you’ve got the little guy figuring out that he can leverage it too and make a bunch of money really fast. My challenge and I think great fear is that I don’t think this is going to end well for either of them. Now, here are Kevin Orrick and David McAlvany. Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick, along with David McAlvany. While I was in Denver on the 16th Street Mall this last few days. And got a chance to see, 16th Street Mall, of course, is right in the heart of downtown Denver near Rockies Stadium and the clock tower where my daughter got married. That’s what I was there for. My daughter got married. Yeah. It was amazing. The night before, I was hungry for some Indian food, just I was ready for some curry. I went out and the restaurants, of course, because of COVID, there’s hardly anybody on the 16th Street Mall, hardly anybody in the restaurants. And I was thinking, how in the world is this guy staying open? – this man who owned this restaurant, very expensive real estate. And as I was sitting there, I started to realize it’s not about the people sitting inside, these guys, these bike couriers with these gigantic backpacks were showing up, lined up, they had their masks on, they had their helmets on, and they were waiting to pick up food and deliver it, people were still going out, but they were ordering in, and these bike couriers were delivering, but I want to get to one of the key things that I heard Dave, because I think it characterizes what’s going on right now. David: So I was just wondering, on the delivery side, what do they call someone … if you’re bike courier delivering Indian food? What are you if you’re delivering Chinese food? Kevin: Well, I don’t know. I do know this. I do know that these guys all had a dream or at least some of them had a dream of not having to carry food for forever. One of the bike couriers came in and he asked the owner of the restaurant, he said, have you been buying stocks? Have you been doing…? Because this is the heat of the battle right now with GameStop and all this other stuff. You could tell this was a guy who had never purchased stocks before as far as the bike courier goes and he asked the owner of the restaurant, he said, “Do you think we’re going to get rich?” And I was telling my son the story. I called him on the phone. And I said, “This is really amazing to see these bike couriers talking about the stock market.” And my son, who’s 30 years old, he reminded me of something we all should know, when the shoeshine boy is giving you stock picks, you’re at the top of the market. And in a way, I’m not saying that the bike couriers are shoeshine boys, but it was interesting to sit there and watch how business and life has changed over the last year, but especially over the last two weeks. David: Yeah. I mean, I think history students will read with fascination about the capital flows of the early 21st century. You had credit expanded, money supply stretched to gargantuan proportions, you had Wall Street, which became more and more casino-like, investing became trading, trading was transformed from quarterly timeframes and long-term holds to monthly timeframes and short-term holds,

Momentum Investing Counts On Greater Fool Theory. The Wait Can Be Lonely But Buying Value Pays. Violent Rotations In the Market Can Create Risks Or Opportunities.   The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick Is Value Investing Dead? January 27, 2021 The McAlvany Weekly Commentary, covering monetary, economic, and geopolitical news events. David: The winds of financial conditions, they’re beautiful when they’re at your back, but they’re terrifying when they’re sweeping across the road. As we take the turns and twists on the road, those external factors, public policy choices, treasury department tax initiatives, financial conditions, they reasonably contribute to an uncertainty of outcomes and a trajectory which can become disastrous. Now, here are Kevin Orrick and David McAlvany. Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick, along with David McAlvany. David, November was a big month for a lot of reasons. David: Well, of course the election and five days there after we lost Alex Trebek. For your family I know, an occasional evening and dinner time and listening to Jeopardy in the background. Kevin: Oftentimes, yeah. We put Jeopardy on, and Alex had a way of moderating the show, but also commanding just an awful lot of authority. This was a man who was well learned. David: Now, fascinating to see the guests come and go. I particularly liked when Sean Connery was on the program. Alex, I’ll take Janet Yellen for 400. What is this week’s treasury assurance? No, that is not correct. What is $410 billion in bills, bonds, and notes? Our average duration is still under five and a half years. Kevin: Well okay, so keep playing it, keep playing it, if you’re playing Jeopardy. David: Okay, checking in on authoritarian history. We have the first week behind us. Alex, I’ll take history of executive orders for 200. Clinton used two executive orders, Bush, two, Obama, five, Trump, four. How many has the new president implemented in just five days? Kevin: Would the answer be, what is 30? David: The answer is not salute Marines. The answer, yes, correct, what is 30? That is the correct answer. The last but not least, Alex, I’ll take the Nobel Prize for three million. Sorry, that was the wire from Moscow. I meant, I’ll take the Nobel Prize for 1,000. The question, who won the Nobel Prize on his first day as president? Yes, that’s correct. Joe Biden, what is Joe Biden? Beat Obama as the fastest man to ever win the Nobel Peace Prize. He hasn’t even implemented regime change in Syria yet. Kevin: Dave, I know you’re being tongue in cheek on the Jeopardy questions, but you and I had an interesting discussion last night on virtues and values. I’m reading a good book right now on Greek and Roman mythology and the cardinal virtues that are displayed there. Fortitude, temperance, prudence, justice, along with the weirdness that goes into the mythology. There are lessons. David: Coincidentally, my oldest son is starting Aristotle’s Nicomachean ethics this week and I had a great time. My wife asked me, “Hey, where’s the copy of Aristotle’s ethics?” I said, “I think I can put my hands on it.” So I went upstairs- Kevin: Being a philosophy major, I bet you could. David: I grabbed Ackrill’s essays on... I grabbed more than he needed because I’m an enthusiast, shall we say. Kevin: Yeah. David: But I brought it to him this morning and I said, “Book two and three, which you’re reading this week, this is some of the most important reading you’ll do in your life because if you grasp virtue ethics, they’re in book two. You’re looking at what creates character. You’re looking at what sets in motion who a person becomes and the impact that they have on the world.” So virtue is not some obscure place that you arrive at,

Peru, Israel, Walt Disney, Coca-Cola, all issue 100 year debt Shorter Duration Debt is negative return - $17 trillion Tactical Short Q4 Call - Register at mwealthm.com The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick Want Slightly Positive Interest Rates? Buy 100 Year Bonds!? January 20, 2021 The McAlvany Weekly Commentary, covering monetary, economic, and geopolitical news events. David McAlvany: If you’ve ever made a piñata, it’s the veneer of paper and glue you put on a balloon. I’m fascinated by how quickly we move past even recent history, and ignore the realities of the European Central Bank being in a desperate bind. The Fed acting as if all is well, while in fact, these are desperate measures in desperate times. Now, here are Kevin Orrick and David McAlvany. Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick, along with David McAlvany. I was watching TV the other night. Even though we had COVID, it’s nice that we had playoff games in football. Tampa Bay, Brady was playing Drew Brees with new Orleans, and they were playing at the Superdome, and it just brought back memories. You remember Katrina? David: Oh yes. Kevin: [laughs] That was rough, 2005, and in fact, it really was quite a disaster. I went to an article that was saying there are some myths about Katrina in 2005 in New Orleans. The first myth was that this was completely unpredictable. Of course, the weather was unpredictable to a degree. They do get hurricanes, but the brakes of the levies were not unpredictable. They said that this had been looked for for a long time. There was another myth, and that was that all of New Orleans was built below sea level. [laughs] That myth was only half true. About half of New Orleans is below sea level. The third myth, and this is the one that got me, is that everything is better now, that maybe it won’t happen again. They said, “No, no this will probably happen again.” It just reminded me. Watching a game in the Superdome, do you know how high or what the elevation is of the Superdome above sea level, there in New Orleans day? David: I hope it’s at least a little bit above sea level. Kevin: [laughs] It’s three feet. As we do this commentary, and as we look forward, one of the things that we want to try to do is learn from the past. Do we really learn from the past, Dave? David: I think one of the issues from Katrina is that we still have the structural issue. It was a maintenance concern. That first myth of whether or not it was foreseeable, you’re right. There’s issues which are very foreseeable, although the extraneous external factors causing an immediate crisis, maybe you don’t see those, but you can stack up. You can assess and analyze where the weaknesses are if you’re looking at structural issues. Levees breaks, is that a repeating issue? Very well could be. You can’t time the storm, but you can certainly look at the consequential issues relating to structural concerns. Never really fully fixed. Kevin: We have Doug Noland and Lila Murphy, and we’ve got a number of other sources to look forward and say, “What do we know about the past, and what can we do to keep certain disasters from the past from happening?” There’s probably no one better to talk about that than Doug Noland. We have that tactical short call coming up on Thursday, the 21st. David: Yes, that’s right, 4:00 PM Eastern, 2:00 PM Mountain, Managing in a Mania, and the conversation will be a doozy. Register, send your questions in ahead of time. We have it: a mania. Here we are managing in that context. Don’t miss it. This will be an historic conversation. Kevin: Last week we talked about the value of a human voice and how it’s terrible to try to shut it down with censorship, or try to control or mute that voice. You brought up Martin Luther King.