PodCasts Archives - McAlvany Weekly Commentary

Fed is on track to commit $11.5 trillion in “gross cumulative support” Minsky - Moment comes when stability begets sudden instability Carl Swenlin says Apple’s vertical blow off months away from reversal   The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick "Not QE" Is Costing Every Man, Woman, & Child $183 Per Day November 20, 2019 "Here is the present tense reality. It’s simple. The markets are on a tear higher. So we have, as we described earlier, a form of stability. And I would just remind you of Minsky, at this particular moment in time, so you don’t have to blindly go to the financial slaughter when instability becomes a reality of the moment, and I think that moment is not far from now." - David McAlvany Kevin: Ah, David, the price of prosperity, and the price of calm, and the price of low volatility. All you are really asking me, and my kids, and my wife, and my parents, and every other man, woman and child in the United States, is for $183 a day. That’s it. For every head in the United States, every soul on this boat, $183 a day right now. Good thing that we have prosperity. David: Yes, QE-4. So we have yield curve and that yield curve has now a positive slope once again. Kevin: Ah, I’m so glad we’re back. No recession, right? That’s what that means? David: Yes, because the inversion which was occurring and which traditionally has signaled recession, and as recently as spring of 2019 the San Francisco Fed was referencing that as a very reliable indicator of recession on the horizon. Kevin: And an inverted yield curve is simply shorter-term rates paying higher than longer-term rates. And when it inverts, it usually says there is going to be a recession. That happened this spring. David: We’re actually back to normal. It no longer suggests signs of a recession, and we’re glad to see the mechanics of the Fed intervention working effectively, where QE-4 they are buying down the rate at the short end of the curve and eliminating those inconvenient signals, and it reinforces the market uptrend and buttresses confidence. That is kind of how it reinforces the market uptrend. God forbid the inversion remain and investors look at that and then begin to act on the suggestive recessionary period ahead. Kevin: What you are talking about is it is artificially being changed. In other words, this $183 a day, every man, woman and child in America is paying, that is this QE-4 or what Powell called, “Not QE.” David: (laughs) That’s right, so all is well thanks to the benevolent, powerful steering committee at the FOMC, the Federal Open Markets Committee, and so we have established the price of peace, we have established the price of calm, at this moment, and it is 60 billion dollars a month, roughly 2 billion dollars a day. Again, if that seems like an expensive habit, or what it would take to maintain a perpetual buzz, you just look at that national addiction, divide by every man, woman and child, and as you said, it is a measly $183 a day, which, at some point, if we’re not careful, is merely going to be the cost of a cup of coffee. Kevin: I wonder if the Fed has ever been this powerful in history. A few days ago Trump invited Powell into the oval office. It was a completely unexpected meeting, but I know that Trump tweeted afterward that he was quite pleased with how it turned out. David: Fascinating. You always have two sides of the story. On the one hand, Trump says, “Very good, cordial meeting. Discussed, including interest rates, negative rates, low inflation, easing dollar strength, its effect on manufacturing, trade, etc. Powell walks out and one of his first comments is, “We’re going to operate according to our legal mandates.”

Tallest towers & biggest debt deals warn of next major fall Walgreens Buyout - Does $70 billion seem high? Knowing when to leave - CEO departures hit all time high   The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick Pride Comes Before The…? November 13, 2019 “I think they’re blind. I think they’re blind with rage to seeing that they are, in fact, misdiagnosing cause, and that the source of excess within the system is being driven by an unelected source. But they can’t bring themselves to acknowledge that it is, in fact, the seen hand of unelected technocratic power which bears responsibility for creating this monster. It is not the unseen hand of the market.” David McAlvany Kevin: We have talked in the past, Dave, about how deliberate your parents were, and especially you and your wife now with your kids. Consequences seem to be an important part. Loving your children is first, but consequences – they have to understand that there is a cause and effect. It is almost like free markets. David: Not to get too philosophical, but the idea of agency and the idea of an individual making choices – the importance of those choices is that there are consequences to our choices. Kevin: Both good and bad. David: Yes. And to line out what are the logical consequences, the good logical, or the bad logical, consequences, makes someone reflect and say, “This is my life, my destiny. Boy, I can make a mess of this or I can make something really neat from this.” Kevin: And one of the greatest ways you can show love to your children is to display that, that there are consequences, and encourage good decisions. I think about what we are seeing in the markets now. We have called them free markets in the past, but it is hardly free when governments intervene, they don’t allow companies to fail, they really don’t suffer the consequences of bad behavior. In fact, companies these days don’t really even have to have a profit to be rewarded. David: What is fascinating to me is, if you look the Chinese exchange, ChiNext, they just changed their requirements for listing as a publicly traded company. So with so many profitless companies listing in the United States and on other exchanges, you had Shenzhen’s technology focused ChiNext exchange – they want to compete. So what do they have to do to compete in a world of profitless companies? You lower the bar to do so, so you can now list through ChiNext – ChiNext is a little bit like New York’s NASDAQ, technology focused. But up until now both Shanghai and Shenzhen, their stock exchanges, have had a multi-year, 2-3 year, profitability requirement prior to going public. Kevin: Well, doesn’t that make sense? If you’re going to go public, shouldn’t you be making some money first? David: There is a sense in which that is intuitive. Yes, it makes sense, to me it does, but the Chinese Securities Regulatory Commission announced that the profitability requirements were going to be scrapped for ChiNext IPOs and they are hoping that brings liquidity to fledgling companies in need of an infusion to move ahead. That’s not all bad, but what you do see, like what we have in the United States, many of the unicorns which have gone public in the last year or so are high-risk propositions, because it is not like they have revenue and sales already in tow. They are ideas, and as long as the ideas become something, as long as the dream becomes reality, that’s fine, but an investor is speculating on a dream, not on a functional operation. So that’s really where the Chinese have, to this point, basically said, “Great. If you are a functional operation, if you have profits, then we will list you. And now they are saying, well, we’re missing out on a lot of listings.

Does shifting interest rates to lowest possible levels tempt us to cheat time? Shiller P/E at nosebleed height of 30.28 - Could it go higher? Alan Newman: Stock market is now the most dangerous in history   The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick Negative rates, Immortality, & Frodo’s Ring November 6, 2019 "If you can come to terms with finitude and mortality, you tend to look to the future, and you tend to look at future generations, and what the significance of your life is, in time, and throughout future history, what it will be. To me, that is the point of legacy. Be careful in the decisions that you make. Be calculated in the commitments that you make, and be aware of the things that you are saying yes to, with all the costs and benefits that are attached to them." - David McAlvany Kevin: Part of today’s culture, Dave, has really been influenced by J.R.R. Tolkien’s stories, The Hobbit, and The Lord of the Rings. I think if you had to compress what those stories were about, it is about resisting irresistible power, sort of the pull of immortality and full control. I bring that up because we all have that type of a ring pulling at us in different parts of our lives, and even in society today in the form of going into debt that people know would never be paid back in a lifetime. David: It is fascinating that Tolkien chose the name Gollum because there is another description for that in Jewish literature which is yetzer, and you have a yetzer hara and a yetzer ha-tov. Yetzer halav is the evil inclination and yetzer ha-tov is the good inclination. So you can be imaginatively inclined toward doing the good, imaginatively inclined toward doing evil, and what you see in the Gollum character is where an evil inclination has ultimately destroyed who the person was, and remade the person in a tragic, and as you described, slimy kind of character. Kevin: But they didn’t start that way. Of course, The Hobbit came first and The Lord of the Rings series came second, but it still had to do with the way the characters reacted to the ring, and of course, Gollum ultimately took his life, the despair of not having the ring, not being able to avoid the temptation, or resist. But he didn’t start that way. He started as a hobbit, a little bit like Bilbo and Frodo, but he succumbed to the ring. I think of other scenes in that movie – Boromir, who was a human, who when he had the ring in his hand you could see he changed. We even see Bilbo, when he is older, he holds that ring and you can see just a slight change, and Peter Jackson does a great job with that. Gandalf, a wizard, and Galadriel, the elf – they also understand from a longer-term perspective that they can’t hold that ring for long because they can’t resist. I think it is only Aragorn who actually purposely resists the ring the whole time – walks away. I may have the story wrong, but Dave, what I am trying to say with this is, do we have a ring right now? We have negative interest rates. We have men who are in power who are spending money that they know they will never have to pay back. So there is always a cost, isn’t there, to choosing immortality and compressing time? David: I think that is the issue. We’re talking about prices that relate to a measurement of time, and so how do we see the future, when you talk about the yetzer and you talk about that character Gollum, we’re talking about the use of imagination, how we see the future. Sometimes we have a very truncated view of the future where it is a very short period in time and the decisions that we make in light of that truncated imagination are different than if we have an expansive view of time, both past and in the future. There is a quote that stopped me in my tracks this week.

All markets are now correlated - Rising now means plunging later Enron II? Private equity bundled for future disappointment Is your 401k in a “target date fund”? If so you are the sucker   The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick If It Walks and Talks Like Recession, Call It “Recovery” October 30, 2019 "He may be lost in his own matrix of ideas and worldview and textbook knowledge and unable to see the world in any other way except on the basis of the assumptions that he has, but the academic is applying a philosophy of maximal control. The market practitioner, Jim Grant, is applying a philosophy of maximal freedom, and there is the reason I like to spend time with Grant." - David McAlvany Kevin: Well, you’re back, and I always enjoy it when you’ve had a trip to New York and you have had time to spend with Jim Grant and whatever the gang is of economists and experts that he gathers every year, or actually, twice a year, isn’t it, for the Grant’s Conference? David: This was a unique opportunity, because on the one hand I went for the Grant’s Conference. Jim has been writing the interest rate observer for decades, and my dad read him, I read him, and we continue to learn lots from him and from his guests at the conference. But there was another aspect which was interesting this year. Gratitude and thanks to Bob and to Lily and Michelle and Jeffrey and Derek. I was hosted for a day and got to meet with a couple of different groups there in Manhattan and it was absolutely fantastic. Kevin: You were treated like royalty from what I understand. From morning to night, it sounds like there was something planned and it was always good. David: Yes. I was asked to do two different seminars and it was just amazing hospitality. I think I discovered a community of friends quite unexpectedly, so thank you so much for that, Bob, Lily, Jeffrey, Michelle and Derek. Thank you so much. Kevin: I have to look at this from an aspect of what we learn when you get back because oftentimes – I went to a conference a couple of weeks ago that I am still going back and reviewing – when you go to a conference and you have a high-intensity stream of information coming at you from people who really should know what they are talking about, you can’t gather it all at once. You have to sit down and ask, “What was just now said?” And one of the best things that you can do is talk to someone else who was at the conference. And so what I would like to do, Dave, so that we can maximize this – we should just say right now, this is a conference that is several thousand dollars to go to. If a person who is interested in economics has never been to Grant’s, they ought to go. But if you don’t, or even if you did, make sure that you go through and debrief afterward. David: He has an online option where you don’t have to go to New York, you don’t have to be at the Plaza Hotel, you can access all of the speaking by video, and I’ve thought of doing that, but honestly, things crop up and so it actually is worth my time and the effort to get there, be there, sit there, takes notes, interact directly with the speakers, have lunch and eat with them, talk with them, and hash through particular issues. Kevin: And these are decision-makers. Oftentimes we are asked, “Why don’t you just stick with whatever your philosophy is?” Why don’t you just talk more about your philosophy? The problem is the people who are making decisions don’t always agree with your philosophy, and for you to be able to make good decisions you have to know what they are thinking, whether it is a Mario Draghi or an Otmar Issing, or in this case, a Dudley who has been president of the New York Fed, you may not agree with everything he says,

IMF warns “normalization of rates may be more difficult than previously envisioned” “Not QE” is in high gear, $7.5 billion in one day Elizabeth Warren promises to tax wealth   The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick “The Fed Is In Some State Of Panic Over Something That Is Not Entirely Clear” – Bill King October 23, 2019 “You can see why wealthy families have a little bit of money in art, a little bit of money in gold, a little bit of money in international real estate. These are forms of wealth storage that are either quiet, or they are beyond the arm of whatever treasury you might be concerned about. Come back to this issue of building tax capacity in the IMF paper. Building tax capacity – maybe Elizabeth Warren is just what the IMF doctor ordered.” David McAlvany Kevin: David, something is not right. It just doesn’t feel right. Our friend, Bill King, said just recently, “The Fed is in some stage of panic over something that is not entirely clear.” When you know something is not quite right – have you ever met a person and they seem very, very genuine, and you think, “This guy, boy, he would be a good hire.” And then as you call references and look around and get context for him, you start to realize that not only is this a person who can’t keep a job, but he leaves disaster in his path. David: Oh, like he’s been fired from every previous job he has had? That’s an interesting thing. Kevin: Well, you need context and you need references, because people can put on a face, and what I’m saying is the Fed is putting a face on right now. David: (laughs) Kevin: And that’s probably not what is actually happening. David: When my wife came to visit me, before we were married, about 20 years ago, she watched my family, she watched friends, and she was curious about how they reacted to me when we were all together. Was this the genuine Dave, was I acting strangely? Were there clues from my sister, my brother-in-law, from my friends? Kevin: She was getting references. That’s what she was doing. David: What did my actions say? And a part of this was she was unable to judge the context from afar. We were living 2000 miles apart. What did my actions, what did the actions of others tell her about sincerity, or about the reality of the man that I was presenting myself to be, the reality of our circumstance, the future, maybe potentially, our future together? Kevin: Fortunately for you, you turned out to be genuine, but what if we were behind the doors of the Fed – I’m not talking about the Wednesday announcements when the Fed comes out and actually does the pre-prepared announcement, but when the doors are closed, and behind the doors, what is the context going on there? David: In a similar way we observe the Federal Reserve and we’re trying to judge the context. We know that one major transition occurred from Greenspan to Bernanke where Greenspan was intentionally opaque, he was guarded, and he riddled his words, so much so, that in that era when we spoke about what he was saying it was referenced as Greenspeak. I think it was only intelligible to him. But Greenspeak was how we described his language. And there was a cultural shift during the Bernanke era which included telegraphing in advance what moves you were considering and communicating. Kevin: “Tell them what I’m going to tell them, tell them, and then tell them what I just told them.” And that controlled the market. David: We call that forward guidance, and it hasn’t been that long since this new strategy of “transparency” has come into vogue, and it serves a purpose, not always to telegraph what will happen, but perhaps to direct the flow of decisions toward desir...

Only 4% of CEO’s see economy improving over next 6 months FED still providing up to $75 billion in overnight loans GE freezes pensions for 20,000 employees   The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick FED’s Powell Announces Additional $60 Billion Per Month Of “NOT QE” October 16, 2019 “I think without those reference points you might be tempted to think of your brand of politician as having the country’s best interest in mind. After reading both of those books I think you will look at all politicians the same way, as being incredibly self-interested, and not particularly interested in what is best for the country.” - David McAlvany Kevin: David, if you forgot when we were talking – let’s just say I said that the Federal Reserve has just promised 60 billion dollars a month addition to the market, a little bit like quantitative easing I, only larger. And corporate CEOs have the lowest confidence level, actually very, very low level, where they look ahead and say, okay 4% of us believe things are going to be better in six months, when would you think I was talking? Remember, the 60 billion, the corporate CEOs. David: 2008, 2009, middle of the global financial crisis. Kevin: How about October of 2019? (laughs) Those are the facts right now. We have to talk about this. Powell says that that 60 billion is not quantitative easing. Well, what is it? David: We may think of present tense problems at Deutsche Bank, and they have had problems for the last couple of years, or if you reflect back to 2008-2009 and the role that systemically important banks played in the global financial crisis, would anyone think about or reflect on BNY, that is, Bank of New York Mellon as a very important player today? That is not the topic for October 17th Tactical Short call. We are doing our quarterly call and it is at the periphery of the topic. We are going to be talking about managing short side beta in an extraordinary environment. But it is on topic today because you have Bank of New York Mellon who is the bottleneck of a 2.4 trillion dollar repo market, the Tri-Party repo market. Just a few years ago J.P. Morgan exited the business. They left Bank of New York Mellon the sole provider of clearing and settlement for these repos, again, 2.4 trillion dollars’ worth. Kevin: You’re talking about just general liquidity to the short-term market. That is what these repos provide, right? And they are the bottleneck of trillions. David: Wondering if all is well in the repo market is, by default, asking if all is well with one of the financial market’s largest custodial giants – custodial in this sense not being the cleaning crew of Wall Street (laughs). Kevin: And speaking of CEOs, usually when the captain of the ship gets off first, the ship might be going down. David: You are referencing the CEO leaving Bank of New York Mellon here in the last few days, they are losing their CEO, and that may an issue in months ahead as there is pressure which remains in the repo market, and you have the primary player in that market searching for new leadership. Kevin: Yes, but we have the Federal Reserve. They can smooth out everything these days, can’t they? David: Yes, and I think, actually, that CEO departure was for greener pastures. Fixing what is broken at Wells Fargo is, I think, where that CEO is headed. But you have this context, back to what you said of the Fed, this is a context of concentrated responsibility with BNY, and it is easy to see how the Fed has stepped in to provide liquidity, and may, in fact, remain in the role of market smoother. We used to think of the Fed as being involved as a last resort. Well, they are now the market smoother of first resort,

Wall Street cookie cutter investment plans don’t work When gold rose from $700 to $1900 there were five $100 corrections China & India buying increase whenever gold corrects down   The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick What Is Your Next Strategy After Gold Goes Parabolic? October 9, 2019 “That is an end-of-cycle dynamic, we have in private equity today, and again, I think now it is a part of the pie. The little pie chart of the financial advisor, you now have a designated private debt, private equity position, and you can feel like a sophisticated investor. What you don’t understand is that you are being handed the bag as the big boys are exiting the room.” – David McAlvany Kevin: After 32 years of working in the gold industry it is interesting, there are two types of people who buy gold. I’m thinking of the way the Chinese and the Indians buy gold. They buy gold anyway. They’re not really speculating on price. Then you have the person who is mainly just interested in making money and they really only buy when they think that gold is going up. But I would rather be like the Chinese and the Indians that really just buy gold anyway, especially when it drops. David: I think you have hit on something very key because you are talking about one group of people that see gold as real wealth, and a store of real wealth, and the other who only see a price, and only speculate up or down on the basis of price, and they don’t see the added dimension to what gold is, like what art is, or what real estate is – a representation of real wealth. So yes, real wealth, and a store of it, you continue to buy, and as you say, you buy gold anyway, regardless of the price. And those statistics are generally higher, the volume statistics for both the Chinese and the Indians are higher when the price is lower. Kevin: I was just reading about how Chinese buying goes up as gold goes down. The amount of ounces or tons that they buy actually goes up. That is the kind of investing that you would want to do. We have talked about value investing and when you have corrections, like we’re getting a little bit of a pullback now on this large gold rise that we have. A person who understands the long-term trend is going to go in and buy more as it drops. But what is amazing is that 90% of the investors, especially here in America, because we are very, very spoiled to Fed interventions, control of the markets, that type of thing this last ten years. People back away any time it starts to go down. David: Well, glancing through a chart of weekly performance for a long list of assets, the standouts, at least in the last week or two, have been all the fixed income. The fixed income space is where the volatility has been. I mentioned last week radical volatility in the treasury market, and it has been nothing short of breathtaking this year. You look at investment grade bonds. Their yields have collapsed over 35% so far this year. Two-year treasuries – those yields are down 44%, 14% last week alone. So again, the changes from one week to the next have been really intriguing. Kevin: What is amazing, too, is that they are not really paying more for more time. In other words, normally you could go in and buy a ten-year treasury and say, “I’m going to get a fair amount more for the time that I’m going to put in.” There is hardly a difference. David: And the gap between the two-year treasury and the ten-year treasury almost looks like a rounding error, ten basis points – 1.46 for the two-year, 1.56 for the ten-year – and as you say, if you go to one-month paper instead of ten-year paper, you have had a 1.76 yield, a 20 basis point premium for the shorter term. Kevin: We’ve talked about how crazy negative interest rates a...

Negative Rates: Buy Swiss bonds for 1087, in 10 years get back only 1000! Backfire: Trump wins if Dems march all the way to Impeachment Hypocrisy: Record company share buybacks as execs offload their own shares The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick Lagarde’s ECB to Save the World with “Green Bonds”… October 2, 2019 “That’s what makes this show particularly interesting, as an observer, because the consequences – it’s not just a question of: Does it bounce when it hits the ground? If they’re juggling something of greater fragility, then the consequence of losing control and watching one thing that they are currently managing quite well – watching it drop, the consequences are much, much greater. - David McAlvany Kevin: David, we have been looking at some of the things going on, and it doesn’t necessarily spell true trouble yet. I’m thinking of the repo market and the Federal Reserve quietly putting 50-75 billion dollars in at night to just try to keep things calm. You know what it reminds me of? Years ago, back when I was 18 or 19 years old, I went to a festival that taught me how to juggle. I bought the juggling balls and actually, I did learn to juggle. And I still do that. Just to clear my mind I’ll pick up three rocks and juggle, or what have you. But I can only do it for so long before one of the balls starts getting a little far to the outside. And then I reach, and then another ball gets a little further to the outside, and then I have to reach. David: (laughs) Kevin: You know, you’ve seen jugglers where it’s not going terribly wrong yet, but you know something is going wrong and you know a ball is going to hit the ground at some point. David: I see it in the treasury market today. You have treasury yields that have moved this year by close to 50%. You have the ten-year treasury that has gone from 2.79 – this is a U.S. treasury. That was its high earlier in the year. It dropped to 1.47 – 2.79 to 1.47 – and then from 1.47 in September to 1.9 in less than 30 days. That is massive volatility. Today it sits about 1.66, but the marked characteristic in the U.S. treasury market has been that of radical volatility. Kevin: Watch interest rates. You talked to Jim Grant. He writes the Interest Rate Observer. That is a very expensive newsletter, and people pay good money for a guy who understands interest rates. But you interviewed, probably, the man of all interest rate observers, which was Dick Sylla, five or six weeks ago. He wrote the book, The History of Interest Rates, 4,000 years. David: That’s right, Homer and Sylla. It is kind of the standard text, and he is a man who knows a thing or two about interest rates. Make use of our archives. If you missed that interview with Dick Sylla I think it is really key. We know that bonds are subject to natural bouts of supply and demand shifting, and with that you do see some volatility. Kevin: Yes, but we’ve seen central banks be guaranteed buyers. Why in the world do we see volatility at all in bonds? You know they are going to come in and buy them if they need to. David: This is to your point. It is all under control as long as you keep those three or four, or however many things you are juggling, kind of close to you. As they get a little bit out of control, a little bit out of reach, all of a sudden that appearance of, “Look at me, I’ve got all of this managed.” Kevin: Order becomes chaos really quick. David: Right. We are getting used to the use of central bank balance sheets as a fresh source of demand. They’re there, they’re in the market, but importantly, it’s not just a distortion in price which results, but there is an erasure of vital information which is conveyed in that rate of interest.

Quantum Computing makes giant leap - good or bad? Does quantum decryption impact cryptocurrency? Repo Market: Fed provides $50-75 billion per day in emergency liquidity   The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick Google & NASA Solves 10,000 Year Problem In 400 Seconds September 25, 2019 “You’ve had debt issuance which has gone crazy, you have central banks moving back to QE mode, you have sovereigns that are looking to expand fiscal spending, and the bond market vigilantes seem to have taken a long vacation. The gold market may very well be sending you the same message – you’ve gone too far, this has been too much, this is not sustainable. I think the gold market is suggesting that it is time for insurance.”  - David McAlvany Kevin:You know, I’m sort of a nerd, Dave, in many ways. Back in the 1990s I bought a book by Richard Feynman, the physicist, which talked about the concept that he was toying with called quantum computing. The name of the book was The Feynman Processor. What he was toying with was something that would actually give a form of knowledge power that would overwhelm any kind of processing that we had ever known in the past using quantum science. David:In the last week to ten days we have had the announcement that cooperation between NASA and Google has used quantum processing in a very effective way. Kevin:One of the problems with quantum processing, without getting too technical, is that it requires very, very low temperatures, and so refrigerators had to be made to actually cool things lower than any place in the universe that we know of. They have to keep these quantum particles in what they call super position – they are very finicky, very sensitive – for interaction. But up to this point, as far as I have studied this, they were able to keep eight quantum bits in super position. Well, last Thursday it was announced, for a short period of time, on the NASA website, and then of course they pulled the report off, that they were able to process something with 53 qubits – quantum bits. They kept them in super position and they actually ran a program past them that would have taken 10,000 years on, actually, the fastest linear super computer that we have at this time. David:That’s amazing. Kevin:But before we talk about that, Dave, there are geopolitical events that are going on. We have the makings of what looks like war in the Middle East, possibly. David:We had quite a week last week, and as we head into this week, as well. Between the Fed and their moving of rates, between what was happening in the oil market earlier in the week, obviously, there is a lot going on. Last week started out with a noticeable rise in oil, so, depending on who you talk to, attributable to the Houthi rebels, or to Iran. I guess there is motive involved if you are trying to go to war with Iran. Kevin:It involved a fair amount of oil, didn’t it? We’re talking millions of barrels. David:That’s right, 5% of the world’s total production. Saudi oil infrastructure lost 5.7 million barrels of production a day. That’s better than half of everything that comes out of Saudi Arabia. By the end of the week what you saw was that concerns of that supply being offline for long – they had faded. So there will be a number of months – originally they had thought a few weeks – to make those repairs. But the lingering impact on the oil market is this – it is the realization that asymmetric warfare makes a lot of infrastructure, whether it is oil infrastructure in the Middle East or infrastructure elsewhere, very vulnerable. Kevin:This is a little different than states shooting at each other. The old Cold War – remember, it was real easy when you watched a James Bond film because you kne...

Lila Murphy - “You must know the community in the company you invest in” Doug Noland - “You must know the signals of the credit markets” Be a fly on the wall for the McAlvany Wealth Management team discussion To learn more go to https://mwealthm.com About Our Guests: Doug Noland: Doug has 25 years of investment management experience. With 16 years at the Prudent Bear Fund, which followed nine years working with short-biased hedge funds, Doug has deep expertise in all aspects of managing short exposure. After beginning as a trader, Doug worked as an analyst, portfolio manager, senior PM and then senior VP and head of alternative equities management at Federated Investors. Doug was also PM for the Prudent Dollar Income Fund, with broad experience in fixed income, currencies and commodities. Doug graduated summa cum laude from the University of Oregon (accounting and finance) and received his MBA from Indiana University. Prior to investment management, Doug was a Price Waterhouse CPA, and Treasury Analyst at Toyota USA. Doug has been a long-time student of macro economics, assisting with The Richebacher Letter (1996-2001) and authoring the Credit Bubble Bulletin since 1999.   Lila Murphy:  Founder of Intrinsic Value Partners, LLC., an analytical and due diligence consulting practice focused on hard asset securities. She also sits on the board of Dundee Corporation, a TSX listed diversified holding company with investments in natural resources, real estate, wealth management, and agriculture. Prior to August 2018, Lila was a Portfolio Manager on the Alternative Investment Team at Federated Investors, where she was responsible for capital allocation, stock selection and portfolio construction for a 40 stock hard assets strategy. Prior to Federated, she worked for David W. Tice and Associates on several products including two hedge funds (Prudent Global Gold Fund, Prudent Global Natural Resources). She also provided due diligence on the resources portfolio within Prudent Bear Fund. She graduated with honors from New York University and has earned the Chartered Financial Analyst designation.   The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick Getting Paid To Own Real Things September 17, 2019 “There is such a deep level of satisfaction getting to work with professionals, but it speaks to who we are as a group, who we are as a team. Professionalism demands our very best. And that’s what we want to do. We want to offer our very best to a client base, to work our tails off and put a product, or a number of products, out there that serve their needs, that answer that question – quid deinde? What is next?” David McAlvany Kevin:We have two special guests in the studio today, Dave, but before we go to them, I think we should probably point out, this is the first Weekly Commentary since the European Central Bank went to negative nominal rates. They are literally telling people that they are negative. And this is the first Commentary that we have ever had where Trump has tweeted that he wants negative rates, as well. David:Talk about competitive devaluation, talk about trade wars, what do we want? We want to compete on the downside with rates, we want to compete on the downside with … if you adopt a policy like that, as Carmen Reinhart said a few weeks ago, you are adopting a policy that is intentionally picking the pockets of savers. It is a remarkable period of time. But as you and I have talked about it, you have pointed out, and I totally agree, that it suggests a period of desperation. Kevin:Dave, I have flown airplanes and I have also turned autopilot on and gotten up and done other things.

Former Fed guy Dudley suggests using FED to oust Trump in 2020 Sugar Daddy Draghi Leaving ECB - What gifts will he leave? Summers warns “zombification” of economy due to central bank policies   The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick 20-Year Race: Gold (487%) Beats Buffett (386%) September 10, 2019 “When we factor in where we are at as a country in the context of how we price all of our assets, for the dollar, what course is it on? Is this the last chapter, and is it characterized by a bang – a lot of violent regime change – or a whimper – where the evolutionary process just leads us toward greater and greater irrelevance? Time will tell.” David McAlvany Kevin:Wow, it’s good to have you back. You were with you dad and your mom and family over in Europe, and fortunately, you sent the tape for the listeners to hear a couple of weeks ago, you and your dad talking. I saw last night, Dave, the pictures of where you recorded that program on Adriatic. David:We were at Umbria when we recorded that and just looking out over the countryside, sitting right above a series of Etruscan caves. We’re talking about places where people stored things and hid things thousands of years ago. It was a pretty remarkable trip. Kevin:You ended that trip with a triathlon, like everybody does when they take a relaxing vacation the last thing they want to do, the first thing you want to do, actually, is go ahead and run a race that is 70 some-odd miles. David:(laughs) I’m fairly certain that in 24 hours I was able to crank enough cortisol through my body to eliminate all the benefits of several weeks of vacation. Kevin:You were telling me a story. You and I were talking last night about playing the long game and how important it is not to burn out early if you are actually playing the long game. You are the author of the book Legacy, which is all about long game, but your race taught you something, didn’t it? David:Yes, it did. I am reminded of it because there are parallel lessons here. If you are an options trader you are focused on what happens in the next two seconds or two days. Maybe if you are a long game thinker in the options market it is two weeks. But that is your perspective. The longer term perspective may incorporate years or decades. Kevin:If you’re Warren Buffet, it’s a lifetime, or generations of lifetimes. David:Yes, and so I think there is that option of thinking in very short terms and it makes you into a person who is making very different decisions. So, to me, my preference is for the long game, and when you are racing you certainly have to keep that in mind. Kevin:You said your race, your swim, your triathlon, and fortunately, I’ve gotten the chance to do this once, a half ironman with you. You sort of got addicted to it. I moved away from it after doing one. But you said your swim was the fastest you have had, a personal record, there in Austria. David:That’s right. We were in Zell am See, Austria, and I did my fastest swim ever, the most beautiful bike ride I’ve ever been on. Kevin:And it’s a fast bike ride, too. It was close to probably a record bike ride for you, at least personally. David:I’ve actually had better races, but it was a solid effort given the terrain. Kevin:But you pushed, and you put everything into the first two legs because you told me the run was misery. David:The run was really tough. Kevin:It is a half marathon distance, just the run alone. David:That’s right. Usually the first mile is no fun just because you’re transitioning off of kind of thick legs from the bike ride, 56 miles on the bike. And this time it was mile seven before my legs...

McAlvany Weekly Commentary About this week’s show: The opaque transfer of wealth using negative interest and regulation Inflation is hidden by making the same priced potato chip bag even smaller Never underestimate the Government’s ability to create a “captive audience” About the guest:  Carmen M. Reinhart is the Minos A. Zombanakis Professor of the International Financial System at […] The post Carmen Reinhart Reprise: Can The Bank Pick Your Pocket? appeared first on McAlvany Weekly Commentary.

McAlvany Weekly Commentary How Don McAlvany bought & sold gold legally when gold was illegal Nixon Lied – “We will not devalue the Dollar” 5 Decades later we see central banks buying gold like it’s 1969   The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick Family Meeting with David and Don: Half a Century of McAlvany […] The post Family Meeting With David & Don: Half A Century Of McAlvany Gold appeared first on McAlvany Weekly Commentary.

McAlvany Weekly Commentary Richard Sylla is a Professor Emeritus of Economics and the former Henry Kaufman Professor of the History of Financial Institutions and Markets at New York University Stern School of Business. He teaches courses in financial history, economic and business history of the United States, and comparative enterprise systems. Today he joins the commentary to discuss: […] The post Richard Sylla: The Economics Of Time appeared first on McAlvany Weekly Commentary.

McAlvany Weekly Commentary Gold breaks $1500 as safe haven “Free Stuff” beats free markets: Will Kirchner return to Argentina Leadership? Russell Napier suggest we may be entering a 30 year bull market for gold   The McAlvany Weekly Commentary with David McAlvany and Kevin Orrick Once A “Sure Bet,” Argentina’s 100 Year Bond Drops To 54¢ on the […] The post Once A “Sure Bet,” Argentina’s 100 Year Bond Drops To 54¢ on the dollar appeared first on McAlvany Weekly Commentary.