MARKET NEWS / MCALVANY RECAP / MARKET NEWS

Be a Lifelong Student

MARKET NEWS / MCALVANY RECAP / MARKET NEWS
McAlvany Recap • Aug 07 2023
Be a Lifelong Student
MPM Posted on August 7, 2023

As summer enters the home stretch and young people everywhere prepare to go back to school, there are also lessons for those of us who haven’t seen a classroom in a while. It has been well said that you never stop learning—or at least you shouldn’t.

A saying recently spotted on a wall poster noted that, “You don’t stop reading because you get old, you get old because you stop reading.” It’s a saying that’s observably true. Once you stop exercising your mind, just as when you stop exercising your body, it atrophies and dies.

This is a good forum in which to make these observations. There is very little potential for offense. If you’re reading this, you’re clearly a reader. We value your interest. May your tribe increase!

What we have in mind here, though, is not an exercise in mutual admiration. Reading and writing are key supports of civilization; high-level thought; the preservation of skill, knowledge, and virtue; and true progress (not human deification but improvement of the human condition). Beyond a few rudimentary words by trained chimpanzees, no other denizen of earth can commit their thoughts to writing or read the thoughts of others.

So what’s the point here? Just this. The ability to think, reason, and learn is fundamental to freedom and richness of life. There’s a reason dictators burn books. It helps them cut off realms of thought among their citizens. And those realms typically involve some form of independently assessing right and wrong. Dictators claim the ability to make those assessments absolutely, with no dissent or disobedience. And of course they are always right.

Clearly we’re headed that way in America and throughout most of the world. To help stem that tide and protect yourself from its effects, feed your reading habit. Study the words and thoughts of sound-thinking, disciplined people. Learn from them. Accept the benefits they work so hard to convey to you. Improve your situation and your ability to think clearly in every situation.

Below are four communications from people who have spent tens of thousands of hours each in their fields of analysis. Their observations and conclusions are here for you to read, hear, or see (podcasts and videos have obviously become effective ways to transfer information as well).

There are not many places where you can benefit from such productive efforts at so little cost. And by reading or listening to these analysts, you can avoid the groupthink so prevalent in our country today. The herd is heading for the slaughterhouse (hopefully not literally, but certainly figuratively). Now might be a good time to break away.

Key Takeaways:

  • When China sneezes, the rest of the world catches cold
  • Is Fitch playing politics?
  • Either/or scenarios don’t demand either/or preparations
  • The signs are clear, NOW is the time to act

The McAlvany Weekly Commentary: David and Kevin begin by reaffirming the importance of family and the benefits of cultivating compassion. A person who does well in life financially but comes up short in either or both of these areas typically feels the lack, often strongly. They also mention the quarterly conference call for the Tactical Short fund, which has now taken place. You can listen to a recording of the call or read its transcript here. You need not be an account holder in Tactical Short to benefit from the call, which is substantive with regard to economic and financial matters rather than marketing-oriented. They move from these subjects to the effects of Chinese monetary stimulus actions on the world economy—particularly with regard to commodities.

Credit Bubble Bulletin: In his missive for the week titled “Shot Across the Bow,” Doug notes that, “The two-year versus 10-year Treasury spread narrowed 20 bps this week, the largest narrowing since the banking crisis week of March 17th.” He identifies a risk-off tenor that affects bonds worldwide before segueing into developments in equities and employment. He then turns to the downgrade of the U.S. credit rating by Fitch and the almost hysterical response to it by some of the biggest names in government and finance. His take on the hoopla? As always, clear and logical, backed by facts and reason, not political or personal agenda. Click on the link to see what all the fuss is about.

Hard Asset Insights: Morgan uses a famous quote from F. Scott Fitzgerald to develop his analysis this week, “The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function.” He does this because two competing developments threaten to envelop the U.S. economy—a significant recession and high inflation. Though recession has the edge in likelihood, inflation is still a strong possibility. This week’s missive develops these thoughts and advises what a person who can comprehend both scenarios as possibilities should do to prepare for an uncertain future.

Golden Rule Radio: Tory and Rob join Miles for the program this week. They begin with gold and its recent pullback, then turning to the downgrade of U.S. debt by Fitch and developments in the dollar, equities, and bonds. As noted by Doug Noland in his Credit Bubble Weekly, the pushback against Fitch’s action was severe. The hosts of GRR note and quote several of the naysayers, but proceed to examine the data behind Fitch’s downgrade. As they observe, the facts speak for themselves. The hosts then look at a chart of the Dow and make some cogent observations about things that seem to be invisible to most analysts. And given the logic of their analysis, Tory points out that this is when you buy your hedge for your equities positions.

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