MARKET NEWS / MCALVANY RECAP / MARKET NEWS

The Ebb and Flow of Empires

MARKET NEWS / MCALVANY RECAP / MARKET NEWS
McAlvany Recap • Jul 03 2023
The Ebb and Flow of Empires
MPM Posted on July 3, 2023

When William Shirer wrote The Rise and Fall of the Third Reich, his choice of title began in a way that could be used as a template to describe every major power in the history of mankind. The rise and fall of: Egypt, Assyria, Babylon, Medo-Persia, Greece, Rome, Byzantium, Spain, the Netherlands, Austria-Hungary, France, Great Britain, and many more—and now America?

This repetition of historical patterns has spawned some important books in recent years, perhaps most significantly Strauss’s and Howe’s Generations and The Fourth Turning. Without going into detail, the gist of these and other works on the topic is that there are patterns to the rise and fall of great powers. Even the facts evidenced in the first paragraph above would tend to validate that assertion.

Do such patterns apply to America? They would appear to. America’s fall is not yet certain, but it seems to be losing power and influence in world events. Many of its enemies are already hailing its death, but there is hazard in celebrating too early.

Adam Smith admonished nabobs who nattered too negatively that “there is a great deal of ruin in a nation.” It’s observably true. We can see it every day in America. Just when we believe the country has hit a new low from which it can never recover, something noble appears to give us hope. Some of the good guys are battered but not broken. The nation staggers forward, wounded—perhaps mortally, but still fighting on.

This is the milieu in which the analysts below do their work. The excruciatingly slow train wreck of a massive nation that has a world of ruin in it—it’s painful to watch, heartbreaking to live through, and exceedingly difficult to accurately analyze. The complexity, interconnectivity, crosscurrents, and sheer number of factors defy certainty by all but the Almighty. Yet there is need for information, for context, for wisdom, and for salutary action.

While the McAlvany analysts hope and pray for better days in America, they are committed to providing correct and truthful information, and they strive to parse that information accurately. In a complex and morally challenged world, they constantly work to provide not only truth in information and presentation, but timeless wisdom in how to view current events and prepare for possible future events.

This is not a simple job. Describing a super-slow-motion train wreck can seem like an endless repetition of the same facts week after week, but the importance is in the details. As the nation tumbles tail over teakettle, lives will be gained or lost, homes and jobs will be gained or lost, fortunes will be gained or lost, and the list goes on. We must go on living as the nation goes on dying (if dying is an accurate description; we hope for better things).

An individual might seem small in the big scheme of things, but that’s where life is—in the individual. And that’s who the below information is for.

Take it for what it’s worth because it’s worth a lot. Use it to inform and benefit your life. That’s why it’s here. And if the folks at the McAlvany companies can be of further help to you as you prepare for uncertain times ahead, don’t hesitate to call us at 1-800-525-9556. That’s why we’re here.

Key Takeaways:

  • When life imitates art
  • Channeling Joe Friday
  • Everything Bubble 2.0 or set-up for disappointment?
  • Triumph and disaster—treat those two imposters just the same

The McAlvany Weekly Commentary: What does Rus have to do with the Bard? Only here will you find the answer. David and Kevin examine Shakespeare’s Coriolanus for insights into the Wagner Group’s recent activity in Russia. The hosts also look to history for insights as they examine the coup that was not a coup against Gorbachev. Building on that analysis, the hosts then observe that currencies often offer more insight into a nation’s health than many other data points. Hence, the ruble tells us much about Russia. Similarly, the yen tells us much about Japan. The hosts compare the gold value of the yen in 2000 vs. its value today to see how devastating loose monetary policy can be to a nation and its currency. Also viewed through the currency lens are all the BRICS countries—and Germany. The title of the program reflects the predicament the Bundesbank is in because of interest rate-induced currency woes.

Credit Bubble Bulletin: Doug titles his weekly summary “Just the Facts” this week, and that is truth in advertising. He offers the prints for major markets, sectors, bonds, and credit sources for the US and other nations. Apparent in his choice of newsworthy articles is the yen quandary and Japanese noises to the effect that support for the currency could be forthcoming. BofA bond woes also feature prominently, as do the abilities of major banks to withstand a “doomsday economic scenario.” Investor warnings to hedge funds using a Treasury strategy called “basis trade,” along with possible “limits on the ability of large lenders to use Federal Home Loan Banks as a financial backstop” are also in the news. There’s much more—a rich and varied smorgasbord of the most pertinent facts and reports in the news today.

Hard Asset Insights: Morgan notes that markets are partying hard in the run-up to Independence Day this year. They’re acting like we’re on the cusp of “ ‘everything bubble’ 2.0.” So what is his take on these developments? “These are dangerous times to be playing in the shark-infested waters of financial markets. It could be different this time. It’s possible. But, for those heavily long financial assets amid the promise of a new lasting bull market, it had better be very different in almost every conceivable way this time.” His proof elements for such a statement are sobering indeed. His conclusion? “Wealth preservation should be prioritized above all else.” Be sure to read this important letter for information on how to do so.

Golden Rule Radio: Tory and Miles begin with recent action in the gold market, and acknowledge the recent dip. They also acknowledge that, though such action is an opportunity for buyers, it’s not necessarily pleasant for owners. But Miles puts the fact into perspective by observing a truism about markets that, despite its banality (and often unpleasantness), is absolutely crucial for investors to understand: “If markets worked perfectly, nobody would make money on them. The fact that they overextend in either direction is where you find opportunities.” In that context, Miles explains his dollar-cost-averaging-plus strategy. He buys a given dollar amount worth of gold every month no matter the cost, but has a second strategy in place as well. “Having multiple strategies in any market makes a lot of sense because you want to both play the averages and play the opportunities.” Be sure to listen to the program this week for his crucial insight.

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