MARKET NEWS / MCALVANY RECAP

The War for Power

MARKET NEWS / MCALVANY RECAP
McAlvany Recap • Mar 18 2024
The War for Power
MPM Posted on March 18, 2024

History has given an exceptionally clear verdict: capitalism provides a much higher and better standard of living for its practitioners than socialism.

Socialists, of course, are undeterred. They say that previous socialist leaders didn’t do it right, which is arrogance in the extreme. Lenin, Stalin, Hitler, Mao, et al were certainly evil personified, but they were also exceptionally able men. For a person to believe he or she can make a fundamentally flawed system work better than they did is ego on steroids.

But there’s also a problem with capitalism. Unless the most successful of its practitioners are somehow walled off from undue influence over a country’s governance (which is what our Bill of Rights attempts to do), capitalism quickly turns into crony capitalism.

The latter is an extremely unfortunate term, as crony capitalism is not capitalism at all, merely cronyism. Once it takes effect, a country becomes increasingly divided between the very rich (and powerful) and everyone else. The middle class disappears along with most of the lower-level upper class, and the uber-rich soon own almost everything.

Then the poor (which is almost everyone at that point) begin to see communism as the only solution. They think communism will take from the rich and give to the poor. In reality, it’s just another system whereby the fortunate few have everything and everyone else has nothing.

This discussion is germane because America’s uber-rich now have the keys to the kingdom. They have exercised their influence since the country’s earliest days, but opposition was stronger and better informed then. Today, relatively few citizens are knowledgeable and involved.

Without labeling it as such, the content creators below chronicle this war of the rich and powerful against everyone else. In last week’s MWC, Edward Chancellor pulled back the curtain on the inflation/deflation debate: Deflation helps the people. Inflation helps the cronies.

Why is there even a debate in the Fed as to which option should be pursued? Because the Fed exists for cronies. It must be cautious—there are far more people than cronies, and if the people are too badly oppressed they can always come for the cronies with pitchforks. But Fed policies will always skew crony over the long run. So will the swamp (the alphabet agencies and federal contractors) and most politicians.

The deeply informative publications below are not political in nature. However, they can be effective in forming an informed citizenry, and are offered free of charge. Once you’ve learned from them, you’ll better understand what’s happening in the crony world, and be better able to interact with your elected officials. You’ll also be better able to protect yourself from the depredations of the one percent, or the fallout from their half-baked schemes.

Key Takeaways:

  • Slip-sliding into war
  • Asset inflation is real, and it’s big
  • Is the Fed damaging its reputation?
  • Gold’s record pricing has a silver lining

The McAlvany Weekly Commentary: David and Kevin take a look at America’s growing involvement in the wars in Ukraine and the Middle East. David describes the stakes in the Middle East, explaining why Israel feels it has to eliminate Hamas rather than just fight it to a standstill. From there they discuss the American system of trade and finance that many other countries are becoming disenchanted with. Pressure continues to grow for an alternative to the dollar system. Why? America strongly enforces its rules and defends its prerogatives—often to other countries’ detriment. Many of those countries are getting tired of such strictures and treatment. The hosts also discuss the difficulties higher interest rates are presenting the government over the debt it must refinance, and the difference between government bonds and corporate bonds.

Credit Bubble Bulletin: Reading CBB is like talking with someone who knows all the greatest monetary thinkers and has correlated their thoughts. This week Doug draws from the work of German economist Dr. Kurt Richebächer regarding the nature of asset inflation. If you haven’t considered asset inflation apart from price inflation, this analysis is simply must reading. Why? “History teaches that the greatest crises unfold after the bursting of major asset and speculative bubbles.” This, combined with the facts that no one hates asset bubbles and we are in the middle of an astronomical one right now, certainly merits your attention. Japan languished in the doldrums for over 30 years after its spectacular 1980s asset bubble burst. This is eye-opening analysis. Don’t miss it.

Hard Asset Insights: Morgan takes a hard look at failed Fed policy this week. “Inflation is still alive and well, but policymakers look increasingly likely to cut interest rates into that elevated inflation anyway. That’s an extremely important development. It suggests that monetary policy may indeed be compromised by the extremely high levels of government debt. If so, the era of the use of interest rates to curb inflation may be over.” Of course, that’s a long and highly relied-upon tool. Losing it poses a vexing question: if interest rates no longer work to control inflation, what does work? Nationally, that remains mostly an unanswered question. Personally, the answer has been with us for thousands of years. Don’t miss this discussion that sums up a number of major national and international developments, and draws an inevitable conclusion.

Golden Rule Radio: Tory begins the program this week with tongue firmly planted in cheek, welcoming listeners to “Silver Rule Radio.” That pointed jest introduces a subject that the hosts have been discussing extensively lately. Miles explains the charts in enlightening detail, concluding that “silver is banging on the ceiling a lot harder than [it] is banging on the floor,” meaning that the price pressure in the metal is upward. He mentions some points along the way that will likely provide challenges, but identifies the level he believes will form a new ceiling. The hosts then turn to gold, and talk about its likely future before noting that the gold:silver ratio has been coming down, even in the face of record gold prices. This has compelling implications for ratio traders, and is must-consider information.

Stay Ahead of the Market
Receive posts right to your in box.
SUBSCRIBE NOW
Categories
RECENT POSTS
Are Cryptocurrencies as Good as Gold?
Is the Trend Your Friend?
When the Standard is the Problem
The Importance of Balance
Can the Center Hold?
The War for Power
Taking an Interest in Interest
Gold Trading Near All-Time Highs
Double your ounces without investing another dollar!