In the last few weeks, I have written about a few of the major manias that have occurred throughout history mostly in stock markets but also in other assets. What I have been thinking about is how much time had to pass before another major mania took place and another was born.

The reason is pretty obvious. Of the many who were chasing the latest fad, many bought in after most of the major gains were in the rearview mirror. This led to many having their financial lives ruined or at least greatly impaired.

It is always the same story- “It’s different this time!”

When something like this happens the fresh memories of losing a substantial amount of money makes most rational people shy away from taking undo risks.

Many people who were chasing stocks in the 1920’s, only to see an obliteration of their wealth, were some of the most conservative people I have ever met. (Yes, I am old enough to have had grandparents who lived through it).

Even if they avoided the collapse the images of those that took part lasted a lifetime.

Today, it is absolutely amazing to me that we have had three major bubbles burst in the last 25 years and we are in the largest and most dangerous bubble that I have ever seen.

It appears that so far, we have not learned much from the most recent booms and busts.

In the year 2000 we had the Nasdaq bust which led to an 80% loss in that index and took 15 years to get back to where you started if you bought near the top. In 2001 and 2002 the other major averages suffered major losses also- though not quite as drastic as the Nasdaq.

From 2003-2007 on the back of lowered interest rates virtually all “assets” rose together. Real Estate, commodities, stocks and bonds. Thing feel REALLY good when the “markets” are rising.

Then came 2008 where many saw losses of near 50% on many assets. Even some historically conservative investments suffered large losses. Of course, over the next few years banks were propped up with over $29 TRILLION (No surprise since the major banks OWN the Fed). The Fed went on a “printing and buying” scheme that is so large there is no historical precedent.

Since that time, we have had hiccups like in 2018 and in 2022 but for the most part the “printing and buying” has just been growing exponentially. This has led to bubbles in housing, stocks, and bonds.

It is easy to see that the current crop of “investors”- I use that term loosely because most “investors” today are algorithms or gamblers- have been programmed to believe that every time the “market” attempts to actually determine a fair price the authorities will step in and maneuver the price higher. I believe that this mechanism is what has led us to where we are today.

It is not that we HAVEN’T learned- we have just learned an alternate reality. For now.

I cannot help remembering how the allies flew dummy missions over Germany for weeks so that when the actual bombing was going to take place the defenders were complacent and disregarded it as the Same old-same old. It actually appears that China may be using that same maneuver with Taiwan right now. Which mission may be the real one?

You would think that with all of the information available at our fingertips people would be able to see the actual state of the economy and realize that, as PRICES are rising VALUE is actually contracting. This is exactly what has led to EVERY major crash in history.

Of course, many will say like Brian Moynihan (CEO of Bank of America) “While the music is playing you have to dance”. The problem with that, like in 2008, is that we cannot tell when the music will stop. That should be a GREAT lesson for all of us. VERY few got out of the way and even fewer became filthy rich by betting against the “market”. With all of the “printing and buying” taking place shorting the “market” is probably a fool’s game. I gave that up in 2011.

A lesson that I learned during that time was that even if you were diversified and had assets everywhere there was still danger.

Even gold, which is the ultimate safe-haven asset saw a large drop in 2008. The reason was simple. Everything was collapsing. This led to major losses and so since many people had margin accounts and loans, EVERYTHING got sold- not by traders but by margin clerks. Because of gold’s liquidity it was sold also.

In June of 2008 gold was 930.00 per ounce. By October-during the crash is fell to $730.00. As all assets started to rise gold recovered first and blasted up to $1662.00 by March of 2012. Enter JP Morgan and others who manipulated the prices of silver and gold lower for the next 6 years.

(Gold Quotes from Macrotrends)

In their conviction it was noted that they manipulated the price of gold and silver tens of thousands of times.

This led to the illusion of US dollar strength and helped the USA maintain its economic dominance- for a while. In 2018 gold bottomed out at around $1220.00. Since then, it has been on a steady march higher to where we are today- over $2870.00. The major factors for gold’s relentless rise- even though the suppression schemes are still ongoing are the Bank of International Settlements making it a tier one (riskless) asset and the US weaponizing the US dollar. As a side note, I noticed that at least five times prior to 9AM EST today at least 5 major downdrafts in the spot price took place. As I am writing this at about 12:30 I also notice that at around 11:30 another MAJOR hit occurred. Currently the price is up $28.00 today. What SHOULD it be up without all of the interference?

Actually, a few years ago with this type of action it would probably be DOWN HARD. Central bank buying has put a solid bid in every time the manipulators manage the price lower.

A good investor should learn from their mistakes. Some things that I think are important:

· Be diversified. This does NOT mean all sorts of stocks but all sorts of different assets.

· Risk only what you can afford to lose.

· Buy Low- Sell High- probably the hardest thing for our psyches to actually carry out.

· Heed your gut feelings- if it feels like time to reduce or increase risk- follow your instincts.

· If you have strong conviction do not let a short-term setback, make you buy or sell something you may regret doing.

· Many times, the financial game shows are selling you stories- do your own research. Most times there is an ulterior motive.

· If you are counting on someone else’s “promise to repay” get a good look at the numbers and determine for yourself just how likely repayment is- and if what you are getting repaid in will retain anywhere near its original value.

Nobody (at least not we regular folks) can know what tomorrow brings. All we can do is …

Be Prepared!

Any opinions are those of Mike Savage and not necessarily of those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice. The information in this report does not purport to be a complete description of securities, markets or developments referred to in this material. The information has been obtained from sources deemed to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.

Commodities are generally considered speculative because of the significant potential for investment loss. Commodities are volatile investments and should only be a small part of a diversified portfolio. There may be sharp price fluctuations even during periods when prices are overall rising.

Precious Metals, including gold, are subject to special risks including but not limited to price may be subject to wide fluctuation, the market is relatively limited, the sources are concentrated in countries that have the potential for instability and the market is unregulated.

Diversification does not ensure gains nor protect against loss. Companies mentioned are being provided for information purposes only and is not a complete description, nor is it a recommendation. Investing involves risk regardless of strategy.