Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
UK House Building and House Prices Trend Forecast - 20th Aug 19
The Next Stock Market Breakdown And The Setup - 20th Aug 19
5 Ways to Save by Using a Mortgage Broker - 20th Aug 19
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
GOLD BULL RUN TREND ANALYSIS - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19
Central Banks Move To Keep The Global Markets Party Rolling – Part III - 14th Aug 19
You Have to Buy Bonds Even When Interest Rates Are Low - 14th Aug 19
Gold Near Term Risk is Increasing - 14th Aug 19
Installment Loans vs Personal Bank Loans - 14th Aug 19
ROCHE - RHHBY Life Extension Pharma Stocks Investing - 14th Aug 19
Gold Bulls Must Love the Hong Kong Protests - 14th Aug 19
Gold, Markets and Invasive Species - 14th Aug 19
Cannabis Stocks With Millennial Appeal - 14th Aug 19
August 19 (Crazy Ivan) Stock Market Event Only A Few Days Away - 13th Aug 19
This is the real move in gold and silver… it’s going to be multiyear - 13th Aug 19
Global Central Banks Kick Can Down The Road Again - 13th Aug 19
US Dollar Finally the Achillles Heel - 13th Aug 19
Financial Success Formula Failure - 13th Aug 19
How to Test Your Car Alternator with a Multimeter - 13th Aug 19
London Under Attack! Victoria Embankment Gardens Statues and Monuments - 13th Aug 19
More Stock Market Weakness Ahead - 12th Aug 19
Global Central Banks Move To Keep The Party Rolling Onward - 12th Aug 19
All Eyes On Copper - 12th Aug 19
History of Yield Curve Inversions and Gold - 12th Aug 19
Precious Metals Soar on Falling Yields, Currency Turmoil - 12th Aug 19
Why GraphQL? The Benefits Explained - 12th Aug 19

Market Oracle FREE Newsletter

The No 1 Gold Stock for 2019

Sound Money on the Drifting Sands of Belief 

Currencies / Fiat Currency Apr 17, 2015 - 12:25 PM GMT

By: Dr_Jeff_Lewis

Currencies My kids just exited the stage where they still believe pretty much whatever I say. We had a decent track record for a while. It seems like just a moment ago when my son actually believed that I could fly.
 
Belief can be constructive, powerful, and sometimes blinding. They arise from experience shaped by the stories we tell about them. Often the stories are told for us; and without contemplation we run with them.



I want to bring up the issue of market perception, and perhaps why the truths of the matters are so incredibly illusive to the vast majority.  No better example of this is the political-economic beliefs of the generations born out of the great financialization which spanned over 10 decades.
 
Thankfully, my son never tried out flying for himself but sometimes children do have to figure things out on their own.  We tell them that the oven is hot - and not to touch it.  They don’t believe us. So they find out for themselves…and then they listen. They are much more likely to believe what we want them to believe.
 
It's similar to our collective modern investment hero worship. The hedge fund heroes of the moment or Warren Buffet, for example. The life of an investment banker. The dazzle and the glitter - the fame. Even the so-called good guys and the ones buying gold and nickels.
 
And there is proof. They've been right in the past. Look at them now. They are celebrated. Most likely they will be right again.  So we give them benefit of the doubt.
 
Yet at all times we need to summon the courage to hold them accountable - for everything.
 
How much time does it take to ask a question about reality?  First of all, risk ain’t what it appears to be. Based on the evidence and aftermath of each successive credit bubble crisis, with rare exception, true risk is distorted. There is no skin in the game.
 
But in the mainstream it’s different - we are bombarded with information about what to do, and yet we take on all the risk. In fact, through direct and indirect taxation, we take on the pain. The risk less cultural elite manifest through policy.
 
The regulators saved us once before. This translated to they will do it again. And it’s ‘evidence’ that they were right. And so we should give them the benefit of the doubt without ever delving any deeper. Because no doubt they will be right again - for better or worse, whether they gamed the system or not.
 
Of course, they only saved themselves.  If we peel back the layers we will begin to see the interventions and policy for what they are: experiments, guesses, and assumptions based on theories that have no evidence.
 
Pseudo science — there is no math that governs or accurately predicts human behavior. There probably will never be one but this is the prevailing belief because it hasn’t collapsed yet. So they must we be right.

Look at how great things are. See how good we look on the outside. People who can’t see that are the lunatic fringe. Real estate is up and interest rates are low. Anyone can finance (own) a brand new car, go to college. But again, when we explore each of these, it all dissolves into what it truly is - a sham.
 
Why is real estate up? Bailouts, consolidation, low interest rate, and induced investment flows. The hunt for yield is like some kind of staged (fenced in) safari guaranteed to capture the last game. It is not organic, single family infrastructure - driven true growth.
 
Why are borrowing rates low?  Because they manipulated them there by managing the rate of interest is ultimate price suppression.  Real rates are a different story - they are much higher. The rates matter for them only in terms of the debt service, not the stimulation of real growth and investment.
 
Equity valuation is parabolic because margin (borrowing rates are low) is easy. Corporate buy-backs veil the truth about growth. Cash is funneled away from what otherwise might be capital expenditure.

But what choice do they have? It’s not like there is much hope for growth or the ability to foresee future demand. The pillage is as much about the future as it is now.

But…We are the wealthiest nation in the world. We can’t fail.
 
Again, once this dissolves with little contemplation, all we are left with is the naked truth. Unfortunately, most people are nowhere near prepared for the indignity when their clothes are ripped away in the next crisis, which means they will be ripe for giving in to wherever authority tells them to scurry.
 
The truth is that across all markets we are being lied to. Systematically and consciously. This is behavioral economics almost by definition. Of course, the reality is that these lies lead to unsustainable conditions, to say the least.
 
I'm reminded of this each time I get the question: When? When will this end? When will the price finally escape from the grips of this manipulation?
 
When they decide they’ve had enough. Managed and manipulated markets are never sustainable. They always fail. And we will forget these heroes and their fleeting, criminal existence in a microsecond. 
 
Letting go the false paradigm - the belief that price really tells the truth about reality - is nearly impossible. You should pat yourself on the back as one of the few who have broken away from the herd. It's much more than being a contrarian investor.

For more articles like this, and/or for a breath of fresh silver market reality amidst the stench of denial and technically meaningless short term price obsessed madness, check out http://www.silver-coin-investor.com

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com

    Copyright © 2015 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Dr. Jeff Lewis Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules