Chris’ note: At Daily Cut AM… Market Mission Control, our job is to get you through the coronavirus panic with your health and your wealth intact.
Today, world-renowned cryptocurrency investor Teeka Tiwari shows why you need to own some bitcoin and gold in your portfolio now. They’ll protect you from the rampant money-printing by governments and central banks.
First, a final reminder that, at midnight tonight, our publisher is ending our special offer to join Teeka’s Palm Beach Confidential advisory at half-off, along with instant access to his “5 Coins to $5 Million: The Final Five” buy list. These are the five tiny cryptos Teeka says could turn $500 stakes into a small fortune.
And make sure to stick around to the end of Teeka’s insight. There’s a controversial debate raging in the mailbag over the best way forward through the crisis…
Will you be ready to profit from the next bubble?
By my calculations, we’re about to see two massive bubbles inflate.
But they won’t be in stocks or bonds.
And right now, you can buy into two pre-bubble sectors at crazy-cheap prices.
Over the next year, you’ll see these two sectors soar to levels you’ve never seen before.
It’s all thanks to central banks and politicians.
Let me explain…
Neel Kashkari is the president of the Minneapolis Fed.
On March 22, he told CBS’s 60 Minutes that the Federal Reserve was standing by with an “infinite amount of cash” to prop up the economy.
What are dollars worth if central bankers can create an infinite supply of them?
Last week, Congress passed a $2 trillion rescue package for the U.S. economy. And the Fed (America’s central bank) may create twice that amount to revive the financial system.
Plus, there’s an extra $330 billion from the British government… $250 billion from the Bank of England… and another $814 billion from the European Central Bank.
That’s a total of over $7 trillion in direct and indirect money-printing.
Friends, do you think all of that money is free?
Ask Zimbabwe and Venezuela.
At the start of the century, they tried similar policies… and watched inflation rise as high as 79,600,000,000% and 9,586%, respectively.
This absolutely destroyed the buying power of their currencies. They ended up quite literally not being worth the paper they were printed on.
To be sure, the U.S. and Europe are backed by massive and diverse economies possessing unmatched, gigantic earnings power. So I don’t expect the hyperinflation we saw in Zimbabwe and Venezuela.
But surely, even our developed economies have their limits.
The combined GDP of the U.S. and Europe is $26 trillion. But total government debt and central bank holdings are expected to top $51 trillion.
How many people would let you borrow 196% of your annual income?
That’s what’s happening on an international scale. How is that money ever going to be repaid?
Long story short: It’s not…
Now, I’m not suggesting the U.S. and Europe will outright default on their debts.
What I think they’ll do instead is debase the value of their currencies.
Here’s a simple analogy…
Let’s say I borrow $100 from you over 10 years. Today, I can buy about 25 Big Macs with that $100.
In 10 years, I’ll pay you back your $100. But by then, you’ll only be able to buy about 22 Big Macs with that same $100.
That’s assuming a normal rate of “Big Mac” inflation.
That was one alternative way Argentines measured the rate of inflation in their economy. They knew the government was fiddling with the figures. So they tracked the rising price of a Big Mac. It’s a metric governments can’t interfere with.
This is a simplified example. But it illustrates my larger point…
Normally, the interest I pay you will cover inflation. But in today’s world, you pay me interest to hold your money. Factoring in inflation, lenders are now paying borrowers.
It’s insane… But that’s exactly what investors are now doing with trillions of dollars of government debt.
They’re loaning governments dollars today that will buy less stuff 10 years down the road.
But borrowing money for free isn’t enough for the bankers. They want an even better deal.
Central banks will debase the currencies they control so much that 10 years from now… $100 will buy only 12 Big Macs.
By cutting the buying power of their currencies in half, they reduce their debt burden.
This is a familiar playbook, one governments have been using and perfecting for centuries.
But I’m not writing to you today to bore you with the arcane details of how central banks will pull off their next heist.
The key now is getting you squared away so you can profit from it.
The two easiest ways for you to do that are to buy bitcoin and gold.
Both took a hit in the early stages of the stock market selloff. But I counseled against reading too much into it.
I wrote that the selling in gold and bitcoin had more to do with overleveraged traders raising cash to meet margin calls than a loss of confidence in their protective power.
As the world was selling bitcoin and gold, I advised Palm Beach Daily readers to buy. Since then, we’ve seen bitcoin prices rally back as much as 68% off its lows. And gold ran 9% higher just last week.
Friends, it’s a no-brainer: Buy gold and bitcoin.
Every central bank in the world is racing to debase the value of the currencies they control at a scale we’ve never seen before. But they can’t devalue gold or bitcoin.
That makes them the only refuge for investors looking to shelter their money from the ravaging effects of reckless money-printing.
Gold prices could easily double from these levels. And bitcoin could quadruple (or more).
Out-of-control money-printing will massacre the buying power of dollars, euros, yen, rubles, etc.
So it’s imperative you protect your buying power with gold and bitcoin.
If you want exposure to these two trends, consider a small position in gold and bitcoin. They’ll both gun higher as central bankers continue to print money out of thin air.
Just remember to never bet the farm on any one investment… and always follow a sensible asset allocation plan like the one I laid out for you here.
For more on how to buy bitcoin, you can check out this handy step-by-step guide. And for more on how to buy gold, catch up on Chris’ Daily Cut AM dispatch from yesterday here.
Chris here – Each day, hundreds of people are signing up as Legacy Research readers… and joining us for the first time.
If you’re one of them, welcome aboard.
Our top priority right now is to give you the insights and information you need to get through this crisis with your health and your wealth intact.
As part of that mission, we’re putting together a “community center” for you for as long as the lockdowns last.
It’s where you can send your thoughts about how the global coronavirus pandemic is impacting you.
It’s also where you can share your personal stories about how you’re getting through this crisis.
And it’s where you can put your most pressing questions to the analysts right across Legacy Research.
I’ll get to as many of your emails as I can. And I’ll publish as many answers as I can get through in these pages.
So send your questions and stories my way. You can reach me at [email protected].
In yesterday’s mailbag, one reader went as far as to call the coronavirus crisis a “scam.”
Some readers are angry at the extent of the lockdowns. They wondered if we could just quarantine the old and the vulnerable… instead of everybody.
That way, the young and healthy could go back to work and stop the economic destruction these lockdowns are causing.
Today, we hear from readers – including frontline medical staff – who are pushing back on that idea. First up, a doctor’s perspective…
I sympathize with those who want to abandon self-quarantining except for the most vulnerable. But the data shows something else.
One of the biggest issues is that scientists have not found a connection in the fatality rate. They don’t have a valid reason why patients fare better in some places and decline faster in others. Many patients in the non-risk group get sick enough to need hospital care, some using the ICU [intensive care unit] of major hospitals.
While more of them may recover as compared to the at-risk group, the system was never built, staffed, or supplied with enough equipment to handle the sudden influx of patients needing acute respiratory care. Patients literally suffocate without the devices.
Our healthcare system is overwhelmed. If the country took immediate action to contain the virus when it first appeared (preparations were recommended countless times over the last 10 years), the writers of those letters would have a strong argument. And the economy would not have needed to be shut down.
The disease is now out of control. There’s no telling who has it, where it may end up, and for how long. For those who think sheltering is a one-time thing, you need only look at pandemics in the past.
The famous flu of 1918 crippled Philadelphia because they did not close down fast enough. St. Louis took immediate steps to curtail the first wave, only to experience a second, and more numerous, wave of infections because they abandoned self-quarantining too early.
We must stay the course.
– Dr. Peter A.
Peter’s take on what we need to do has a lot of support among your fellow readers…
I am astounded by the tone set by many of your readers’ comments in today’s Daily Cut AM. The gist is that the reaction to the COVID-19 scourge is overblown and that the cure (staying in place) is worse than the disease.
First of all, I think they should put themselves in the shoes of a person in an ICU fighting for their life against this insidious virus.
Second, I think they need to appreciate that the whole purpose of “flattening the curve” is to prevent a massive and overwhelming overload of the healthcare system. We know that physical and human resources required to fight the disease are limited.
Third, I think that they need to be better informed about the reality that this virus is not just killing older people. Close to where I live, the store manager of a large supermarket and two of his employees recently contracted the virus. He, at the age of 48, is now dead.
New York City today reported the death of its first child.
Even in the land of the free and the home of the brave, it is, in my opinion, unconscionable to put economic interests above human life.
– David B.
Reading about how people feel regarding COVID-19 is embarrassing! As a grandmother, mother, sister, and HUMAN BEING, I was taught by my Catholic faith to care for others. Oh, never mind. It makes me sick to my stomach to think how many people of independent means don’t care about the poorer in our communities. Absolutely terrible!
– Margaret K.
Thank you all for writing in. I knew this would be a hot-button issue in our mailbag. But we welcome all views here at The Daily Cut. Consider it a forum to air your thoughts on all of this. Have your say here.
One thing is for sure… the coronavirus panic is the perfect excuse for governments to fully implement the digital police state we’ve been warning you about.
We’re appalled by the emergency powers bills… and military curfew states… we’re seeing spring up all over the world.
Soldiers are on the streets. Cops are standing by with their “baton rounds.” If you want to make your skin crawl, check out this article in British newspaper The Guardian. It details some of the excesses authorities are using around the world to enforce mandatory lockdowns (including spraying people with a bleach solution, trapping them in dog cages, and firing teargas and tasers.)
But the new measures that worry me the most… in terms of their long-term impact on our freedoms… are the invasive new surveillance measures.
Twenty governments around the world – including the U.S. and Britain – have introduced new digital tracking measures…
Seven countries are using advanced physical surveillance technologies…
Eleven governments have imposed COVID-19-related censorship…
And internet shutdowns continue in four countries, despite the outbreak. Find out more at this COVID-19 Digital Rights Tracker.
Make no mistake… Once governments and their spooks legitimize spying on us directly through our smartphones, it will become an enduring part of society. And last I checked, George Orwell’s 1984 wasn’t an instruction manual. It was a warning.
This trend is already in motion. Take this chilling report from a reader in Europe…
Hello, I live in Belgium, Europe. The insanity is complete. Elderly people living in old folks’ homes have strict quarantine. They are not allowed to leave their (tiny) room, have to eat and drink in their room, watch television in their room, and are not allowed to see family members.
They might have the virus and spread it… so the older people feel sick from loneliness and boredom… Some don’t understand why their loved ones leave them without showing up, and feel very worried (as they have dementia)…
Some older people even die because of a lack of personnel to feed them (for example, when they are paralyzed), whereas normally, their partner would come every day to feed them… Really tragic!
And now, police start controlling the people driving on the highways, where they go, whether it is urgent enough. If not, they get penalized €250 to €350 [$273 to $383]… When you want to go to a shop, and the police consider you could go closer to your house, you get penalized… When your daughter walks too close to her friend, you get penalized…
But what’s the worst part of it? People start to phone the police when they “suspect” someone is not going by the rules… This is becoming DDR, former East-Germany, where nobody could trust anyone… And it has just started…
– Kate R.
Thanks for sharing your story, Kate. I wish you the best of luck over there in Belgium.
And if you’re not yet caught up on the full scope of the digital police state we’ve been warning about for some time now, make sure to catch up on the following dispatches in the archives:
The story so far is that the Chinese have already created the model for the digital police state. But governments in the West have needed an excuse to implement the same kind of system.
This crisis is the perfect excuse.
We know from history that people accept all kinds of curbs on their liberties when they’re scared. Scare people enough and they’ll even cheer when they see the jackboots on the streets.
Expect cellphone tracking and tracing to become a normal part of life. The government will know where you are at all times via the GPS (satellite geolocator) in your phone.
You will also pass facial recognition cameras all day every day… to verify that you’re allowed to move in certain areas. These will make sure there’s no choice but to obey curfews.
And collecting fines will be easy. All the feds will have to do is “suspend” your stimulus checks. When everyone is relying on the government for their pay checks… they won’t have much choice but to comply.
More on that in upcoming evening editions of The Daily Cut.
Meanwhile, be sure to let us know if you have a pressing question for Bill Bonner, Doug Casey, Teeka Tiwari, Jeff Brown, and the rest of the Legacy team.
And keep sharing your stories about your experiences in lockdown. You can write us any time at [email protected].
April 1, 2020
P.S. If you’re in lockdown with school-age kids, this is an especially challenging time. That’s why in his free daily e-letter, Postcards from the Fringe, colleague Tom Dyson has been sharing his favourite homeschooling resources with his followers.
Tom has been homeschooling his kids for years. And in solidarity with folks who are being forced to homeschool their kids in lockdowns, he’s put together a wealth of resources into a special bonus report. It’s free to read as a Daily Cut reader… no strings attached. Download it here.
Be sure to pass it on if you think it will be useful to your friends and family. And drop us a line and tell us what you think about it. You can email us at [email protected].