The Cardinal Sin of Investing: Permanent Impairment of Capital

September 18, 2017

Peak Prosperity

Last week we presented a parade of indicators published by Grant Williams and Lance Roberts that warned of an approaching market correction as well as a coming economic recession.

The key message was: When smart analysts independently find the same patterns in the data, it's time to take notice.

Well, many of you did, by participating in this week's Dangerous Markets webinar, which featured Grant and Lance.

In it, both went much deeper into the structural fragility of today's financial markets and the many reasons why economic growth will remain constrained for years to come.

The excessive build-up of debt in the system -- and the absolute dependence on its continued expansion to keep the economy from imploding -- is, of course, seen as the prime risk to future growth.

As Lance demonstrates here with several of his excellent charts, so much leverage has been taken on that its servicing is increasingly stealing capital that would otherwise go to savings, consumption and productive investment. Going forward, the demands of the debt service will simply result in less and less capital available left over to grow the economy:

As financial assets are (supposed to be) valued on future growth prospects, lower forecasted growth demands lower valuations. Grant calculates that, should the US see another decade of 2% average annual GDP growth (and it has averaged less than that over the past decade), stock prices should be roughly half of what they are today to be considered fairly valued:

And Lance builds further on this, explaining how this moribund growth, coupled with America's aging demographic trend, will simply savage the nation's (already troublesomely underfunded) pension and entitlement systems:

But there are a number of other destabilizing risks to fear beyond our terminal debt addiction. One that Grant believes is not getting enough attention right now is the de-dollarization trend becoming notably apparent across a number of America's strategic trading partners:

These clips are merely several minute's worth of the excellent discussion and insights from the full one hour-and-a-half long Dangerous Markets webinar. Those interested in watching the full webinar can learn more here.

It's little surprise that, given this multitude of concerns and systemic risks, both Grant and Lance advise investors to prioritize caution. They see extremely few undervalued -- or even fairly valued -- asset classes at today's prices, perceiving nearly everything else at dangerously elevated levels.

In a situation like this, moving your capital to the sidelines may be the best move available. The risks of remaining long are obvious. But betting against the market has been a losing proposition for years -- no one knows how many months/years the central planners may be able to hold reality at bay.

Grant and Lance wrestle every day with market allocation decisions on behalf of their clients (and they discuss a number of potential options in the webinar). But both agree that, since the math is clear a major-to-massive correction will happen at some point, having dry powder set in reserve to deploy at much lower prices is a low-risk/high-reward strategy.

In Part 2: Smart Strategies For Building & Managing Your Cash Savings, we address many of the most frequently-asked questions involved in holding cash right now, including strategies for preserving purchasing power, avoiding bail-ins, fees and other threats to cash savings.

As Grant concludes on the webinar: Permanent impairment of capital is the cardinal sin of investing. Well, today's markets present a clear and present danger of coming capital impairment for those who don't take prudent action in advance of a market downturn. Don't be guilty of inaction.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

Media cover-up: Why Clinton deported six times more than Trump

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MSNBC and CNN want you to think the president is a new Hitler launching another Holocaust. But the actual deportation numbers are nowhere near what they claim.

Former MSNBC host Chris Matthews, in an interview with CNN’s Jim Acosta, compared Trump’s immigration policies to Adolf Hitler’s Holocaust. He claimed that Hitler didn’t bother with German law — he just hauled people off to death camps in Poland and Hungary. Apparently, that’s what Trump is doing now by deporting MS-13 gang members to El Salvador.

Symone Sanders took it a step further. The MSNBC host suggested that deporting gang-affiliated noncitizens is simply the first step toward deporting black Americans. I’ll wait while you try to do that math.

The debate is about control — weaponizing the courts, twisting language, and using moral panic to silence dissent.

Media mouthpieces like Sanders and Matthews are just the latest examples of the left’s Pavlovian tribalism when it comes to Trump and immigration. Just say the word “Trump,” and people froth at the mouth before they even hear the sentence. While the media cries “Hitler,” the numbers say otherwise. And numbers don’t lie — the narrative does.

Numbers don’t lie

The real “deporter in chief” isn’t Trump. It was President Bill Clinton, who sent back 12.3 million people during his presidency — 11.4 million returns and nearly 900,000 formal removals. President George W. Bush, likewise, presided over 10.3 million deportations — 8.3 million returns and two million removals. Even President Barack Obama, the progressive darling, oversaw 5.5 million deportations, including more than three million formal removals.

So how does Donald Trump stack up? Between 2017 and 2021, Trump deported somewhere between 1.5 million and two million people — dramatically fewer than Obama, Bush, or Clinton. In his current term so far, Trump has deported between 100,000 and 138,000 people. Yes, that’s assertive for a first term — but it's still fewer than Biden was deporting toward the end of his presidency.

The numbers simply don’t support the hysteria.

Who's the “dictator” here? Trump is deporting fewer people, with more legal oversight, and still being compared to history’s most reviled tyrant. Apparently, sending MS-13 gang members — violent criminals — back to their country of origin is now equivalent to genocide.

It’s not about immigration

This debate stopped being about immigration a long time ago. It’s now about control — about weaponizing the courts, twisting language, and using moral panic to silence dissent. It’s about turning Donald Trump into the villain of every story, facts be damned.

If the numbers mattered, we’d be having a very different national conversation. We’d be asking why Bill Clinton deported six times as many people as Trump and never got labeled a fascist. We’d be questioning why Barack Obama’s record-setting removals didn’t spark cries of ethnic cleansing. And we’d be wondering why Trump, whose enforcement was relatively modest by comparison, triggered lawsuits, media hysteria, and endless Nazi analogies.

But facts don’t drive this narrative. The villain does. And in this script, Trump plays the villain — even when he does far less than the so-called heroes who came before him.

This article originally appeared on TheBlaze.com.

Exposed: America’s ancient power grid is a national security disaster

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If America wants to remain a global leader in the coming decades, we need more energy fast.

It's no secret that Glenn is an advocate for the safe and ethical use of AI, not because he wants it, but because he knows it’s coming whether we like it or not. Our only option is to shape AI on our terms, not those of our adversaries. America has to win the AI Race if we want to maintain our stability and security, and to do that, we need more energy.

AI demands dozens—if not hundreds—of new server farms, each requiring vast amounts of electricity. The problem is, America lacks the power plants to generate the required electricity, nor do we have a power grid capable of handling the added load. We must overcome these hurdles quickly to outpace China and other foreign competitors.

Outdated Power Grid

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Our power grid is ancient, slowly buckling under the stress of our modern machines. AAI’s energy demands could collapse it without a major upgrade. The last significant overhaul occurred under FDR nearly a century ago, when he connected rural America to electricity. Since then, we’ve patched the system piecemeal, but it’s still the same grid from the 1930s. Over 70 percent of the powerlines are 30 years old or older, and circuit breakers and other vital components are in similar condition. Most people wouldn't trust a dishwasher that was 30 years old, and yet much of our grid relies on technology from the era of VHS tapes.

Upgrading the grid would prevent cascading failures, rolling blackouts, and even EMP attacks. It would also enable new AI server farms while ensuring reliable power for all.

A Need for Energy

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Earlier this month, former Google CEO Eric Schmidt appeared before Congress as part of an AI panel and claimed that by 2030, the U.S. will need to add 96 gigawatts to our national power production to meet AI-driven demand. While some experts question this figure, the message is clear: We must rapidly expand power production. But where will this energy come from?

As much as eco nuts would love to power the world with sunshine and rainbows, we need a much more reliable and significantly more efficient power source if we want to meet our electricity goals. Nuclear power—efficient, powerful, and clean—is the answer. It’s time to shed outdated fears of atomic energy and embrace the superior electricity source. Building and maintaining new nuclear plants, along with upgraded infrastructure, would create thousands of high-paying American jobs. Nuclear energy will fuel AI, boost the economy, and modernize America’s decaying infrastructure.

A Bold Step into the Future

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This is President Trump’s chance to leave a historic mark on America, restoring our role as global leaders and innovators. Just as FDR’s power grid and plants made America the dominant force of the 20th century, Trump could upgrade our infrastructure to secure dominance in the 21st century. Visionary leadership must cut red tape and spark excitement in the industry. This is how Trump can make America great again.

POLL: Is K2-18b proof of alien LIFE in the cosmos?

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Are we alone in the universe?

It's no secret that Glenn keeps one eye on the cosmos, searching for any signs of ET. Late last week, a team of astronomers at the University of Cambridge made an exciting discovery that could change how we view the universe. The astronomers were monitoring a distant planet, K2-18b, when the James Webb Space Telescope detected dimethyl sulfide and dimethyl disulfide, two atmospheric gases believed only to be generated by living organisms. The planet, which is just over two and a half times larger than Earth, orbits within the "habitable zone" of its star, meaning the presence of liquid water on its surface is possible, further supporting the possibility that life exists on this distant world.

Unfortunately, humans won't be able to visit K2-18b to see for ourselves anytime soon, as the planet is about 124 light-years from Earth. This means that even if we had rockets that could travel at the speed of light, it would still take 124 years to reach the potentially verdant planet. Even if humans made the long trek to K2-18b, they would be faced with an even more intense challenge upon arrival: Gravity. Assuming K2-18b has a similar density to Earth, its increased size would also mean it would have increased gravity, two and a half times as much gravity, to be exact. This would make it very difficult, if not impossible, for humans to live or explore the surface without serious technological support. But who knows, give Elon Musk and SpaceX a few years, and we might be ready to seek out new life (and maybe even new civilizations).

But Glenn wants to know what you think. Could K2-18b harbor life on its distant surface? Could alien astronomers be peering back at us from across the cosmos? Would you be willing to boldly go where no man has gone before? Let us know in the poll below:

Could there be life on K2-18b?

Could there be an alien civilization thriving on K2-18b?

Will humans develop the technology to one day explore distant worlds?

Would you sign up for a trip to an alien world?

Is K2-18b just another cold rock in space?

Big Pharma’s role in rising neurological disorders: Will RFK Jr. uncover the truth?

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Our children are sick, and Big Pharma claims to be the cure, but is RFK Jr. closer to proving they are the disease?

For years, neurological disorders in our children have been on the rise. One in nine children in the U.S. has been diagnosed with ADHD, and between 2016 and 2022, more than one million kids were told they suffer from the disorder. Similarly, autism diagnoses have increased by 175 percent over the past decade. RFK Jr. pledged to investigate the rising rates of neurological disorders as Secretary of Health and Human Services, and this week, he announced a major initiative.

Earlier this week, RFK Jr. announced that the HHS has embarked on a massive testing and research effort to uncover the root causes of autism and the sharp spike in recent diagnoses. The HHS Secretary vowed that the results will be available by September of this year, leaving many skeptical about the study's rigor. Conversely, some speculate that the HHS may have unpublished studies revealing critical insights into these disorders, just waiting to see the light of day.

Glenn brought up a recent article by the Daily Wire referencing a New York Times piece in which experts questioned the legitimacy of ADHD diagnoses. Glenn agreed and suggested that people are just wired differently; they learn, work, and study differently, and the cookie-cutter, one-size-fits-all school system simply fails to accommodate everyone.

New York Times' ADHD Admission

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Earlier this week, the New York Times published an article that made a shocking admission: there are no concrete biological markers for ADHD. The clinical definition of ADHD is no longer supported by the evidence, and there are no physical, genetic, or chemical identifiers for the disorder, nor is there any real way to test for it. The paper also admitted that people diagnosed with ADHD would suddenly find that they no longer had any symptoms after a change of environment, profession, or field of study. This suggests that "ADHD" might simply be a matter of interests and skills, not a chronic brain sickness.

The most horrifying implication of this admission is that millions of people, including children, have been prescribed heavy mind-altering drugs for years for a disorder that lacks real evidence of its very existence. These drugs are serious business and include products such as Adderall, Ritalin, and Desoxyn. All of these drugs are considered "Schedule II," which is a drug classification that puts them on the same level as cocaine, PCP, and fentanyl. Notably, Desoxyn is chemically identical to methamphetamine, differing only in its production in regulated laboratories rather than illegal settings.

Worse yet, studies show that these medications, like Desoxyn, often provide no long-term benefits. Testing demonstrated that in the short term, there were some positive effects, but after 36 months, there was no discernible difference in symptoms between people who were medicated and those who were not. For decades, we have been giving our children hardcore drugs with no evidence of them working or even that the disorder exists.

RFK Jr's Autism Study

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Autism rates are on the rise, and RFK Jr. is going to get to the bottom of it. In the year 2000, approximately one in 150 children was diagnosed with autism, but only 20 years later, the rate had increased to one in 36. While some claim that this is simply due to more accurate testing, RFK Jr. doesn't buy it and is determined to discover what is the underlying cause. He is an outspoken critic of vaccines, asserting that the true scope of their side effects has been buried by greed and corruption to sell more vaccines.

RFK Jr. doesn't plan on stopping at vaccines. Similar to ADHD, RFK Jr. suspects other environmental factors could increase of autism or exacerbate symptoms. Factors like diet, water quality, air pollution, and parenting approaches are all under investigation. It's time to bring clarity to the neurological disorders that plague our nation, cut through the corruption, and reveal the healing truth.

Neurological Intervention

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Big Pharma has been all too happy to sit back and watch as the rate of neurological disorders climbs, adding to the ever-growing list of permanent patients who are led to believe that their only choice is to shell out endless money for treatments, prescriptions, and doctor visits. Rather than encouraging lifestyle changes to improve our well-being, they push ongoing medication and costly treatments.

All RFK Jr. is doing is asking questions, and yet the backlash from the "experts" is so immense that one can't help but wonder what they could be hiding. Both Glenn and RFK Jr. have their suspicions of Big Pharma, and the upcoming HHS study might be one of the most important steps to making America healthy again.

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