- You can’t control the Bilderbergers…
- … but you can control how you respond to their acts
- The war on cash: One rule for the elites, another for you and me
- Can a state trooper clean out your bank account remotely?
- Why the next Fed rate increase won’t mean a hill of beans
- Bad bank or bad banker? How about both?
The Bilderberg meeting is underway. We think it’s a fine day to invoke the serenity prayer…
God, grant me the serenity to accept the things I cannot change,
Courage to change the things I can
And wisdom to know the difference.
[Even the militant atheist Ayn Rand expressed broad agreed with this sentiment, authored by the American theologian Reinhold Niebuhr.]
The global elites are gathered in Dresden, Germany, from now through Sunday. And terabytes of Internet bandwidth are being wasted with speculation about who’s there and what they’re up to. Are they scheming against the “Brexit”? Maneuvering against Donald Trump?
All we know for sure is that even the most subtle hints of dissent by protesters are being suppressed…
We won’t waste any of your 5 Mins. today on baseless speculation. It won’t do anything to make you wealthier or freer or happier. Bilderberg is truly one of those “things I cannot change.”
So what can you change? You can take preventive measures in light of something we already know is on the elites’ long-term agenda — the war on cash. We know it’s on their agenda because elites like Larry Summers, Harvard economist Ken Rogoff and Citigroup economist Willem Buiter talk about it openly.
Today, we take note of two new developments…
First, you need to know that in the war on cash, the elites apply the rules of engagement differently to themselves than they do to you and me.
From the Financial Times: “Commerzbank is considering storing excess deposits as cash in vaults rather than with the European Central Bank, in the latest sign of the strains that negative interest rates are putting on Europe’s financial system.”
Time was that big banks kept money on deposit with a central bank and collected interest. But with negative interest rates infesting both Europe and Japan, that’s all changed. European banks now pay 0.4% a year for money kept on deposit at the European Central Bank. So Commerzbank — Germany’s second largest — might opt to keep cash in a vault.
Rest assured that in a full-on crackdown on cash, you won’t be allowed that option. You’ll have to keep, say, $10,000 in an account and lump it when the balance is reduced to $9,800 a year later.
Second, you need to know that even an ATM card might be a dangerous thing to hold as the war on cash ramps up.
As we mention now and then, police often seize large sums of cash from cars during “routine” traffic stops. Under the practice of “civil asset forfeiture,” cops can keep this money for themselves while never charging you with a crime; it’s the cash that’s deemed guilty of drug activity or whatever.
Last October, we told you how these seizures have been expanded to prepaid debit cards. Homeland Security has been handing out special card readers to police departments. Officers can look at the balance on a prepaid debit card and seize the funds.
This week, the CBS affiliate in Oklahoma City did a story about the Oklahoma Highway Patrol’s use of these card readers. Mentioned casually in the story is that the device “allows them to seize money in your bank account or on prepaid cards.”
Your bank account?
Never mind what we already know about prepaid debit cards. “The even scarier question here,” says The Washington Post’s Radley Balko, “is whether this technology can also seize money in accounts that are tied to check cards or secured credit cards.”
Bonus points: The contractor selling the card readers — ERAD Group Inc. — collects 7.7% of all cash the Highway Patrol seizes. Perverse incentives, anyone?
So… what’s still within your control? Where can you summon “courage to change the things I can”?
If you’ve been reading us anytime this year, you know Jim Rickards says gold is the ultimate defensive weapon in the war on cash.
“The war on cash is mostly over, and the government won,” Jim writes in his latest book, The New Case for Gold. “But it’s not too late to get some gold, which maintains its worth as a physical store of wealth and is not affected by the digitization of other forms of money.”
Jim says there’s not enough gold in the hands of everyday people to justify government confiscation. A windfall profits tax, you ask? Even in an “economic emergency,” it couldn’t be imposed by executive order. “Such a tax requires legislation, and the legislative process is slow. Gold holders would know in advance and have time to prepare.”
That’s the good news. Here’s the bad: In the event of a super-spike in the gold price, many gold holders still won’t come out ahead.
That’s the takeaway from a series of conversations Jim’s been having with a highly connected figure in the gold world — someone who controls tens of millions of dollars worth of physical gold.
This individual anticipates an event — soon — that could send gold shooting up past $2,000… $3,000… even $5,000. But it will happen in a way that gold ownership won’t guarantee you a profit.
“In fact,” says Jim, “this gold mania will actually kill many gold owners’ retirements — making them much, much poorer.”
But here too, there are matters within your control.
Although this individual places high value on his privacy — Jim only calls him “Goldfinger,” even to us — Jim has convinced him to take part in a live online briefing from Zurich, Switzerland, next Tuesday, June 14, at 7:00 p.m. EDT.
You can look in on this briefing free. But we have only a limited number of spots available. Click here to grab one while you still can.
Aw, gee — new record highs will have to wait another day.
As we write, the major U.S. stock indexes are in retreat. The S&P 500 has shed nearly 10 points, to 2,109. The record high is 2,131, set on May 21 last year.
There’s no market-moving news to speak of… although the stocks-oil sympathy trade that’s been in play so often this year is in play again today; crude is off 1% at last check, to $50.71.
Gold, meanwhile, keeps on climbing. At last check, it’s up seven bucks, to $1,270 — a three-week high.
Whenever the Fed raises rates next, it won’t offer any relief to long-suffering American savers.
As Jim Rickards explained here yesterday, the next increase likely won’t come until December now. And when it happens, you won’t notice much difference in a savings account.
“The Fed has kept rates at such an unnaturally low level — for so many years — that even a few rate hikes aren’t going to do much at all for savers,” says our income specialist Zach Scheidt.
“Rates are so low that even if the Fed adds a few basis points to its target interest rate, that increase isn’t going to affect savers. As you can see, returns on a short-term CD now sit below an annual yield of 0.2%, and this is AFTER the Fed hiked rates in December.”
Zach snagged the following chart from Bankrate.com and The Daily Shot. “Please note,” he adds, “this chart goes all the way back to 2011:
“It will literally take years of Fed rate hikes,” says Zach, “for interest rates to reach a level where it would make sense to park some capital in a bank savings account or CD. So please don’t count on the Fed to bail you out. A few paltry 0.25% rate hikes won’t do anything for you.”
Getting back to the serenity prayer, you can’t do anything about the Fed’s nonsensical policies… but you can take steps to generate steady investment income anyway. Zach shares his favorite strategy here.
If going rogue and losing $7 billion isn’t “real or serious cause” for firing… we wonder what is.
Here’s a 5 flashback to Jan. 24, 2008: “French bank Société Générale sheepishly announced this morning that one trader has lost the bank $7 billion over the past year,” wrote our fearless leader Addison Wiggin.
“Thirty-one-year-old Jérôme Kerviel somehow bypassed the bank’s risk management division, fooled his investors and placed what the bank called huge long positions in ‘plain vanilla futures hedging on European equity market indexes.’”
It was enough to nearly bring down the bank during the Panic of 2008.
Two days ago, a French labor court awarded Kerviel $511,000 because he was fired without “real or serious cause.”
On the surface, that sounds ridiculous. But peering into the ruling, we see the judges point out the bank “previously tolerated similar practices.” In other words, Kerviel was a fall guy. Naturally SocGen issued an outraged statement promising an appeal.
Kerviel’s windfall might not last long. Next week, he goes to court in a civil case that will decide how much he owes the bank to make up for those losses.
“I have come to believe that nothing that the U.S. government or the Fed says is truthful,” writes an Australian reader.
“The Fed said that they raised rates last December. Where is the evidence that they ACTUALLY did? Look at the bond market. Interest rates have moved lower, not higher. There is no evidence that the December rate hike ACTUALLY happened.
[Indeed. See above…]
“The entire U.S. stock market bubble is an illusion built on lies —companies taking on debt to buy back their own shares, not to put into growth.
“The Fed’s only real concern is looking after the banks, as the Fed is owned by private bankers.
The big four ‘too big to fail’ banks have exposure to derivatives worth $5–7 trillion each. The Fed’s only concern is to keep the illusion alive that the U.S. economy is thriving. We are at the mercy of the banking elite.”
The 5: You too might benefit from the serenity prayer. Politicians and central bankers will do what they do… but you still have a choice in how you respond. Gold? Stalwart dividend-paying stocks? We like ’em both…
“Your item about Hugh Hefner’s deal for selling the Playboy Mansion reminded me of a similar deal that did not work out very well for the buyer,” writes a reader relating the story of Jeanne Calment, the French woman who died in 1997 at age 122. Perhaps other people lived longer, but there’s no documentation to back it up.
From her Wikipedia entry: “In 1965, at age 90 and with no heirs, Calment signed a deal to sell her apartment to lawyer André-François Raffray, on a contingency contract. Raffray, then aged 47 years, agreed to pay her a monthly sum of 2,500 francs (€381.12) until she died. Raffray ended up paying Calment the equivalent of more than €140,000, which was more than double the apartment’s value. After Raffray’s death from cancer at the age of 77, in 1995, his widow continued the payments until Calment’s death. During all these years, Calment used to say to them that she ‘competed with Methuselah.’”
Back to our reader: “I wonder if it only worked out that way because she sold it to a lawyer (so she could screw a lawyer simply by refusing to die).”
The 5: Interesting. In the case of the Playboy Mansion, the buyer is 32, so it appears the odds are on his side. And our understanding is the buyer will be the one collecting the checks in the meantime…
“Thanks for answering the question that I had in my mind but never got around to asking,” writes a reader after we mentioned the “length of The 5” topic seems to pop up in the mailbag every six months or so.
“The question is how long should one read The 5 Min. Forecast to develop a perceptible increase in one’s analytical skills?
“No wonder people find they are spending more time reading The 5 every six months. I guess those are the more honest guys who accept that they spend increasingly more time reading 5 Min.”
The 5: Read The 5, improve your reading comprehension? We had no idea our little daily infotainment missive could be an exercise in self-improvement…
The 5 Min. Forecast
P.S. We’re running out of opportunities to remind you: Mark your calendar for next Monday.
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Your best shot at max gains is if you get in before next Monday, June 13. Click here for the full story before it’s too late.