Loading ...“GAN” (“generally accepted narrative”)
“Son, firstly, the global central banks are NOT going to normalize their balance sheets because they know that to do so would mean sharply higher interest rates and the bubbles they have created since 1980 would all simultaneously POP and, secondly, to “normalize” their balance sheet means SELLING ALL OF THE SECURITIES THEY BOUGHT BETWEEN 2009 and TODAY and that is impossible for one reason – THERE IS NO ONE TO SELL THEM TO.”
The problem with making investment decisions using the GAN as gospel is that unless it fits within your pre-ordained investment thesis, you are anchored in a trap of misinformation and faulty assumptions. To wit, the Western investment community has now gotten to the stage where gold and silver have been completely invalidated as safe haven asset classes having been replaced by stocks and ETF’s and more recently, cryptocurrencies like Bitcoin. Through intervention and message management by way of a conflicted financial media and compromised regulatory regimes, gold and silver in the minds and actions of today’s Millennial money managers are no longer seen as legitimate stores of value because the GAN has enforced that message. However, just as the world is not going to “end” as the result of a thermonuclear war, gold and silver are not going to “end” as a result of a historically-short period of dislocation of their roles as stores of value. Determining the series of events that will inevitably and conclusively reassert the safe haven status of our global society’s only true form of real money remains illusive but the certainty of outcome is, at least for me, not up for debate.
So when I listen to all of these young snapperheads on CNBC Power Lunch or Fast Break discussing Facebook or Tesla or Amazon and have targets set for the S&P 10, 15, 35 percent higher than today’s levels with nary a mention of gold and silver as alternative portfolio options, I am reminded of the days of October 16-28, 1962 and all I can do is think to myself how the GAN back then was so completely wrong both by way of the logic of building bomb shelters and in the logic of assuming one would want to actually live in a post-nuclear-war world. Analogously, to assume that the global central banks are going to “normalize” is a faulty assumption; to assume that stocks will climb “forever” because the central banks “have our backs” is too a faulty assumption; and to assume that gold and silver will never again assume their 5,000-year roles as “real money” is the most-faulty of all GAN-led assumptions.