Encouraging Angels: Ever-‘Not So’-Grande – The Lehman Brothers of the East Echoes 2008 While the US Feigns Prosperity As Its World Hegemony Collapses-You Must Be In Tangibles

Originally appears on Encouraging Angels. -NCS

Over 20 years ago, before my daughter began to show the effects of a catastrophic childhood disease, I was a Board Certified Financial Planner with Morgan Stanley. I helped people construct a balanced portfolio that could hopefully take them through the thick and thin of life and what the markets would throw at us. At the time that I had a ‘mutually agreed upon termination’ as my wife and I choose taking care of my daughter over my career in early 2004, I had -no- negative letters in my file against me. I had done a very good job in guiding my clients the right way.

In retrospect, it is very interesting that I probably learned as much or more about what it would take to survive what is coming -after- separating my employ to care for my daughter. For instance, I learned why Wall Street did not want its representatives (and at that time did not allow) to sell physical precious metals. It is because the US Dollar is the currency of Wall Street-not Gold or Silver as is portrayed as ‘real’ money in our constitution. Wall Street couldn’t let dollars purchase physical representations of people’s wealth like a Gold or Silver Coin. Oh no. Only a derivative of the physical representation would do as Wall Street could use the ‘paper’ Precious Metals market (derivatives funded by the assets of their customers) to control the realm of the physical asserted through the spot price of the metal. Only after I read the book, Patriots by James Wesley Rawles were my eyes opened as to the importance of tangibles in the life of someone who wanted to survive the economic and physical collapse of a nation.

At this point, everyone remembers just how close the world came to collapse during the financial collapse of 2008. The bankruptcy of Lehman Brothers was the fiscal blood sacrifice to appease the monetary titans of New York Banking and Brokerage. The other sacrifice, of course, was the asset values of the portfolios of most Americans. Some never recovered from that ‘Lehman moment’.

In 2021, we have the potential appearance of another ‘Lehman’ moment. Except it is not New York this time, but China. It is a company called Evergrande. According to Jim Clare at Reuters as published at nasdaq.com: ‘Evergrande, whose debt has swelled to 1.95 trillion yuan ($301 billion), more than the gross domestic product (GDP) of Finland, is also set to accelerate asset sales to raise cash, company sources and analysts said.’…’industry watchers say clear signs are now emerging that authorities at various levels are stepping in to avoid a hard landing for China Evergrande Group 3333.HK, amid worries about the “social impact” of a possible collapse that could cascade through the country’s financial system.’…

Lehman’s tentacles were deep into the real estate and financial system when it fell. According to ‘Lehman proposes converting Archstone debt to equity’ …’Lehman Brothers asked a U.S. bankruptcy court to approve restructuring the debt of real estate investment trust Archstone-Smith Trust so it can stabilize the REIT’s balance sheet’… and therein would have helped to stabilize Lehman’s own position (Lehman owned 47 percent of Archstone). Things didn’t turn out so well for Lehman.

According to Forbes …’If not its beating heart, China Evergrande Group, with its countless development subsidiaries, is at least the distended central vein of the Chinese financial system. A voluminous channel through which flows so much of the capital with which the central government force-feeds the economy, the heavily indebted group is now seeing its shares slide and its assets frozen by regulators.’…

Did you catch the phrase: ‘countless development subsidiaries’? Kind of like Lehman’s ‘Archstone-Smith Trust’ but more profuse. More like contagion. More like legion.

In 2008 Hank Paulson asked Congress for a 700 billion dollar bailout that in reality turned into at least 9 trillion. There is only a fuzzy picture of the true magnitude of the actual problem in China. Even if they bailout Evergrande how much will the Central Bank there have to pour into the rest of the players in the system to keep it solvent? -If- it can keep the financial system solvent. What impact will that have in the US and more importantly what impact will it have on your money?

The US Stock market is just a few percent off of its all time high. The bond market is basically at a 300 year high (‘Bonds Look Dangerous At 300 Year High, Charteris Says’ www.bloomberg.com January 7, 2015). The historical modes of stock and bond valuation no longer apply. Price/Earnings ratios, EPS and duration have no meaning when the only thing that matters in keeping the market levitated is whether the Central Bank is printing this week or not. In fact, a time is soon coming that no matter how much they print they will not get the effect that they desire.

Smart people have gotten the message. El Salvador this week just made Bitcoin legal tender. If the dollar could be depended on it would have been depended on.

Supplies of Gold and Silver are tight getting tighter. Gold and Silver have been money for 5,000 years. John Maynard Keynes may have said that the gold standard was a ‘barbarous relic’; but other nations have been buying Gold because ‘they can read the writing on the wall’.

And the United States feigns prosperity by spending money that it doesn’t have in a 3.5 trillion dollar infrastructure bill while at the same time the same government runs out of money in October without more heinous money printing. By the way, the -only- way that the fiat money system works is that it started printing money out of thin air at the beginning. Please watch Mike Maloney’s ‘The Hidden Secrets of Money’ series on YouTube. You will receive an education.

The recent news of the horribly handled exit from Afghanistan shows the lack of skills that Uncle Sam has when it comes to being fiscally responsible as they just leave 85 billion dollars of us taxpayer funded weapons with the enemy they fought for 20 years.

So what can you do? The asset class that Walk Street does not profit on directly is tangibles (actual physical assets). You will do well to have what you can touch. Canned goods. Grains. Water. Gas/solar generator. Shelter. Security.

Fiscally, get physical gold and silver if you have the aforementioned tangibles. If the US dollar becomes worth less before it becomes worthless, perhaps you might consider converting some portion of your ‘fiat’ assets to a -physical- form of gold and silver (this is not financial advice-please consult your financial advisor). The US dollar devalued during the Great Depression. It devalued when it took silver out of the coin money after 1964. It devalued when the US went off of the gold standard. Gold and Silver have advanced in value during all these devaluations over the long term and has never been worth zero. Gold and Silver fluctuate and may be worth more or less than you purchased it for when you sell.

I am more concerned about the return of my money than the return on my money,” said Mark Twain. The statement you get from an investment house are just numbers on a page until you convert them into something else. You can’t eat them, or heat with them or satisfy your thirst with them. Tangibles fill that role. God knows that there is less and less tangibles available every day now. Physical Gold and Silver, in your possession , are the statement that lets you never worry about the return of your money-it’s right there in your hand.

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Stan Szymanski (or Encouraging Angels) is not a medical doctor. This is not medical advice. In all matters pertaining to the health and care of a human being consult a medical doctor. This is not legal, financial or personal advice. Consult appropriate professionals in those fields for that type of advice.

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About the Author: NC Scout

NC Scout is the nom de guerre of a former Infantry Scout and Sergeant in one of the Army’s best Reconnaissance Units. He has combat tours in both Iraq and Afghanistan. He teaches a series of courses focusing on small unit skills rarely if ever taught anywhere else in the prepping and survival field, including his RTO Course which focuses on small unit communications. In his free time he is an avid hunter, bushcrafter, writer, long range shooter, prepper, amateur radio operator and Libertarian activist. He can be contacted at [email protected] or via his blog at brushbeater.wordpress.com .

5 Comments

  1. Robert Orians September 10, 2021 at 05:57

    The big one is coming soon . You can feel it . 1929 was a cakewalk in comparison to the coming ” great reset ” as the modern banksters have termed it . Introducing the anti-Christ system hiding behind the curtains . After my morning devotions I was given this scripture and a warning of the coming “evening wolves ” . After suffering hunger all day long the evening wolf is fiercer in his habits . It seems like the evening wolves have taken Afghanistan. Lord help those we left behind to the evening wolves .Are we next . Do the wolves wear a bankers suit ?
    Habakkuk 1:13
    You who are of purer eyes than to see evil
    and cannot look at wrong,
    why do you idly look at traitors
    and remain silent when the wicked swallows up
    the man more righteous than he?

  2. boss21 September 10, 2021 at 10:15

    Good article. I have two friends who sold property at high profit last year. Still have converted nothing to metal or crypto.

  3. Rooster September 10, 2021 at 11:21

    Before Lehman was sacrificed, Bears Sterns had 2 funds collapse the summer before…..they were short funds if I recall and named after the “greeks”(Alpha or Beta or close) and those were the canaries in the cold mine. Similar failures will come around this time as well….the Chink House may be that canary. Nobody really knows except those that will fire the kill shots.
    As my mentor taught me, you dont trade the market you want, you trade the market you have.
    The Greatest Trade Ever by Zuckerman will give you some idea of what this looks like.
    R

  4. Ralph k September 10, 2021 at 14:17

    I would like to add a few remarks/observations. Despite the inevitable fall of the USD, it will be around for a while yet and folks should keep some cash on hand (cash is king), outside the banking system. It will still work for a while. Do not put it in a safety deposit box, for one, if calamity strikes, banks will be closed, two, you are technically not allowed to store federal reserve notes in the box, three, if and when the bank opens, if you go to the bank to get your goods, edicts in the past from the govt stipulated an employee had to be present when you opened it, and had legal authority to confiscate illegal items (it was gold at one time). Also always remember that once you deposit money in the bank, you are just a creditor, and not very high on the chain of people who get first dibs if there is a failure. Tangibles are good, diversity also is good (not talking the woke kind here) cash, stocks, real estate, bonds, and cryptos. Some say our stock markets are extremely over extended, while true, and it will probably correct some but will continue to go up for the big money in Europe is sending capital here because they don’t trust their own financial system. Thats one of the reasons the overnight lending rate among banks is so low, everyone is parking their cash at the federal reserve because they don’t trust one another. The other day, the deposits linked to overnight lending, had over a trillion dollars, a new record, probably because of the China issue. Look at the current negative interest rates in Europe (since 2014), they have destroyed their bond market completely and in doing so destroyed pension funds, insurance funds and so on, which usually require a return ~7% per annum to fulfill their obligations, and as the IMF and other central banks have stipulated that by law, the govt pension funds must put a large portion into….guess..govt bonds, which pay negative interest. They are running out of money for their obligations, hence the need for an all digital money system so they can control it all, debit your account whenever, without depositors having any recourse in the matter. And as much as I like the idea of cryptos, do not ever forget that governments do not like competition, they will create their own and yours will be illegal, plus you require a functioning internet and electrical grid for them to function. Precious metals are nice but hardly anyone under 40 has even seen silver or gold coins except in a movie. Long term they will be fine, but not initially except to the few that recognize their value. PM’s shine when the confidence in govt fails. Fungible items such as ammo, cans of food will serve as money also, just like cigarettes in prison. Oh, btw, Lehman Brothers was sacrificed because when Long Term Capital Management went under, a consortium of the largest financial institutions in the US agreed to collectively lend them money, but Lehman declined. That was not forgotten nor forgiven, and when they had troubles, blood in the water, no one gave a rats ass about them. A good read on that is “When Genius Failed”. The two people that put LTCM together were Nobel prize winners in economics. Even eggheads screw up especially when massive leverage is in operation and the unexpected happens. Enough of my musings.

  5. Anonymous September 11, 2021 at 10:19

    5

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