Renaissancemen.org

The setup….

If you look at the daily highs on the stock markets, you’d think all is peachy in the world. Well, in reality, if you think about who owns a vast majority of these stocks, you are making stupid rich people more stupid rich by the day.

My former IRS agent buddy is convinced all is well. He goes to his local malls outside of DC, and he sees one new expensive car after another spending ridiculous sums of money on things they don’t need, and that is the litmus test he has. Well, I didn’t grow up with money, and I know what poor looks like. Try any mall outside of major cities and you see things like this…

This is my local mall. All of those anchor stores closed. One was turned into a casino, another into a local gym that has since gone out of business due to COVID restrictions. The foot traffic there is scarce, at best. THIS is America’s malls, not what you see outside of DC.

In fact, 4 of the top 6 richest counties in this country are all bordering DC.

What that tells me is there’s a lotttttttttttttttttt of money sloshing around DC. Not that the country is healthy.

If you look at where most of the other wealth is, it’s located in NYC and the surrounding areas where fund managers can make tens of millions a year. This sloshing of money then trickles down to local businessmen. On Long Island, for example, you either work for the local government or have a landscaping or pool cleaning company. Or have 15 side gigs just to pay your taxes.

There’s also a lot of wealth in California with the movie stars. Think about how all of these people worth hundreds of millions of dollars then tend to lecture you on how you should vote.

I set this stage because my country is hanging on by a thread, and most are completely oblivious to it. They watch their football or baseball on TV, get dazzled by movies, or occasionally go see a concert.

Mike Maloney might call all of that Bread and Circus. And, I think he’d be right.

Hanging on by a thread….

What I mentioned above is more true than any of you foreigners who read my stuff can comprehend. I follow Marin Katusa at times, and he talks about how the dollar is in demand all over the world. He has no idea of the real crud we exist in. The fractionalization of our families. The power-grabbing politics which are worse than I’ve seen than in 45 years on this earth.

I wrote a piece where I essentially stated that over the last 40 years, higher than reported inflation has happened. I felt we have been misled. With this inflation being hidden, THIS is the root cause of all of the problems I mention above. I showed in that document that over the course of 40 years, you whittled away the middle class. Costs of everything accelerated far higher than wages. This then leads constantly to the minimum wage arguments. I’d contend raising minimum wage simply leads to robots taking your jobs as well as continued price inflation. I have posted this a few times, but today, it is how we fix this country. Those actually asking for $15 per hour are not even in the ballpark….

Because of what we are now seeing every day with Bread and Circus, we are all seeing….

• CEOs making billions
• Sports stars raking in hundreds of millions in a contract
• Singers worth a billion dollars
• Actors who make $20-40 million a film, and many are worth well over $100m.

Our culture in this country is based on capitalism. Free markets (I’ll save this for later). Point is, with capitalism, if you don’t grow, you die. Most don’t realize this concept.

Think about it. You make a lemonade stand that rakes in money. Other kids on your block launch lemonade stands. The market becomes saturated. In order to continue to make money in this system, you need to:

1. Be more efficient than your competitors – lower production costs
2. Expand your business to capture new markets – open up a stand on the next block over

Those two items above have hit Americans right where it hurts over the last 40 years. To lower production costs, many companies outsourced a lot of their supply chains and productions to other countries. Our local unions were crushing us, and to compete on the global stage, we needed to reduce production costs. At the same time, we needed to expand sales to other countries. Penetrate new markets – like the middle east.

In my MBA studies, I read a book 20 years ago called the “McDonaldization of Society”. I recall one thing from that book clearly – “we have never bombed a country with a McDonald’s in it”. The point is, we penetrate these markets, expand western companies, then ensure our military can protect them from being nationalized or run out of the country.

These two elements have led to a depleted manufacturing class as well as massive military budgets to ensure we can sell Levis to the remote corners of the world. I get it. You spend a lot of money on military, and you actually do get an ROI with tax revenues from these American companies.

Until they decide to then move from the US. Then what do you have? An exported American company that doesn’t really pay you taxes. 90% of the company’s employees no longer work in the US. And now, you have a company that moved to the Virgin Islands and we are using our military to ensure their overseas endeavors make 200-400 billionaires in this world more super rich.

Our experiment is failing.

I believe all of this stems from how we fibbed about the inflation rates. You see, if you artificially juke inflation lower, what happens is this:

1. Your currency is stronger
2. Your debt rates are lower – meaning you can expand and borrow super cheap capital to lever up your returns

Now, when you have a super strong currency, it sounds tremendous, but what that REALLY means is you can buy a lot more foreign goods with your currency. Meaning, labor in other countries is much cheaper. This outsources all of your production capabilities.

In REALITY, our inflation was much higher than reported. Shadowstats uses the government’s own CPI numbers and their formulas to show this. Most of you reading, get this. But if inflation HAD been reported higher, a few things would have happened:

1. Less borrowing would have occurred. This means lower national debt.
2. Less expansion of industries. Less military expenditures thus needed to support those regions
3. Less loss of good American jobs, and less poverty.
4. Higher savings rates.

When you are pasted pictures of how these celebrities live, we are encouraged to borrow more rather than save more.

My country now is fractured, perhaps beyond repair.

The macro picture to look at…

I wrote a piece last May or so where I thought S was about to HTF. Big picture was I saw some major issues

1. No one is coming into the office. Telework is now here to stay, and vacancy rates for office space will go insane.
2. With many people not able to work in the service industry, many will be evicted
3. Many small businesses have been forced to close, perhaps forever. Many will lose their homes.

What my conclusions here were damning for the real estate industry.

• Office space vacancies would create massive gluts in supply and drive prices down. These are held by commercial entities that may have mortgages on these and cannot go below a certain amount. many commercial entities may go bankrupt.
• Landlords who own these houses have mortgages they pay for these houses. If no one has jobs and can afford rent, there will be a massive glut of available places to rent at a price no one can afford. Landlords could lose their houses.
• Small business owners who own restaurants, tire shops, candle shops – and own homes – will lose their mortgages and there will be a massive amount of homes then coming on to the market. This will drive home prices down and many will have to be short sales where the bank will lose their asses.

The above was a massive real estate deflation I predicted last May. I was very wrong. Why? MASSIVE money printing and rules came about where you could not evict people or foreclose. I believe these laws/rules all expired TODAY.

Meaning, I was perhaps correct, but shifted to the right with massive government intervention with trillions. What happened was prices instead skyrocketed. All of this money hit the market and people were fighting to get out of cash into overpaying for houses, by a lot. My brother sold his house in the middle of it – with a bidding war – and the top bidder could not get a mortgage for it because the banks essentially stated he offered too much. So my brother took the next best offer, a cash offer.

Renters happened to also get extra money with unemployment. Paying them, essentially, not to work. The equivalent rate for this was like $17 per hour to sit on their asses. Meanwhile, 9 million jobs were open. The thought was, if you want these people badly enough, pay them more than what they are making to sit at home. A socialist’s wet dream, actually.

That extended unemployment ends TODAY.

The most recent jobs numbers missed by a ton. But the truth is this….with 9 million jobs open and millions now getting off of the teat of extra unemployment, you naturally would think many of them would go back to work.

Instead of them being flush with $17 per hour and not allowed to be evicted, many of them may now be competing for jobs at $12 per hour, facing owing their landlords thousands, eviction notices, and life is about to change. For the worse.

While many of these people may now land jobs, they may be having 5-50% less income than before. While many may now be evicted, thus glut of housing will then sort of be a reset for landlords. The best places to live will fetch the most. Remember all of those vacant office spaces in the big cities? Well, if you can rent in the suburbs and work remotely for half the cost, why would I pay your high city rents?

Meaning – I think we will see massive problems in cities, where suburban home rentals may catch a strong bid.

Meanwhile, with the delta variant and mu variant and any other variants, there’s now a war at play to try and get people back in the office. This battle now is about getting a vax or not, and I don’t want to get into that here – but Gerald Celente talks about the massive vacancy rates for office space in NYC and states they aren’t coming back. My HR guy is telling me every person he’s talking to is asking about telework.

I believe for most traditional jobs, telework is here to stay. This macro event MUST be digested. WTF do you care if Bob has a vax if he’s been teleworking for the last 18 months, led your office in productivity, and never physically interacts with your staff? Why would you then try and force something on Bob that may have him looking for another job? While this political football is in play, you now have to understand your company of 100,000 just reduced their office footprint by 80%.

What happens with all of these office space vacancies?

What happens to all of the retail space in these malls that will never come back? Washington Prime Group was a prime example of this, as they filed for bankruptcy. I made a pile of money off of them right before this, but the point is they had all of these mall spaces worldwide and no one is coming back to malls.

My contention is this is one of the catalysts for a great deflation that is coming with the real estate sector. One of my couple friends that own a lot of units sold a bunch last summer and are touring the country with an RV. Sold their house, too. I can tell you there may be a LOT of people that are cashed up, and when this deflationary event cascades over the next few months, really keep an eye on the large commercial real estate firms who are about to lose their asses – look at the banks and who lent to them, as they are about to lose their asses….then look at Black Rock who is borrowing money from the Fed at .8% to buy up all of this.

I’ll tell you what. Get me an ETF in 6 months that is buying up all of this shit and I’m in.

While this deflation is happening, you will start to see a lot of supply coming to the market now. Retail, commercial, and homes/apartments about to hit the markets. I think we are 3-5 months out from a massive, massive, massive supply glut.

Meanwhile – keep your eyes on the Chinese stock markets and Evergrande. I don’t know much about this company other than they have debt at $305 BILLION that lenders are demanding immediate payment from. Liquidation is commencing. Their bonds are worth pennies on the dollar. In the last several months, you have had a lot of prominent TV people talking about investing in China. Then, Jack Ma disappears. Crackdowns on rich people there to consolidate power. Now, you have a MASSIVE company that is looking to default. Think about all of the companies that may have billions in this. All of the Hedge Funds around the world.

And this is the START of the real estate issue here. Think about how many firms have properties that are about to lose 1/4 to 1/2 their value over the next 6 months? I see a lot of bond liquidation. Lots of people are apparently in junk bonds to get some sort of yield – and JUNK BONDS PAY LESS YIELD THAN THE RATE OF INFLATION.

Energy

We consistently hear talk in this country of a green future, but the rest of the world seems to not give a shit at the moment. Saudis and Russians making deals. Germans de-nuking their power plants. Companies now paying in Yuan and Rubles for gasoline rather than dollars. Countries reducing their foreign reserves in USD as they are increasing their gold.

While Steve St. Angelo continues to scream about an energy cliff that may or may not hit, you also have the US discontinuing a pipeline that was almost done and freezing out new oil drilling permits – WHILE telling the Saudis they need to pump more oil to keep our prices down. The balls.

Don’t look now, but uranium may accelerate faster than I anticipated. I was expecting to get in around 2022/2023. The macros I was looking at had to do with Japanese restarts versus available uranium stockpiles. Seems like Sprott decided to step in and create a uranium trust to soak up ALL available uranium. This has me looking at SPUT sooner rather than later and wondering if any form of Gamma squeeze can happen with Cameco. I don’t know the short interest, but I’d get the hell out of the way of that. I am a member of the Silver Chartist, and they do cover some uranium companies, so I need to start finding good spots to get in and not chase these things.

Afghanistan

There’s a lot I cannot talk about due to what my job is, and for those of you who have taken a look on LinkedIn probably guessed, I have to keep everything pretty high level and non-critical for specific reasons. What I can say is the current situation may have created an environment where Americans are trapped there, which leads to a lot of things similar to the 1979 Iran situation. Point is, that it’s possible this thing escalates a bit. This is a good fear play situation, but most Americans don’t want us over there. Could events unfold that have us re-engage and be there for 50 years with an air base? Possibly.

Stock markets

If there’s a massive taper, the stock markets could drop 5-10% quickly. However, if there’s another 3-5 months of bad jobs numbers, steadily high inflation numbers, missed profit targets – this could lead to the rollover that Michael Oliver discusses rather than a hard crash that many others predict. However, if the housing, retail, and office vacancy situation goes where I think it does, a lot of REITs are about to get their asses handed to them and soon.

If all of these unemployed people making $17 per hour to sit at home now have less money, this dings retail numbers. If they are back to work, potentially a lot less Robinhood trading.

Cryptos

Gareth Soloway was a savant when Bitcoin was over $60k and he called for it to drop to $30k. Within 3 weeks, it did just that. A few weeks ago, he called for it to hit $52 and then go significantly down. As we speak, BTC is $51,300.

I want you to consider a generic demographic of who may have bought cryptos the last 18 months. Many think of them as the Robinhood crowd who are day trading getting unemployment and having this extra money to chase cryptos.

If TODAY the spigot is turned off, consider the downstream effects. They WERE making $17 per hour to sit at home and play video games. They now go back to work at $10 per hour. Bitcoin didn’t hit a million. I suspect over the next 6 months you may start to see liquidation of some of these positions as many of these holders need to sell for food, rent, cars, etc.

Gold/Silver/PMs

All of the above tells me money will be rotating out of REITs, tech, and cryptos. IF inflation is actually 7% – why would you hold cash? IF the DXY is indeed heading south, why would you want to hold it? Also, word is many have sold out of 10 yr items and the govt is buying a lot of the bonds/treasuries in an unofficial yield curve control now. The Fed balance sheet is $8T.

With the latest jobs report, tapering is less likely to happen as quickly as they want it to. I am going to expect to see a lot more vacancies and you may start to see a lot of headlines of house prices falling and supply increasing. There may be general anxiety and fear bubbling. The stock market, I believe, will start its move sideways soon as the financial and REIT sector get attacked – FAANGs will be the only thing keeping the markets afloat. GM now has expected delays of new cars due to semiconductor shortages. Car stocks may slide.

Meanwhile, taper talk will dominate the Fed over the next few months. Remember, this is NOT reducing the fed balance sheet OR raising interest rates. It’s adding less and less to the balance sheet over time. Will they taper $1b per month? $20b per month?

During all of this, there will be the collective realization high inflation is here, and the Fed is powerless to stop it. I believe THIS is your final catalyst to run to PMs. As I posted an article yesterday which discussed all of the big names now into gold, it will only take a few social media investment influencers to direct the mobs this way and there you go. Game over.

At the same time all of this is going on, Andrew Maguire and others discuss how paper derivatives in gold are being wound down ahead of a Jan 2022 deadline in which we may see $2500 gold. Likewise, we saw an announcement yesterday where China plans to enter the derivatives market by having an exchange of their own.

Overall, I believe what Rick Rule says about fund allocations is extremely true, and very timely for this discussion. He mentions that over the last 40 years, big money has allocated 1.5% of their holdings to gold. Today, it’s .5%. All you need is for a reversion to the mean to then add 3x the dollars to the gold market. What if many suspect a 1970s inflation story is coming? Could that 1.5% err to the higher end of 3-5%? If 5%, that’s 10x the amount currently invested? Seems like it can’t happen. Then you see how billionaire John Paulson is making a gold bet that can pay him 25-50x. How long before crypto people smell what that guy is cooking and take the same bet?

Conclusion

The second half of 2021 I believe has the below elements cooking

• increased price in uranium
• oil goes sideways
• American influence extremely crippled by recent gaffes of foreign policy
• Divisiveness amongst Americans increasing
• Telework sticking around
• More virus fear porn used to justify trillions more in spending
• DXY heading south for years to come
• REITS and many banks are about to have a come to jesus moment with vacancies and defaults
• Retail is about to get crushed with less money in peoples’ pockets to spend on stupid shit
• Taper talk puts pressure on the markets
• Gold and silver rise from the ashes of a 12 month consolidation to lead all sectors in performance 4Q 2021.