TFMR Podcast #32 - Kerry Lutz of The Financial Survival Network

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Earlier this morning, I had an opportunity to speak with Kerry Lutz. With everything that has transpired over the past few days, I thought we all could benefit from Kerry's unique wisdom.

In this podcast, we discuss QE∞, the U.S. election and the simple steps everyone should be taking now to prepare for a tumultuous future. We also discuss Kerry's new book, "Forget Wall Street. Go For The Gold!", which will be released next month.

I think you'll enjoy this brief, yet informative, conversation.

TF


28 Comments

Istack's picture

I am convinced

That Kerry Lutz never sleeps and is perpetually recording podcasts.  I love his deep cool monotone voice.

Nick Elway's picture

The Chicken Game

Silver Alert's picture

Thurd

Yea, got the coveted thurd. Now I have to go back and see what the post actually says.

Silverbugs's picture

Great interview, agree. The

Great interview, agree. The Elections are over, we know were in for a rough go. Just keep stacking everyone. Gold and Silver is the only financial instrument I can trust now. Get physical!

http://schiffblog.blogspot.ca/

Mr. Fix's picture

I still love podcasts!

Just in time,

I just finished Jim Willie's!

JackPutter's picture

Can Keynesians Admit

admit that they were wrong?  Will they need a twelve step program?

1.  Came to admit that they are powerless over currencies without limits.

2. Came to believe that a power greater than ourselves could restore us to monetary-sanity.

3. etc.

California Lawyer's picture

ZH Posting Stories Re Apple

I am doing a ch. 13 case for a long time client.  Going to lien strip off damn near $400,000 of worthless bank loan liens on the principal residence.  Case law is now very favorable here in the Central District of California, so, no time like now to pull the trigger.

Anyhow, in between calls from the client, I came across these zh stories:

http://www.zerohedge.com/news/2012-11-08/samsung-s3-overtakes-iphone-worlds-best-selling-smartphone

http://www.zerohedge.com/news/2012-11-08/apple-enters-gravtitational-singularity-hedge-fund-hotel-evacuation-begins

What does that mean to me?

Analysis:

Reggie Middleton, who posts all the time on zh, and who is a shameless promoter of himself, warned long ago that Apple was prime to fall, and would make an excellent short candidate.  He also was ridiculed.  I have no dog in the fight, as I stack only, and do not trade any form of paper.

Anyhow, there was one most interesting theme that I could not resist following.  It is the hedge fund paper profit at year's end, that seems to be critical here.

According to Reggie, and other articles posted over the last year or so, plenty of hedge funds loaded up on Apple stock.  The hedge funds thus showed a large paper profit, hence justifying their take from investors of 2 and 20, which I understand to be the fee investors pay to the hedge fund in exchange for the hedge fund managers' turning the investors' funds into more money.  2% is the fee, and the hedge fund gets 20% of the profit?  Something like that?

Anyway, per Reggie, who I do believe is a fantastic analyst, but prone to PT Barnum-like outbursts, plenty of the hedge funds were heavily invested in Apple, and now are facing a dire situation.  IF the hedge funds want to close out the year with a profit, then they either have to exit the Apple positions now, or hope that Apple improves.  I also understand that the index funds all are heavily weighted with Apple being a large position.

The  problem is that Apple looks to be a loser in the intermediate term, falling away from record highs, leaving the hedge funds in a precarious position.  Apple is looking bad right now from a technical analysis perspective.  Apple is also looking bad from a fundamental perspective, now that Samsung is the world leader of smart phones.  Apple's margins have to decrease to compete on price, but if that happens, does that not hurt Apple's stock price?  So, Apple has fix itself, or else price will suffer.

So, does that not seem to confirm that hedge funds will sell their Apple shares, in order to stop the losses now that we approach year end?  If Apple sells off, then won't that kill the indexes, thus triggering algos to sell, too?  Is that not portending a big selloff of the S&P and other indexes?

If the markets drop, then what about the PM's?  How can Bernake ramp up more QE than he already is doing?  What will elevate the markets?

Would a big drop in the S&P, Dow, etc., trigger risk off or risk on?  How does this interplay with the fiscal cliff and the debt ceiling?

My conclusion is that IF the markets drop, the plunge protection team launches into action, flooding the market with buy orders, using fresh cash from Bernanke.  The dollar will increase, presumably, and markets will stabilize.  So there should be tons of volatility.  

Short term it seems like a near impossibility to prognosticate.  But long term, does that not confirm a constant rise in PM's?

It does to me, so I am launching a new round of stacking.  The question is whether to stack 50/50 gold silver in terms of dollars invested, or should I weight more heavily towards gold or silver?  

All opinions and thoughts are most welcome, yes, you too, Kcap! 

Thanks in advance.

Steinbacken's picture

Using the World's Newest Curse Word

Wha, what, WHAT?!!  Tavistock!  What is this about not enough proof for the lawyer?  (Nice pod....)

While I'm at it.  Oh, Tavistock!  Why does anyone even look at the silver to USD ratio anymore?  It's all fake.

(Hint:  it applies to all forms of cabal programming/ brainwashing/ agenda-honing/ misinformation/ corporate propaganda/ ...and if you believe in the possibility of it...mind control.)

Subotai's picture

California Lawyer

Gold or Silver?  My vote, fellow barrister and Big Valley veteran (I have blessedly escaped- no offense) would be for silver for the following reasons:

1.  It is likely to see more volatile swings based on recent history.  Over the past 12 years, there Silver has been up, peak to trough, roughly (VERY roughly) 900% while gold has been up a smoother 600%.  Check my numbers, but I think I'm close.

2.  I think there is less to justify the current low price in Silver than in Gold. 

3.  Industrial demand is growing, and will grow even faster if the economy were to somehow pick up.  Even if it doesn't, technology advancement alone will drive increased demand, even in a depressed economy.  From 2008 to 2011, annual silver demand increased 12%, and by far the largest source of increase was industrial demand.

4.  As I understand it, marginal demand for silver is currently being met by recycling.  That is a tight market.

5.  Silver is a more convenient and realistic form of payment, if things get really ugly.  Some people will take it as payment today.

6.  Even though it takes up much more space and weighs more than gold, it is still realistic to store significant amounts.

NOTE:  There is marked difference between someone who is simply a PM believer and someone who is hedging against a SHTF event (be it a prolonged natural disaster or something less usual).  If you are the latter, you might consider ROI on weapons, ammunition, and food appropriate for long term storage.  I won't drone on in prepperspeak, just consider how valuable an AR-15 might be to the guy across town when he belatedly realizes that everyone should own firearms.

Keep stacking and racking, that's my motto.

145Bluesman's picture

!! ACHTOOON BABY !!

YOU HAVE FORTY THREE DAYS UNTIL THE END

12/21/2012

that is all.

sarc)

R man J's picture

Enjoyed the discussion

Kerry Lutz "renaissance man",  thanks for the solid and interesting effort, historical common-sense, AG/AU thoughts, etc.  The way this interview began, I thought maybe there would be some inside information on unlocking the female "inner cougar". Married 32 years.ridiculous. expectation.I.know.

Jdawg's picture

Our Congress Will Play Chicken

The Speaker and Senate Majority Leader will start in earnest next with the the game of chicken little.  The knuckle head from Kentucky will raise the flag and the race will start.   Tell me who will go over the cliff?  

steveo's picture

Uh, now for a practical

Uh, now for a practical matter...
Sign up on link on right side "Engelhard" and win free 10 ounce bar of silver.
Not a joke
http://oahutrading.blogspot.com/

benny_bomb_boom's picture

where are the exits

love that. at least having a plan for all the outcomes possible you can dream up. you can do what you need to do to survive now. 

nothing like picking your spots

Strongsidejedi's picture

@California Lawyer - Apple v. gold/silver

@California Lawyer - great discussion about APPL and hedge funds positions exiting.

The futures and options pricing of gold or silver is subject to the same liquidation process.

When its the SLV or GLD ETF doing the trading, I have to think that the liquidation will be on whenever gold or silver reaches the maximum desired price.

Regarding gold or silver, my answer is yes.

From what I can tell, the gold price seems much less volatile than silver.

But, I also suspect that it is far easier to carry a 1/2 oz or 1 oz gold coin than 500 ounces of silver.

So, your answer may lie in your need to move versus shelter in place.

steveo's picture

A good plan involves both

A good plan involves both possibilities

steveo's picture

Well now, if you are up

Well now, if you are up early, pondering the market,
considering clicking and entering a number, like say 35.21 and being sent a 10 oz bar of silver.    Not a scam, the real deal.

Go to the right side, click on the "Engelhard" and enter the contest.   This is for futures spot price on Nov 30.   Real deal, enjoy it.

http://oahutrading.blogspot.com/

steveo's picture

del

del

thurd aye's picture

The phone call lasts just a

The phone call lasts just a few seconds. The words "congratulations, you've become a partner",

are just about all Lloyd Blankfein, the boss of Goldman Sachs, will have time to say to the 85 or

so bank high-flyers he will ring next Wednesday to invite into one of the most prestigious and

lucrative cliques on Wall Street.

HISSSSSSSSSssssssssssssssssssssssssssssssss

http://www.guardian.co.uk/business/2012/nov/08/congratulations-goldman-sachs-partner

California Lawyer's picture

Thanks Subotai and Strongsidejedi

I appreciate the opinions.  Subotai, I stack and rack, and I just now purchased a Springfield Armory M1A, standard, with a nice 15-20 trijicon scope so I can reach out and touch the zombies at distance.

I have a stacking plan for ammo, too.  Once per month, I am buying a box of JHP for each caliber of handgun I have, .38, .40, 9mm, .357, .45.  I am going to track the prices and put up a spread sheet at the end of next year, so I can see the inflation in terms of useful goods, in real time.

I like your idea of getting another few AR-15's, too.  I have two, plus two Mosin-Nagants with 3000 rounds.  Those nasty smelling and painful relics, replete with bayonets, are for the desperate dummies who failed to prepare at all, and for which I will gladly barter for something of value when needed.

Strongsidejedi, nice sense of humor, as usual.  I am heavy weighted in silver, so I want to balance into gold, but I figure when silver increases, maybe I can trade silver for gold.  I just don't want to part with anything now, whether to trade or what not.  I suppose stacking either is a no lose like you say, so WTFDIK?

Anyhow, thanks for the thoughts.

Mantis's picture

Gold versus silver

When looking at the GSR I personally think over 50 as we are now means silver is too cheap (although looking back over a long period of time 50 looks about average). Based on the fact i think silver is too cheap relative to gold I would buy silver.

I tend to like ivars thinking that the ratio will spike down to about 30 or so in which case i might start favoring gold or even selling some silver to buy gold at about that time. With the volatility of silver being greater the GSR will presumably have a few such spikes as we ride the bull market up.

I'd say overall gold being less volatile than silver is a safer bet, just now i am weighted towards silver but in the end i will probably want to be holding gold. Either is a good bet compared to bits of paper tho :)

El Gordo's picture

Moving target

My big question is why am I stacking?  I hear people complaining about the depressed price of silver and wanting it to go up, but I wonder, "why would I want it to go up?"  I want more, and as fiat become available, I hope to score more, and the lower the price relative to fiat, the more I can get.  Now here's where I prove myself to be an idiot or a liar, but I cannot conceive of a price where I would want to sell.  If the price is rising, does that not in itself prove the value of the fiat is going down?  That would be trading a winner for a loser, wouldn't it?  If I want losers, I can stay in cash, buy a new electric car, big screen TV and the like.  There is no paper out there that I can find that offers a decent return or has any upside potential without being manipulated by the government or the private sector con men, so what else is there?  One day maybe my heirs will dig through some of my crap and wonder what I was doing and call the metal recycling shop to come haul off all this crap, or maybe they will stuff it in their pockets and take it home and not tell anyone about it.  Who knows.

I initially thought I needed a base investment, so I acquired some bulk pieces for door stops.  But I do not have the capability to convert them to a usable form, so I then decided to go for some smaller pieces, including ingots and rounds.  Over time, I have become a little more discriminating and only deal with sovereign issues.  Each step along the way has require a larger premium over spot; or conversely, less silver for my buck, but I do believe that if I need it, having a recognizable sovereign would be better than a "Joe Bob's Silver Shop" one ounce round.  I am primarily in silver since I am a cheap, small time player, but the ability to move a few gold pieces in my pocket is certainly easier than hauling a bag of silver.  Again, who knows.

If this was easy, anybody could do it.  We all just do the best we can with what we have and move on from there.  I do not necessarily fear my neighbors in a crisis nearly as much as I fear my government.  I have to firepower to deal with a neighbor who would do me harm although I would rather try to talk him/her down, and I am a charitable sort to begin with if I have something they need.  I do not have the firepower to resist my government, but again, we never know what we might do until confronted with a situation.  In the interim, all I can do is just keep stacking.

Someone once told me to be wise like the old tom cat who puts a little in the kitty every night.  I'm not sure that I understood that, but I try to save as I can.

Roark's picture

Yup.

Always enjoy reading El Gordos stuff

Fred Hayek's picture

Kerry Lutz is like the James Brown of prepping and PM's

James Brown used to be billed as "the hardest working man in show business".  In some shows he'd have a guy come out in mid show and make a very theatric deal out of producing a cloth and wiping James Brown's brow.  Kerry does a ton of interviews with, seemingly, everybody who advocates prepping and holding PM's.  He's a big contributor to the "movement".

GuerrillaCapitalist's picture

California Lawyer

I'm not sure I have anything to add after our esteemed neighbors weighed in on your question of which shiny metal to concentrate your resources.

I'm solidly in the silver camp. I think there is much more upside for silver than gold for a myriad of reasons. Primarily because silver is an industrial metal (as well as money) used in more products than I can count. The USGS reports that silver will be the first element to go extinct. I don't know the timeline, but for the nation's geologists to issue such a warning is ominous in my not quite humble opinion. I have a sense that silver is much more manipulated than gold and once the cartel loses control of the market we will see an explosive run in the price.

As others in the community have pointed out, gold is much more portable, so if one has to bug out the weight may be a factor. We're already at our bug out location (BOL), so that doesn't factor into my decisions.

But once the smoke clears, I don't think it will matter which metal represents the largest portion of our stack. We are so far ahead of the rest of the citizenry that our survival is all but assured.

I found your information concerning Apple interesting and frankly I'm not a bit surprised. Another chink in the wall of paper assents.

Larry L's picture

California Lawyer

Most of the other replies on gold, silver and food are pretty good!

If you look back several years silver was at a ratio of 80:1 gold. As the arm swings back and forth it goes to extremes. I would not be surprised to see the ratio go to 5:1 or even to 1:1.  When the ratios get close together like 5:1 you would want to convert most of your silver to gold. When the ratio gets above 80:1 or 100:1 you would want to convert most of your gold for silver. Any easy way to gain wealth; but always have both in hand, no paper!  Also NO BE OUT OF ALL DEBT OR SOMEONE WILL TAKE YOUR PROPERTY AWAY FROM YOU.

Above all the material things in life we must HAVE OUR SPIRITUAL HOUSE IN ORDER.

Keep stacking and keep praying!

SteveW's picture

California Lawyer

Thanks for linking the excellent and scary apple article. Reminds me of the time the Canadian market was dominated by Nortel before it crashed.

I'm on the fence and 50/50 by price for silver/gold. I recognize and agree with the arguments that silver looks to have more upside potential, while it's more volatile.

I expect that graphene will at some point replace silver in those applications that depend upon its thermal/electrical conductivit,y where graphene is superior to silver (electronic circuits, solar panels etc.), but its reflective and anti-bacterial properties will maintain its industrial applications.

Silver has been money in Western society since at least 1158 when a penny weight was 1/240 part of one pound of sterling silver and continued its monetary role until the 1960s. Silver is/was walking around money while gold is for storage of wealth and one day we may return to the freedom inherent in the usage of sound money.

Subotai's picture

California lawyer

Mosin Nagants???  That's a great idea.  The reasoning is exceptional - anyone that can tell a decent gun from a POS will already own one, so Nagants will fly off the shelves at prices that might suggest they are actual guns.  Brilliant!  I'm inspired. 

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