The Moral Consequences of Hyper-Inflation Have Come Home to Roost

The middle-class is getting rocked [Morning Reckoning] March 16, 2023 [WEBSITE]( | [UNSUBSCRIBE]( The Moral Consequences of Hyper-Inflation Have Come Home to Roost - Inflation is in itself immoral. Its consequences are the moral breakdown of society. - This speech will send chills down your spine. - You’ll likely remain a perennial outsider in an increasingly foreign society… unless you start making a move today. Asti, Northern Italy March 16, 2023 [Sean Ring] SEAN RING Good Morning Reader, Happy Thursday from beautiful Northern Italy! There are times I wish I was unaware of what’s going on in the world. Especially since last Sunday. I won’t lie. The thought of Meghan and her ginger nut Prince becoming paupers lit me up like a Christmas tree. I was so excited to use this meme. It’s devastating that it’s no longer valid. It would’ve been so delicious. Ironic, even. And I lived in England long enough to understand irony. What happened with respect to SIVB and Signature Bank was idiotic economically. But in a much more important and real sense, it was immoral. In this Morning Reckoning, I’m putting in print part of one of my favorite speeches by a professor I wish I knew better. [March 20th Announcement - Your Shot at Big Gains?]( On March 20 at 10 AM Eastern, one tiny stock is going to make an announcement that could send shockwaves throughout the market. And if you aren’t on the right side of what happens next, you’ll regret it forever. [Click here now for the details.]( [LEARN MORE]( I’m No Priest, But… Professor Joseph Salerno of the Mises Institute gave a speech years ago about the moral breakdown of society in the face of inflation called “[Easy Money, Easy Morals]( I can’t encourage you enough to listen to the whole thing. It’s only 30 minutes, but if you play it at 2x speed, you’ll get done in 15 and lose none of the value. Professor Salerno gives a great account of Weimar Germany, which eerily mirrors what America is going through right now. Sure, there’s no hyperinflation yet. But the moral consequences have long been evident. Professor Salerno said: “At some point, people lose confidence in the value of the money. The price continues to rise at ever rapid rates, even more quickly than the government can print money up. So even in the middle of this massive inflation, people experienced a shortage of money. They didn't have enough money as much as they needed to buy goods and services. It destroyed people's bank deposits and pensions. If someone had a pre-war pension of 200 marks per month, which was very comfortable, they couldn't even buy a meal by 1920. Workers didn't want to hold money for a week. So they began to demand to get paid three times a week, and then every day, and then three times a day, and had their fiancés and wives at the factory gates to get the new money, rush out to buy things as quickly as possible. Teachers and professors, who were traditionally paid monthly in Germany quit their jobs, because if you had to wait a month for your income, that income was worth 1,000,000th of what it was worth prior. So they quit their jobs and became taxi drivers and waiters. Farmers refused to pay you to sell you an egg, even for a whole wheelbarrow full of marks. Those people that were able to get the new marks as they were printed up by the banks were the ones that benefited. They got it before the prices rose. And they spent it… they bought up hotels, they bought up land. You had so-called joint ventures in Germany, which put together coals, banks, hotels, electricity. These were not very productive and, and in fact, collapsed. They were put together by paper money. On the other hand, this was based on the looting of the savings of the people on pensions who had no access to this new money right away. The middle class were getting paid every two weeks or every month. So you had this nouveau riche, these newly rich that began to rush out and, and spend the new money, because they knew it was going to depreciate, on ostentatious examples of conspicuous consumption. Who were the victims? The middle class, the small businesses, the pensioners… they were all wiped out. And what about the effects on moral values? Obviously, it no longer paid to be thrifty and to save for your future and your child's future. So, thrift, such an important value in the capitalist economy, went by the board. People no longer carefully planned their investments. They simply bought anything because they felt that the prices were going up the next day. So people no longer look to the future. They suddenly became very interested in immediate gratification to get anything and get it now. Productive work was discouraged because most people had left the factories and spent all their time hunting for bargains, trying to get rid of their marks. Even sexual morals changed. Women's dowries were wiped out. Now, you laugh about that, but dowry had a very important function in the old culture. It was a way of signaling to a prospective suitor that the woman's family was virtuous, had thrift, they worked hard, had family commitments to one another. Now, the women became discouraged of ever accumulating dowries in the future and ran off with their boyfriends. And the term boyfriend was not used in polite society in Germany in the 1920s! Prior to the hyperinflation, it was a scandal for an unmarried middle-class girl to have a “boyfriend.” Everybody sought after this ostentation, this luxury. And that replaced the goal of having a good and solid family name… Of being sober in your investments. And finally, the people who were looked up to are the unscrupulous gamblers and profiteers who now got to the top of the social structure, where the old families and the old wealthy who worked hard and were good examples to the rest of the populace, were now at the bottom. Now, there is a direct link between inflation and the breakdown of morality, an even more direct link. Let me just explain it in the following way. By bringing about a thoroughgoing social revolution, it really does destroy the middle class and the productive rich. But by destroying money itself, it destroys everyone's ability to plan for the future and leaves them no recourse, but to seek immediate gratification. Moreover, whether we like it or not, men and women live in a world where they cannot live or flourish physically and spiritually without property. But remember, property is not merely a collection of material things. It refers to those things that are judged valuable in serving human wants and desires. But in the modern world, you can never know what the value of property is in a specialized economy of mass production unless you know its money value. So in a real sense, valuable property is an extension and a definition of an individual's very personality.” [Has World War III Just Begun?]( NATO sends tanks to Ukraine… Russia prepares for a winter offensive… [Is the beginning of World War III?]( [Click here to learn more]( I’ve just released an urgent message with my thoughts. But more importantly, I’m offering to send you an [exact playbook]( on what I see playing out in the world and what you need to do to prepare. [Simply click here now to watch my short message and to see how to claim a copy completely free of charge.]( [LEARN MORE]( Oh, The Realization I know what you were doing while you read that speech. In your head, you thought about your dwindling purchasing power. And that’s despite having more money in your bank account than you may have ever had before. You now see why smart people have abandoned noble causes (like teaching) for worthless, but higher paying roles like “influencer.” You visualized today’s nouveau riche, with their Birkin bags and Cartier bracelets. Fear of Missing Out (FOMO) is now a hasty, but understandable way of investing in cryptocurrencies and NFTs. Broke, but shapely young women getting their funbags out on Only Fans suddenly makes perfect economic sense. And those who merely show a bit of skin on Instagram are saints by comparison. And worst of all, you know exactly who those unscrupulous gamblers and profiteers are. They’re people you formerly admired and respected. Venture capitalists, investment bankers, corporate lawyers, former House speakers, and now, entrepreneurs with the right bank accounts. But don’t take my word, or even the good professor’s. Have a look at this: [tweet] This era’s story – like Weimar Germany’s – is all about inflation and the way it distorts incentives. Before you go, let me disabuse you of one notion. You can’t save everyone. We’re far past that point. But you can save yourself, as my colleagues and I have written many times before. Concentrate on that. Head to the [Daily Reckoning]( to catch up on the ways to get ahead of what’s coming. And if you didn’t read the Rude this morning, my good friend and colleague Byron King talks to you about real deposit insurance: the rock-solid kind. He’ll show you why “pounds in the ground” are far superior to “Biden Bucks.” Until next week, take care. Let me know what you think of these recent events and how they’re affecting you and your faith in the system by emailing me [here](mailto:feedback@dailyreckoning.com), I’d love to hear your thoughts. All the best, [Sean Ring] Sean Ring Contributing Editor, The Morning Reckoning feedback@dailyreckoning.com [Man Who Predicted Bitcoin Warns: “Don’t Buy Bitcoin!”]( [Click here to learn more]( James Altucher first predicted Bitcoin all the way back in 2013… And ever since, he’s been one of the biggest advocates for it. But now, he’s warning Americans that buying Bitcoin could be a big mistake… [Click here now to see why](. [LEARN MORE]( In Case You Missed It… Greg Guenthner, Editor Don’t Let a Good Bank Run Go to Waste [Greg Guenthner] GREG GUENTHNER Good Morning Reader, I began my trading week by waking up to a long list of banks plummeting into the abyss as a whiff of panic spread beyond the walls of the Silicon Valley Bank implosion. Everyone’s still groggy from the weekend time change – but that hasn’t stopped friends and relatives from blowing up my phone with countless market meltdown questions… Are stocks going to crash? What happens next? What should I do? These are simple questions. But they don’t have easy answers. So, I’m going to stick with what I know. When a crisis hits, all your plans begin to look silly and irrelevant. I was focused last week on rates, the US dollar index, and the market’s reaction to a slew of economic data as the averages chopped along at key levels. We were debating whether the Fed would continue to drag the market toward another 50 basis-point hike. Could this fragile market handle another rate bump? Would shell shocked investors stick around if stocks lurched lower? These concerns are now firmly on the back burner. This week, all we’re hearing about are banks, banks, banks. It’s all too easy to get sucked into the noise machine. The financial news, our government overlords, and the venture capital echo chamber are using fear to get what they want. We’ve already witnessed a swift bailout over the weekend. As the old saying goes, never let a good crisis go to waste. We shouldn’t, either. Now’s a great time to reassess open positions, review bigger-picture market ideas, and (most importantly) figure out what has and has not changed in the market since last week. [Warning: Will “Bidenflation” Destroy Your Retirement?]( [Click here to learn more]( If you’re like most Americans, you’ve worked hard for decades to build your financial legacy. And now, as a result of Biden’s disastrous money printing policies, that’s all at risk. According to one top retirement expert, “Bidenflation” threatens to destroy your retirement and make your hard-earned savings worthless. That’s why you must take action right away to protect yourself… [Click here now to get the simple, step-by-step actions to survive “Bidenflation.”]( [LEARN MORE]( How to Avoid the Next SVB First, it’s probably a good idea to make sure we don’t get caught in any positions that could meet a fate similar to the crashing banks. This is where charts are especially useful. A crucial fact that gets lost in the noise of these inevitable crises is that stocks don’t crash from their highs. But that’s not how the financial media portrays these events. If we’re to believe the narrative, everything was going peachy keen for long-term SVB investors until late last week. Sentiment and those slippery fundamentals (or at least, the market’s collective understanding of the fundamentals) did abruptly change. Aside from a few diligent short-sellers, no one was panicking about Silicon Valley Bank’s ability to keep its doors open seven short days ago. But an avid chart watcher wouldn’t have been involved in Silicon Valley Bank. Why? For starters, the stock was going down for a long time. More specifically, the stock was locked in an obvious downtrend while pinned under its declining 200-day moving average. [chart] This stock gave investors zero reasons to trust any of its rallies since its peak in late 2021. Even a strong January snapback was roundly rejected before it could make an attempt at topping its 200-day moving average. That’s a decent sign the downtrend is still very much intact. Aside from a short-term minded swing trader attempting to play a quick momentum move at the very beginning of the year, the chart offers no signals to a long-term minded investor. Of course, not every chart that looks like this will crash. But every stock that does crash will likely have peaked many months before the main event that seals its fate. The sellers will trickle in little by little. Eventually, if everything goes perfectly wrong, the floodgates will open. The lesson here is simple: Don’t buy stocks in downtrends. Not only will you sleep better at night – you’ll probably also avoid any major market catastrophes in the future. [Biden Just Signed Death Warrant On Your Freedom]( [Click here to learn more]( If Biden’s Executive Order 14067 comes to pass, a former advisor to the CIA and Pentagon is predicting legal government surveillance of all US citizens; total control over your bank accounts and purchases; and indefinite Democrat control past 2024. He says Covid was a trial run for how to control a population. Dems will use their “pandemic playbook” to silence any dissent. [Click here to see exactly what to do before it happens](. [LEARN MORE]( Surviving a Stock Market Shock It’s a mess out there right now. It feels as if market conditions are changing faster than the weather in New England. Decision making is especially difficult during these market shocks. The first instinct of many investors is to do something. News is breaking! Markets are in flux! It’s time to make a big move… Unfortunately, these knee-jerk reactions often lead to trouble. A volatile market is like quicksand. If you thrash around too much, you’re going to be up to your neck in poorly-judged trades. During these sudden, event-driven market moves, it’s usually best to take a step back. Yes, you should always honor stop losses on your open positions. I’m not advocating for taking your hands off the wheel! But firing off round after round of directional plays coming off a weekend of bank failures isn’t a winning formula. Another valuable market exercise during these bursts of volatility is to turn back the clock to just before the event rattled Wall Street. What were the key market levels before the trouble started? What trends were already changing? The market’s still very much in-flux as I type. I want to relay to you exactly what I’m seeing right now – just understand these facts could change between now and when this note hits your inbox… Here’s what has my attention now: The US dollar index failed at 105 and has turned sharply lower. Early last week, I noted that a move lower from the dollar at these key levels could help spark the next leg of the gold rally. Mix in a little fear from the ongoing bank crisis and the fuse is lit. Gold has settled higher for three straight sessions and has blasted above $1,900 following an ugly February. Silver is rocketing higher. The miners are snapping back to life. Are they finally ready to break out of their choppy ranges? The noise is deafening – don’t let it distract you from these opportunities. Let me know what you thought of today’s article… and if you want any more topics covered by emailing me [here](mailto:feedback@dailyreckoning.com). Best, [Greg Guenthner] Greg Guenthner Contributing Editor, Morning Reckoning feedback@dailyreckoning.com Thank you for reading The Morning Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Sean Ring] [Sean Ring, CAIA, FRM and CMT]( is a former banker and financial educator and is the editor of the Rude Awakening. Sean has trained interns and graduates from Goldman Sachs, Morgan Stanley, Citi, Bank of America, Standard Chartered Bank, DBS (Singapore), the Abu Dhabi Investment Authority (ADIA), Bank Indonesia (the central bank), HSBC, Barclays, RBS, and BlackRock. He knows the global economy is being corrupted by forces that most people can't understand and has used his unique and worldly experiences to help people navigate the markets. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your The Daily Reckoning e-mail subscription and associated external offers sent from The Daily Reckoning, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@dailyreckoning.com. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. We allow the editors of our publications to recommend securities that they own themselves. However, our policy prohibits editors from exiting a personal trade while the recommendation to subscribers is open. In no circumstance may an editor sell a security before subscribers have a fair opportunity to exit. The length of time an editor must wait after subscribers have been advised to exit a play depends on the type of publication. All other employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. The Daily Reckoning is committed to protecting and respecting your privacy. We do not rent or share your email address. Please read our [Privacy Statement.]( If you are having trouble receiving your The Daily Reckoning subscription, you can ensure its arrival in your mailbox by [whitelisting The Daily Reckoning.](