The Vacuum Tube in the Coal Mine

The sanctions on Russia are biting us in the most unexpected places. [The Rude Awakening] May 17, 2023 [WEBSITE]( | [UNSUBSCRIBE]( The Vacuum Tube in the Coal Mine - The Rude never agreed with sanctioning Russia - Not because Russia is friendly but because we in the West need Russia’s stuff - Is this an early warning shot for the West? [External Advertisement] [Biden to Introduce Social Credit System like China?]( Whenever the military develops a breakthrough technology, timely investors could see groundbreaking returns. General Dynamics returned 8,990%... Boeing soared 4,238%... L3Harris shot up 1,628%... [Here's the next stock we think soars ]( [Click Here To Learn More]( [Sean Ring] SEAN RING Dear Reader, Good morning from gorgeous Jekyll Island, once again. We’re filming all sorts of goodies for you now. Tomorrow, our livestream will start at 1 p.m. I hope you can join us. Regrettably, some of our team aren’t here with us. But they stay in touch via our Slack channel. I always want to hear — or at least read — what they say. And I came upon the most interesting story from Jonathan “J-Rod” Rodriguez and Erik Kestler. I must warn you I know nothing about music. Singing in my high school choir was as close as I’d get to a band.(And I only did that for the girls…) But with J-Rod and Erik’s help, I’ve seen an invaluable warning signal. The Actual Phrase The title of this piece is a play on the phrase “the canary in the coal mine.” The phrase originates from the former practice of taking caged canaries into coal mines. The birds were early-warning devices for toxic gases such as carbon monoxide, methane or carbon dioxide. The gases would kill the canary before they became dangerous to humans. This is because canaries are more sensitive to air quality due to their faster metabolism and respiratory rate. So if the canary showed signs of distress or died, the miners knew they had to evacuate immediately. In modern usage, the phrase is used metaphorically to refer to a person or thing that serves as an early warning of a coming crisis or danger. It's used to point out risks that aren’t apparent on the surface but can lead to significant problems if ignored. For example, a sudden drop in sales might be the "canary in the coal mine" for a business, signaling deeper issues that must be addressed. So what’s going on with the vacuum tubes? What Happened? When J-Rod is on the Wednesday editorial call, behind him sit three beautiful guitars. Upon seeing them, I imagined him strumming away to entranced ladies and having his way with them afterward. Studmuffin! When I tap on Erik’s Slack pic, he’s jamming on an electric guitar like the late, great Eddie Van Halen. I cannot compete with this kind of coolness. So it was with a quizzical look that I followed their conversation on our editorial Slack channel. It started, as it usually does, with beer. I’ll cut to the chase, though. Friend and colleague Alan Knuckman put up a pic of the beer he drank in high school. It’s Red, White & Blue, costing $4 a case. Impressive. I feel it, as I used to drink Milwaukee’s Best (The Beast), Busch, and, God help me, Natural Light. They were about $8 a case outside Philly in the early to mid-’90s. Erik then wrote how anti-German jingoism led to a backlash against any beer with a German-sounding name during the world wars. As a result, America had crappy beer for 50 years. (Most claim that it lasts until the present day.) J-Rod retorted: Along a similar vein, most medium- to high-end electric guitar amplifiers are powered by vacuum tubes (as they have been since the 1950s). And the best tubes are made in Russia. Thanks to the Ukraine war sanctions, you can’t buy them in the U.S. anymore. What’s on the shelf is all you can get. The above is entirely Greek to me. As Captain Renault said in Casablanca when learning the stolen exit visas were hidden in Sam’s piano, “It serves me right for not being musical.” So I’ll do my best to explain to the non-musicians among us. [Biden to Introduce Social Credit System like China?]( If you say the wrong thing on Chinese social media, you are labeled “untrustworthy”. They can then take away your ability to travel, restrict internet access, or deny your family the best jobs. They even confiscate your pets. Thanks to Biden’s new Executive Order 14067, a former CIA and Pentagon advisor predicts America will soon become a total surveillance state like China. [Click here to see our dark future…]( [Click Here To Learn More]( The Tied-up Tubes While it's true that many guitar amplifiers use vacuum tubes, solid-state amplifiers (those using transistors) have been commonplace since the 1970s. Many beginner guitar amplifiers today use solid-state technology, which is generally more reliable, lightweight and less expensive than tube technology. However, because of their distinct sound characteristics, vacuum tubes are still widely used in medium to high-end models. Here's why: - Tonal Characteristics: Vacuum tubes often provide a "warmer" or "richer" tone than solid-state amplifiers. Although this is subjective, nearly all players prefer the sound of tube amplifiers - Overdrive and Distortion: When a tube amplifier is pushed beyond its limits (i.e., overdriven), it produces a type of distortion generally considered musically pleasing. This "tube distortion" or "tube overdrive" is a fundamental part of the sound of electric guitar music in many genres, mainly rock and blues - Dynamic Response: Tube amplifiers have a unique dynamic response due to how tubes handle signals. Tubes react to the strength of the player's touch — playing harder drives the tubes harder and produces a louder, more distorted sound, while playing softly produces a cleaner, quieter sound. This is a characteristic that's hard to replicate with solid-state technology - Tradition and Perceived Quality: Tube amplifiers are associated with the "golden age" of guitar music and many iconic players, so many guitarists prefer them due to tradition and the perceived quality associated with tubes. While tube amplifiers have these advantages, they also have some drawbacks compared with solid-state amplifiers. They're more expensive and heavier, require more maintenance and are prone to technical issues. Since I know nothing about this subject besides what I wrote above, I’ll stick with J-Rod’s assessment. Damn Sanctions! I’ve written [over]( [Rude]( with the word “sanctions”]( in them. I never had a good word for them. They are wars by other means and generally start with hurting the sanctioner rather than the sanctioned. You may be saying, “Sean, come on. These are musical playthings. Who cares?” Ukrainians would say that the least we can do for their country is make a trivial sacrifice. But what if this is just the canary in the coal mine? What if this is merely a taste of what’s to come? I had no idea Russia made this stuff. But I do have a better idea of the stuff Russia has that we don’t have much of. Here are 10 natural resources that Russia has in abundance that are not as abundant in the United States: - Natural gas - Crude oil - Nickel - Palladium - Platinum - Diamonds - Timber - Rare earth elements - Vanadium - Cobalt We’re playing with fire here. Wrap-up Vacuum tubes may be what musicians have a taste for. But their disappearance from our shelves could signal a far greater disaster. Let’s hope this war is over sooner rather than later and these sanctions disappear. Have a great day! All the best, [Sean Ring] Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( In Case You Missed It… The Devil’s Down in Georgia [Sean Ring] SEAN RING Dear Reader, Good morning from beautiful Jekyll Island, Georgia, where we’re holding [our livestream on Wednesday](. I’ve just met some of my most excellent friends and colleagues for the first time, including Jim. I’m thrilled about [Wednesday’s livestream and hope you’ll join us]( then. Some of you may still be asking, “Why Jekyll Island?” In today’s Rude, I will answer that question simply. This isn’t meant to be an exhaustive study. But I’ll tell you this: American financial history is one of the most exciting rabbit holes you can ever fall into. History Lessons Last Friday’s Rickards Uncensored meeting was a hoot and a half. I love contributing, but my guilty pleasure is listening to my colleagues tell their stories. Whether it’s Dan Amoss’s comprehensive analyses, Matt Insley’s charts, or Byron King’s excellent history lessons, I learn much more than I teach. (Shhh! That’s between us.) But Byron’s stories always make something click for me. Last Friday, Byron held up a book he was reading titled, The Panic of 1907. He went on to say the Panic led directly to the fateful meeting at Jekyll Island three years later. I had known that, but I never really understood it. My reaction was one every teacher hopes for in a classroom from a student: widened eyes, agape mouth, and a gasp of air—an actual a-ha moment. So today, let me connect those two events for you as Byron did for me. The Panic of 1907 The Panic of 1907, also known as the 1907 Bankers' Panic, was a financial crisis “with everything on it.” Bank runs, a stock market downturn, significant liquidity crises…. You name it…. It had it. The panic demonstrated the supposed weakness and vulnerability of America's banking system, which at the time lacked a central bank to provide emergency liquidity to struggling financial institutions. There were several triggers for the Panic of 1907, including the failure of the Knickerbocker Trust Company and speculators’ attempt to corner the copper market. Both led to a general loss of confidence in the banking system. This resulted in a bank run, causing a domino effect of bank failures due to liquidity shortages. During this crisis, financier J.P. Morgan emerged as The Man. He coordinated a response among New York bankers, contributing his resources and persuading other bankers to do the same. This shored up struggling institutions and restored confidence in the banking system. However, this ad hoc response exposed the supposed vulnerability of the U.S. banking system, which had to rely on private citizens to prevent a complete collapse. That’s the official historical conclusion, anyway. I think citizen-based ad hoc solutions are the best, as they are, by default, tailored to the situation. That is, we’re not constantly fighting the last war (like the Fed is doing now). The truth is, Morgan never wanted to do that again. Some might call that an evasion of responsibility. Officially, the Panic of 1907 led to the realization that there was a need for a more structured and formal system to prevent such crises - how’s that working out for us? - and to provide stability to the banking system. You know what they say about the best intentions. As a result, Congress created the National Monetary Commission in 1908 and tasked it with studying and recommending solutions for the banking and financial industry. Senator Nelson W. Aldrich, the head of the National Monetary Commission, led a team of experts to study European central banking systems (Shields up! Red alert!). After taking leave of their senses, those “experts” developed a proposal for a similar system in the United States. The result? The Federal Reserve Act of 1913. But first… [America’s #1 Economist Bets Big On Gold, Says Now Is The Time To Buy!]( Jim Rickards is widely considered to be the #1 living economist in America. Throughout the years, he and his team have issued a number of bold calls which turned out to be 100% accurate: - They predicted the 2008 housing crisis years in advance… - They predicted Brexit and Trump’s 2016 victory… - They predicted Covid-19, months before the first case originated in China… - And much, much more. But none of that compares to Jim’s urgent new prediction… [Jim predicts gold is now entering into a super boom phase, one which could last for years and push the price of gold to $15,000 an ounce or higher.]( In fact, Jim is so certain that he’s already bet a significant amount of his own money on gold – and today, he’s on a mission to show everyday investors like you how to get started. [To see the exact steps to take to profit as gold soars higher, click here now.]( [Click Here To Learn More]( November 1910: Jekyll Island The Jekyll Island meeting in November 1910 was a secret gathering of six men representing the bigwigs from Wall Street and the U.S. Government. This meeting was instrumental in creating the plan that eventually established the U.S. Federal Reserve System. The six men who attended the meeting were: - Nelson W. Aldrich: A U.S. senator from Rhode Island and chairman of the National Monetary Commission. - Abraham Piatt Andrew: Assistant Secretary of the U.S. Treasury. - Frank A. Vanderlip: President of the National City Bank of New York (predecessor of Citibank). - Henry P. Davison: Senior partner of the J.P. Morgan Company. - Charles D. Norton: President of the First National Bank of New York (another predecessor of Citibank). - Paul M. Warburg: A representative of the Rothschild banking family in Europe and brother of Max Warburg, who was head of the Warburg banking consortium in Germany and the Netherlands. The Usual Suspects, I suppose. These men met privately on Jekyll Island, Georgia, under a veil of great secrecy, using only first names or code names. The goal was to devise a plan to reform the American banking system, which was seen as unstable and prone to crises and which J.P. Morgan no longer had any interest in bailing out. Their proposal called for creating a central banking system that could provide an elastic currency (i.e., a supply that could expand or contract as needed), serve as a lender of last resort to banks in trouble, and manage the country's monetary policy. Of course, the problem with elastic currencies is they seem to expand forever, with fits of contraction, until they fall to their intrinsic value: zero. The plan faced significant opposition from those who feared it would create a banking monopoly controlled by Wall Street interests. The opposition has obviously and conclusively been proven correct. To address these concerns, the plan was revised to incorporate a decentralized structure with multiple reserve banks spread across the country and a governing Federal Reserve Board with members appointed by the President and confirmed by the Senate. Well, this didn’t help. The New York Fed is where all the real decisions are made. This revised plan was adopted by Congress and signed into law by President Woodrow Wilson as the Federal Reserve Act in December 1913. Wrap Up I don’t think the Federal Reserve’s creators were necessarily evil. Well, not all of them, anyway. But we can’t control our creations, especially when we send them out into the world. Robert Louis Stevenson, author of The Strange Case of Dr. Jekyll and Mr. Hyde, once wrote, “Jekyll had more than a father's interest; Hyde had more than a son's indifference.” Mr. Hyde is beyond our control for now. Have a great day! All the best, [Sean Ring] Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( ‘Secrets of Jekyll Island’ A LIVESTREAM Broadcast with Jim Rickards & Danielle DiMartino Booth [Jekyll Island] On Wednesday May 17th at 1pm EDT you can watch live, exclusively through your access link from the comfort of your own home, as two of the world’s foremost thought leaders deliver world class economic insight. 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