In this week’s Mantra Monday, Lynette discusses the impact of inflation, currency devaluation, and the challenges faced by the global banking system. Learn about the impact of drought on Kenya’s economy and the recent changes in the global oil benchmark. Join the conversation and be part of a thriving community that values knowledge and preparedness.
8:25 Wealth Preservation
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I’m Lynette Zang, Chief Market Analyst at ITM Trading, and a very thankful prepper because we are in some very treacherous waters. So welcome to Mantra Monday. Let’s just jump right in.
Because the world food prices rise for the first time in a year according to the UN Food Agency. And we know that food becomes the single biggest issue for people as we go through these transitions. So making sure that you have food security is absolutely critical. Why do we? Okay. Absolutely critical. Now what we’re seeing is that the world food prices, I mean it’s really kind of interesting because we’re seeing just the opposite of this. But what they’re saying is that world sugar prices are spiking well in a lot of processed food, there’s a lot of sugar. So what are you doing to make sure that you have food security? This is what I’m doing is can we show, this is my basket of produce. Look at these gorgeous tomatoes. I’ve got bigger ones coming next week. Mint, kale, carrots, lemongrass. Okay, so if you can grow your own food, this is critically important that you become as food independent as you possibly can. If you’re dependent on the grocery store, it’s gonna cost you more if you can get it. But I think we’re already seeing barren shelves.
And Kenya’s economic growth, undershoots expectation on drought. Kenya’s economy performed worse than expected in the fourth quarter as a drought. Tighter financial conditions and government spending cuts weighed on output and consumption. You’ve gotta have water in order to produce the food and you also have water to drink. So the two things we can’t live without are food and water. So make sure that you are secure in this because yes, it’s gonna impact the whole global economy.
US Crude sets the world’s most important oil benchmark for the first time. Now I think this is particularly interesting and we’re gonna get more into this in the next few mantra Mondays, but WTI West Texas crude Midlands Inclusion. So this is new. Remember since the, since the eighties, early eighties, really seventies, they have turned absolutely everything into a tradable financial product. And now finally fracking and the US Midlands inclusion and Dated Brent-a pricing basket traditionally made up of North Sea grades Brent, Forties, Oseberg, Ekofisk and Troll-is the most significant overhaul of the measure in decades. Really interesting. So they just put it into the benchmark as it’s on the decline, which I think is so interesting.
Outside the Permian, the rest of the US shale production appears to have peaked with output declining in a number of them. But here’s the peak right here in 2020. Now that was a big decline there because of what was happening with the cerveza virus virus. But even so, even afterwards, you can see in all of the levels, these are all the different oil fields. They’re a lot lower than they were in 2019, but goody cause now it’s part of the benchmark. And if there’s less output, well we have to see what happens with demand as well. And this is just in the US.
When people are hungry and hopeless, they make choices they would not otherwise make. San Francisco woes, multiply, multiply as Nordstrom joins retail exodus. And these cities in many areas are becoming like ghost towns. When property is unoccupied, it definitely goes downhill and you have an element that goes in and can get really pretty destructive. Nordstrom Inc. Plans to give up at store in downtown San Francisco, becoming the latest retailer to depart the area as the city struggles with emptied office buildings and crime concerns. So I know, I’ll tell you one of the best things that I’ve done honestly is to put in security shutters. You know, my sister put in security screens. So what are you doing to make sure that people cannot come into your home, into your property when they are that desperate? You need to make sure that you’re covered because as businesses, shutter, crime grows. And when people are hungry and hopeless, they make choices. They would not otherwise make.
Barterability. Right? Now, I can barter with any of the produce in my basket, but it has a shelf life. That’s why silver is a better basic barter tool cause it doesn’t have a shelf life and it’s recognizable and there’s always demand because it’s used across the entire spectrum of the global economy. But if we’re going down to South America and we look at Argentines pulled a billion dollars from bank accounts in April rush. So what we’re really seeing, and we certainly saw this with with credit suisse as well, the issue around the global banking system is a global banking system issue too. It’s not just the little regional banks in the US but it’s also the big banks in Europe and and in Argentina as well. Deposits fell, peso, weakened. Well why would they do that? Well, Argentines withdrew over a billion of US dollar deposits from the banking system from late March to the end of April as speculation. So one month as speculation spread about a potential currency devaluation in the official exchange rate. Now isn’t that interesting, right? So when people start to lose confidence in this garbage, they fly to safety of real money. So right now they’re still looking at the dollar, but you and I live here, we know how much more expensive everything is. Is it because the dollar’s so strong? Heck no. It’s because by design the central banks are destroying the purchasing power of the currencies. Dollar deposits drop nearly 16.4 billion on March 20th to just below 15.3 billion by the end of April. A 6.7% decline according to the central bank in Argentina. Checking accounts are denominated in pesos, but savings accounts can be denominated in US dollars. A reality after decades of currency crisis and runaway inflation. But they’re going from the frying pan into the fire because is the dollar really a whole lot better off than the peso? No. No it is not. And ultimately the true flight to safety is always into gold that has been proven over and over and over again. And look at Zimbabwe, I’m gonna talk more about this, but look at Zimbabwe now coming out and backing their CBDC with gold that just started on is today the eighth ninth. Oh, okay. That just started on the ninth of this month and we’re gonna have to see if it’s convertible. So there’s more to the story yet. But stay tuned.
Because, because when as they destroy this, this stuff, the purchasing power, if all of your assets and all of your wealth are intangible and denominated in the currency, they can go up to 10 trillion. But if the currency has zero value, doesn’t matter. A trillion times zero is still zero, zero capacity to save Argentines buckle as inflation tops 104%. Are you gonna wait till inflation in the US tops 104% or are you gonna get this now while it’s still available and, and your dollars can buy something because countries that have experienced this know better, they can’t buy the produce. That’s why it’s so important for you to grow it. But the cards are stacked against you by design. Inflation causes nominal confusion so people marry the numbers. But again, a trillion times zero equals zero. If you can’t buy anything with it, what good does it do? We’ve seen billionaires in Zimbabwe.
And the importance of community and community is arguably the most important part of the mantra because no one person can do it all themselves. And it seems to me like we have been more and more and more separate and it’s divide and conquer. If you’re not part of the community, if you look at the wealth of mental illness that’s happening, a lot of it has to do with loneliness and feeling not a part of. And I know a lot of people that come and watch this material and that are part of thriver the new Thrivers community. People feel alone because they talk about this with their friends and their family and they think they’re cuckoo birds, but they’re not cuckoo birds. You know, you’re not, you know it, you’re seeing the truth. It’s just that other people have their heads buried in the sand. So we need to come together with like-minded people so that we just don’t have that same issue. Community again, arguably the most important part of the mantra. You need every single piece and you certainly need your wealth protected and your food and your water, you need every single piece. But community is critical and that’s what we’re all about at the Thrivers so you might wanna check that out if you haven’t already.
And shelter. Well this is the house price to income ratio in the United States from the first quarter of 2012 to the fourth quarter of 2022. And even though the real estate prices have turned, you can still see real estate is highly unaffordable for most. And with interest rates going up, you see part of what could push the price of real estate up were interest rates down at the bottom somewhere near zero, 2%, 3%, so that then people could, in theory anyway, afford more house. But you’ve got house prices still at nosebleed levels and incomes that are ticking up in some cases. But down in other cases, it still means that house prices to income ratio are still at the very unaffordable level that will change, right? Right now you have house prices here and you have gold prices down here that’s gonna flip flop. And so what history has proven over and over and over and over and over again, on average 25 ounces of gold can buy an entire city block buildings and all the opportunity lies ahead as long as you can hold on to your purchasing power. That’s part of the strategy. It’s not all of the strategy, but certainly into the future we are going to be able to get into position where we cannot outlive our income. Just keep hanging with me. I’ll let you know when I do it because house price to income ratio remains near all time high. Oops. Sorry about didn’t really mean to do that, you got a little cutting to do in this one.
But that’s mantra Monday. It is critically important that you get this done as quickly as possible because it’s not all doom and gloom as I just showed you. If you can be in the right place at the right time with the right asset, then not only will you survive this, but you could even thrive through it and come out the other side in a much better position. So if you haven’t set your strategy in place yet, click that Calendly link below, give us a call, set up a time to talk to one of our strategy specialists and get your own strategy in place and get it executed as quickly as you can. And also don’t forget that we have the Thrivers community and you get exclusive access to me realtime content, lots of real-time content, not just for me, but from lots of community members and certainly my team where you can see what we’re doing up north. You can see what we’re doing on the farm down here. So if you haven’t yet, please remember to subscribe, leave us a comment, give us a thumbs up and share, share, share. And until next we meet, please be safe out there. Bye-Bye.
Higher Oil Prices Means Wall Street’s Shale Investments Will Finally Pay Off – Bloomberg