Tuesday , April 13 2021
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Jay Taylor

Articles by Jay Taylor

Appearance of U.S. Government Solvency

20 hours ago

Growing fear of financial fragility in the markets and rising fears of inflation are keeping the Fed suppressing the long end of the yield curve and proclaiming anti-inflation rhetoric. It reminds me very much of my early adult years, of the inflationary 1970s, when my first mortgage rate was 17.5%.
Only this time, we are infinitely worse off because we can’t take long-term rates much above 2% or the whole dollar-based system will implode. Money has to be created out of thin air, with the money supply growing infinitely. That’s necessary not only to keep the U.S. government appearing to be solvent but also to paper over growing evidence of insolvent hedge funds and to keep stock prices elevated, lest we have pension funds all over America biting the dust. 
Almost every day, Chairman Powell

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Real World Inflation

15 days ago

The financial markets enjoyed a great week at the expense of the monetary metals and commodities. And in his March 25, 2021, missive, Michael Oliver’s work suggests that commodities are likely to become involved in a choppy arm-wrestling consolidation at or around current levels for the next month or two although it is not unreasonable to wonder just how much impact the lack of transport through the Suez Canal will have on prices at the same time massive stimulus is being released in America. But given the torrid pace of inflation in the real world as displayed on the following chart, some sideways action would seem reasonable and welcome. Our government can talk about 2% inflation, but whose kidding who? The chart on your left gives you an idea of the massive inflation in all manner of

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Interest Rates amid Out of Control Spending

20 days ago

John Rubino, Corwin Coe and Quinton Hennigh return as guests on this week’s program.
As countless thousands of illegal immigrants swarm over the U.S. southern borders from all over the world, Democrats can’t wait to give them free stuff in exchange for votes. It’s as if money grows on trees.  But it doesn’t! Each dollar created has behind it not gold but a dollar of debt. The math doesn’t work because debt is growing much faster than income. Sooner or later, the system will either implode into deflationary depression or explode into a hyperinflation.
How much more of this debt-based money can be produced before we face a hyper inflationary end? That is what was discussed with John. Corwin, who heads up Sitka Gold Corp., provides  updates on not just one but on three exciting gold

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Inflation Fears

22 days ago

We witnessed a slight whiff of deflation last week as fears of inflation drove interest rates higher to the point where they started to give stocks a bit of competition. The 10 Yr. Treasury rose to 1.75%, which compares to the 1.34% on the S&P 500. True, you get a 1.82%% dividend yield on the Dow but if it’s income you are looking for, why would you want to own stocks for a mere 7 basis points especially when stocks are at historically high levels and when U.S. Treasuries bring much, much less volatility? Certainly, insurance companies and pension funds must be thinking like that even if retail investors generally are not.
Ten Year U.S. Treasuries
At least before the market started melting down this past week, some people were suggesting that the Fed should allow rates to rise rapidly,

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Central Bank’s Deception of Monetary Reality

27 days ago

Chris Powell, Michael Oliver and Patrick Highsmith return as guests this week on the program.
If individuals created money out of thin air as central banks do, they would go to jail for counterfeiting theft. The need for this central bank’s immorality is to be able to clandestinely pick the pockets of its citizens to fund “essential” services run by the military industrial complex and “bleeding heart” socialist politicians.  To achieve that end, the price of gold must be capped within possible limits to con the masses into remaining confident in a dollar that has lost massive amounts of purchasing power.
Chris explains the mechanical operations of how this con job is carried out by America’s ruling elite. Within this con operation gold creeps silently higher over time, allowing retention

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A Sick Cycle of Money Printing

29 days ago

In America, money grows on trees. Actually, it doesn’t: In America, money grows from computer keystrokes! So, party on! Wall Street celebrated this week—sort of—though there are growing concerns even among Keynesians that inflationary pressures may be about to get out of hand. Oil was a big weaker this week, but base metals soared and gold and silver found their footing and rose a bit. But the big kicker in my view was a surge in interest rates, evidenced by the decline in the long bond (TLT). Also, my IDW hit yet a new high this week, rising from 181.7 last week to 183.25 as of March 12, 2021.
As Michael Lebowitz, CFA, tweeted out last week, “if the Fed prints friendly gradual inflation, it has a numbing effect. It impoverishes the middle class, 

but enriches those who are already filthy

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Investments for this Brave New World

March 10, 2021

Frank Holmes and Jeff Deist return as guests on this week’s program.
Trillions of dollars created out of thin air serve to reduce interest rates toward zero. This combined with lower capital gains taxes has resulted in the greatest financial gambling casino in history and taken wealth away from production. Now, with inflation on the rise, the days of zero interest rates appear to be numbered. And a new administration is likely to hike capital gains taxes forcing capital more toward companies that actually produce useful products and profits.  What kind of companies will benefit most from this rapidly changing environment? Gold and various commodity producers should do well as raw materials prices rise. But what about technology stocks, including crypto currencies?
We asked Frank, whose

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We Hold these Truths to Be Self Evident. Not!

March 8, 2021

The founding of America in 1776 was based on the following values spelled out in our Declaration of Independence.
“The unanimous Declaration of the thirteen united States of America, When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.
“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of

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The Return of the Bond Vigilantes?

March 1, 2021

Bloody Awful! While copper and oil continued to rise and the Rogers Raw Materials posted a strong gain this week, the Biden Treasury and friends made sure price discovery for gold and silver, which compete as money with fraudulent fiat, was denied. The paper markets once again smashed those honest money metals and it wreaked havoc on our Model Portfolio, which, prior to this week, had been outpacing the S&P 500 by a wide margin.
Let me comment quickly about my IRA trades this week, because they reflect my gut feeling about the dangers that we are facing now that my worst fears seem to be unfolding.
What are my worst fears? They are that we will have a replay of the 1970s when the Fed lost control of interest rates. A new term, “Bond Vigilantes,” was invented then to describe the market

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Rising Interest Rate Concern

February 22, 2021

Everything was down this week except commodities (Rogers Raw Materials Index) and by my Inflation/Deflation Watch). This is evidence of rising prices in the real economy rather than financial market inflation and it seems the Bond Market (TLT) is responding with higher rates. The 10-Year U.S. Treasury rose this week to another high of 1.34% since the rise began last August.
It’s pretty amazing that my IDW eked out a gain this week despite the fact that virtually all stock indexes in the Watch fell. But copper surged by 7.64%. That along with the Rogers Fund was sufficient to increase my IDW from 182.05 last week to 182.13 this week. 
Also, note that in this letter’s Model Portfolio shown above left, the only positive sector is the Base Metals Energy & Tech stocks. Alliance Bioenergy has

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Could Rising Rates Pop the Equity Bubble?

February 17, 2021

Lyn Alden and Michael Oliver return as guests on this week’s program.
Even though M. Oliver has been bearish on U.S. Treasuries, his analysis persistently convinced him it is not yet time to pull the plug on the U.S. T-Bond. However, his work has also persistently pointed to a rise in commodity prices and long-term dollar decline. He awaits his momentum and structural analysis to dictate Treasury plug pulling time. He suspects rising levels of inflation will trigger a rate rise explosion that leads to the Fed’s loss of control of rates which will in turn trigger stock market carnage.
Lyn explains how rising rates impact equity markets and if she can perceive of market dynamics that might cause central banks to lose control over rates. We ask M. Oliver for his latest T-Bond rate analysis &

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With Inflation & Interest Rates on the Rise Stocks May be in for Trouble!

February 16, 2021

I’m very concerned now that we are entering a period of stagflation akin to but likely much worse than that of the 1970s. Not only has my IDW hit new highs early this year but since the March 20, 2020 Covid-19 stock market crash, the first 4 of the top 5 components of the IDW were housing and commodities and 6 of the top 8 were related to real estate and commodities.
Despite the rise off the bottom of the commodity sector, the chart below left shows just how suppressed commodities are relative to their 2011 top. As inflation begins to rise, we are also seeing interest rates begin to rise (note TLT is down 8% this year meaning yields are up) and the dollar has begun to decline which adds still more inflationary pressures. Michael Oliver views the following chain of events: 1. Inflation

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“Mugs & Metals” on the silver squeeze. Got gold?

February 15, 2021

Last week I joined February’s “Mugs & Metals” panel that discussed the “silver squeeze” that is going on. In this discussion, lead by Elijah Johnson, I joined Frank Holmes, Andy Schectman, Lobo Tiggre, Patrick Vierra, Chris Marcus, Robert Kientz and Tavi Costa.
From Andy Schectman, we learned that retail bullion dealers are unable to access silver without paying huge premiums even as in some instances they have to wait many weeks to take delivery. At the current price, constrained by the massive paper markets, supply is simply not coming on to the markets. Andy opined that it would take at least $50 silver before some supply might be pried from the hands of silver hoarders. He went on to say “We’ve seen the most demand in 30 years for silver at Miles Franklin in the last two weeks.”

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Inflation Showing Up

February 15, 2021

Is the T-Bond starting to sniff out some inflation concerns? The 10-Year U.S. Treasury nudged higher to 1.21% this week. As this chart shows, the trend is undeniable.
My IDW hit a new high again this week at 182.05 as this “everything bubble” continues to expand. It is primarily the Commodity items in my index, which eventually show up in the CPI, rather than Stocks, that have risen the most since January 1, 2021. The Rogers Index, which measures food, clothing, energy, and base metals, is up 11.24% in the first six weeks of 2021. The Housing Index is up by 11.78%. The big gainer is Oil, which is up 22.77%. Copper has gained 6.12%. Various equities sectors like the Auto, Real Estate, and Consumers are represented as well as India and China stocks. Those have all gained in this everything

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The Upcoming Revolt of the Middle Class

February 3, 2021

Charles Hugh Smith, Michael Oliver and Chen Lin return as guests on this week’s program.
Last summer BLM & Antifa wrecked havoc in most of the large cities in the U.S. while the mainstream media paid little attention to it or to the plight of America’s middle class who have become increasingly impoverished by the transfer of wealth from manufacturing to government-funded enterprises. With their voices not heard for decades & their President censored from partisan Twitter & Facebook, the anger of a small number of Hillary Clinton’s “deplorables” triggered the January 7 storming of the U.S. Capitol building. Will silencing descent lead to national unity or is that akin to pouring fuel on to the fire?
Charles explains the reasons for the evolution of two separate Americas and what impact

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Dot-Com Insanity

February 1, 2021

This past Tuesday on my radio show, John Rubino noted this market has the feel of the dot-com insanity of 2000 with GameStop Corp. being the poster child for this nonsense.
Not only were young folks with little or no experience in the market buying with abandon anything with large short positions, but so too were some major players.
According to reports on Friday, nine investors, including large fund-running institutions like Fidelity FMR and BlackRock, plus some well-positioned individuals like Chewy co-founder Ryan Cohen, watched the value of their GameStop holdings soar more than $1 billion. That’s based on an Investor’s Business Daily analysis of the most current holdings reported to S&P Global Market Intelligence. It’s possible some of these investors may have boosted or cut their

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Will Democrats be Gold Friendly?

January 27, 2021

John Rubino and Dr. Quinton Hennigh return as guests on this week’s program.
The Democrat party hates gold. Alan Greenspan explained why in 1966. He wrote: “This is the shabby secret of the welfare statist tirades against gold. Deficit spending is simply a scheme for the hidden confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.” Now that Democrats control all branches of our government what will that mean for stocks, bonds, commodities and precious metals in 2021? Absent a Republican-controlled senate, we can anticipate endless trillions of inflationary dollar creation.
John opines on what that will mean for the

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January 25, 2021

Although the energy heavy Rogers Raw Materials Index was down 1.03% last week, everything I’m looking at suggests we are facing inflationary headwinds.
My IDW shown below hit another new high at 176.45. Driving my IDW higher this past week were the Housing Index (+6.39%) and the China Stock Index (+6.12%); Silver posted a 2.99% rise as well, and Gold picked up a bit too. But this is a stagflation story more akin to but likely much more severe than that of the 1970s.
The chart below on your left is from the Wolf Street report dated January 22, 2021, and shows the massive decline in jobs, which means prices are rising not because of healthy economic demand.

What is leading to inflation if the economy is so weak? Well first off, supplies are being reduced because government is forcing

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Interest Rates Could Get Away from The Fed

January 18, 2021

Veteran mining analyst John Tumazos commented on his outlook for gold and the markets on January 13 and he said a couple of things I agree with that most market participants don’t see:
First, he said that he ridicules both equity investors who think the Fed controls interest rates or anyone who buys government bonds or US treasuries with interest rates approaching zero. We observe events that suggest 5% or higher for 30-year Treasuries. 
Secondly, John called attention “to the unwillingness or inability of manufacturers to deliver goods.  In other words, excess liquidity will be exacerbated as new supplies of goods may not be delivered or supplies fall.  In our opinion, the current climate resembles the 1973-74 era of Nixon’s wage-and-price controls, where shortages abounded as

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MIF Letter Writers Share Their Top Picks for 2021

January 13, 2021

Peter Ball, Brent Cook, Chen Lin, Eric Coffin and Gwen Preston return as guests on this week’s radio program.
The junior gold and silver exploration stocks have been on fire and with massive monetary inflation required for the U.S. to fund its surging deficits to the detriment of the dollar, 2021 figures to be another banner year for companies able to make significant discoveries of precious metals deposits in the ground. Peter’s NV Gold Corporation has several prospects in Nevada that look promising, details of which he will share. Brent, Eric and Gwen are especially adept at locating companies with favorable risk/reward exploration prospects.
Chen shares his expertise in the biotech sector as all four guests share their views for 2021. Brent, Eric and Gwen won the gold, silver and bronze

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Suppression of First Amendment Rights

January 11, 2021

It was another “Inflation on” week with my IDW reaching another new high. It rose from 173.87 last week to 175.65 as of today. No doubt inflationary pressures and increased equity prices have put some downward pressure on the T-Bond. With rising levels of price inflation, you might expect the gold and silver to rise but perhaps it was the “stronger” dollar that put downward pressure on the precious metals. The dollar rose on the index to 90.066, up from 89.94 last week. Or it might very well be policymakers with their own propaganda policies in play. As Chen reported, “someone” suddenly sold $2 billion worth in the market before the U.S. markets opened, leading to a sharp downward spike. Could it be that someone wants to send a message that with Trump now out of the way and the global

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The Fourth Estate’s Role in Thrusting America into Fascism

December 30, 2020

Charles Hugh Smith and Jim Greig return as guests on this week’s program.
Fascism is the system of government that cartelizes the private sector, centrally plans the economy to subsidize producers, exalts the police state as the source of order, denies fundamental rights and liberties to individuals, and makes the executive state the unlimited master of society. By that definition fascism is now rising rapidly in America. The “Fourth Estate” refers to the press and news media, both in explicit capacity of advocacy and implicit ability to frame political issues. It wields significant indirect social influence. At no time in American history has the press manipulated the outcome of a Presidential election more toward a party espousing economic fascism than in 2020.
Charles discusses that and

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A Brief Note About Mining Analyst Leanne Baker’s Passing

December 26, 2020

When I heard the news of Leanne Baker’s passing, I knew I had to express my sadness.  My work as an investment letter writer allowed me to meet this very special person only briefly on a few occasions. Except for people close to me, I have never felt such sadness as when I learned of Leanne’s passing.  I think I know why. She was one of the kindest and classiest persons I have met in her industry and in my brief encounters with her I always felt more at peace.   I’m sure she must have had that same impact on those who knew her far better than I.
Her gifts to those around her and those she served in her profession without a doubt made this world a better place.
Our sincere condolences go out to her family.
Jay Taylor

Post Views:

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Preparing for the Petrodollar’s Demise

December 23, 2020

Lyn Alden, Michael Oliver and Corwin Coe return as guest on this week’s program.
After President Nixon closed the gold window in 1971, the U.S. dollar retained its value despite massive expenditures undertaken to expand its empire. The dollar retained its value through diplomatic arrangements with Saudi Arabia to force nations around the world to pay for oil imports using U.S. dollars. To enforce the dollar system, the U.S. military was used in countries like Iraq and Libya.  Seemingly, the U.S. could issue an infinite amount of debt used to manufacture dollars.
Lyn explains why the petrodollar’s days are limited, what that will mean for Americans in general, and how investors should prepare to profit from this knowledge before the dollar’s imminent decline. Michael shares his thoughts on

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Bitcoin and The Dollar

December 21, 2020

I don’t want to call this a risk-off week even though stocks and bonds and precious metals rose and interest rates rose. I think it more appropriate to view the world a bit differently now because I think what we are starting to see is major concerns of the one market that is involved with nearly every trade in the U.S.—namely, the dollar. So, I’m starting to look at rising commodities, silver copper stocks, and yes, also rising interest rates as a “risk on” for the dollar. No market has illustrated this concern more than the rise in the price of Bitcoin from $10,494 on Sept. 22, 2020 to $22,860 as of Friday, Dec.18. That’s a 118% rise in three months!

In addition to Bitcoin, my IDW rose by 0.88% just this week. On an annualized basis that works out to a 54% rise. The changes in values in

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Inflation Roadmap

December 16, 2020

Alasdair Macleod, Michael Hudson and Chen Lin return this week on the program.
It is beginning to be obvious that global economic woes extend beyond COVID lockdowns and that monetary inflation for the dollar, as the common foundation for other fiat currencies, whose issuers face similar problems, will continue to accelerate. Fiat currencies have only survived this long due to increased financialization of the dollar and the US economy. Since the 1980s Wall Street has gradually dominated the US economy at the expense of Main Street. It has done so through monetary inflation, creating the conditions for the ultimate monetary collapse.
We asked Alasdair to help us explain how the dollar’s trip toward the dustbin of history is likely to proceed and what we should be looking for to tell us it’s

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Selling the Chinese a Rope They’ll Hang Us With

December 15, 2020

In 1955, Major George Racey Jordan quoted Lenin as saying “When it comes time to hang the capitalists, they will vie with each other for the rope contract.” Whether Lenin actually said that is open for debate but what isn’t open for debate is the truth of that statement. We are now witnessing exactly the act of very rich pro-globalist anti-Americans discarding all our freedoms that they used to become wealthy for the sake of becoming still richer and more powerful. Here are some examples as to how American capitalists are selling the Chinese communists a rope they are using to destroy what’s left of America’s free capitalist society:
Revelations that Hunter Biden and his family were receiving $10 million per year to arrange introductions of powerful Chinese government-controlled companies

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The Handwriting is On The Wall

December 14, 2020

Judging by these metrics, we had a slight “risk-off” emotion for the week ending 12/11/20. Stocks were down and safe havens were up, evidenced by a slight increase in gold and a 2.3% increase in the T-bond. I really think the markets are biding their time to see how the new government in the U.S. is going to shake out. My view is that if the Democrats win the Senate, the day for a hyperinflationary blowoff is likely to come sooner rather than later. It’s coming in any event, but with a Republican Senate, it will take a bit more time for the complete destruction of the America as we know it than if the Democrats take total control.
Either way, the handwriting seems to be on the wall, or on my IDW, if you will. The rise was a bit more subdued this week, thanks to declines in the S&P 500 and

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Coping with a New World Order

December 9, 2020

Richard Maybury, Michael Oliver and Marco Roque return as guests this week on the program.
The Fourth Turning of America began around 2008 when American intelligence services began spying on Americans rather than exclusively on foreign adversaries. To the deep state, the forces of democracy become problematic when they seek to question abuses of power by elite members of society. Donald Trump got in their way and thus the U.S. government spied on him and his administration from the very start of his Presidency. They employed means to remove him from draining their swamp. So, Americans are now in the process of losing the promise of life, liberty and the pursuit of happiness.
Given that America’s version of fascism appears to be gaining a foothold in the U.S. Rick shares his concerns and

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Reducing Investment Risk amidst Increasing Chaos

December 2, 2020

David McAlvany and Dr. Quinton Hennigh return as guests on this week’s radio program.
As we end the insanity of 2020, what might be in store for 2021? A growing number of proponents of Modern Monetary Theory (MMT) suggest that wealth can be created via central bank printing presses and computer key strokes. But a more primitive MMT policy was tried in John Law’s South Sea Bubble with disastrous results. With history firmly demonstrating that there are no free lunches, why do economists and politicians insist this time its different?  With COVID-19 accelerating growing levels of insolvency, what might be in store for stock, bond, commodity and precious metals markets in 2021 as massive numbers of bankruptcies appear on the horizon?
We asked David to opine and tell us how McAlvany Wealth

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