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Almost One In Four Russell 3000 Companies Cannot Pay Interest On Debt Margin Debt On Stocks Still 5% Higher Than Before The 2008 Crash World Economic Forum Promotes Insects As Great Replacement Protein... Yum

Central Banks To Target The Middle-Class To Slow Economy Extreme Interest Rate Volatility In China & U.S. In 2022 Visit mcalvany.com To See Our New Look & Latest Updates

Would A Fed Pivot Cause Stagflation? Are Things Worsening In The World, Or Are We Just Getting Old? The 15 Minutes City & Who Wants You There

The Mythos of Russian Identity Tied to Putin's Power Did Putin's Attack Solidify Ukrainian Identity? Will The War In Ukraine Ultimately Dethrone Dollar Hegemony? Click here for "The Story Of Russia," by Orlando Figes

When will the Central Bank Digital Currency be introduced? Where can we place our economic faith right now? Does government debt matter when interest rates are still low? Your Questions Answered Part 1 December 14, 2022 “While rates are historically low, the debt is significantly greater today, which magnifies each incremental move higher in interest rates. So even with small moves and rates on a very large number, the IMF puts total global data at 230 trillion. The World Economic Forum figures it’s a little closer to 300 trillion. Wherever you pencil it out. To manage that debt at 0% is easy. It’s not so easy at 4%. It’s definitely not easy 5 or 6 or 7%. 1% on 300 trillion, 3 trillion in debt service, but 4% puts you at 12 trillion.” — David McAlvany Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick, along with David McAlvany.  I always enjoy these programs, Dave, but I enjoy it even more when you’ve been traveling. I know you’re over in Europe right now, and this is more common than uncommon where I’m talking to you, you’re on the phone, and we’re doing a Commentary thousands of miles from each other. David: Well, the last time I prepared for a commentary in Europe, I was on a train between Paris and Brussels, and sometimes I’ll listen to music while I’m doing that, and it was Palestrina then. Now on the same train with a dear friend and colleague and my youngest son, and it’s the Kronos Quartet instead of Palestrina that’s running in the background.  So we’ve now operated in the US and Europe for a long time as a business, and times change. The way we do business has had to evolve through the years. It’s been 50 years, so some things have to change. We maintain the same relationships here in Europe. Adaptation, of course, has had to take place with new regulatory landscapes, and it’s required us to evolve as well. So a number of years ago, inspired by a very tight supply of physical metals in the US—that was in and through the global financial crisis—we established impeccable relationships in a number of Europe’s gold and silver hubs which allow us to source product even when the US markets are too tight and premiums excessive. So banks, central banks, refineries in the UK, Switzerland, Germany, France, Belgium, they fill the gaps that would otherwise exist and do exist for other precious metals firms. So having superior products and sourcing will continue to serve us well in the bull market that is ahead of us. I’d love to be recording the Q&A from Durango. I’d love to be in studio. I hope those listening will tolerate slightly inferior sound quality. But here we go, the first of a couple of weeks because we’ve had a lot of questions, and we’ll just dive right in and cover as many as we can today. Kevin: Well, it sounds good, Dave. And actually I’m a beneficiary. I know my clients have been a beneficiary of just having those inventory resources over in Europe, and I bought a tube of sovereigns last Friday, and we haven’t had sovereigns in a while, so I appreciate that you guys are over there. I appreciate that you’re keeping the relationships going.  I’m going to start out with the question from Steve. He says, “Over the last couple of years, digital dollars have been discussed by various governments and NGO entities. Recently, it seems the fire has been turned up. In fact, the FTX Ponzi scheme may be the perfect ‘reason’ for Congress to implement rules and regulations on digital dollars in order to ‘protect the public.’ What is the likelihood that CBDC will be introduced or even made mandatory in 2023?” David: Yeah. So central bank digital currencies, the idea of them being mandatory in 2023, there is no pilot program at this point. So a realistic timeframe is not likely in 2023. If the Fed launched a program in 2023, again, a pilot program, general adoption would still be several years out from that date.

Blackstone has to halt redemptions - Price drops 12% GDP boosted by strategic petroleum reserve sales & weapons to Ukraine Send questions for Q&A to info@mcalvany.com Fed Pays Banks 3.9% To Not Loan Money! December 7, 2022 “And that’s been the story of this year. Uniformity was the surprise for the 60/40 portfolio because you thought you had a balance between stocks and bonds, and that balance was supposed to keep you from losing money, and yet you lost on both sides. Instead of losing on one and gaining on the other, now you’re the double loser. Uniformity is telling you that policy matters, rates matter. We have a very leveraged system which is hypersensitive to small changes.” — David McAlvany. Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick along with David McAlvany.  We’re coming into that time of the year where we’re going to do our question and answer program. If you would send those questions to info@mcalvany.com, three to five sentences long, please, but we’ll try to get to all of those questions at info@mcalvany.com. I-N-F-O at M-C-A-L-V-A-N-Y.com.  Well, the famous Table 30, Dave. Table 30. You left me. You left me and you went down to Cancun. You have a friend who is a musician professionally, and he invited you down for a couple of days. And you had texted me—and thank you, by the way, for communicating that you weren’t going to be there for the Monday meeting, that was helpful. But when you texted me and said, “Hey, can you cancel Table 30?” I thought, “You know what? We both have a doctor who’s a friend who listened to the Commentary back when he lived in New Zealand.” He moved to Durango and I called him up and I said, “Hey, remember Table 30?” He goes, “Oh, yeah, I’ve heard all about Table 30.” “Well, would you join me for Table 30 on Monday night because Dave is out of town?”  So, I hate to sound like I was a traitor, Dave, but for the first time in over a decade of the meetings on Table 30, you weren’t there. I still enjoyed the Talisker and Dennis did, too. David: Well, it sounds like an official launch for the rebranding of the McAlvany Weekly Commentary. We’ll just call it Table 30 from now on. Kevin: You know what? That’s been suggested, that’s been suggested. David: Table 30 it is, it’s where the good stuff happens. It is a little bit like jazz, you don’t necessarily know what happens next, but it’s always good. Kevin: Well, and speaking of that, I think you’re just about to head to Europe for a couple of weeks as well. So, I think we’re probably going to desert Table 30 a bit but, hopefully, we’re going to have some really good interviews. I know you’re looking at interviewing someone just strictly on this history of Russia and Ukraine. How do you say his name? Is it Figes? David: Sure—I don’t know. Kevin: But I’m looking forward to hearing that. David: Well, I’ll be back in town sometime around the 14th or 15th of the month and that’s going to be immediately after Powell’s comments and the determination of the next move by our central bank. So, there’s some things that may or may not deliver this year for Christmas. We like to think of the Santa Claus rally, and maybe it’s not quite as generous as it’s been in past years.  Last week, the big moves in the markets came after the Powell address at the Brookings Institute. This was not an official Fed announcement with Q&A, but these days a central bank talking about anything—about the weather—it changes the mood of investing, and it is a part of that exaggerated focus on Fed-speak and the market dynamics that tie to a very sensitive structuring of assets.  Doug and I were talking the other day and he said there was a point in time, not that many years ago, where there were no Fed announcements. You had Fed watchers, and they had to determine what was going on by the actions taken.

Cap Russian Oil at $30.00? Hello Black Market Mark Mobius Predicts Bitcoin Falls To $10k... Q&A Programs Are Coming. Submit Questions to info@mcalvany.com Will Sesame Credits Be Xi’s Tiananmen Tank? November 30, 2022 “There is no going back to what we just had in terms of an up trend. Now, we get to process through the excesses. That’s where we see changes in the bond market. That’s where we see changes in the stock market. That’s where we see changes in the real estate market. And all of a sudden, what you have in the cryptocurrency world is just symptomatic of excess speculation coming to the end of this particular cycle.” — David McAlvany Kevin: Welcome to The McAlvany Weekly Commentary. Now, I’m Kevin Orrick along with David McAlvany.  I always enjoy this time of year, Dave, because we ask our listeners to give us questions. And please send those to info, I-N-F-O @mcalvany.com, info@mcalvany.com. That’s spelled M-C-L-A-V-A-N-Y.com. It’s good to get feedback from— I almost feel like it’s family that’s listening to the show every week. David: I don’t know if I enjoy this season or not, because it’s incredibly humbling getting the questions that we do. And I will say that over the 15 years of doing this, each year, the questions have gotten progressively harder. It makes constructing an answer, it makes researching an answer, it makes responding that much more challenging. Kevin: One of the things I heard, another podcast that I listen to, they do question and answer as well, Dave, and they ask their listeners to make the questions no longer than about four or five sentences. I think that would be a reasonable request in this case too. Some of these questions come in and there’s several pages in the past, and it takes most of the program to read the question. David: Yeah. So keeping it brief and to the point, construct the question well. We’ll try to construct the answer just as well. Kevin: You got a comment last week from someone. Speaking of questions and answers. You may have misspoken slightly as far as the name of one of the cryptocurrency companies. And probably worth addressing that before we even get started today. David: Yeah. At first, we have another casualty in the crypto world. BlockFi filed bankruptcy—that’s chapter 11—this week. So that’s the first notable event in crypto land. Second to your point, last week’s comments were critically appraised, accurately judged, and by an engaged listener. And so my apologies for confusing Digital Currency Group’s struggling unit Genesis with Gemini. That’s the Vinklevoss, Winklevoss, Vinkle—I’m not in Germany—Winklevoss twins. That’s Gemini, and they’re not currently under the gun. The Gemini Earn program—this is where it gets a little confusing—the Gemini Earn program uses Genesis as a lending partner. Kevin: So there still is a tie, to a degree. David: Yup. Genesis paused withdrawals on that program. But when you’re thinking of Gemini, all of the Gemini services are functional. So I think the other noteworthy fact is that the Digital Currency Group’s product Grayscale Bitcoin Trust, and I’ve owned the product in the past. I don’t any longer, but it shows stress in the way that it’s trading at present. What I mean by that is it’s trading at a 30 to 45% discount to the underlying bitcoin assets. You’re talking about 10 and a half billion dollars in bitcoin assets. That’s 643,000 bitcoins, something like that and it’s trading at less than 6 billion in value. So again, there’s something wrong with the product itself. When something trades at a discount, the market is reading through to something. Why it’s trading at a discount, I think we’ll figure that out with time. Genesis we know likely won’t survive. Kevin: Yeah. Well, there’s a complexity there. There’s a complexity too. Let’s say Genesis doesn’t survive. Does it take somebody else with them?

Crypto "Genius" will be missed by the liberal Davos Elite Rogoff will be proven right, innovation will now be regulated & appropriated Real estate prices will be the debacle of 2023 FTX, “Effective Altruism” Proves All-False November 23, 2022 “This is that inflation theme playing out and this is the middle class being under greater and greater pressure already having to adapt their behavior. The middle class is being broadly pressured via inflation into a new identity, and that is an identity that’s sometimes painful to conjure up in the mind, this picture of ‘we’re all now the people of Walmart.’” —David McAlvany. Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick, along with David McAlvany.  I have a wonderful lady who’s a client. She’s purchased gold in the past, but she moved a different direction a couple of years ago. She started buying bitcoin, and she bought it well. I remember talking to her this time last year. It was right before Thanksgiving. She had four complete Bitcoins and you’d figure that 160,000 each, that was worth almost a quarter of a million dollars last year. I’ve been talking to her and she kept her head about her. She said, “I don’t know if this is real or not, but I’ve got a quarter of a million dollars worth of Bitcoin.” Well, I talked to her the other day, and not only had the bitcoin come down, if she still had the four, it would’ve come down to about $60,000 worth of value from a quarter of a million, but Dave, she had been hacked. She said, “Believe it or not, I don’t even have them anymore. I was hacked. They were taken.” So it’s a metaphor for what’s going on in the crypto universe, isn’t it? David: I’d be hacked if I had been hacked. Kevin: Very much so. David: So many things in life are about where you start, and particularly with a Ponzi scheme. I highly suggest that if you’re going to be involved in a Ponzi scheme, that you be involved early and not late. Because if you’re involved early, you may be one of the few that gets out intact. I’m joking, of course. I’m not suggesting that anybody participate in the Ponzi scheme, or even that bitcoin is a Ponzi scheme. In fact, I know a very respectable gentleman who put a $100,000 into bitcoin. He did it at about a dollar to a dollar-twenty per Bitcoin. So he had a few more than those four that you were just mentioning. Kevin: Yeah. Wow. David: It did remarkably well. But in the end, we do find that there are complications with crypto. Financial Times put together a surprising piece called “The Crypt,” as in the crypto, but this is “The Crypt,” and this was November 16th. I highly recommend it. I think we’re all familiar with Sam Bankman-Fried and FTX’s crypto exchange at this point, but perhaps we did not know that this is actually number 15 this year on the list— Kevin: Really? Wow. David: —of crypto disruptions and implosions. For the sake of our conversation, when we think about a disruption, that’s either a partial or a complete gating of assets, in other words, you can’t withdraw when your assets are frozen. You may not get them back, or an implosion where you actually have a liquidation, some form of a bankruptcy filing. Number 15, you heard that right. Kevin: Wow. Really? Well, I knew there had been others. Do you remember some of the names? David: In no particular order, you’ve got BlockFi, Genesis, which, this is the Winklevoss twins, and actually, this is just as of today, they may be facing bankruptcy if they can’t raise a billion dollars. Yeah, a billion. That’s no big deal. Kevin: Just a billion. David: SALT Lending. There was FTX, which of course we mentioned, Hotbit, Hodlnaut. This one sounds like it’s a comic book: Invictus Capital. Vauld, Voyager, Babel Finance. Celsius goes back a little ways. Earlier in the year, we had the Terra and LUNA, that whole debacle,

Crypto carnage as FTX declares bankruptcy Recession looms while stock market celebrates 7.7% inflation Learning the art of living backwards Carry Trade Heaven Now Hari-Kari Hades November 16, 2022 “So the markets are a daily engagement. Last week’s activity was so radical in nature as to the off-the-bell-curve-centerline and more out on the edges of professional experience. We reflected many times midweek, the whole team, about how only once, twice, maybe three times in your professional career, in the context of money management, do you see this kind of radical behavior, interest rate volatility, currency market volatility, equity, digital asset volatility, all on a spectrum that was fitful and very atypical.” — David McAlvany Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick, along with David McAlvany.  It’s amazing, Dave, you sent me notes this morning. We didn’t get a chance to meet last night, so you sent me notes, just scribbled notes, actually typed notes from the Dallas airport, and I had my assistant print them from Phoenix into the Durango printer. I came in and it’s like, oh, so Dave’s trip to Dallas went well. You landed at 10:15. It’s noon now. We’re recording. It’s just— Technology, it’s amazing how we can pull these things together. You from Dallas. The recording studio is up in Idaho. We were just talking to John in the recording studio. The notes were printed from Phoenix to Durango. All this stuff comes together and it sounds almost like we’re just sitting in the living room, doesn’t it? David: Everything is speeding up. You had Moore’s Law, which explains some of how things are moving faster and faster and faster. Kevin: How about volatility in the markets this last week? Have we ever seen what we’re seeing right now? In bonds and geopolitics it just feels like something is really brewing, like the froth on the top of your espresso that you’re sipping right now. David: Everything is speeding up, and maybe that’s a consequence of getting older, and we tell ourselves that. We know that’s true, but it has this sense of speeding up. In the markets, some of this has to do with structural changes that happened in 1999, 2000. We were two decimalization from fractional shares, which allowed for a more rapid transaction to occur. We really didn’t have— Kevin: Or transactions per second. High frequency trading, you can have 500 transactions in a second. David: Looking at last week, markets decided to melt up, not melt down. I think it’s important to look at the context. We’ve got the bond market, which is in the middle of its worst year in modern history. You’ve got pending home sales, which have dropped 31% year over year. Kevin: 31%. David: And that’s as higher rates are starting to impact real estate, and I will say just starting. We passed the 31 trillion mark on our national debt as of October. Kevin: I thought Biden said he cut that in half. Was he mistaken? David: I think he might have misspoken. It doesn’t happen often, but we’ve since then already added a quarter trillion dollars more, a quarter trillion in less than a month. So some estimates put our 2023 interest payments at a trillion dollars. That’ll be a first in US history. Kevin: Wow. David: A trillion dollars interest payment for the year. Run the math on what percentage that is of our tax revenue, and you realize that this is really becoming something. The Fed is still reducing its assets by 95 billion a month and— Kevin: Well, who’s going to loan us money then? The Japanese and the Chinese have been doing that, but I don’t know that that’s going to continue. David: It’s a big question because we’re on track to add, next year, $2 trillion to our debt. So again, over the next 12 months, we have to find replacements for the Japanese, for the Chinese,

Powell pops the pivot presumption Midterms & CPI numbers this week Will the dollar fall & gold rise? Technicals are hinting yes Central Banks Purchase Record 400 Tons of Gold November 9, 2022 “When you think about gold being at $5,000, that’s 2.9, almost three times higher than current prices. Some people say that’s not even reasonable. Now, actually, it’s not unreasonable. If we revisit the earlier comments on sticky inflation, if we look at the structural factors of deglobalization and geopolitical disarray, they suggest that a basic three times move in gold to peak levels is quite defensible.” — David McAlvany Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick, along with David McAlvany.  The year 1896, Charles Dow, Ed Jones, editors of the Wall Street Journal, came up with the Dow Jones Industrial Average. At the time, it was worth one ounce of gold, $20. Over the next few years, couple of decades until 1929, the Dow rose to 20 ounces of gold. And then there was the reversal that actually is reminding me of where we are today. David: That’s right. So, you get an index, which was once 10 companies, now 30, and it was a proxy for the markets. Still is. You’re right. As things continue to grow in post-World War I period, we got through the Roaring Twenties to the market peak in 1929. Kevin: That fateful year. David: You could exchange your shares in the short list of companies for a few ounces of gold. In fact, it was about 19 ounces of gold, 18 and change. Then the market crashed. Stocks went into free fall. Gold obviously is a security, and people clamoring for what at that point was still just cash really. Moving to cash was moving into gold. It goes from an 18 or 19 to 1 ratio down to 1 to 1. One to one was the ratio. The Dow Jones Industrial Average had the same value as one ounce of gold. Kevin: Could that happen again? Because we’re at 19 to 1 now, aren’t we? David: We are. We’re 19.3 as of this morning, and we’ve been as high as 43 to 1 going back to the year 2000, but here we are at close to 20 to 1. Kevin: You wonder when that happens, and it’s not going to happen overnight, but I think of the tantrum that occurred a few years ago when the market expects one thing and gets another. This week, we saw the same type of thing, didn’t we? There was elation after Powell talked. David: For about 20 minutes. Kevin: And then Powell gave an interview afterwards and he just poured water on it, didn’t he? David: Party pooper. Well, his decision to raise rates 75 basis points was not a surprise, but his assertive stance in the Q&A afterwards signaled to the market that a pivot to looser policy was not to be expected anytime soon. Kevin: There’s your tantrum. David: Tantrums ensued, which may have marked the end of a very short and sharp rally. Time will tell, but it’s very interesting because we got very bearish very quickly. And then all of a sudden, as we head into this week, it’s not so bearish. We look at a variety of indicators suggesting that pressure, the internal credit market pressures are actually not on the boil. So, we’ve got an election, significant data releases this week. So, actually, a bit of confusion in terms of discerning the short term trends. That can be a challenge. Kevin: We have a tendency sometimes to look at the nominal rate, what we see in numbers, but actually the real rate of interest, negative or positive, is more important, isn’t it? David: As much progress as Powell has made with lifting rates, most recently in 75 basis point increments, in real terms, the target rate has only gone from -5.25% one year ago to -4.25% today. Kevin: So, that’s negative to the inflation rate basically. David: A real rate, you just have to factor in inflation. So, for all the lifting of rates that we’ve seen, in real terms,

Country Garden now paying 118% on its debt Equities spike up in dangerous bear market rally When does the shoe drop on the real estate market? Xi Whiz - China’s Getting Scary November 2, 2022 “It is important to look at the enthusiasm in the U.S. markets and realize the fragility that we have on a global basis because these are things that in an interconnected financial world do matter. Even if they’re not in the limelight, they’re incredibly important. The Chinese currency continues to reflect and increase stress, even with the People’s Bank of China and the Commercial Bank interventions of selling the U.S. dollar in support of yuan. Chinese currency hit its weakest level since 2007 this week.” — David McAlvany Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick, along with David McAlvany.  Your family is a very talented family, your wife, very much into the arts. Your son now is playing a leading role in a musical. He had his first night this weekend. David: That’s right. And then as you often have with the afternoon shows, there’s a little bit of a lull. They’re quiet shows. The audience is a little less engaged for those. Kevin: It’s the kickoff. Yeah. David: That’s right. So, Anastasia, we’re bringing in a little Russian conversational aspects and songs as I hear him sort of warming up his voice in the shower. It’s really— Kevin: This was your teenage boy, is— Yeah, and now he is singing— You know, Anastasia. It reminds me, back, oh, 34, 35 years ago when I first started, Dave. I had someone call me. I can’t remember if they became a client or not, but they told me that they were friends with the real Anastasia, the one who had actually lived through the execution in 1918. Of course, there’s always been this legend about the Anastasia, and you and I are reading a book right now called The Story of Russia. So we’re thinking in these terms, but it’s interesting. Disney picks up on these themes. You don’t necessarily know if you’re being told the true story, but you are being told an entertaining story. David: Absolutely. Well, the other entertaining story that I had, crossed my desk this last week was the positive GDP figures. I thought they were remarkably entertaining. Kevin: Oh, yeah, we’re doing well, aren’t we? David: Well, after two quarters of negative GDP, we end up in a positive print of 2.6%. And as you look into it, probably the most fascinating aspect, I think the most entertaining aspect, was called the deflator. The deflator is how they account for inflation. And so that adjusts the number, and, as it turns out, their inflation input runs around 4%. And I’m thinking, well, the annualized rate is still north of 8. So how did you get that cut in half just in time for the show? Kevin: Well, you can add or subtract numbers. Joe Biden was talking the other day, and he said we had 54 states in the United States, so I think you can use whatever number you want, but listen— David: You count a deck of cards, there’s probably 54 cards as long as it’s jokers included, right?  Kevin: Or the two extra aces. Remember the two extra— Oh, the ones in your sleeve, right? Is it? Well, sometimes you— Speaking of shows, have you ever looked at a line and seen a lot of people wanting to go into something that you’ve never heard of before, and you’re like, Gosh, am I missing something?  David: We’ve all done that. When you go by a restaurant and there’s not a soul inside, you say to yourself, there’s got to be a good reason. Kevin: Right. Right. David: Even if it’s not true. That’s the running assumption. Meanwhile, the restaurant next door that’s flowing out under the streets and has a line of 45 minutes wait, you think, they got to know something I don’t know.  Kevin: Well, should I have been buying stocks last week, Dave? That’s what I wonder.

The bear in 3 acts, we're in act 1 Average bear market loses 38% in 318 days Would you "buy the dip" in Russia in 1917? Buy The Dip? Not So Fast October 26, 2022 “For the patient investor, we are talking about a values realignment and this notion that we’re only in the first phase of a bear market. We still have two phases left. You have to focus on asset preservation. And your two means of doing so are not in the bond market, by the way, but some combination of cash and gold. And with a high dollop of patience, I think you’re setting yourself up for immense success in the decade ahead.” — David McAlvany Kevin: Welcome to The McAlvany Weekly Commentary. I’m Kevin Orrick along with David McAlvany.  Our audience, especially those who’ve listened for a while, know that we take time each Monday night to go over to a restaurant in Durango. It was called Ken & Sue’s for years. They sold recently. It’s now 636 Maine. But we have a table, table 30. We sit back in the back, and we actually have a scotch that we enjoy. We enjoy it straight up neat, both glasses and soda back. Straight up neat, no ice. We had a metaphor last night occur, Dave, that made me think a little bit of inflation. I guess it was the first time in 15 years there was a faux pas, a serious faux pas, but it was a metaphor for inflation, wasn’t it? David: It was the last bit of Talisker. That in itself is a sad story, but even sadder still is that it was served on ice with the soda in one glass. Kevin: And that—that is inflation. David: I looked and I thought surely somebody didn’t order apple juice because that’s what it looked like when it was served. Kevin: Yeah. It wasn’t quite the same, and we had to send it back, but we can’t send inflation back. David: Nope. Kevin: We just had the McAlvany Wealth Management meeting. Doug was over here, came in to town to give his talk. I know, for those who missed that, you can still tune in on Thursday, the Tactical Short Call. This is quarter three coming up. David: That’s right. So we’ll review the third quarter, look towards the end of the year, and the title of our presentation is “Prelude to a Market Accident.” Very bright and cheery, almost like running out of Talisker. So this is an important conversation, particularly as we look at the unwinding of a number of major financial structures. We’re talking about the UK, China, Japan. There is literally an unraveling taking place here in recent weeks, and it’s fascinating to me as I tune in to CNBC and Bloomberg—nary a comment on those things which are very high drama. Kevin: This is why it’s so important, Dave, that we look at the financial, moving to the economic, moving to the political, moving to the geopolitical or geostrategic. I was looking at famous quotes from the last few years about investing and buy the dip, sell the tip. Buy the dip, sell the tip. Buy the dip, sell the tip. Most people who don’t necessarily look at the geopolitical situation are going to probably continue to buy the dip, but there are times when that doesn’t work. David: A number of weeks ago, we brought Robert Rhea and Hamilton and of course Charles Dow into the conversation. These are Dow theory legends. We have John Hussman who quoted Rhea over the weekend. And got a lot of respect for John. He framed the current market set up very well with this quote from Robert Rhea, quote from 1932. I think it shines a bright light into the current trading setup. Rhea said this. “There are three phases of a bear market. The first represents the abandonment of the hopes upon which stocks were purchased at inflated prices. The second reflects selling due to decreased business and earnings. And the third is caused by distress selling of sound securities regardless of their value by those who must find a cash market for at least a portion of their assets.”

China arrests 1.4 million since June Japanese Central Bank is losing control Is Putin the new Prince Vlad? Hardly China’s “New Era” Is Old Totalitarianism October 19, 2022 “Who is not subject to these same pressures? More money, more debt, more pleasure, more time, more credit in the system. Our central bank, it doesn’t matter who it is, whether it’s the central bankers or Xi Jinping or you and me. Testing the limits is not that uncommon. But when we reach beyond them, paying for it isn’t either.” — David McAlvany Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick, along with David McAlvany.  When I was a kid, Dave, I think of how many times I tested limits and I can look back and go, “Gosh, that was a close one. I know God was looking out for me on a couple of things.” But I remember being called into the room by my grandmother, who loved the fact that I had a lot of freedoms, but she also knew that I was very much into space exploration when I was a kid. I was six years old when man walked on the moon. All I wanted to do was make a rocket go up, and I thought, “They’ve got fuel in a rocket.” So I went out to the garage and I got gasoline and I filled up a big container with gasoline and then I went inside and I got matches and I lit the gasoline with matches. I had put something on top because I thought the combustion would actually cause the top to go up. Actually, all it did was just really burn. But I look back, Dave, I had absolutely no idea what I was messing with at the time. And how often do we just barely miss it when you go, “Gosh, that was a close one.” David: That was a close one. Well, I mean, combustible is the first word that comes to mind when I think about the ingredients that are both in the financial markets and in the sphere of international relations today. You can go a long time with combustible ingredients that never cause any harm, right? Kevin: Yeah Yeah. David: They’re dangerous. Kevin: Gas in a can is not as dangerous as gas with a match. David: Well, exactly. So maybe even they’re inherently unstable, but handled well, just not of great consequence. So the same gas that my eight year old cooks his eggs with can burn down the house. Kevin: Yeah. David: And if you talk to a teenage boy from the 1980s, he can tell you, at least this one can, Aqua Net is both great for styling hair and working as a small scale flame thrower. Kevin: So if your grandma asked you about the Aqua Net, like she asked me about the gasoline, would you have told the truth? I slipped into a lie for a little bit at the time. David: Well, there’s two truths. Was I styling my hair first or— Kevin: It’s true. David: Moving on to bigger and brighter things. There are many things in life that are not dangerous in the hands of one person, and then quite dangerous in the hands of another. So maybe we’re talking about the line between confidence and overconfidence, or awareness, unawareness, educated, uneducated, I don’t know, but your reference, Kevin, to old pilots and bold pilots, but there being no old, bold pilots comes to mind. Kevin: And I know you to be fairly bold. I know that you’re a limits tester. You’re getting off this last weekend, your last race, and I think there was quite a bit of water on the road when you were biking. David: Right? So yeah, kind of a minor diversion. This is not quite flame throwing, but could be a bad example. I was riding a bike, generally not a hazardous activity unless conditions are challenging and the navigator’s pushing the limits. Kevin: Wet roads. Yeah. David: Sixty turns on a three-loop course after torrential rains, you kind of need to watch your speed. And around the first major U-turn, I locked up the brakes, fishtailed, nearly laid it over. Fortunately, nothing more dramatic or painful happened.

Brits reversal: 100 billion in “NOT QE” Biden scolded by Macron for his flippancy on nuclear threat No Bid Markets: What if there were really NO buyers? QE or NOT QT? That is the Question October 12, 2022 “We know that quantitative tightening is a temporary policy statement. It basically says, “We’re not buyers today. In fact, we’re selling.” The UK was scheduled to sell products this week, but because of market dysfunction, they were forced to reverse policy course and go back to buying. If they had not done so, we would already be in the throes of a global financial market panic. And this is where, again, if you look at asset inflation on a global basis, what it has revealed is just how interconnected the world of finance is.” — David McAlvany Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick along with David McAlvany.  Well, I thoroughly enjoyed the last few days, Dave, with our clients coming in for the McAlvany Wealth Management Conference. What really hit me as I was talking to these wonderful people—and they were enjoying each other, too, a lot of them had not met each other—what hit me was there really is a grand narrative, or there’s a theme, there’s a framework for thinking that when you share that with other people, it can become very rich if it’s based on truth. David: We do this once a year, where the clients will gather here in Durango. In addition to that, we have our quarterly calls just exclusively for clients. And again, it’s a venue for exploring what our thinking is on the markets up to that point, and prospective ideas looking ahead. It’s also an opportunity for Q & A to occur. This is not a common thing for most asset management companies to do, but it is something that we feel is very important to be proactively communicating, and dissecting what is happening in the markets in real-time with our clients. Of course, we do have a framework for thinking about what is happening, and so that was a really great couple of days with clients. So glad that some of them could make it in. For those who couldn’t make it, of course, they’ve got access to the video archive. Unfortunately, it is a client-only video because we do talk about the unique things that we have in the portfolio. But a great job by Robert and Doug and Philip and Morgan, and very helpful insights, so— Kevin: I was impressed just listening to the team talk. Each one knew their area really, really well. And for the listener who wants to go back and hear what Doug Noland had to say, he did publish word for word what he said in the meeting in the Credit Bubble Bulletin, at least the first part of it. So, that would be worth going into the Credit Bubble Bulletin and reading.  Dave, we have limited time, I know we think based on the stacks of our books and what we just buy with one click at Amazon, we have this idea that we have the time to read all these different things. But one of the things through the years that I took the time, almost every day, to read, there were two things. If I could only read two things in the morning before talking to clients, I would read Bill King, the Bill King Report, and fortunately, thank you, Dave, for paying for the subscription for that for all of us, so we would get a chance to look at it. But Richard Russell, this was a man that going back even before World War II, he was looking at something called Dow theory, which went back another 40 or 50 years, back to Charles Dow. David: It’s a healthy framework. Kevin: It’s a framework. Yeah. David: Yeah. He was a fan of Dow theory. I think when he encountered it, what it unlocked for him was an understanding of the markets that he didn’t have previously. Kevin: Didn’t he start writing in the ’50s? And he picked up the baton from the person who was using that system before that? David: Yep. Mid to late ’50s,