The Cardinal Sin of Investing: Permanent Impairment of Capital

Last week we presented a parade of indicators published by Grant Williams and Lance Roberts that warned of an approaching market correction as well as a coming economic recession.

The key message was: When smart analysts independently find the same patterns in the data, it's time to take notice.

Well, many of you did, by participating in this week's Dangerous Markets webinar, which featured Grant and Lance.

In it, both went much deeper into the structural fragility of today's financial markets and the many reasons why economic growth will remain constrained for years to come.

The excessive build-up of debt in the system -- and the absolute dependence on its continued expansion to keep the economy from imploding -- is, of course, seen as the prime risk to future growth.

As Lance demonstrates here with several of his excellent charts, so much leverage has been taken on that its servicing is increasingly stealing capital that would otherwise go to savings, consumption and productive investment. Going forward, the demands of the debt service will simply result in less and less capital available left over to grow the economy:

As financial assets are (supposed to be) valued on future growth prospects, lower forecasted growth demands lower valuations. Grant calculates that, should the US see another decade of 2% average annual GDP growth (and it has averaged less than that over the past decade), stock prices should be roughly half of what they are today to be considered fairly valued:

And Lance builds further on this, explaining how this moribund growth, coupled with America's aging demographic trend, will simply savage the nation's (already troublesomely underfunded) pension and entitlement systems:

But there are a number of other destabilizing risks to fear beyond our terminal debt addiction. One that Grant believes is not getting enough attention right now is the de-dollarization trend becoming notably apparent across a number of America's strategic trading partners:

These clips are merely several minute's worth of the excellent discussion and insights from the full one hour-and-a-half long Dangerous Markets webinar. Those interested in watching the full webinar can learn more here.

It's little surprise that, given this multitude of concerns and systemic risks, both Grant and Lance advise investors to prioritize caution. They see extremely few undervalued -- or even fairly valued -- asset classes at today's prices, perceiving nearly everything else at dangerously elevated levels.

In a situation like this, moving your capital to the sidelines may be the best move available. The risks of remaining long are obvious. But betting against the market has been a losing proposition for years -- no one knows how many months/years the central planners may be able to hold reality at bay.

Grant and Lance wrestle every day with market allocation decisions on behalf of their clients (and they discuss a number of potential options in the webinar). But both agree that, since the math is clear a major-to-massive correction will happen at some point, having dry powder set in reserve to deploy at much lower prices is a low-risk/high-reward strategy.

In Part 2: Smart Strategies For Building & Managing Your Cash Savings, we address many of the most frequently-asked questions involved in holding cash right now, including strategies for preserving purchasing power, avoiding bail-ins, fees and other threats to cash savings.

As Grant concludes on the webinar: Permanent impairment of capital is the cardinal sin of investing. Well, today's markets present a clear and present danger of coming capital impairment for those who don't take prudent action in advance of a market downturn. Don't be guilty of inaction.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

Earlier this year, Coca-Cola became the poster child for how a corporation could shove leftist ideologies onto its consumers. The company suspended advertising on Facebook in a push to censor former President Donald Trump, published a manifesto about racial equity, and demanded all legal teams working for Coke meet certain diversity quotas.

But now, after Trump, Sen. Ted Cruz (R-Tx.), Sen. Rand Paul (R-Ky.), and many other conservative voices called for a boycott of the company's products, Coca-Cola appears to be shifting directions.

The Washington Examiner reported that the company issued a conciliatory statement after conspicuously failing to appear on a published list of hundreds of corporations and individuals that signed a statement denouncing the Georgia voting bill.

"We believe the best way to make progress now is for everyone to come together and listen respectfully, share concerns, and collaborate on a path forward. We remained open and productive conversations with advocacy groups and lawmakers who may have differing views," the company said. "It's time to find common ground. In the end, we all want the same thing – free and fair elections, the cornerstone of our democracy."

Then last week, Coca-Cola Co.'s new general counsel, Monica Howard Douglas, told members of the company's global legal team that the diversity initiative announced by her predecessor, Bradley Gayton, is "taking a pause for now." Gayton resigned unexpectedly from the position on April 21, after only eight months on the job, to serve as a strategic consultant to Chairman and CEO James Quincey.

"Why is Coca-Cola 'taking a pause' on all of these? Because you have been standing up," Glenn Beck said on the radio program Monday. "You and others have been standing up. Your voice, it's the power of one. Your voice makes a difference."

Watch the video below to hear more form Glenn:

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This week on "The Glenn Beck Podcast," civil rights activist and Woodson Center founder Bob Woodson joined Glenn to call out the leftists in the "race grievance industry," like the Rev. Al Sharpton and Black Lives Matter, Inc., who, he says, are "profiting off the misery of their people."

Woodson lived through the appalling segregation laws of the last century and has a much different message about what it means to be "oppressed" than the so-called "anti-racist" activists today.

Woodson said he believes the real struggle for impoverished minority communities "is not racial." He argued that leftists "at the top" derive "moral authority" by claiming to represent "so called marginalized groups," while they prosper at the expense of those "at the bottom."

"There's nothing worse than self-flagellating guilty white people and rich, angry black people who profit off the misery of their people," Woodson said.

"I call what Sharpton and some of those are doing is worse than bigotry. It's treason. It's moral treason against their own people," he added. "The only time you hear from them is when a white police officer kills a black person, which happens maybe 20 or 21 times a year, but 6,000 blacks are killed each year by other blacks. So, in other words, their message is black lives only matter when taken by someone white, which means you are betraying the black community when you turn your back on 20 children that are slaughtered and you don't march in that community and demand that those killers be turned over to the police."

'The problem is not racial," Woodson asserted. "The problem is the challenge of upward mobility. Any time you generalize about a group of people, blacks, whites, Native American, and then you try to apply remedies, it always benefits those at the top at the expense of those at the bottom. ... It's a bait and switch game where you're using the demographics of the worst of these, to get resources that helps the best of these, or those who are prospering at the top. So, if I was the president, I would say an end to the race grievance business, that America should concentrate on the moral and spiritual free fall that is consuming people at the bottom."

Watch the video clip below to catch more of the conversation, or enjoy the full podcast here or wherever you listen to podcasts:

Want more from Glenn Beck?

To enjoy more of Glenn's masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, subscribe to BlazeTV — the largest multi-platform network of voices who love America, defend the Constitution and live the American dream.

Following President Joe Biden's first joint address to Congress, Glenn Beck joined fellow BlazeTV host and author of the new book, "American Marxism," Mark Levin to expose what they called the "Liar-In-Chief's" radical plans for our country and to explain why the far Left's proposals and programs are really a "frontal attack" on our Constitution, our country, and our way of life.

"Substantively, this is a frontal attack on our Constitutional system of limited government. It is a frontal attack on our capitalist system. He's basically throwing out all the bromides for the radical left groups that now form the base of the modern Democrat Party. And I make the case that ... this is Marxist bullcrap in its broadest sense," Levin stated.

"Here we are, a country now where one man can get up in the middle of the night and make a list of everything he wants to do to the country," he added, speaking figuratively. "It's like an unreality where we're living in separate worlds ... the whole thing is a fraud."

Watch the video clip below to hear Levin expose the lies and misinformation in Biden's speech and explain why he believes the true message is absolutely chilling for the future of our nation:

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After months of delays and COVID-19 excuses, President Biden finally delivers his address to the joint session of Congress. It is a truly historic moment, as only a few hundred members of Congress received an invite. While some have compared this speech to JFK's moon landing challenge, it will likely be more like FDR's New Deal nightmare. Will Speaker Pelosi continue her tradition of ripping up the president's speech? Will VP Harris cackle to a quiet audience?

Glenn Beck teams up with fellow BlazeTV host Mark Levin, author of the new book "American Marxism," to take on the progressive plans that could completely transform our economy and our way of life. Steve Deace, BlazeTV host and author of "Faucian Bargain," joins to discuss why it's not enough for conservatives to just lament the dangerous Democrat agenda; we must activate against the woke infection of our institutions. Plus, a power panel to rival CNN talking heads: Stu Burguiere, BlazeTV host of "Stu Does America," and Jason Buttrill, head researcher and writer for Glenn Beck.

Watch the video below:

Want more from Glenn Beck?

To enjoy more of Glenn's masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, subscribe to BlazeTV — the largest multi-platform network of voices who love America, defend the Constitution and live the American dream.

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