Best of Dennis – More Than Just Hope… Play To Win!

Best of Dennis…

Dennis is taking some much-deserved vacation time, and will be back writing soon. This article was posted originally on March 28, 2024, and it is still relevant today….

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Our article, The Impossible Dream outlines how actions of the political class, Federal Reserve and casino-banks are leading our country into extraordinarily difficult times.

Subscriber Mike G. asks a doggone good question:

“When first learning to play chess, I was focused only on protecting my pieces. As my skills progressed it was taking ever longer to defeat me, but I still lost. It wasn’t until I shifted my strategies to “How can I play offense?” that I began to win.

Dennis, how can we go on the offense against the elites – the guys who tell us, “You will own nothing and you will be happy,” while Billy Gates acquires more farmland, moves ever closer to force-feeding us “biologically-engineered” meats?”

Where to start?

Doug Casey quotes former senator Richard Russell, adding a comment of his own:

“‘In a depression, everybody loses. The winner is just the person who loses the least.’

A depression is bad for almost everyone, but especially for the improvident. This is why you have to increase your net wealth before the crisis.”

Doug feels having multiple passports, living in one country, having money in multiple countries is one way of protecting your wealth from overzealous governments. I’m sure the elites have done that.

What about the rest of us? How can the average person, who realizes what’s coming, go on offense and protect their wealth and lifestyle?

Play to win!

“Understand this: things are now in motion that cannot be undone.” — Gandalf

We cannot stop what is in motion; like it or not, we’re in the game, and vulnerable. Sports fans understand, if you only play defense, the best you can hope for is a scoreless tie. We must do better.

Let’s begin, what/who is the opponent. Who are the forces working against us, trying to capture our freedom and wealth?

The corrupt Washington establishment, controlled by the elite, banks and special interests no longer look after the common man, they are the enemy!

What should we expect?

More spending and debt. We’re adding $1 trillion each quarter to our $34+ trillion national debt. Expect $50 trillion soon. Lenders will demand interest rates commensurate with the increased default risk and/or inflation of the currency. At 5%, interest cost on our debt will be $2.5 trillion annually.

Statista reports, “In 2023, the total revenues of the U.S. government totaled around $4.44 trillion.” Over half of federal government revenue will go for debt service. Fed Chairman Powell states the obvious, “It’s unsustainable”. Politicos ignore him.

Higher Taxes. Statista continues, “Income taxes amounted to $2.18 trillion dollars in 2023, whereas corporate income taxes totaled $420 billion.”

Transportation Secretary Buttigieg said:

“The President has put out a proposal to raise taxes. (The) way to do it would not touch anybody making less than $400,000 a year, which is something that most Americans…support.”

Just political BS! The Manhattan Institute explains:

“It’s farcical to suggest that the tax-the-rich pot of gold is large enough to rein in our deficits and finance new spending programs. Seizing every dollar of income earned over $500,000 wouldn’t balance the budget. Liquidating every dollar of billionaire wealth would fund the federal government for only nine months.”

The middle class will get screwed, higher taxes are coming.

Cut in Social Security and Medicare. Historically this is a political non-starter, along with any significant, meaningful spending cuts. Deficits soar along with higher inflation! Lose-lose no matter which way they go.

Civil Unrest. Remember the 2020 civil unrest? Violent protests, torching businesses, looting and destruction; which the media called “peaceful protests.” Hold my beer….

Alex Jones predicts, if Trump gets reelected, between the election and inauguration, they plan to “torch” the country; making the 2020 riots pale by comparison. Be forewarned, even if he is wrong, better safe than sorry.

Personal thoughts… While the political class may preach “reform,” no matter who is elected, it never happens.

True reform requires “career establishment political leadership” to put the needs of the nation ahead of their own personal interests – something they are incapable or unwilling to do.

Expect many “congressional dinosaurs” to be gone. Will the next generation be any better? Once elected, political promises are forgotten, they do what they are told.

The next president is screwed! The consequences of reckless spending/debt are upon us. Expect him/her to be labeled “Herbert Hoover”, while their party will be out of power for years to come. You’d think they would see what’s coming.

Hope versus Offense…

What strategy can a middle-class person employ?

Fortify your defense and prepare for offense. Defense = protecting what you have. Offense = proactively looking for, and taking advantage of, opportunities.

At the outset of WWII, step one was to fortify the homeland defenses. Concurrently they built offensive battle plans while reallocating resources necessary for implementation. Factories geared up to produce equipment for war. Men were drafted and trained. To succeed on offense, you need good assets to do the job.

What assets do we own? How can we protect them from a market crash, economic downturn, inflation and/or confiscation?

Get out of debt. The process to accumulate wealth (build assets for offense) is simple; spend less than you earn, save the difference, learn how to invest wisely and watch your wealth grow.

Having a good job, while easily making debt payments isn’t enough. Consider increasing your income, while cutting expenses to pay off debt.

Your true net worth = your assets – minus your liabilities. Being heavily in debt in tough economic times is a recipe for disaster. You don’t want to be dependent on a desperate government for survival.

You must build capital to go on offense. Being out of debt, with even a small amount of real investment capital during tough times will provide some great opportunities.

Msn.com reports, “A record number of Americans took money out of their 401(K) plan last year for a financial emergency.” If the “emergency” is to pay for past or current consumption, they are going in the wrong direction.

Retrain yourself. The solution to debt problems is to eliminate bad spending habits, retrain yourself if necessary. This is a major step.

In some countries, people are taught to save 10% and live on the rest. They think differently than most Americans.

As a youngster, we had many immigrants come into our classrooms. Their families worked hard, sacrificed, and their first goal was to buy a three-story apartment with a basement and windows high up the wall. They would rent the apartments and live in the basement. They were keeping up with their immigrant friends, not the Joneses…. By the third generation, the children were college-educated and living well in the suburbs.

By contrast, most Americans have been brought up with a spending mindset, charge it and worry about paying it off later.

To go on offense many will have to revise their thinking, and change their saving/spending habits.

Self-education. Unfortunately, many stock brokers and financial consultants don’t work in our best interest. Do what it takes to know and understand what investing is all about, don’t rely solely on the advice of others.

Investing. Offense or defense? Two major threats are inflation and a depression. Having a portion of your investment capital invested in assets (like precious metals) that outperform inflation builds your foundation. For more detail, click HERE.

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With the remaining capital available, look for diversification and solid, safe income. This is NOT investing in a few mutual funds on the advice of a stockbroker; it is much more.

I contacted the Global Investment Division of my online broker. It’s possible to buy international stocks using an American Depository Receipt (ADR) – which represents shares of stock on a foreign exchange. Holding stocks denominated in foreign currencies is another hedge against inflation.

There’s a difference between speculation, saving and investing. Savings is money where the principal is safe, unlikely to grow, and produces a fixed income.

Speculating is buying a stock, hoping the price will go up, so you can sell at a profit.

Investing is finding productive businesses that will survive (and thrive) in tough times, while paying reliable dividends. While their stock price may decline, you want the income, plus the investments in gold and other inflation-beating assets to make up the difference.

Defining success. While Senator Russell says everyone loses, and success is losing less than others may be true, how do we keep score?

Assume, before the crisis, an investor had a reasonable, positive net worth. The crisis comes; they provide for their family, take advantage of some real investment bargains, have a roof over their head and maintain a reasonable lifestyle. When the recession/depression ends their net worth hasn’t changed – did they win or lose? Millions will slip well down the economic ladder; many starting over. Success is defined by not having a major economic reset.

As retirees, Jo and I view things simply. If we had a good year, enjoyed our lifestyle, and have the same (or more) buying power at the end of the year – we consider it a good year. We can no longer afford to speculate.

In today’s tough economic times, survival, protecting your family, lifestyle, net worth and maintaining buying power, while taking advantage of investment bargains, is winning in my book.

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Quote Of The Week…

“Each player must accept the cards life deals him or her: but once they are in hand, he or she alone must decide how to play the cards in order to win the game.” — Voltaire

And Finally…

Courtenay W. shares some great baseball quotes:

• “Us ballplayers do things backward. First we play, then we retire and go to work.” — Charlie Gehringer

• “The funny thing about these uniforms is that you hang them in the closet and they get smaller and smaller.” — Curt Flood

• “Sure I played, did you think I was born age 70 sitting in a dugout trying to manage guys like you?” — Casey Stengel, to Mickey Mantle

• “The way to catch a knuckleball is to wait until the ball stops rolling and then to pick it up.” — Bob Uecker

• “All I remember about my wedding day in 1967 is that the Cubs lost a doubleheader.” — George F. Will

• “It ain’t like football. You can’t make up no trick plays.” — Yogi Berra

• “You don’t realize how easy this game is until you get up in that broadcasting booth.” — Mickey Mantle

• “If you get three strikes, even the best lawyer in the world can’t get you off.” — Bill Veeck

• “Bob Gibson is the luckiest pitcher I ever saw. He always pitches when the other team doesn’t score any runs.” — Tim McCarver

• “Trying to sneak a pitch past Hank Aaron is like trying to sneak the sunrise past a rooster.” — Joe Adcock

And my favorite:

• “When you start the game, they don’t say ‘Work ball!’ they say ‘Play ball!'” — Willie Stargell

Until next time…

Dennis Miller

“Economic independence is the foundation of the only sort of freedom worth a damn.” – H. L. Mencken

 

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