President Nixon shocked the nation when he disrupted its favorite TV western, Bonanza, on a Sunday.
The economy was in dire trouble. He had to reach the people before the market bell rang the next morning… or traders might have had their own gold bonanza at Fort Knox. That would have risked destroying the dollar.
So on August 15, 1971, Nixon declared the U.S. was breaking its promise to redeem dollars for gold. This gold-backed international money system had been in place since the Bretton Woods agreement of 1944 – which fixed exchange rates among 44 nations and pegged the dollar to gold.
But that Sunday, it gave way to the paper-money era.
The value of gold no longer guaranteed the worth of the new “fiat” currency…
And the Fed got the green light to fire up its money printers.
Now, in this week’s mailbag edition, a reader wonders if it’s time to turn back the clock… and make the greenback honest money again.
You’ll also hear from “billion-dollar trader” Jason Bodner as he reveals the workings of Wall Street whales who move entire markets…
And tech guru Jeff Brown explores the bleeding-edge biotech that’s revolutionizing cancer treatment.
Bur first, if you’re new to The Daily Cut, welcome aboard.
Here, we plug you into the best research, ideas, and recommendations from Jason, Jeff, Teeka Tiwari, Nomi Prins, Dave Forest, and the rest of the Legacy Research team.
On Fridays, we feature questions from our readers… and answers from our talented team of investment gurus.
So if you have a question for anyone on the team… send it to feedback@legacyresearch.com.
I (Chris Lowe) will do my best to get you a reply.
Now, let’s get back to that question about the gold standard… and hear from Nomi Prins, the newest addition to the Legacy gurus. Nomi is a best-selling author, financial journalist, and former global investment banker. She’s also a former Wall Street insider who knows how to beat financial elites at their own game.
In her new e-letter, Inside Wall Street With Nomi Prins, she’s been blowing the whistle on these elites’ shady practices.
And she’s on a mission to help her readers profit from the market distortions central banks create.
So the question of whether it’s time to take up a new gold standard is perfectly suited for her…
Reader question: Nomi, congratulations on your new appointment. As you know, we have lost approximately 90% of our purchasing power since the Federal Reserve opened for business in 1913. It is time for a new gold standard.
As you know, gold cannot be devalued. As J.P. Morgan stated in testimony before Congress in 1912, “Gold is money. Everything else is credit.” I would appreciate your views on this subject.
– Robert C.
Nomi’s response: Thanks so much, Robert! I believe that if we still had some form of gold standard today, the economy would be totally different. The Fed and other major global central banks wouldn’t have been able to build such massive books of assets… interest rates wouldn’t be so low… and cheap-money monetary policy wouldn’t be so much more advantageous to corporations and mega banks than to average people.
Until 1971, the gold standard provided a mooring for the creation of money supply. That’s because you can’t fabricate gold out of thin/electronic air, as you can with fiat dollars, yen, or pounds.
That would have implicitly capped inflation – or, as you put it, purchasing power relative to the dollar or any other fiat currency.
One interesting thing I discovered while researching my 2014 book, All the Presidents’ Bankers, was that Wall Street was a big factor in pressing the Nixon administration to take the U.S. off the gold standard.
The reason was simple. Since this standard’s inception, major Wall Street bankers sought the Fed to help them access cheap credit in exchange for keeping gold reserves there. But once they didn’t have to anymore, and they could keep paper money or debt in reserve instead, banks were free to take on more risk with their credit decisions.
This led to global credit crises in the late 1980s and 1990s, as well as the 2008 financial crisis. The Fed and other central banks eventually went overboard manufacturing money in the 2008 crisis – and now again since the start of the COVID-19 pandemic.
That’s because they haven’t had to worry about limits in advance.
If we had a gold standard today, I believe it would have curtailed the irresponsibility of excessively dovish monetary policy and the private banking subsidies central banks have given.
That said, I think the chances of returning to the old gold standard are slim to none.
I think there are better chances, though, of a blended gold standard. The International Monetary Fund (IMF) might administer this as part of its special drawing rights multi-currency basket.
Next, a question for those of you wondering about the mysterious moves of Wall Street elites.
They’re a small group of institutional investors who wield extreme power in the market. That’s because they deal in such vast amounts of money and stock.
They like to hide their tracks. But there’s no one better at shedding light on the big money that moves markets than billion-dollar trader Jason Bodner.
Before joining us at Legacy, he also worked on Wall Street. He was one of the few guys there authorized to make trades of $1 billion and up.
He spent nearly 20 years placing these monster trades for some of the world’s wealthiest investors.
Now, Jason uses artificial intelligence (AI) as part of his proprietary system that spots when big-money investors start piling into the market’s strongest stocks.
And at his Outlier Investor research service, he pinpoints “outlier” stocks that institutional players are entering – so he can help regular investors profit from these moves.
His paid-up subscribers have had the chance to make gains of 300%… 423%… 429%… and even 657%.
Today, one wants to know how long the Wall Street whales can stay under the surface when they make their big trades…
Reader question: When Wall Street “big money” does the kind of position-building activity Jason monitors, how long can the Wall Street folks keep their purchases of stock in a target company quiet or private? One month? Two? Or what? I assume that after these quiet purchases become public, the time until “liftoff” varies.
– John M.
Jason’s response: Hi, John. Thanks for your great question. Big money can – and likely will – keep its buying quiet for as long as possible.
13F and 13D are the names of regulatory filings the Securities and Exchange Commission (SEC) requires. They publicize what these folks are buying.
Let’s use the 13D as an example.
If I’m a multibillion-dollar hedge fund quietly buying up stock in particular company, I take my time. Buying too quickly lets the cat out of the bag because other investors will notice unusual activity. And I end up competing with myself.
Why?
Other investors will buy shares ahead of me to sell them back to me at higher prices. To avoid that, I take my time. But I have a threshold to pay attention to.
Let’s say I’m an activist hedge fund… I want to get a board seat and control the company to try to make changes.
In that case, I have until I reach a 5% ownership stake to remain unfiled. Once I hit 5% ownership, I must file a 13D with the SEC. Within 10 days, that becomes public info.
Depending on what my strategy is for buying the stock, my activity may look like the following:
Day 1 – I buy a chunk and try not to make waves.
Day 2 – I buy some listed options (knowing I’ll likely push the stock higher soon).
Day 3 – I buy more stocks “in line” with current prices.
Day 4 – Prices start to lift. Folks on Wall Street suspect a big buyer is out there.
Day 5 – I buy more stock and options, possibly “over the counter” to avoid options exchanges.
I’d keep going until I hit that 5% threshold. I’d buy everything I could… until I’ve had my fill and I’m required to report it. Then the race is on.
Not all large orders work this way. But some I handled on Wall Street went exactly like this.
There isn’t a clock on the wall that says, “12 days after big money buys is the limit for privacy.” Different managers have different goals and strategies. Sometimes the cat’s out of the bag right away. Other times, it stays hidden for a long time.
In either case, at Outlier Investor, I focus on when big-money buyers are unusually loading up on shares so we can ride that buying to higher prices.
Switching gears, regular readers need no introduction to Legacy’s in-house tech expert, Jeff Brown.
He’s given his subscribers the chance to make outsized gains from bleeding-edge tech stocks.
For example, his model portfolios have closed out gains of 332% on CRISPR Therapeutics (CRSP)… 340% on Ambarella (AMBA)… and even 448% on Nvidia (NVDA).
And next Wednesday at 8 p.m. ET, he’s hosting an exclusive online event about a new opportunity.
He’ll reveal why NFTs (non-fungible tokens) are about to mint a new generation of crypto millionaires.
In fact, he believes you can make upwards of four years of tech stock gains in as little as three months.
These tokens allow us to own digital collectibles – but that’s just the start of their applications. You may not yet see their real-world value. But this is a chance for life-changing wealth you don’t want to miss out on.
So put aside your doubts and reserve your place for Jeff’s event here.
Then, read on to find out about another of the profit opportunities Jeff is excited about right now – the rise of precision medicine.
Thanks to a suite of new technologies, we can now identify health problems we otherwise wouldn’t know we had.
And one Jeff reader got in touch to ask what impact these technologies will have on cancer treatments…
Reader question: Hello, Jeff. With all the advances being made and worked on in new therapies via AI/machine learning (ML) applied to drug discovery and personalized medicine, do you have a prediction for the extinction of chemotherapy for cancer patients?
– Gary S.
Jeff’s response: Hi Gary. Thanks for writing in. This is a key topic I’ve been covering in my daily e-letter, The Bleeding Edge. AI and ML have done incredible things for the biotech industry and drug development.
As we know, traditional cancer treatments like chemo and radiation basically burn down everything in your body. The aim is to take out the cancerous cells in the process. Even surgery is invasive and risky.
It’s miserable for patients. And for patients who have advanced stages of cancer, success rates are low.
But cutting-edge companies are working on far more effective – and less painful – alternatives to these kinds of treatments.
For example, last year, I wrote about Deep Genomics’ work. The company is developing an AI-enhanced approach to gene editing. When a genetic mutation causes cells to produce the wrong proteins, Deep Genomics’ tech will simply “turn off” those cells.
Specificity is key with gene editing. We don’t want any off-target changes. Fortunately, Deep Genomics can target specific areas of our DNA for treatment.
Gene-editing tech like this is the definition of precision medicine. It goes straight to its desired target… instead of affecting the entire body like chemo. One day soon, we may be able to single out cancer cells to target.
AI and ML are also being used to understand how proteins fold, how proteins interact with different compounds, and how individual DNA interacts with specific therapeutic approaches.
In time, physicians will be able to feed our DNA into a system and quickly determine the best course of treatment based on our individual makeup.
As I often say, I believe we’re on the path to curing many human diseases previously thought to be incurable. So much progress is happening in the biotech space. And AI/ML is speeding it up… and creating new ways of thinking about medicine.
That’s something to look forward to. And it’s a trend we’ll continue to watch throughout 2022. It’s also one of the biggest investment opportunities I’ll keep on investors’ radars.
This topic is deeply personal to me right now, as I’m experiencing my own health challenge – prostate cancer.
But because I was proactive in identifying it early, I’ve got a shot at beating it.
Through my efforts, study, and support from a great medical team, I’ve begun to grasp the full effect our diet and lifestyle choices have on our health.
Yes, part of the problem is our genetic makeup. But most of our health problems come from our consumption and the quality and regularity of our exercise.
If I work hard enough, I may be able to reverse the cancer and avoid surgery altogether. All I know is I’m up for the fight.
At the moment, some advanced precision medicine techniques aren’t available to me. But it won’t be long before they are.
My advice is, now’s the time to make extra efforts to take care of our health. If we can stay in good health for the next five to seven years, the range of therapeutic options will be remarkably better than what’s available to us today.
We’ll wrap up with a message of support from one of Jeff’s readers…
Reader comment: Jeff, as a lifetime subscriber, I can’t tell you how much I have learned by reading your newsletters, and how confident I am when talking to others about investments and technology. I’m even making money!
I sincerely pray you will indeed beat this cancer. You are the type of person that can do it. Through your courageous efforts and our prayers, you will come out on top.
Stay strong, Jeff. We are here for you.
– Charles S.
That’s all for this week.
To read Jeff’s account of the revolutionary health screening that uncovered his cancer, go here.
Plus, don’t forget there’s still time to reserve your place for Jeff’s first online event of 2022, happening on Wednesday at 8 p.m. ET.
He’ll reveal a way to play the NFT megatrend that could secure your financial future.
And if you’d like to put a question to the Legacy experts, write to us at feedback@legacyresearch.com.
Have a great weekend.
Regards,
Chris Lowe
January 21, 2021