I was born in the 1950s, a decade dominated by thousands of WWII servicemen marrying and starting families in the creation of the largest demographic in history, the "Baby Boom Generation." The 1950s saw Elvis Presley dominate the entertainment industry with ten #1 hits and the top box office movie was Disney's "Cinderella." Actors and actresses in the limelight included John Wayne and Marilyn Monroe, and the most popular sports figures were Jackie Robinson, Maurice Richard and Rocky Marciano, while politics were dominated by Eisenhower, Castro and Khrushchev. It was the decade that ushered in a "Cold War," which was the prelude to major attitudinal events of the '60s, including the Bay of Pigs Crisis and the assassination of JFK in '63.
I recall writing an essay where I referred to the death of Kennedy as the "Death of American Idealism," and it surely seemed that way, as soon after the Vietnam War mobilized an entire generation into protest and resist a status quo that was reprehensible to the core.
For those of us who were raised in the '50s and '60s, there was a sense of moralistic pride that permeated the collective psyche; the accomplishments of an entire generation were altering mores and fashions and attitudes in ways that seemed to place freedom and equality at the forefront of every discussion.
As we moved out of the inflation-ridden '70s, and then into the '80s and "The Era of Golden Age Thinking," soon forgotten were the idealistic platitudes of past years and finished campaigns. Boomers embarked on careers not in the Foreign Service or the Peace Corps, but to the astonishment of those that can today reflect, they tossed the love beads and headbands and bell-bottomed blue jeans into the waste basket in favor of pinstriped suits and investment banking.
The twenty-year bull market in stocks began with a vengeance, and with it an insatiable, maniacal quest for wealth by a generation that spanned oceans and continents.
Neither politics, race nor creed got in the way of this steamroller of technological, ideological and medicinal advancements, which included cellular phones, personal computing devices and, of course, the biggest of them all, the Internet, where Boomers needed tutorials from children and grandchildren on operating instructions.
However, with the arrival the New Millennium and Y2K, the fabric of society had become ragged around the edges, as outsourcing and globalization gutted the manufacturing engine of the Western world. It was the pitiable plight of the middle class that not only saw a plunge in Western standards of living, the ravaged tax base forced governments to embark on a debt binge never before seen in our history.
Compounding the trillions of dollars spent fighting useless wars that have done nothing to stabilize an already shaky geopolitical foundation, the leaders of the G20 nations, comprised primarily of men and women born in the '50s and '60s, have turned a blind eye to the principles that guided them fifty years prior. The Boomer generation, instead of remembering the joy of sitting on a hilltop listening to rock music in upstate New York, swapped that simplicity for a place in the Hamptons or in the south of France, or a chalet in Aspen, complete with nannies for the grandkids and five high-end autos in the driveway.
Fast forward to 2020, and with an insidious pandemic crippling the global economy, the Baby Boom leadership has once again turned to the fiat printing presses for solace. Like they have done at every turn since the dot.com bubble burst in 2001, they are papering over structural infirmities within the global economic system with layer upon layer of debt.
Critical errors in planning and execution have left the corporate world vulnerable and in need of the banality of taxpayer-funded bailouts. The same Boomer generation that allowed bankers and brokers to escape jail time in 2008, after they immolated the financial landscape with the insanity of unregulated financial engineering, has once again championed the curse of moral hazard and come their rescue—and as a member of the baby boom generation and citizen, I am at once embarrassed, insulted, and ashamed.
I recognize that the purpose of this missive is to offer insights from forty-odd years of market warfare, but there are occasions like today where I really don't feel like talking about the relative strength index or interventions by the Treasury or the price of gold. What I want to get off my sexagenarian chest is that we, as a generation, somehow and somewhere along the way, chose to forget the principles drilled into us by the generation that preceded us—a generation that sacrificed immensely during a World War and came out the other end intact, physically, intellectually and morally.
The events of the past month have been largely the purview of the United States, which has taken the initiative to "save" the global markets from the long-overdue arrival of a corrective phase, something they have dreaded for the past twelve years. The S&P 500 has advanced 412% from the March 2009 lows, and as of the time of this writing, is down a paltry 13.85% year to date. Netflix and Amazon hit all-time highs this week, and yet the people in control of the printing presses seem have hit a panic button the size of the Grand Canyon. They think that a bear market in stocks is an inconvenience best avoided by the indiscriminate trashing of one's domestic currency as well as a thorough debasement of its future purchasing power. They are not just kicking a can down the road; they are kicking a ticking time bomb of social unrest and civil disobedience directly into the laps of their children and grandchildren.
These baby boomer leaders in the U.S. are joined by sexagenarian and septuagenarian leadership in Europe and Asia conducting the exact same procedures that will keep these dreadfully run, buyback-enriched companies afloat, despite zero justification and with significant moral hazard. It has become a coordinated global campaign to keep the bubbles inflated and the masses complacent, and I promise you all, as a veteran of multiple bull and bear markets, that this will not end well.
There are no carcinogens in bear markets; they do not cause systemic failures. What they do is "cull the herd" of weakness, sickness and infirmity. Bad businesses fail and new businesses are born. That is the fundamental law of capitalist jungles. Sadly, no one will listen; no one will be angered; nothing will get done; and lives less full will go on.
The generation that spit in the face of government in the 1960s and fought against war, racism and inequality at great peril and loss of life has now chosen to avoid the confrontation of corruption, graft, manipulation and moral hazard by kicking the nuclear can into the faces of our children. The word "shame" should have no boundaries.
Originally published April 18, 2020.
Follow Michael Ballanger on Twitter @MiningJunkie.
Originally trained during the inflationary 1970s, Michael Ballanger is a graduate of Saint Louis University where he earned a Bachelor of Science in finance and a Bachelor of Art in marketing before completing post-graduate work at the Wharton School of Finance. With more than 30 years of experience as a junior mining and exploration specialist, as well as a solid background in corporate finance, Ballanger's adherence to the concept of "Hard Assets" allows him to focus the practice on selecting opportunities in the global resource sector with emphasis on the precious metals exploration and development sector. Ballanger takes great pleasure in visiting mineral properties around the globe in the never-ending hunt for early-stage opportunities.[NLINSERT]
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