2021 Blog Archives

2021 Blog Archives

12.30.21 - 1933 Gold Coin Sells for $18.9 Million

Gold last traded at $1,813 an ounce. Silver at $23.00 an ounce.

NEWS SUMMARY: Precious metal prices steadied Thursday in thin pre-holiday trading. U.S. stocks inched higher in early light trading after the S&P 500 and DJIA closed at new records.

Gold in a Post-Pandemic Landscape -WGC/Wall Street Journal

"In uncertain times, investors traditionally turn to gold. It's tangible and solid when everything else seems in flux.

For nearly two years, the Covid-19 pandemic has wreaked unprecedented upheavals across the world. Reflecting this uncertainty, the price of an ounce of gold soared from $1,474 on March 19, 2020, to $2,067 by Aug. 6, 2020 - an all-time high. It has eased somewhat since then but remains mostly in a range above $1,700.

As the pandemic continues, daily life has assumed a new normal. But the uncertainty persists in the form of supply-chain and labor problems, which are driving inflation higher for the first time in three decades....

Reacting to bad news is no way to run a portfolio, investment advisers say. Instead, build a portfolio with a long time horizon and diversify it so that not all of its components are affected in the same way during market turmoil.

'You choose assets that will work together to improve the risk-adjusted returns of your portfolio,' says George Milling-Stanley, chief gold strategist at State Street Global Advisors.

Because gold tends to rise when stocks fall, the yellow metal can be a valuable diversification tool. 'I think of gold as a long-term strategic investment rather than a short-term tactical one,' Mr. Milling-Stanley says.

'The question of timing or entry point becomes less relevant if you're making a strategic investment over the long term. What gold is likely to do in the next few months is less relevant.'....

A little bit of gold has long been considered a way to reduce risk in portfolios. In a widely diversified portfolio, the traditional allocation has been between 2% and 10%, depending on factors including the investor's age and risk appetite."

gold coin Stuart Weitzman's 1933 Double Eagle Gold Coin Sells for a Record US$18.9 Million at Sotheby's -Barron's

"Fashion mogul Stuart Weitzman's 1933 Double Eagle gold coin shattered auction records for the world's most valuable coin at Sotheby's New York on Tuesday morning.

The rare coin, the only of its kind in private ownership, sold for $18.9 million, nearly doubling the world record, Sotheby's said. The result came after a three-and-a-half-minute bidding war among three bidders in the saleroom at Sotheby's York Avenue headquarters and another on the phone. The buyer's identity was not disclosed.

The previous auction record for a coin was set in 2013 by a 1794 Flowing Hair silver dollar, which sold for US$10 million at Stack's Bowers in New York....

With a face value of US$20, the Double Eagle was the last gold coin produced for intended circulation. It features an American eagle in flight on one side and Liberty striding forward on the other.

After President Franklin D. Roosevelt withdrew the U.S. from the gold standard, in an effort to lift the country from the Great Depression, the coin was never issued. Most of the coins were then destroyed and declared illegal to own, except this one."

The Fed's Doomsday Prophet Has a Dire Warning About Where We're Headed -Politico

"Thomas Hoenig doesn't look like a rebel. He is a conservative man, soft-spoken, now happily retired at the age of 75. He acts like someone who has spent the vast majority of his career, as he has, working at one of the stuffiest and powerful institutions in America: the Federal Reserve Bank....

In 2010, Hoenig was president of the Federal Reserve regional bank in Kansas City. As part of his job, Hoenig had a seat on the Fed's most powerful policy committee, and that's where he lodged one of the longest-running string of 'no' votes in the bank's history.

Hoenig's dissents are striking because the Fed's top policy committee - called the Federal Open Market Committee, or FOMC - doesn't just prize consensus; it nearly demands it....

Between 2008 and 2014, the Federal Reserve printed more than $3.5 trillion in new bills. To put that in perspective, it's roughly triple the amount of money that the Fed created in its first 95 years of existence...Hoenig was the one Fed leader who voted consistently against this course of action....

Hoenig warned that it would suck the Fed into a money-printing quagmire that the central bank would not be able to escape without destabilizing the entire financial system.

On all of these points, Hoenig was correct. And on all of these points, he was ignored. We are now living in a world that Hoenig warned about....

'There is no painless solution,' Hoenig said in a recent interview. 'It's going to be difficult. And the longer you wait the more painful it will end up being.'

To be clear, the kind of pain that Hoenig is talking about involves high unemployment, social instability and potentially years of economic malaise....

Hoenig isn't optimistic about what American life might look like after another decade of weak growth, wage stagnation and booming asset values that primarily benefited the rich. This was something he talked about a lot, both publicly and privately...When the financial system benefited only a handful of people, average people started to lose faith in society as a whole."

Dollar's Best Days Look Numbered Amid Rush to Front-Run Fed -Yahoo Finance

"Investors are primed for the dollar to climb next year. But the juiciest trades may be over even before 2021 ends....

'The dollar is expected to strengthen in the first half of 2022 as the Fed likely ends tapering in March and starts raising rates in June,' said Naoya Oshikubo, chief manager at Sumitomo, which oversees about $740 billion in assets.

The greenback may surrender some of its gains in the second half, though 'its adjustments will be moderate, just to remove the excess rally related to the heightening expectations prior to rate hikes.'....

With traders gearing up for rate hikes, some are suggesting dollar gains may falter in 2022, or that the currency may even drop....

'Historically the dollar has traded with strength in the six months preceding the first U.S. interest rate hike,' said Arjun Vij, portfolio manager at JPMorgan Asset Management...But with two-to-three rate increases already baked into markets, 'there is the possibility that the bond market tries to price a policy mistake in the U.S.'"

*Swiss America will be closed Friday, December 31. Happy New Year!*

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12.29.21 - Ten Key Economic Questions for 2022

Gold last traded at $1,804 an ounce. Silver at $24.84 an ounce.

NEWS SUMMARY: Precious metal prices steadied Wednesday on mixed economic data and a weaker dollar. U.S. stocks traded mixed as traders continued to assess the threat of the omicron Covid-19 variant.

Gold price hits 5-week high as crude oil surges -Kitco

"Gold and silver prices are higher in early U.S. trading Tuesday, with gold notching a five-week high and silver a four-week high. Sharp gains in crude oil futures this week and a wobbly U.S. dollar index are fueling the precious metals market bulls....

U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins, and are at or near their record highs. Traders and investors continue to exhibit general 'risk-on' attitudes that are bullish for the stock markets.

The Omicron strain of the coronavirus is proving to produce less serious illness than the other strains, while new vaccines and therapeutics are rolling out to battle the virus.

'Serious but manageable' appears to be how the marketplace is viewing the matter. The U.S. Center for Disease Control has just cut in half the quarantine time for those exposed to the virus.

The key 'outside markets' today see Nymex crude oil prices higher, at a five-week high, and trading around $76.85 a barrel. The U.S. dollar index is slightly lower early today. Meantime, the yield on the U.S. Treasury 10-year note is presently fetching 1.472%."

balloon Ten Economic Questions for 2022 -Calculated Risk

"Below are my ten questions for 2022. These are just questions; I'll follow up with some thoughts on each of these questions.

The purpose of these questions is to provide a framework to think about how the U.S. economy will perform in 2022, and if there are surprises - like in 2020 - to adjust my thinking.

A key question is when will the pandemic subside significantly? This will have a huge economic impact but is a question for infectious disease experts. The good news is a large percentage of the population is vaccinated, and there are effective drugs on the way. Science should continue to make progress against the virus.

1) Economic growth: Economic growth was probably around 5.5% in 2021 as the economy rebounded from 2020...The FOMC is expecting growth of 3.6% to 4.5% Q4-over-Q4 in 2022. How much will the economy grow in 2022?

2) Employment: Through November 2021, the economy added 6.1 million jobs in 2021...Will the remaining jobs lost in 2020 return in 2022, or will job growth be sluggish?

3) Unemployment Rate: The unemployment rate was at 4.2% in November... the FOMC is forecasting the unemployment rate will be in the 3.4% to 3.7% range in Q4 2022. What will the unemployment rate be in December 2022?

4) Participation Rate: In November 2021, the overall participation rate was at 61.8%...the BLS is projecting the overall participation rate will decline to 60.4% by 2030 due to demographics. What will be the participation rate in December 2022?

5) Inflation: Core PCE was up 4.7% YoY through November. This was the highest YoY increase in core PCE since 1989. The Fed is forecasting the YoY change in core PCE will be in the 2.5% to 3.0% range in Q4 2022. Will the core inflation rate increase or decrease by December 2022?

6) Monetary Policy: In response to the pandemic, the Fed cut rates to zero...A majority of FOMC participants expect three rate hikes in 2022. Will the Fed raise rates in 2022? If so, how many times?

7) Residential Investment: Residential investment (RI) was a slight drag on growth in 2021...Note: RI is mostly investment in new single-family structures, multifamily structures, home improvement and commissions on existing home sales. How much will RI change in 2022?

8) Housing Credit: Will we see easier mortgage lending in 2022? Will we see a further sharp increase in mortgage equity withdrawal (MEW)?

9) House Prices: It appears house prices - as measured by the national repeat sales index - will be up around 18% to 20% in 2021. What will happen with house prices in 2022?

10) Housing Inventory: Housing inventory decreased sharply during the pandemic to record lows in early 2021. Will inventory increase as the pandemic subsides, or will inventory decrease further in 2022?"

Three Books That Aren't About Investing"¦ Which Every Investor Should Read -American Consequences

"Serious investors care about more than the markets. They care about the freedom that makes those markets work, and the wisdom behind that freedom. Serious investors also care about the things that threaten market freedom - such as foolish politics and ideology.

Having investments is like having kids. You want them to grow and prosper, with liberty and responsibility. You don't want them ruined by bad ideas"¦ like getting a face tattoo....

1) Free to Choose By Milton and Rose Friedman

Nobel Prize-winning economist Milton Friedman (1912-2006) possessed the wisdom behind market freedom. He was the 20th century's leading academic theorist of free-market economics.

But Free to Choose is a book for the general public written with his wife Rose, also an economist and with a degree in philosophy, too....

2) The Road to Serfdom By Friedrich Hayek

Austrian-born economist Friedrich Hayek (1899-1992) was another powerful advocate of free markets. He saw central planning as the greatest threat to economic liberty and argued that the danger exists whether the central planners are dictators in China, bureaucrats in Europe, or Democrats and Republicans in Congress and the White House....

What will the politicians and political appointees in charge of that centralization do? They'll plan how we work, spend, save, invest, and do business.

We'll be told what to do, how to do it, and where the benefits of our labors will go. We'll become our government's serfs....

3) New Ideas From Dead Economists By Todd Buchholz

Todd Buchholz provides us with the whole scope of economic thinking from Adam Smith to Alan Greenspan. He tells us what the great thinkers thought, and sorts through which ideas were wise and which were stupid.

He shows us how to use the great thinkers to think for ourselves about the economy. And he does it all in 287 pages of clear, quick, and often very funny writing....

Buchholz explores every prominent economic theory. We discover how the wisest - and the most foolish - economists concocted their ideas. If economics were a fancy restaurant, New Ideas would be a tasting menu....

Meanwhile, Buchholz never loses sight of that moral dimension of economics - putting human capital first."

Biden's War against Fossil Fuels Is a War against Ordinary People -Mises

"Among other steps designed to restrict domestic production of oil and natural gas, the president canceled completion of the Keystone XL pipeline, banned drilling for oil in the Arctic Wildlife Refuge, and greatly curtailed the issuance of leases for companies to develop fossil fuel resources underneath public lands and waters.

Since then, the prices of gasoline, oil, and natural gas have risen smartly...Bank of America is predicting that the price of a barrel of oil may rise to $120 this winter, inflicting additional hardships on the poorest Americans.

Globally, many countries are already in the midst of a full-blown energy crisis. There are critical shortages of fossil fuels at a time when energy from so-called renewable sources (more accurately, 'intermittent' energy sources) have fallen far short of expectations....

Surely, with so many people at home and around the world needing more energy so badly, the Biden administration would ease off its aggressive restrictions on fossil fuel production here in the United States, wouldn't it? Alas, no. Instead, Team Biden has doubled down on its anti-energy policies....

Team Biden left the recent United Nations climate gathering in Glasgow pleased that a plan has been put into place for the world's major banks to restrict investment in companies that produce fossil fuels....

The only action the president has taken to try to lower domestic gasoline prices has been to dip into our national Strategic Petroleum Reserve. That stockpile was created to be available in the case of a national emergency. A 'national emergency' would be something like war or weather or terror-related ruptures of vital fuel pipelines. The 'emergency' that the president has today is his own plummeting popularity polls.

President Biden's insistence on squelching fossil fuel production before intermittent sources are sufficient to fill the gap is unconscionable. If the coming winter is harsh, the resulting hardships suffered by Americans and others around the world will be a humanitarian crisis that could have been avoided by a rational and compassionate energy policy."

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12.28.21 - Taxing Economic Credibility

Gold last traded at $1,810 an ounce. Silver at $23.07 an ounce.

NEWS SUMMARY: Precious metal prices steadied Tuesday on rising oil and a flat dollar. U.S. stocks traded mixed as traders weighed the economic impact of Omicron.

Gold clings around $1,800 as holiday lull sets in -Reuters

"Gold prices hovered around the key $1,800-per-ounce level ahead of the year-end, even as the dollar steadied and appetite for riskier assets improved on easing fears over a fallout from the Omicron coronavirus variant....

'This is just noise on a low-volume day ahead of the holidays,' said Daniel Pavilonis, a senior market strategist at RJO Futures.

He added that next year was bound to be good for gold, especially with high inflation likely to persist....

'Gold faces technical resistance at $1,815 and $1,826, with geopolitical risks ahead potentially keeping gold supported, despite the tapering narrative,' said Nicholas Frappell, a global general manager at ABC Bullion."

credibility Taxing Economic Credibility -Project Syndicate

"Gone are the days when political leaders saw credibility as their most precious asset. From presidents and prime ministers on down, economic policymakers have crossed into territory beyond the familiar terrain of political hyperbole, becoming increasingly disconnected from voters' own understanding of reality.

There are multiple explanations for this. First, today's communication environment favors extreme statements over cold, dispassionate, fact-based analysis. In a polarized society, politicians have grown more interested in feeding their extremist base than in offering moderation or compromise.

Second, forecasts sometimes turn out badly. The claim that 'inflation is transitory' was not unreasonable at first; but it became more dubious with every passing month, partly because the public has a different understanding of the term than economists do. To the average voter, transitory means 'gone quickly,' a description that does not fit a problem that has not only persisted but worsened....

Third, political leaders hate to be the bearers of bad news, preferring to blame problems on their opponents or some political foil like the oil and gas industry. Every time gasoline prices spike, the left claims it is the result of a nefarious conspiracy of domestic producers....

The failure to see this reflects widespread economic illiteracy, which is the fourth reason for the current situation....Consider inflation. To economists, statistical agencies, central banks, and finance ministries, inflation means prices are rising. But to the general public, inflation implies that prices are uncomfortably high for one's budget....

An example is the budget-scoring gimmickry used to hide the true costs of legislation like US President Joe Biden's 'Build Back Better' (BBB) bill. To cram as many 'progressive' policies as possible into a ten-year $1.75 trillion budget window, many benefits supposedly would end after a short period....

All political leaders feel pressure to try to circumvent the laws of economics or even the laws of arithmetic - as Biden has done by claiming that his bill costs nothing. Whatever temporary advantage this tactic confers, the resulting erosion of credibility eventually comes back to haunt political leaders of all stripes."

The Last Hurrah -Rogue Economics

"This is the final Diary you will receive from us via Rogue Economics/Legacy Research. Yes, we're moving on....

Let's begin with a 'thank you.' Many dear readers have been suffering through our Reckonings and Diaries now for more than 20 years....

Many thanks to you, Dear Reader, for sticking with us"¦ especially to those dear readers who have taken the time to write and tell us why they thought we were a fascist"¦ a communist"¦ or simply a moron. Heck, they may be right....

And now, in the home stretch of our career, we hope to make the relationship worthwhile for you....

As you get older, you may become more vulnerable to the coronavirus, but you become more resistant to claptrap. You remember the WIN buttons"¦ the lime-colored leisure suits"¦ and the Vietnam War....

We bring this up because we think we are approaching a period of Peak Delusion. A good dose of geezer cynicism may be the only way to survive it.

The 'new' dollar - without gold backing - was introduced more than 50 years ago. When it came out, the old-timers preached doom.

Now, we're going to see that they were right. No pure paper money has ever survived a full credit cycle. Our guess is that this dollar will be gone, too, when interest rates reach their next top....

In 2000, our very simple 'Trade of the Decade' - sell stocks, buy gold - turned out to be the best trade of two decades.

At the end of the 1990s, gold was trading at $282 an ounce. The Dow was just over 11,000. Since then, gold has gone up about 6 times. The Dow is only up three times.

Investors who made our trade have coasted calmly through the three major crises of the 21st century"¦ and are still way ahead."

What to expect from America's third year of COVID -Axios

"America's third year of dealing with the pandemic is likely to start as bleak as ever, with a devastating Omicron surge for the first couple of months.

Yes, but: Experts are hopeful that once the wave of cases, hospitalizations and deaths caused by the Omicron variant ebbs, life will finally be able to more closely resemble normal.

Between the lines: The silver lining of a tough January and February is that most of the country could have some degree of immunity afterward - either through vaccination, infection or both - that helps protect them against severe COVID infections in the future....

State of play: The new year 'will start with an almighty surge of Omicron. This will play out differently in various places, but it is hard to imagine anywhere will be spared,' emailed Bill Hanage, a professor of epidemiology at Harvard....

What they're saying: 'The best possible scenario is Omicron tears through the population, it causes a month or a month and a half of economic disruption and illness, and then we're through it,' said Megan Ranney, an emergency physician and academic dean for Brown's School of Public Health....

The big picture: Experts say we're never going to be 100% done with the coronavirus. The hope is that it becomes more like background noise.

'We're moving into the third year of something that feels frustratingly predictable and avoidable,' said Saskia Popescu, an Arizona-based epidemiologist.

'Everyone is in a very exhausted frame of mind where you have a lot of false dichotomies, a lot of us versus them - which doesn't help anybody.'"

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12.27.21 - 2022: Inflation Will Define Next Market Battleground

Gold last traded at $1,807 an ounce. Silver at $22.96 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on year-end bargain hunting and a weaker dollar. U.S. stocks rose despite a slide in airline shares following Covid cancellations.

Gold Price Holds $1800 for Christmas as US Inflation Confirmed at 4-Decade High -Bullion Vault

"Gold prices slipped into the long Christmas weekend in London on Thursday, trading $5 below last week's finish as the fast-spreading Omicron variant of Covid-19 failed to dent a rally in world stock markets and new US data confirmed inflation has accelerated to the fastest pace in 4 decades.

After yesterday's third-quarter GDP revision showed annualized economic growth of 2.3%, beating analyst forecasts, the Bureau of Economic Analysis said Thursday that the so-called 'core' PCE measure of domestic US prices rose 4.7% per year in November.

Matching the peak of February 1989, that was the fastest such rate of inflation in the world's largest economy since September 1983....

'European banks prepare for pullback in ECB stimulus,' says a headline from the Wall Street Journal, noting how covered bond issuance 'rose recently to highest monthly level since pandemic began.'

'The threat of inflation, which will underpin a potential rate increase, or less liquidity provided by the central banks,' reckons Gabriel Levy, global head of debt capital markets at French bank Natixis."

inflation Inflation Will Define the Next Market Battleground in 2022 -Institutional Investor

"Inflation is no longer transitory. With the monthly core inflation rate running above 4 percent for half a year, investors have come to believe that it will pose an acute challenge in 2022, despite the recent tapering announcement from the central bank....

The current inflationary environment is a result of two significant changes to the Fed's policies, according to BCA. One is the Fed's decision to shift away from premature tightening...The second is the Fed's plan to target a flexible average inflation instead of a purely forward-looking inflation rate....

BCA predicts that the Fed will begin to raise rates in June 2022 at a pace of 25 basis points each quarter. But with tougher financial conditions...it might slow the pace of tightening.

'Financial conditions are incredibly easy at present,' the report said. 'But it is conceivable that risky assets will sell off on fears of Fed rate hikes, and a large enough sell-off would cause the Fed to pause.'....

A high inflation rate accompanied by the Fed's tightening policy will likely result in more volatile investment portfolios and lead to a "tolerable" year instead of another "great" one like 2021, according to Erik Knutzen, multi-asset chief at the investment management firm Neuberger Berman....

The conclusion, Knutzen said, is that inflation is among a few key factors that 'will define the battlefield for markets in 2022,' regardless of the Fed's pace of monetary tightening. 'Asset allocation is likely to be a tougher fight next year than it was this year,' he added."

Covid-19 Marches Toward Endemic Status in U.S. as Omicron Spreads -Wall Street Journal

"The Omicron variant's aggressive advance is the latest twist in the course of a disease that public-health experts say is on a path toward becoming endemic in the U.S.

In other words, the Covid-19 pandemic won't have an end date. Rather, a crisis that engulfed the world within months of the coronavirus's discovery in China will dissipate in fits and starts into something that feels more like normal over the course of years, infectious-disease experts say.

'I don't think there's going to be a day where the whole thing feels over,' said Joshua Schiffer, an associate professor in the vaccine and infectious disease division at Fred Hutchinson Cancer Research Center....

Omicron shows how vulnerable society remains, even in countries with relatively high levels of population immunity. The variant accounted for 73% of new U.S. infections in the week through Dec. 18, Centers for Disease Control and Prevention estimates show, up from 13% the week before.

Hospitalizations and deaths were already rising in the U.S. before Omicron was identified, and officials have said they expect its rapid spread to further strain the healthcare system.

With a new wave rising, people and institutions are making decisions that reflect changing attitudes toward the threat that Covid-19 represents....

Meanwhile, people and businesses have had mixed reactions to Omicron. Some are scaling-back holiday plans, while others are forging ahead. After two years, many people are tired of the pandemic's disruptions and precautions used to fight it....

Physical therapist Noah Greenspan opened a rehabilitation clinic in New York City on Monday for patients with lingering Covid-19 symptoms, or long Covid. He had provided online services and a smaller, temporary clinic since October 2020. 'We are planning as if Covid will never go away,' Dr. Greenspan said....

The CDC says a disease is endemic when it is continuously circulating in an area at a baseline level and in a predictable pattern. A lack of social disruption is another hallmark of an endemic disease, some public-health experts said.

The question then becomes: How much risk and how many Covid-19 deaths will people and governments tolerate?"

Books: George Will's Truly Wonderful 'American Happiness' -Real Clear Markets

"The first book I ever read on public policy was Compassion Versus Guilt. A collection of columns by the great Thomas Sowell...In many ways Sowell's collection is a look back in time. Some writers are so prominent and popular that they still rate this kind of publication.

Washington Post columnist extraordinaire George Will is one of them. Thank goodness. His latest collection of essays, 'American Happiness and Discontents: The Unruly Torrent 2008-2020' is nothing short of spectacular.

Will doesn't hide his disdain for some of the consequences of what he would undeniably view as progress. He laments that 'New technologies' have produced 'a blitzkrieg of words, written and spoken.' Worse, the words in Will's mind are more and more 'shouted by overheated individuals who evidently believe that the lungs are the seat of wisdom.'

Will's book is an antidote to the present level of discourse, and most fun for readers eager to learn well beyond policy is that so much of Will's commentary springs from the voluminous books he consumes with great vigor. As he puts it, 'The more fuss is made about new media, the more I am convinced that books remain the primary transmitters of ideas.'

In short, this most excellent of books is in many ways about books, and will have the reader ordering all manner of new ones after reading commentary that springs from the reading of them by Will. American Happiness teaches a great deal, but also sets the stage for a great deal more learning....

In a Wall Street Journal interview about American Happiness, Will was asked about his favorite column within. It's 'Jon Will at Forty,' which is about his oldest son who has Down syndrome. Will's account of his son's life, and how well-lived it has been is beyond uplifting. He hasn't let the limits he was born with deter him from pursuing a great and happy existence."

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12.23.21 - Silver will go "˜crazy' in 2022

Gold last traded at $1,807 an ounce. Silver at $22.91 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on safe-haven buying ahead of the Christmas holiday weekend. U.S. stocks extended gains as investors looked past recent jitters over the spread of the omicron Covid variant.

Silver will go 'crazy' in 2022, gold to break $2k again, speculation will end -Kitco

"2022 is the year speculative money recedes from the markets, said E.B. Tucker, director of Metalla Royalty.

'Everybody is a speculator, and so next year, I expect this speculation runs out of gas. There's no more stimulus check coming. There's more liquidity coming into the average person's pocket.'

'They got a raise this year, but everything they're buying is going up in price. Sales are slowing down. The refinance boom is slowing down,' Tucker told David Lin, anchor for Kitco News.

'Next year, you're going to see a rotation out of [stocks] and you're going to see a move into something real.'

Tucker predicts that next year, silver will 'go crazy' and gold prices will top $2,000 again as capital rotates into precious metals."

cancelled Christmas is Canceled -The Reformed Broker

"Okay this is probably not true everywhere but it's definitely true in New York.

Omicron is the sequel nobody wanted. Stocks are already selling off because case counts exploded over the last seven days. I personally know more than fifty people who've tested positive this weekend.

Almost none of them know each other. All vaccinated. All breakthrough infections. Maybe the vaccines are keeping them from getting really sick, but they're not stopping sh*t.

Scientists are saying J&J and AstraZeneca offer no protection whatsoever. The Chinese and Russians gave themselves their own vaccines. Neither of them work. Unfortunately these are the shots that most of the 'vaccinated' populations in Africa and Latin America got. India too....

Back to Long Island. My friend's son had a Bar Mitzvah scheduled for Saturday night. His wife had to cancel it on Friday as all the 'We can't make it' texts came in. They weren't canceling because they're afraid of getting sick. They're canceling because they're afraid of testing positive and getting put into quarantine....

Sporting events are being canceled, in some cases due to lack of non-quarantined players. Saturday Night Live went without an audience this weekend. The Christmas show. This is the big meme of the moment as lines for tests wrap around the block.

I share all of this anecdotal stuff with you as a reminder about the playbook. This is the playbook that got you through both the onset of the pandemic with as well as the delta explosion this past summer.

We only know two things at this point - we know for sure the headlines are going to get worse (way worse) into January. But we also know their ability to shock us will only diminish....

The shutdowns, cancellations, case counts, etc are going to be horrendous this coming January. But, at a certain point, stocks will react less to each piece of news. And eventually, it'll be 'let me guess, more cases. Great.' and stocks will rise. You will not see this turn in sentiment coming. It always comes.

But not yet. The realization of Omicron's immediate impact on the economy I've just described is only now beginning to wash over us all. The stock market can still be surprised. It's early and it's going to suck. Be prepared."

Buchanan: What To Do About That Russian Ultimatum-ZeroHedge

"'Get off our front porch. Get out of our front yard. And stay out of our backyard.'

This might stand as a crude summary of two draft security pacts Deputy Foreign Minister Sergei A. Ryabkov delivered last week as Russia's price for resolving the crisis created by those 100,000 Russian troops on Ukraine's borders.

Ryabkov's demands appear to be a virtual ultimatum, designed to be rejected by the U.S. and NATO and provide Moscow with a pretext for an invasion and occupation of part or all of Ukraine....

Russia is calling for the creation of a security zone around its borders to include all of the former Soviet Union and beyond, where U.S. and NATO military bases would be prohibited....

Before dismissing these Russian demands outright, the U.S. should look closely to see if there are not some issues on which compromise is possible and common ground can be found so the Ukraine crisis might be defused....

The U.S. has already signaled, with President Joe Biden's warning to Putin about 'severe "¦ economic sanctions' should Russia invade, that we are ruling out war and confining any U.S. response to nonmilitary means....

A Russian-Ukrainian war, which Kyiv would almost surely lose, would prove a disaster for both nations.

The winner would be China. For such a war would leave Russia no place else to turn for an economic, political and strategic partner. And U.S. interests are not served by the cementing alliance between Beijing and Moscow."

'Twas the Night Before Christmas -Real Clear Markets

"'Twas the night before Christmas, now just hours away,
But Santa had problems with his magical sleigh.
His reindeer were hungry and not ready to fly,
Their feed was lost in the broken chain of supply.

Ships by the score were for weeks unable to reach
The east port of Savannah or the west in Long Beach.
When, at last, Santa found food for his hungry herd,
Their long wintry ride now could proceed undeterred.

And so, he set out on this cold Christmas eve night,
Determined to bring the world great joy and delight.
But as large snowflakes below him drifted and swirled,
He began pondering the weird state of the world.

He saw it firsthand o'er the long Texas border
Where the scene was one of chaotic disorder.
The lack of control seem'd such a sorry disgrace,
With thousands of refugees all over the place.

So much has changed during these last harried two years,
As Covid panic took hold on great waves of fear.
Governments had decreed 'cross states, cities and towns,
Strict new sets of rules and most distressing lockdowns.

By, in effect, putting so much commerce on ice,
These actions would exact a brutally high price.
But no mandated rules or strictures unbending,
Have done much to hasten the pandemic's ending.

When Big Pharma brought out new vaccines at "˜warp speed,'
We hoped a jab or two would be all that we'd need.
But then came Delta and its breakthrough infections,
As the new caseload spike raised fears and dejection."
(The rest of the story...)

*Swiss America will be closed Friday, December 24. We hope you and your families have a wonderful holiday.*

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12.22.21 - 2022's Great Asset Price Reconciliation

Gold last traded at $1,799 an ounce. Silver at $22.75 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on safe-haven buying and a weaker dollar. U.S. stocks continued to rebound from a three-day losing streak spurred by fears about the omicron Covid variant.

A Gold Price Forecast for 2022 *2,500 USD Underway* -InvestingHaven

"Our 2022 gold price forecast comes at a very interesting time. At the time of writing the USD being one of the leading indicators for the price of gold has been dominating precious metals prices.

It did 'suppress' them throughout most of 2021, more than at any point in time in recent years. Lately, however, the USD has been rising together with precious metals....

A new bull market in gold and silver has started with the June 2019 breakout....Based on the long term charts which show gold's dominant patterns we expect this new bull market to continue for several years....

Based on the long term charts which show gold's dominant patterns we expect this new bull market to continue for several years....

We strongly believe that our bullish gold forecast for 2021 is simply delayed with one year. It's postponed to 2022. And this makes our 2022 gold forecast even more bullish than the one of 2021....

Our gold price forecast for 2022 is strongly bullish with a price of $2,500. We expect GOLD to peak somewhere in the 2nd half of 2022 provided it clears $2,015 in the first half of 2022."

sky falling The Great Reconciliation Of Asset Prices In 2022 -ZeroHedge

"The coming new year will be fraught with risk due to the removal of central bank and government supports. This could very likely lead to the collapse of the most overvalued stock market in history.

According to the Conference Board, US economic growth is set to slow from 5.5% annual growth for all of 2021, to 3.5% during 2022. Of course, Wall Street apologists almost never predict a recession until we are in the middle of one.

Nevertheless, it is clear that the growth of the economy will slow significantly next year. And, in the view of Pento Portfolio Strategies, the risk of a recession and an asset bubble collapse is high....

We recently learned from the Bureau of Labor Statistics (BLS) that Consumer Price Inflation (CPI) surged by 6.8%, and Producer Price Inflation (PPI) shot up by 9.6% y/y in November.

This helped to send Real Average Hourly Earnings down by 1.9 percent from November 2020 to 2021. CPI is running at a 40-year high and is at a rate that is 3.4 times higher than the Fed's asinine 2% target.

Of course, the clueless Fed finally started reacting to all this inflation by announcing at the December FOMC meeting that it would be speeding up the pace of its taper by two times....

It will take (ten) 25 basis point rate hikes to reach a 2.5% Fed Funds Rate (FFR), which the FOMC now regards as a neutral overnight lending rate. Powell believes a neutral FFR would be 50 bps above the FOMC's 2% inflation target - assuming inflation falls to that level.

In spite of these plans, the chances are very small that the Fed will end up being able to hike rates very much at all before the entire artificial economic construct comes crashing down....

Then, you must factor in the stubborn COVID Delta variant and the new and more contagious Omicron mutation, which Mr. Powell now views as potentially adding upward pressure on inflation.

This could cause the Fed to tighten its monetary policies even more quickly. The consumer will also be left with the complete lack of any fiscal support of any significance next year, after receiving $50k on average per American family over the previous two years.

The next recession, which is likely to occur in '22, will cause solvency concerns to spike as revenue collapses and the National Debt-to-Federal-income ratio soars....

That leaves the Fed and Treasury with a dangerous dilemma: allow asset prices and the economy to implode, which will certainly fix the inflation problem; but will most likely lead to a depression.

Or, try and pull the economy and assets higher by once again borrowing and printing multiple trillions of dollars, which will send the rate of inflation skyrocketing from its 40-year high."

US population growth at lowest rate in pandemic's 1st year -Associated Press/KWQC

"U.S. population growth dipped to its lowest rate since the nation's founding during the first year of the pandemic as the coronavirus curtailed immigration, delayed pregnancies and killed hundreds of thousands of U.S. residents, according to figures released Tuesday.

The United States grew by only 0.1%, with only an additional 392,665 added to the U.S. population, from July 2020 to July 2021, according to population estimates released by the U.S. Census Bureau.

The U.S. has been experiencing slow population growth for years but the pandemic exacerbated that trend. This past year was the first time since 1937 that the nation's population grew by less than 1 million people.

'Population growth has been slowing for years because of lower birth rates and decreasing net international migration, all while mortality rates are rising due to the aging of the nation's population,' said Kristie Wilder, a Census Bureau demographer.

For the first time, international migration surpassed natural increases that come from births outnumbering deaths. There was a net increase of nearly 245,000 residents from international migration but only around 148,000 from natural increase."

These are the 5 most valuable skills to learn in 2022, says futurist - and where to find free online courses -CNBC

"As a futurist and business strategist who's trained thousands of executives to navigate booming markets, I've identified five skills that can make you an especially valuable professional in 2022 - and free online courses that teach them.

1. Problem-solving - In the future, it will pay to think critically and creatively about your work - and to add unique skills, experiences and connections to your professional toolkit....Recommended free course: Creative Thinking: Techniques and Tools for Success

2. Strategic planning - Futurists don't predict the future. We identify trends in society or a market and consider the impact that these trends might have....Come up with a plan B, and protect yourself against uncertainty....Recommended Free Course: Strategic Planning Skills

3. Decision-making - We will all be called on to make fast and impactful choices in 2022. This is true even if we don't have the same level of information or the time to plan as we did in the pre-Covid era....Coach yourself on how to exercise good judgement and trust your instincts, and you'll stand out from those who are too nervous to be decisive. Recommended Free Course: Critical Thinking for Better Judgment and Decision Making

4. Listening - People who will achieve business success in 2022 and beyond will know how to draw on a wide range of talents, perspectives and skills. That requires the ability to really listen to other people and their opinions....Recommended Free Course: How to Listen

5. Logistics - Deadlines are getting tighter and job responsibilities are getting greater. In the next few years, you'll be called upon to think like a project manager....Recommended Free Course: Introduction to Project Management"

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12.21.21 - Gold: On Course to Break All-Time Highs?

Gold last traded at $1,788 an ounce. Silver at $22.52 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Tuesday amid a minor Wall Street relief rally and firmer dollar. U.S. stocks rebounded from three days of losses amid fears about the fast-spreading Covid omicron variant.

Are Gold Prices on Course to Break All-Time Highs Once Again? -International Banker

"Gold was one of the star performers throughout much of 2020. But with concerns over the impact of the coronavirus abating throughout much of 2021, bullish sentiment for the yellow metal had decisively cooled off by the third quarter.

But today, with yet another strain of COVID threatening to send much of the world into a restrictive state once more, will the safety that gold has historically offered during such times of crisis elevate its price again, perhaps even eclipsing last year's record highs?

Gold remains among the world's most recognized safe-haven assets during periods of market turmoil, and investor interest in the precious metal tends to soar when there is more uncertainty - and more potential volatility - surrounding traditional financial markets, such as equities and bonds, than is normally the case.

This was certainly apparent in 2020 as the coronavirus pandemic panicked global markets, particularly during the first quarter. By early August, the bullion's price had reached an all-time high of $2,067 per ounce (/oz) and remained distinctly elevated above $1,850/oz throughout much of the remainder of the year....

Gold did climb above $1,850/oz in mid-November, however, with the surge in inflation in recent months prompting gold investors to turn to the bullion to hedge against rising prices.

'Looking ahead, we see risks of further strength in [the consumer price index] in early 2022, which could stoke even stronger demand for gold,' UBS noted on November 12...Similarly, commodity strategists at ANZ (Australia and New Zealand) Banking Group stated on November 16 that higher inflation expectations contributed to more gold bullishness."

grinch Get ready for a larger-than-expected interest rate spike in 2022 -TheHill

"As investors assess what is in store for 2022, they should not lose sight of what has transpired over the past two years.

What stands out is that the COVID-19 pandemic is different than any prior global shock in the last 50 years. When it struck in early 2020, the economy suffered its steepest decline on record as businesses and schools were shuttered.

But it also rebounded quickly as businesses reopened, and it has since recouped all of the output declines and most job losses. The economy has also experienced the steepest rise in inflation in three decades....

The vigorous policy response in turn provided cover for investors to add risk to their portfolios. Stock market returns since late March 2020 have exceeded any comparable period in U.S. history with the major indices doubling in value. And there has been no meaningful correction over that period.

Looking ahead, the investment landscape will likely prove trickier for several reasons. First, the COVID-19 pandemic is proving more difficult to eradicate than many had anticipated. Second, the Fed has signaled it will likely raise interest rates to curb inflation. Third, much of the good economic news has been priced into markets....

The looming issue is whether this gradual glide path of rate increases will be sufficient to bring inflation back to the Fed's average annual target of 2 percent....

To a large extent, the gains this year reflected a strong rebound in corporate profits, with earnings for S&P 500 companies up by 40 percent. Going forward, however, investors should lower their return expectations as the economy and earnings normalize while interest rates rise.

How well the stock market performs will hinge to a large extent on how inflation fares. If it recedes as the Fed expects and interest rate increases are gradual, valuations are likely to remain high.

But should inflation prove to be persistent, and the Fed is compelled to accelerate the pace of rate hikes, the stock market would become vulnerable and the bull-run could end. For this reason, I believe caution is warranted."

Mandates, COVID spike bringing Wall Street back to square one -New York Post

"The Wall Street holiday party circuit is a usually great place to have some laughs and pick up a few scoops. Not this year. The scoops are fewer than usual, as are the laughs, because COVID was supposed to be over and as we know, it's not.

No, the big story circulating among bankers and traders as they sip their party drink of choice is that we all should party like it's 1999 because word from their bosses is that seriously protracted lockdowns could soon be coming.

The banks are actually moving back toward COVID square one: People working from home, many more Zoom meetings with clients and in general hiding from a virus that experience tells us can't be escaped.

The Street isn't ready to officially announce any of this, my sources say. And who knows, maybe the bank chiefs will soon grow a pair and learn to live with something that isn't going away no matter how many times ­Anthony Fauci or ­Rochelle Walensky tell us to mask up on the treadmill.

But you know something is up when Jamie Dimon of JPMorgan and James Gorman of Morgan Stanley start doing 180s on their back-to-office mandates. Recall that along with Goldman Sachs' David Solomon, they were the COVID tough guys: 'Get to work or else' were their marching orders just a few weeks ago.

Not so much anymore. 'Between now and Jan. 3, 2022,' Morgan Stanley is telling brokers in NYC 'to work remotely . . . limit business get-togethers' because of an uptick in COVID in the city and at the firm, an internal memo says....

You can't totally blame the executives for their inconsistent approach to dealing with COVID; they take their orders from the clown show that aptly described how our government, both at the federal and state level, has dealt with the pandemic."

My Holiday Gift: Wisdom Lifted From the Greats- RealClearMarkets

"How can you invest better in 2022? Learn from the greats who preceded you. Here are some famous minds whose words can aid you in 2022 - and far beyond.

'Your ultimate success or failure depends on your ability to ignore the worries of the world long enough to allow your investments to succeed. It isn't the head but the stomach that determines the fate of the stock-picker.' -Peter Lynch

How did Lynch turn the tiny Magellan Fund into a world-beating juggernaut? Partly by tuning out false fears that scared others from stocks....

'Be fearful when others are greedy, and greedy when others are fearful' -Warren Buffett

Modern history's greatest investor knows markets pre-price headline worries....

'In the short run, the market is a voting machine but in the long run it is a weighing machine.' -Benjamin Graham

Popular sentiment can make stocks wildly wiggly briefly, but fundamentals prevail over any longer periods that truly matter.

'Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.' -Sir John Templeton

Sir John's description of market cycles is still the best going."

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12.20.21 - Gold Hits Fresh Monthly High, Eyes $1,815

Gold last traded at $1,794 an ounce. Silver at $22.28 an ounce.

NEWS SUMMARY: Precious metal prices steadied Monday on safe-haven buying and a weaker dollar. U.S. stocks traded sharply lower amid rising pandemic fears and year-end bullish exhaustion.

Gold hits fresh monthly high, eyeing $1,815 barrier amid risk-off -FX Street

"Gold built on its post-FOMC strong recovery from the $1,753 area, or over two-month low and continued gaining traction for the third successive day on Friday. The momentum extended through the early North American session and pushed spot prices to a fresh monthly high, around the $1,811 region in the last hour.

As investors looked past this week's hawkish central bank decisions, the prevalent cautious mood was seen as a key factor that benefited the safe-haven gold.

Worries about the economic risks emerging from the rapid spread of the Omicron coronavirus variant continued weighing on investors' sentiment. This was evident from a generally weaker trading sentiment around the equity markets.

The flight to safety triggered a fresh leg down in the US Treasury bond yields, which kept the US dollar bulls on the defensive and further underpinned the non-yielding yellow metal.

Apart from this, the momentum could also be attributed to some technical buying on a sustained move beyond the 200/100-day SMAs confluence and the $1,800 round figure. With the latest leg up, gold has rallied around $60 from the low touched on Wednesday."

the Fed It's No Surprise That The Fed Is Rolling Over -Rogue Economics

"Birds do it. Bees do it. Even educated fleas do it.

Give them more money from the Federal Reserve"¦ and interest rates below the rate of inflation"¦ and everybody does it.

Borrows money, that is. And who does it best? The U.S. government"¦ Borrower Numero Uno in the whole world.

It borrows so much - nearly $6 trillion added to its debt over the last two years - it could never do so honestly. It has to connive with the Federal Reserve to provide more cash and keep interest rates low.

But now, the central bank is in a tough spot. It encouraged people to take on debt. So if it raises rates"¦ they will lose their investments, their businesses, even their homes.

Billionaire investor and hedge fund manager Ray Dalio sees the 'Inflate or Die' trap; MarketWatch reports: 'Ray Dalio warns Fed's hands are tied and higher U.S. inflation is sticking around. Democracy, maybe not.'....

As expected, the Fed is rolling over. Instead of putting out the inflation fire, it will reduce the rate at which it adds tinder! And nobody, except the financial press, was fooled.

But who cares? Not investors. They're bidding up stocks, sure that the Fed still has their backs.

And not the federales either. At the current inflation rate, the real value of federal debt is going down at about $1.4 trillion per year.

And the elite? They're in power"¦ and getting richer. What's not to like?"

If We Don't Get Inflation Under Control, It Could Unleash Some Dramatic Consequences -Reason

"America needs to get its fiscal house in order.

Inflation has reached its highest level in decades. While we're not yet in a situation like we had in the 1970s - and we can hope that the Federal Reserve will regain control before it reaches that point - there are still plenty of reasons to be upset that inflation is getting so out of hand.

Inflation is commonly defined as a general increase in prices, leaving our money with less purchasing power. When the prices of goods and services increase faster than wages, workers essentially take a pay cut. Savers and those who receive interest payments also lose out. Once inflation hits the value of the money saved, its spending power wanes....

Not everyone loses when inflation suddenly appears, though. For example, debtors get to repay their loans in less-valuable dollars. This benefits no one more than the federal government, the world's biggest debtor....

Not surprisingly, history is full of kings and governments using inflation to reduce their debt burdens. Understandably, holders of debt bonds get nervous when highly indebted governments are slow to rein in inflation....

According to the Congressional Budget Office, in the next decade, the Department of the Treasury will have to pay somewhere in the neighborhood of $5.4 trillion in interest payments. A 1 percent increase in rates would add some $250 billion a year to that sum. This is money the federal government does not currently have and would have to borrow at higher rates.

In other words, inflation, in conjunction with the enormous government debt and short-term financing, could unleash dramatic consequences. This risk should provide important incentives to put America's fiscal house in order, including moving away from short-term financing. But so far, there's no sign of anyone willing to make the tough choice."

'The Tragi-comic Climate Doomsday Cult' -Master Resource

"I recently read a piece by Melanie Phillips that spoke volumes about the two-week snooze show hosted by the United Nations last month in Glasgow. 'The Tragi-comic Climate Doomsday Cult' begins:

'What would happen if a doomsday cult were to take over the world? Science fiction? No. It's happened. How else to explain the collective lunacy of the COP26 meeting in Glasgow, an absolute farce where world leaders made complete fools of themselves?

'There's been much criticism of the hypocrisy of the event, with hundreds of private jets flying into Glasgow to hector the world about reducing carbon emissions.

'Far, far worse has been the total erasure of rationality in the hysterical chorus that this was the 'last chance to save the planet' - and the fact that no-one in mainstream debate has challenged this as utter unscientific garbage....

'If anything embodies and signals the end of the age of reason it is this climate cult, in the grip of which the west has gone through Alice's looking-glass into a surreal post-science, post-truth world.

'No wonder Russia and China didn't even bother to turn up to COP26. Their contempt for the west must be bottomless as they look upon its accelerating economic and cultural green suicide - and rub their hands.'"

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12.17.21 - Gold Benefits from Dollar Easing

Gold last traded at $1,802 an ounce. Silver at $22.51 an ounce.

NEWS SUMMARY: Precious metal prices extended gains Friday on safe-haven buying despite a firmer dollar. U.S. stocks extended losses as investors sold tech and bank stocks amid worries over tighter monetary policy and the ongoing pandemic.

Gold benefits from dollar easing after Fed meeting -CNBC

"Gold was boosted on Thursday by a fall in the U.S. dollar, after the Federal Reserve decided to end its pandemic-era bond purchases early next year....

The Fed on Wednesday paved the way for three interest rate hikes by the end of 2022 as the economy nears full employment and the U.S. central bank copes with a surge of inflation.

That weighed on the dollar, which is down around 0.2% against its rivals, making gold cheaper for holders of other currencies.

'The main factor today is the performance of the U.S. dollar,' said Ricardo Evangelista, senior analyst at ActivTrades.

With the Fed meeting out of the way, the real impact of the Omicron coronavirus variant on economic activity is the big question mark for gold, Evangelista added."

rates Inflation in the Housing Market -Wealth of Common Sense

"Shelter carries a one-third weighting of CPI according to the BLS....If you've been a homeowner for more than a few years, you've basically experienced deflation in your housing costs.

Housing prices are up, home equity is through the roof and mortgage rates have fallen...You could argue the homeowner has never had it better than they've had it this past cycle.

But what if you're a renter? After a brief dip at the onset of the pandemic, rents are playing catch-up with housing prices in a hurry....

And what about first-time homebuyers?

Let me count the ways on how awful the past 18 months or so have been for those looking to purchase their first home:

Housing prices are screaming higher. There is no housing supply from a combination of pandemic demand, aging millennials and a lack of new housing starts following the housing bubble. Interest rates are on the floor so no one knows how or where to save for a down payment. So much cash is sloshing around the system that houses are being paid for in cash and well over asking price in many locations....

The pandemic has made inequality in the housing market even worse than it was before.

If you owned a home prior to 2020, you've made out like a bandit, with higher asset values and lower debt payments. If you're in this situation, consider yourself lucky.

But if you're in the rental market or trying to buy your first home, you're experiencing a painful bout of inflation."

No Doubt Investors: Fear Stock Market Failure -Smead Capital Management

"Chairman Powell has communicated to consumers that the Federal Reserve will be 'retiring transitory.' To us, this is the largest mea culpa in the last 40 years of Federal Reserve policy....

As our Chief Investment Officer, Bill Smead (occasionally called dad) recently wrote, the inflation that we are seeing is a wolverine. There is no natural predator to kill it off. It's not a cute, adorable puppy.

The only thing adorable in 10 years will be listening to the stories of investors that thought they wouldn't have to deal with prior tough equity eras like the 1970s and 2000s. We refer to these as stock market failure. Many millennials that have just begun their investing journeys will have their 'head' in their 'hands' while they 'sit and cry.'....

Consumers and households across the developed world are fatigued by the first four waves of this pandemic. We believe this will only grow with the waves to come. We believe this translates to a spending of the excess savings and net worth that U.S. and developed economy households have....

The number one cause of death is life. We will all die, even Elon Musk. The world has come to grips with the reality of that because of this pandemic. As Musk said last week, the biggest risk to economic growth is not enough people being born. We would say not enough life. Life being lived.

In the face of COVID death, consumers are excited about life, private property ownership and getting out. This is acutely human in a finite life, but not what investors had been pricing in. We are 'no doubt' investors in the economic story ahead. Few stand among us. Inflation is real. Poor stock and bond returns can be real. We believe pools of wealth will be hurt and/or will die from this.

Fear stock market failure."

The Democrats' agenda is on a collision course with reality -Washington Examiner

"Despite Democrats' various attempts over the last four months to promote their $5 trillion tax and spending bill, they have barely managed to sell it to themselves, let alone the public.

They want people to believe it is the silver bullet to solving our country's problems. But unfortunately for them, the public does not share their sense of optimism - and for good reason.

Recently, the Congressional Budget Office issued an analysis that warned the economic effects of two provisions that Democrats have long touted in their bill - taxpayer-funded family leave and child care - would raise costs for families and further disincentivize work.

Time and again, sadly, we have seen that the policies Democrats are promoting have failed to square with the reality that millions are witnessing.

For instance, President Joe Biden's promise to freeze border wall construction projects turned out to be a clear sign of capitulation in the battle against illegal immigration, helping to jump-start a border crisis.

Likewise, Biden's decision to terminate the Keystone XL pipeline and block new oil and gas leases on federal lands has left America facing an energy crisis and the highest gas prices in eight years with one arm tied behind our back and more reliant on foreign energy resources. Even the president's nearly $2 trillion bailout bill from March of this year has been classified as a cause of inflation by the San Francisco Federal Reserve.

Recent polling shows that inflation is the No. 1 concern among voters, with 43% believing that the Democrats' next tax and spending bill, which recently passed on a partisan vote in the U.S. House of Representatives, will only make inflation worse.

Yet, instead of recognizing how their policies contribute to the spike in prices families are facing, Democrats in Washington are choosing instead to use budget gimmicks and fake offsets to hide the true cost of their agenda....

An agenda that gives government more control over child care and paid leave decisions will drive more people into the arms of big government, which dictates the terms of those benefits and raises the cost for others. Those are the consequences of an agenda driven by partisan tactics and political timelines instead of the needs of working families. Democrats are on a collision course with reality. They should stop and turn the car around."

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12.16.21 - Fed Signals 3 Rate Hikes in 2022

Gold last traded at $1,797 an ounce. Silver at $22.42 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on safe-haven buying and a weaker dollar. U.S. stocks traded mixed as investors digested the Fed's signal that it would be aggressive on tapering and a forecast of three interest rate hikes in 2022.

Gold - Recovery Ahead -Seeking Alpha

"The gold market is nearing the end of a difficult and very challenging year. Most precious metal investors must have been severely disappointed....

Physical investors can easily sit through such a sideways shuffling. But leveraged traders had nothing to laugh about....

Despite the 15-month correction, gold has been able to easily hold above the uptrend channel, which goes back to December 2015. The steeper uptrend channel that began in the summer of 2018 is also still intact ....

In summary, the chances of a renewed recovery starting in the near future predominate on the daily chart. In the first step, such a bounce could run to around US$1,815.

Secondly, the bulls would then have to clear the downtrend-line, which would release further upward potential towards US$1,830 and US$1,870. The very best case scenario might see gold being able to rise to the psychological number of US$1,900 in the next two to four months....

Following the FOMC interest rate decision and the FOMC press conference, the start of a recovery would be extremely typical. Statistically, gold prices usually finish the last two weeks of the year with higher prices, because the trading volume in the western world is very low over the holidays.

Overall, the seasonal component turns 'very bullish' in a few days, supporting precious metal prices from mid-December onwards. Typically, January, in particular, is a very positive month for gold, but the favorable seasonal period lasts until the end of February."

inflation Inflation is out of control. It's time for the Fed to raise interest rates -CNN

"Inflation now tops the list of complaints among US consumers. Prices for everything, from necessities like food, energy and shelter, to luxury goods like autos and vacations, continue to climb. Amid this worsening challenge, Americans are looking for some relief....

Now, all eyes are on the Federal Reserve's next move. While achieving full employment and price stability are both part of the Fed's dual mandate, it should probably be more worried about these higher prices. Incoming labor market data suggest that the economy has achieved or will soon reach full employment, but inflation is still out of control.

The Fed must act now to help prevent faster inflation from scuttling the US economic expansion and eroding consumers' purchasing power. That means it should accelerate the pace of its quantitative easing taper, and raise interest rates a few times next year.

Higher inflation isn't entirely a byproduct of Fed policies. Pandemic-induced lockdowns overseas that cause manufacturing order backlogs - which raise costs for firms - are outside of the Fed's control. Moreover, the copious amounts of fiscal stimulus that the federal government injected into the US economy, and prospects for more stimulus ahead, also generate consumer price inflation.

However, the Fed has been responsible for low interest rates, which have contributed to rising financial asset and home prices, which can fuel demand for goods and services that spills over into consumer prices. For example, households might use the increased equity in their homes to fund purchases or home improvement projects.

So it makes sense that Fed policymakers might accelerate the pace at which they taper quantitative easing and build in room for several interest rate hikes in 2022. Those hikes might go a long way toward helping consumer price inflation to cool. Even two or three hikes would leave interest rates well below historic levels and continue to provide room for the economic expansion to continue."

Fed Doubles Taper, Signals Three 2022 Hikes in Inflation Pivot -Bloomberg

"Federal Reserve officials intensified their battle against the hottest inflation in a generation by shifting to an earlier end of their asset-buying program and signaling they favor raising interest rates in 2022 at a faster pace than economists were expecting.

Heralding one of the most hawkish policy pivots in years, the central bank said Wednesday it will double the pace at which it's scaling back purchases of Treasuries and mortgage-backed securities to $30 billion a month, putting it on track to conclude the program in early 2022, rather than mid-year as initially planned.

The faster pullback puts Fed Chair Jerome Powell in position to raise rates earlier than previously expected to counter price pressures if necessary, even as the pandemic poses an ongoing challenge to the economic recovery. The Fed flagged concerns over the new omicron strain, saying that 'risks to the economic outlook remain, including from new variants of the virus.'

Projections published alongside the statement showed officials expect three quarter-point increases in the benchmark federal funds rate will be appropriate next year, according to the median estimate, after holding borrowing costs near zero since March 2020.

That marks a major shift from the last time forecasts were updated in September, when the committee was evenly split on the need for any rate increases at all in 2022. The new projections also showed policy makers see another three increases as appropriate in 2023 and two more in 2024, bringing the funds rate to 2.1% by the end of that year."

Silver On Sale: Silver-Gold Ratio Back Above 80-1 -Zero Hedge

"The silver-gold ratio has climbed back above 80-1. This has historically signaled silver on sale. That means it takes just over 80 ounces of silver to buy an ounce of gold.

To put that into perspective, the average in the modern era has been between 40:1 and 50:1. In simple terms, historically, silver is extremely underpriced compared to gold. At some point, you should expect that gap to close....

Geologists estimate that there are approximately 19 ounces of silver for every ounce of gold in the earth's crust, with a ratio of approximately 11.2 ounces of silver to each ounce of gold that has ever been mined.

In 1792, the gold/silver price ratio was fixed by law in the United States at 15:1...With silver playing a smaller role as a monetary metal, the silver-gold ratio gradually spread....

Currently, most analysts believe the Fed is about to embark on a war against inflation and significantly tighten monetary policy. As a result, gold and silver have both seen significant selling pressure despite an extreme inflationary environment. The markets are already pricing in tightening and the silver-gold ratio is widening.

But the question is can the Fed successfully raise interest rates high enough to stop the inflation train? ....

The supply and demand dynamics also look good for silver. Investment demand has skyrocketed and supply is down. Industrial demand is rising. Mine output was hit hard by shutdowns due to the coronavirus pandemic, but silver production was already on the decline with mine output dropping four straight years.

Now may be the perfect time to take advantage of silver on sale."

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12.15.21 - Will Dems Throw Powell Under the Bus?

Gold last traded at $1,765 an ounce. Silver at $21.57 an ounce.

NEWS SUMMARY: Precious metal prices traded steady Wednesday ahead of anticipated hawkish Fedspeak. U.S. stocks retreated as investors expect the Fed to take a very big step toward a rate hike in order to fight rising inflation.

If Property Prices Crash, Look to Gold -ETF Trends

"Consumer Price Inflation hit its highest levels since June of 1982 last month at 6.8%. Economists expect that inflation will continue to grow. 'We expect this to continue until early in 2022 where we expect pricing to reach at or near 7.3% before costs start their long descent back towards 2%,' said Joe Brusuelas, chief economist at RSM, in a note to clients....

The latest inflation news is bound to put the wind back in the yellow metal's sails. In an interview with Kitco News, principal and mining strategist at Hallgarten & Co. Christopher Ecclestone said, 'The inflation beast has gotten out, and it's going to take a lot of effort to get it back into its cage.'

Ecclestone emphasized, 'This will ultimately impact property markets. It's going to impact companies that are highly leveraged. We are already seeing big property crashes in China that are linked to overextended property developers.'

Ecclestone went on to note that when property prices crash, investors will be looking for another inflation hedge, and this could be good news for gold bugs. 'Traditionally, gold has been a hedge against inflation. There is a mistaken view that higher interest rates would impact the price of gold because supposedly people are borrowing money to buy gold which is totally a bogus construct,' Ecclestone said.

'Most people are using gold as a savings method.' He went on to express his belief that gold could reach $2000 an ounce shortly, and then steadily climb to $3000 over the next four years. Ecclestone also thinks that silver can hit $30 next year.

Gold bears have had an easy go of it throughout the year, but the persistence of inflation means that the bulls are about to dominate. Investors can act quickly to get in on gold while the price is still deflated, and there are a number of viable approaches."

laws Civil asset forfeiture laws hurt people like me -Washington Examiner

"How is it that someone not even accused, let alone convicted, of a crime can lose their property to the government? It happened to me, and it happens to countless innocent people every year through civil asset forfeiture laws. It's time we do something about it.

On a March night in 2015 in Springfield, Massachusetts, I found myself surrounded by five uniformed police officers. One of them demanded the keys to my car, and he told me that they would be taking the car whether I gave them the keys or not.

Why? They suspected that my son, Trevice, had used the car in a crime. But I had no knowledge of this. Police never showed me a warrant, and they told me not to get involved or I could face criminal charges myself. They just took my property away from me.

And then they held that property for six long years. In the years that followed my car's seizure, Trevice was killed, leaving two beautiful and accomplished daughters without their father. I had almost nothing by which to remember my son - and nothing to leave to his children. I assumed I would never see my car again.

After my car spent several years in the government's possession, the district attorney finally filed a complaint seeking to forfeit the car for good in early 2020. I did not know what the legal jargon meant, but I knew that I needed help. The legal papers initially only gave me a couple of weeks to respond, and as I got closer to the deadline, I became more desperate and frantic. It was a confusing and terrifying process.

It turns out I'm not the only one who has experienced this injustice. Under civil asset forfeiture, the government can take away the money, cars, and even homes of people who haven't done anything to violate the law.

It's shockingly common, too: According to the Institute for Justice, 'states and the federal government have forfeited a combined total of at least $68.8 billion' every year since the year 2000. I was one of the people targeted by this broken and unfair system. But I was one of the lucky ones....

Fortunately, I was finally able to get my car back after attorneys at the Goldwater Institute stepped in on my behalf. No innocent person should need a lawyer in order to ensure that their property rights are respected.

Yet a majority of states have these laws that let the government take and profit from a person's property, even when that person hasn't been accused of any criminal activity. Even though asset forfeiture laws were designed to target drug lords and the like, it's now innocent people like me who frequently bear the brunt of these laws....

Today, my oldest granddaughter now has the car the government had taken from me, and I am grateful that she has a positive legacy from her father, my son. While my grandchildren got to see an injustice corrected, too many others don't get to see justice done. That's why the time has come to reform our civil asset forfeiture laws and protect the rights of innocent Americans."

Inflation Surges Near to a 40-Year High. Wages Aren't Keeping Up. -Mises

"According to the Consumer Price Index (CPI) for November, year-over-year price inflation rose to 6.8 percent. It hasn't been that high since June 1982, when the growth rate was at 7.2 percent....

It's unclear to what degree inflation might already be entrenched, but year-over-year growth in the CPI has been over 5 percent for the past six months - and on a clear upward trajectory.

At the same time, inflation is taking a bite out of workers' purchasing power. November's numbers on average hourly earnings suggest that inflation is erasing the gains made in workers' earnings. During November 2021, average hourly earnings increased 4.8 percent year over year. But with inflation at 6.9 percent, earnings clearly aren't keeping up:

Looking at this gap, we find that real earnings growth has been negative for the past eight months, coming in at -2.1 percent year-over-year growth for November 2021. November was the eighth month in a row for negative growth in earnings.

Moreover, according to the Conference Board, US salaries are growing at a rate of approximately 3 percent this year.

Combined with November's unemployment rate of 4.2 percent, November's inflation growth puts the US misery index at 10.82. That's the highest level since June of this year, and similar to the misery index levels experienced when the unemployment rate surged in the wake of the 2008 financial crisis....

In many ways, the current situation with the Fed is just a continuation of what we saw during the Yellen and Bernanke years...Today, there's apparently still little enthusiasm for any sudden moves, lest Wall Street get spooked. The Fed may talk like it's concerned about consumer inflation, but it's shown it's much more committed to keeping asset prices high, and that precludes any significant effort at reining in inflation."

How long until Democrats throw Jerome Powell under the bus? -TheHill

"How long will it be until Democrats decide to throw Jerome Powell under the bus?

After all, why should President Biden's big-spending agenda absorb the stink-bomb of inflation when the Federal Reserve chair is also clearly to blame for soaring prices?....

This is dangerous for Democrats. Voters not only consider inflation our number one concern today; they also blame Biden. A scapegoat would come in handy.

Famed money manager Mohammed El-Erian wrote in August that the Fed's ultra-loose monetary policy was 'increasingly putting at risk not just the recovery but also President Biden's transformational economic agenda.' He's right; it's amazing that more Biden apologists have not jumped on that bandwagon.

Here's why: It is inconceivable that Powell did not foresee the mounting pressures that are boosting prices. A fast-tightening labor market, excess demand resulting from federal government payments that the country did not need, rising oil prices and - yes - supply chain problems that created head-spinning price anomalies early on should have derailed the Fed's bond-buying program months ago; all these pressures were like a tea kettle sounding its whistle just before it bursts....

Biden re-nominated Powell for another term as chairman of the Federal Reserve Board on Nov. 22. Just eight days later, the central bank's chief markedly changed his tone and signaled an acceleration of the Fed's tapering program.

Coincidence? Skeptics might conclude that Powell held off combating inflation in order to win another four years in the prestigious post."

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12.14.21 - Gold Steadies Ahead of Fed Statement

Gold last traded at $1,771 an ounce. Silver at $21.92 an ounce.

NEWS SUMMARY: Precious metal prices slipped Tuesday ahead of Wednesday's Fed statement. U.S. stocks retreated for a second day as new inflation data continued to show a record rise in wholesale prices.

Gold steadies as investors prepare for Fed taper timeline -CNBC

"Gold steadied in a narrow range on Monday as the market focus pivoted to this week's Federal Reserve meeting to learn how quickly it plans to unwind economic support measures introduced in response to the coronavirus pandemic....

'Until we get an idea of how much the Fed accelerates tapering and whether or not they are particularly hawkish in their statement, gold will be under pressure,' said Michael Hewson, chief market analyst at CMC Markets UK.

Gold is considered an inflation hedge, reduced stimulus and interest rate increases tend to push government bond yields up, raising the opportunity cost of bullion.

But with the market pricing in the Fed moving forward into a rate rise cycle, it is sufficient for gold to be counted as a defensive asset right now, said Stephen Innes, managing partner at SPI Asset Management."

metaverse If Only We Could Live in the Metaverse -Rogue Economics

"A storm passed over Ireland yesterday. The power went off. Trees blew down. The roof of an old shed flew off.

Oh"¦ if we could only live in the Metaverse"¦ where the only things that happen are things we want to happen. If only we knew where to find it!

Here on Planet Earth, life goes on. And with so many hours"¦ so many resources"¦ so much brain power and capital applied to the fantasy world, it is not surprising that the real world feels a little neglected....

In the fantasy world, assets get more and more valuable"¦ even though they don't produce any more wealth"¦houses go up so much that you can 'take out' some of the value, without giving up floorspace"¦

'Crypto' currencies"¦ meme stocks"¦ NFTs"¦ and money-losing companies can make you rich - even without sales, profits, goods or services, employees, skills, or tax bills. What in the real world can compete with that?

An educated guess: from a flood of liquidity from the Federal Reserve, that buoyed up everything not firmly attached to the real world. For the last 10 years, scarcely anyone's toes have been able to touch the bottom....

Meanwhile, the most important credit in the world, the U.S. 10-year bond, is trading at a nominal yield of 1.4%. But subtract the going inflation rate - 6.2% - and you see that the real yield is MINUS 4.8%.

And now, after lending money for years at yields below inflation, is it any wonder that people retreat to fantasyland?

It is a place where time has stopped"¦ and the future holds no risk. You will not age. No storms will blow up. No one will be shot or die of the omicron variant.

Yes, it is a fantasy world. A make-believe world. A world that exists"¦ but only as a fleeting aberration....And bitcoin"¦ the coin of the new fantasy realm"¦ lost a quarter of its peak value in the last month.

How long before the fantasists need to come up for air?"

These Are The Things Real People Are Spending Millions Of Real Dollars On, In The Metaverse -ZeroHedge

"While billions are joking about Facebook's 'metaverse' plans, real people are spending millions (and soon billions) in real cash to buy imaginary objects. As BofA's Alkesh Shah writes, metaverse land (and yacht) purchases are accelerating as blockchain-enabled applications and new frontiers continue to develop.

Here are some examples of what people are spending all too real money on:

Metaverse Group, a subsidiary of Tokens.com, purchased a 116-parcel estate in Decentraland's Fashion Street district for ~$2.4 million (618k MANA) on Nov 23. If you're wondering where Decentraland is on the map, it's not.The 6,090 square feet of digital land purchased exists solely in the metaverse....

Republic Realm, a digital real estate firm, purchased 259 parcels of land in Decentraland's Metajuku district for ~$914k (1.3mn MANA) on Jun 18. The firm plans to transform its 16,000 square feet of digital land into a virtual shopping district where users can purchase digital wearables.

Retail stores are leased and operated by third parties with current occupancy at 40%. If the idea of digital clothing sounds a bit farfetched, Balenciaga, Burberry,Dolce & Gabbana, Givenchy, Gucci and Louis Vuitton, among others, have already released digital collections.

Axie Infinity, a play-to-earn gaming platform, announced on Nov 24 that it had sold a 'Genesis' plot of digital land - one of 220 - for ~$2.3 million....

Needless to say, such 'meta' investments are extremely risky. Unlike actual real estate, which tends to retain some value even during a market downturn, the value of virtual properties could fall to zero if the world they are in goes out of fashion and people stop visiting it....

BofA's take: 'the metaverse consists of persistent virtual reality platforms, powered by blockchain technology, which allow users to interact through augmented reality (AR) headsets'...To be clear, 'the metaverse has already arrived with ~$392 million spent this year on metaverse-related digital assets.'"

Government 'Regulation' of 'Stablecoin' Is a Multi-Sided Misnomer -Forbes

"Here's how a 'stablecoin' is defined: 'any cryptocurrency designed to have a relatively stable price, typically through being pegged to a commodity or currency or having its supply regulated by an algorithm.'

All of which explains why 'stablecoin' is put in quotes. A crypto currency made 'stable' by its peg to paper currencies is not stable. Almost by definition. Think about it.

From 1971 to 1973 the dollar's definition as 1/35th of a gold ounce was severed. This is important because global non-dollar currencies were generally pegged to the dollar. Their value was consistent based on their peg to a dollar defined in terms of a gold ounce...With the dollar defined in terms of a commodity known for remarkable stability, there was little currency or commodity volatility to speak of.

Since 1973, and with the dollar no longer having a commodity definition, currency trading has soared. As a consequence, currency trading is staggering in its scope. There's roughly $7 trillion worth on a daily basis.

The above number tells you all you need to know about 'stablecoin' or 'coins.' There's no such thing. Private currencies pegged to paper currencies like the dollar, euro et al are pegged to paper forms of money that bounce around with some regularity.

See the $7 trillion trading number yet again. If paper currencies were actually stable as measures of value, the trading would be non-existent. In short, a 'stablecoin' defined as such because it has a paper currency peg is a rather humongous contradiction.

The same applies to private or 'crypto' money that has a strict supply limit. Almost by definition this kind of currency won't be stable...Much as a foot is useful as a measure because it's always 12 inches, the only true 'money' is that which holds its value throughout time....

Historically gold defined money not based on randomness, but because the yellow metal's price has always been incredibly stable thanks to a stock/flow disparity that's enormous. Gold is the constant. Stablecoins defined in terms of gold would logically be stable; that is, unless these coins are pegged to the dollar, euro, yen (or name your currency) price of gold. This is an important distinction.

In 2001 a dollar purchased 1/260th of an ounce of gold, but as of this writing a dollar purchases 1/1800th of an ounce. The previous number is yet another reminder of how volatile the dollar is, but also how worthless it would be to peg a currency to the dollar price of gold. There's no stability to speak of. Truly stable 'stablecoins' would have their value measured directly vis-à-vis gold."

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12.13.21 - Gold Rises on Record High Inflation

Gold last traded at $1,787 an ounce. Silver at $22.32 an ounce.

NEWS SUMMARY: Precious metal prices advanced Monday on safe-haven buying despite a firmer dollar. U.S. stocks retreated as investors remained cautious over how the pandemic will impact the economy and what the Fed will announce Wednesday.

Gold prices end higher as U.S. inflation rate climbs to a nearly 4 decade high -Marketwatch

"Gold prices turned higher on Friday after the U.S. government reported that the rate of consumer inflation hit the the highest level in nearly 40 years.

Prices for the precious metal had been stuck in range bound trading, "supported by inflation and omicron concerns as well as persistently, historically-low real rates," but prices were capped by a strong U.S. dollar and concerns the Federal Reserve may more aggressively tighten monetary policy, said Jeff Klearman, portfolio manager at GraniteShares

'The current low level of real rates reflects a great deal of uncertainty regarding the course of future Fed monetary policy and until they increase and maintain higher levels they will continue to support gold prices.'

Data on Friday revealed that the U.S. cost of living climbed in November and drove the rate of inflation to a nearly 40-year of 6.8%. The consumer price index increased 0.8% last month, more than the 0.7% advance expected by economists polled by The Wall Street Journal.

The 'much higher-than-expected CPI release not only increases inflation concerns but also adds to concerns the Fed may have fallen behind in its fight against inflation,' said Klearman. 'A too aggressive Fed, acting to combat inflation, may also detrimentally affect economic growth leading to falling stock (and other asset) prices, providing support to gold prices.'"

punch The Way Out -Imprimis

"Here are two questions pertinent to our times: (1) How would you reduce the greatest free republic in history to despotism in a short time? and (2) How would you stop that from happening? The answer to the first question has been provided in these last two disastrous years. The answer to the second has begun to emerge in recent months. Both are worthy of study.

To establish despotism in a nation like ours, you might begin, if you were smart, by building a bureaucracy of great complexity that commands a large percentage of the resources of the nation....

This much has been done. It would require a doctoral thesis to list all the ways that rules are made in our federal government today, which would make for boring reading...But how many know how the Centers for Disease Control (CDC) came to be, under what authority it operates, and who is its head? Here is a clue: it is not Anthony Fauci.

Admittedly, this new kind of bureaucratic government would take - has taken - decades to erect, especially in the face of the resistance of the Constitution of the United States, which its very existence violates. But once it has been erected, things can happen very fast.

What, for example, if a new virus proliferates around the world? There have been procedures for dealing with such viruses for a long time. They begin with isolating the sick and protecting the vulnerable. But suddenly we have new procedures that attempt to isolate everybody....

To set up a despotism capable of pulling this off you would need the media's help. Those controlling the media today are trained in the same universities that invented the bureaucratic state, the same universities the senior bureaucrats attended....

The media would need to be willing to suppress, for example, the fact that 50,000 doctors, scientists, and medical researchers signed the Great Barrington Declaration. That document reminds people that you cannot suppress a widely disseminated contagious virus through shutdowns and mass isolation, and that if you try, you will work immeasurable destruction of new kinds - unemployment, bankruptcy, depression, suicide, multiplying public debt, broken supply chains, and increases of other serious health problems....

How to Defeat a Rising Despot: One of our local restaurants is a 30-year-old diner called Spanglers Family Restaurant. Mitch Spangler is the proprietor. The business was founded by his late father, and Mitch was purchasing the business from his mother...When a second lockdown was ordered by Michigan's governor a year ago last month, he kept his restaurant open.

He put a sign on the door and posted on Facebook to make clear, among other things, that he was acting out of necessity for the sake of his business and the livelihoods of all 20 employees dependent on it; that precautions would be taken....

Mitch Spangler is our kind of fellow, and the College gave him some help organizing his legal representation. We did not wish to be in the newspaper about this because we were facing our own pressures, and we too were determined to resist them. But Spangler was no good at keeping a secret: he wore a Hillsdale College t-shirt on FOX News and thanked us for our help....

The story about Mitch Spangler is about our right to work and to store up the product of our labor so that we and our families can eat and thrive...To interfere with these rights is to interfere with the nature of the human being.

In addition to the right to make a living and the right to raise our children, we have the right to participate in our government, even if we are not experts, and the right to look to the heavens and not to our ruling class for guidance. We have these rights because we - every single one of us - were born with them sewn by God into our nature, and we cannot find our earthly fulfillment without them.

If we put these facts together as a people, we will have recovered the understanding that produced the American Revolution. We will stop these current predations upon our rights. We will bring this overwhelming government back where it belongs, under the control of the people. The signs of such a movement are emerging."

Massive U.S. Debts Could 'Trap' Powell as Fed Fights Inflation -Bloomberg/Yahoo Finance

"The U.S. went on a borrowing binge last year and the hangover could make it harder for the Federal Reserve to fight inflation without crashing the economy.

Corporate debt has surged $1.3 trillion since the start of 2020 as borrowers took advantage of emergency Fed action as the pandemic spread, slashing interest rates and backstopping financial markets to keep credit flowing. More debt held by more companies suggests potential risks as borrowing costs rise from currently low levels.

That could create financial stability concerns for Fed Chair Jerome Powell and his colleagues as they debate removing pandemic support in the face of what a report Friday showed were the hottest price rises in almost 40 years. And a tough task: Not since Alan Greenspan's time has the U.S. central bank tried to navigate the economy back to price stability from too-high inflation.

Powell's challenge is to try to curb price pressures without large costs to employment or growth, a move that would likely anger both political parties and blotch his record with the first Fed-assisted hard landing since the 1990-1991 downturn.

'They are in a difficult position,' said Jeremy Stein, professor of economics at Harvard University and a Fed governor from 2012 to 2014. If inflation is more persistent 'and they really have to hike rates significantly, you can imagine what happens to asset valuations: There's just a tremendous amount of interest-rate sensitivity in markets.'....

If higher rates and wider corporate borrowing spreads throttle access to credit, it could push more firms into bankruptcy.

'There are negative aspects when you encourage people to borrow, but then later feel that you can't raise rates because so many people borrowed,' said Howard Marks, co-founder of Oaktree Capital Group. "That's something of a trap."

The next recession: Here's when the 'everything bubble' will burst -Fortune

"In October 20XX. That's not a typo. To reach the best guesstimate of when the next recession will begin, we need to understand how the Federal Reserve creates unsustainable booms and why the next bust may be just around the corner....

The Fed's inflationary policies have increased my two cents fivefold. Maybe the next cryptocurrency is on the horizon: My 10 Cents.

If a dog can have a crypto, why can't a retired finance professor who warned the public that prices were about to accelerate due to the Fed's inflationary policies in the spring of 1976 have one?

Consumer prices rose 5.7% in 1976, 6.5% in 1977, 7.6% in 1978, 11.3% in 1979 and 13.5% in 1980. Talk about being right on the money!....

One of the best leading indicators of a cyclical downturn is the unemployment rate, which reached a cyclical bottom in May 1979 (5.6%) several months before the 1980 recession and didn't peak until November 1982 (10.8%). The unemployment rate declined until the next upturn in layoffs began to accelerate in 1990.

Currently, the unemployment rate has been declining from the lockdown peak of early 2020 and has reached levels that historically have signaled the beginning of the end of a cyclical boom. Lockdowns have undoubtedly distorted the unemployment rate, but the historical pattern reveals that when the unemployment rate nears three percent and then turns up, a recession will soon begin....

My fearless forecast, therefore, is: Inflation accelerates in 2022. Then, the public outcry over skyrocketing prices and the media reports highlighting how prices are decimating the average family's purchasing power may cause the Biden administration to impose wage-price controls as President Nixon did in 1971 to take the sting out of inflation before his 1972 reelection campaign. Biden could use an executive order if Congress doesn't give him statutory authority to impose price controls.

Without price controls, I expect the Fed to raise the Fed Funds Rate, sometime in 2022 and to continue tightening in 2023. Thus, the next recession could begin in the fall of 2023, but no later than a year later. If the recession does not begin on schedule, it only means it has been postponed, not eliminated."

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12.10.21 - Crypto: "˜Top Contender' for Correction

Gold last traded at $1,784 an ounce. Silver at $22.18 an ounce.

NEWS SUMMARY: Precious metal prices gained Friday on rising inflation and a falling dollar. U.S. stocks rose, extending Wall Street's strong rally this week - despite inflation hitting a 39-year high.

Silver Chartbook - Silver, Time To Act -Seeking Alpha

"Gold's response to Covid was a 37% up move, while silver moved up 80%. This volatility leverage works both ways, increasing the risk for silver if not purchased on low-risk entry points and traded with appropriate money management.

We have pointed out various reasons why we find silver an extremely attractive play long term in this year's chartbook releases....

We expect a price advance on silver within the next six to eight quarters to a price target of US$74.40! Significant profits allow for an outstanding risk/reward ratio....

We encourage participation since we see procrastination towards a wealth preservation strategy as the poorest choice in this challenging time for your hard-earned money."

market bulls Tesla, bitcoin, growth stocks? When will the next market bubble pop -CNBC

"When a stock or sector of the market is trading way above its intrinsic value, investors may call it a 'bubble.'

'We would urge caution, severe caution. Be very afraid of the valuations of these growth companies,' Peter Chiappinelli, portfolio strategist at GMO Asset Allocation, told CNBC.

Market bubbles are investing phenomena that can occur when valuations are driven by exuberant behavior - and they can burn investors.

The last 12 months have seen several bubbles burst. Take meme stocks such as GameStop and AMC, as well as dogecoin. And there may still be looming bubbles yet to pop....

Some investors believe Tesla and bitcoin are also bubbles soon to burst.

'Tesla [added] almost [$]200 billion in market cap in a week's span ... when you see that type of euphoria, in particular names, those could be potential examples of bubbles soon to burst,' Jason Snipe, founder and chief investment officer of Odyssey Capital Advisors, told CNBC."

Crypto Is "˜Top Contender' for Correction, Money Managers Say -Yahoo Finance

"By many counts, 2021 was the year cryptocurrencies were finally embraced by institutions. Now those same money-managers say the asset class is ripe for a big selloff next year.

Digital assets are the 'top contender' for a 'major correction' in 2022, with nearly three-quarters of institutions polled saying they're not an appropriate investment for most retail investors, according to a survey done for Natixis Investment Managers....

This year saw a number of big fund managers and pensions start to dabble in crypto, while numerous big-name investors famed for their financial markets acumen have also gotten involved....

Dire predictions for its demise have been a constant for Bitcoin, the largest and original cryptocurrency, since its debut a little more than a decade ago...Since breaking into the mainstream consciousness, Bitcoin has jumped more than 5,000% over the past five years. Bitcoin slumped as much as 3.7% to $48,685 on Wednesday."

Overcoming The Covid-19 Blues -Medium

"I am one of an estimated 25 million suffers of so-called 'long Covid'.

There are two types of long Covid; the first includes symptoms such as; serious lung fibrosis as well as major organ and tissue damage. The second is more subtle, including symptoms such as; sustained fatigue, brain fog and post-exertional malaise.

Health care professionals at a recent Harvard-sponsored forum are now warning that long-Covid represents the next major health crisis we will be facing long after the pandemic ends. Bottom line: It appears that we will all be living with the impact of Covid for a very long time.

As we now move into the third year of this life-changing global pandemic, I offer this humble song to help put the Covid-19 crisis into perspective."

Are you one of the few not facing the Covid blues?
Well bravo! How very good for you.
May we all somehow overcome the Covid blues!

It started in China, Wuhan was the city,
And circled the globe, oh what a pity.
It came to America, oh so quickly,
Making the citizens remarkably sickly.

The pharmaceuticals jumped to the cause!
And worked on a solution without a pause.
Vaccinations were said to be to "the cure",
But a whole lot of folks were not so sure!

My, how our world has so quickly changed,
Yes, our lives have been completely rearranged.
Since Covid first crossed Dr. Fauci's lips.
And the government began offering us tips.

From masks, to zoom meetings, to lockdowns,
2020 brought lots of demands from the top-down.
American's began to ponder our new touchless era,
Asking: "Is Covid real, or a government chimera?"

Yes, this pandemic has further divided our nation,
The new social taboo; "Did you get your vaccinations?"
Then came the 2021 economic fallout; rising inflation,
Despite five trillion in stimulus, there's still no salvation.

As 2022 dawns and the new strains now threaten,
With a death toll of 5 million, fear has begun to set-in.

It's time to reflect on what's most important in life,
Is this the year for more thought about the afterlife?"

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12.9.21 - Will Gold or US Dollar Hit Highs in 2022?

Gold last traded at $1,775 an ounce. Silver at $21.98 an ounce.

NEWS SUMMARY: Precious metal prices remained stable Thursday despite a firmer dollar. U.S. stocks dipped as traders took a pause awaiting fresh economic data on Friday.

Will it be gold or U.S. dollar at new record highs in 2022? 'I'm bullish on gold,' says NDR strategist -Kitco

"Gold and the U.S. dollar are well known for their inverse correlation. But will 2022 be the year of gold or the U.S. dollar? Ned Davis Research's (NDR) chief global investment strategist Tim Hayes weighs in.

With the Federal Reserve looking at a more aggressive tapering schedule next year and potentially two rate hikes, the U.S. dollar index has been holding up quite well at the 96 level, which has been weighing on gold.

But will the inflation narrative change the outlook for gold next year?

'The dollar made a high right after the COVID-19 crisis in March. And on the question of which one is more likely to make a new high - gold or the dollar - I'd say gold. I'm currently neutral on the dollar, which sort of implies that it stays in its trading range. But I'm bullish on gold,' Hayes told Kitco News.

Contrary to the U.S. dollar, gold has a solid setup going into next year and could reach new all-time highs after consolidating since its August 2020 record highs, Hayes noted. 'Gold is likely to hit new record highs as long as this environment remains. And that implies that this is about as good as it gets for the U.S. dollar,' he said."

metaverse The Metaverse Will Change the Way We Live, Think and Work -RealClearMarkets

"The metaverse and how it will usher in - like the first iteration of the internet - a new era and change the way the way we learn, interact, collaborate, and run our businesses.

This is the year 1995 (the year the internet was launched) all over again, but much much bigger. The metaverse is only in the first stage, but it is here.

Now, its participants are wearing goggles and glasses to enter a new 3D world, but the day will come in the not-too-distant future when there will not be virtual headsets or augmented reality glasses, but chips implanted in humans that allow them to connect in real-time by simply thinking the name or business or organization or friend with whom they want to interact.

Just what is the metaverse? Let's start with Fortnite as an example. Fortnite is an MMORPG (Massively Multiplayer Online Role Playing Game) in which 100 players fight it out until the last man standing in a fast-paced, action packed 3D environment which was developed by Epic Games.

It was recently valued at $17 billion. In 2020, 15,000,000 gamers experienced Fortnite's Galactus event. According to Charlieintel.com, Epic has nearly 400 million registered users. The demand for 3D virtual reality games is off the charts and growing....

While the internet was built on code, today's metaverse is built on engines that build 3D universes. Discover Unity, a game engine that can create 3D, VR, and AR experiences for any industry, including 'Auto, AEC, Film, and More.' Fifty-three percent of the 1,000 top-grossing mobile games globally are powered by Unity, according to their website....

According to a 2020 study published in the Journal of Computers in Education, Immersive content and VR can improve knowledge retention to a rate of more than 75 percent. This compares favorably to class lectures, which have a learning retention of only five percent and reading retention of just 10 percent....

Let's imagine we could go back to 1995 when the pinnacle of the digital experience was represented by AOL, CompuServe, and Prodigy...We had no idea what the promise of the digital world held....

Today, however, the metaverse is laying out a vision that includes the 350 million players spending 80 billion hours a year playing Fortnite, 27 million people attending virtual concerts, and more. These advances have opened the doors to shopping, playing, learning, collaborating, and even traveling wherever you want, all inside the burgeoning metaverse."

Pulling The Punch Bowl -Smead Capital Management

"Overall common stock index performance can be a very confusing thing to most investors. From a cyclical standpoint, the history of stock price performance in the U.S. is closely associated with the Federal Reserve Board. When the Federal Reserve Board reverses an accommodative interest rate policy, it is affectionately referred to as 'pulling the punch bowl.'....

To reiterate Buffett's thoughts, bull markets in stocks take on a party atmosphere. Just witness the goofy level of option trading, the millions of small investors chasing exciting futuristic companies/meme stocks and the undying devotion to index investing....

The best percentage stock market rallies of my career were in 1982, 1991, 2009 and 2020-2021. In all cases, the Fed's easy money policy got dumped into bonds and common stocks, triggering big bull moves....The exact opposite is true when the Fed tightens credit to slow down an overheated economy or to stop the inflation wolverine from roaming the landscape!....

The thing to understand about our current circumstance is that is has come 40 years into the most pervasive and extended 'easy' money period in U.S. history. This has led to 40 years of declining interest rates (did we mention $4-5 trillion of U.S. government borrowing to fight the pandemic?). This means that investments from bonds to equities with long duration attached are filled with the most long-term confidence of the last 40 years.

For this reason, owners of 'two in the bush' stocks are running the highest risk possible. When the punch bowl gets pulled, the margin of safety in stocks goes to the 'bird in the hand'....

What investments do well when the Fed is tightening credit and fighting inflation? Go back to the decade of the 1970s, which was spent fighting inflation. Energy stocks, real estate and home building thrived, because they were viewed as beneficiaries of the inflation. Fear stock market failure."

2022 U.S. Market Outlook: Under Pressure -Charles Schwab

"I don't manage portfolios, but I have much sympathy with what two investing legends have recently said. Leon Cooperman has been very vocal about being 'a fully invested bear;' and Julian Robertson believes that 'trying to sell short in this market is like being run over by a train that's going to derail a mile down the road.'....

For all the talk of a 'resilient market,' under the surface, the churn in terms of drawdowns was significant. Rotational corrections are preferred over the bottom falling out all at once; but there is a risk that indexes, at some point, reflect more of the weakness that has persisted under the surface.

Macro backdrops that include slower growth, and a move from a loose to tighter monetary policy, tend to usher in higher intra-market correlations and greater tail risks. We continue to recommend a bias toward quality and not trying to time short-term sector rotations....

One of my oft-expressed mantras about investing is that neither 'get in' nor 'get out' is an investing strategy - that simply represents gambling on moments in time, while investing should always be a disciplined process over time.

That discipline should involve diversification - across and within asset classes - and periodic rebalancing. Investors need to remain extremely alert to the risks of monetary policy, inflation, speculative froth, and ongoing virus concerns. But what ultimately matters is not what we know about the future; it's what we do along the way."

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12.8.21 - Economists Struggle To Hide Collapse

Gold last traded at $1,784 an ounce. Silver at $22.42 an ounce.

NEWS SUMMARY: Precious metal prices steadied Wednesday on dollar weakness. U.S. stocks drifted lower as investors took a pause following a two-day rally earlier in the week.

Inflation to keep gold's opportunity costs low in 2022 -Kitco

"The World Gold Council's (WGC) global head of research Juan Carlos Artigas has said that there are two competing forces in the gold market at the moment.

In an interview with Nasdaq, Artigas said that gold will find support as an inflation hedge trade as investors look to protect themselves against the risk of costs rising. He added that the other factor driving the precious metal is the opportunity costs regarding the speed and strength of interest rate rises, which could create a headwind for gold.

Having said that, Artigas has the view that the risk of higher inflation will outweigh the opportunity cost because inflation could become more persistent. In addition to this, he noted that the impact of higher interest rates could be priced in 'to a degree.'

Artigas said that in a recent WGC survey results, many gold and non-gold institutional investors said they want to increase their gold holdings over the next three years....

Gold is a tried and tested tool for central banks and will continue to be an essential component of their strategic holdings. As time goes on, more investors and central banks will increase their exposure to gold due to the ongoing issues with inflation."

currency When Fiat Currency Stops Being Money -Mises

"Most emerging and developed market currencies have devalued significantly relative to the United States dollar in 2021 despite the Federal Reserve's aggressive monetary policy.

Furthermore, emerging economies that have benefited from rising commodity prices have also seen their currencies weaken despite strong exports. As such, inflation in developing economies is much higher than the already elevated figures posted in the United States and the eurozone.The main reason behind this is a global currency debasement problem that is making citizens poorer....

When the government issues currency - promises of payment - that are neither a store of value nor a generally accepted means of payment nor a unit of measure, it not only does not create money, it destroys it by sinking the purchasing power of the poor captive citizens, who are forced to accept its notes and little pieces of paper (government officials, pensioners, etc.).

This is what we are seeing in many nations all over the world, a massive salary and savings slash created by government intervention on the monetary balance to its own benefit.

Governments benefit from inflation because they pay their debt in a currency of diminishing value and they impose a cut to the price they pay for wages and the services of the sectors that provide service to the issuer of currency."

Mainstream Economists Are Struggling To Hide The Incoming Economic Collapse -ZeroHedge

"The problems of devaluation and stagflation have been present since 1913 when the Federal Reserve was officially formed and given power, but the true impetus for a currency collapse and the destruction of American buying power began in 2007-2008 when the Financial Crisis was used as an excuse to allow the Fed to create trillions upon trillions in stimulus dollars for well over a decade.

The mainstream media's claim has always been that the Fed 'saved' the U.S. from imminent collapse and that the central bankers are 'heroes.' After all, stock markets have mostly skyrocketed since quantitative easing (QE) was introduced during the credit crash, and stock markets are a measure of economic health, right?

Reality isn't a mainstream media story. The U.S. economy isn't the stock market.

All the Federal Reserve really accomplished was to forge a devil's bargain: Trading one manageable deflationary crisis for at least one (possibly more) highly unmanageable inflationary crises down the road. Central banks kicked the can on the collapse, making it far worse in the process.

The U.S. economy in particular is extremely vulnerable now. Money created from thin air by the Fed was used to support failing banks and corporations, not just here in America but also banks and companies around the world....

A Catch-22 situation arises and the Fed must make a choice: 1) To continue with inflationary programs and risk taking the blame for extreme price increases, and 2) Taper these programs and risk an implosion of stock markets which have long been artificially inflated by stimulus.

Without Fed support, stock markets will die. We had a taste of this the last time the Fed flirted with tapering in 2018. In other words, the choice is stagflation, or deflationary depression."

Covid's Three Blind Mice -City Journal

"How could public officials vowing to 'follow the science' on Covid-19 persist in promoting ineffective strategies with terrible consequences?

In a memoir of his time on the White House Coronavirus Task Force, Scott W. Atlas provides an answer: because the nation's governance was hijacked by three bureaucrats with scant interest in scientific research or debate - and no concern for the calamitous effects of their edicts.

Atlas's book, 'A Plague Upon Our House', is an astonishing read, even for those who have been closely following this disaster. A veteran medical researcher and health-policy analyst at the Hoover Institution, Atlas, a radiologist, joined the Task Force six months into the pandemic, after he had published estimates that lockdowns could ultimately prove more deadly than Covid....

Vice President Mike Pence chaired the Task Force, but Atlas says that Pence and the other members were regularly cowed into submission by three doctors who dominated from the start: Deborah Birx, the Task Force's coordinator, along with Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, and Robert Redfield, director of the Centers for Disease Control.

Atlas calls them 'the troika' because of their strategy for presenting a united front, never disagreeing with one another during the meetings in the White House Situation Room. (Reporting later revealed that they had made a pact to resign in unison if any of them was fired.)

These veterans of the federal bureaucracy had worked closely together during the AIDS epidemic, and their track record was hardly reassuring. Their long and costly quest to develop an AIDS vaccine ultimately failed, but they did manage to persuade the public that AIDS would spread widely beyond gay men and intravenous drug users. Redfield, with some help from Fauci, was the chief prophet of a 'heterosexual breakout,' a threat that terrified Americans for more than a decade but never materialized....

Atlas's portrayal of the troika - a better term might be the three blind mice - rings true, both because of the details he provides and because it jibes with what he and they were saying (and not saying) publicly throughout the pandemic.

It may seem incredible that the troika would violate a fundamental principle of public health by ignoring the devasting collateral damage of their policies, yet they never even pretended to conduct a cost-benefit analysis.

'Perhaps the most remarkable insight in the Fauci email trove,' Atlas notes, referring to the thousands of emails from Fauci that were made public, is 'the total lack of mention of harms from the lockdown throughout the pandemic.'....

The politician who comes off best is Florida governor Ron DeSantis, who had, Atlas observes, 'a far more detailed understanding of the pandemic than anyone I had encountered in the Task Force.' Trump comes off fairly well, too, in his conversations with Atlas, as he frets about the harms of the lockdowns and instinctively recognizes the futility of the troika's strategies."

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12.7.21 - Gold Up, Investors Await Fed's Next Move

Gold last traded at $1,783 an ounce. Silver at $22.52 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on bargain-hunting despite a firmer dollar. U.S. stocks rebounded as investors grew less fearful of the potential economic impact from the new omicron coronavirus variant.

Gold Up, Investors Await Fed's Next Move Amid Tighter Jobs Market -Yahoo Finance

"Gold was up on Monday morning in Asia, with investors continuing to digest a mixed U.S. report and weighing its impact on the U.S. Federal Reserve's next move....

The U.S. job report, released on Friday, was mixed. Non-farm payrolls were at 210,000 in November, lower than the 550,000 figure in forecasts prepared by Investing.com and the previous month's 546,000 figure. The unemployment rate fell to 4.2%, a 21-month low....

Although an indication that businesses are boosting hiring, prices remain high and there is little sign of supply constraints easing.

The Fed will likely speed up its asset tapering when it meets later in the month, in response to a tightening labor market. This could also lead to earlier-than-expected interest rate hikes."

winter America's Nightmare Winter -Rogue Economics

"This winter will bring hardships for the poorest among us. But today, we look at another winter - harder"¦ longer"¦ and further in the future.

What are the odds of a staggering economic collapse"¦ political and social chaos"¦ hyperinflation"¦ and revolution? One in two? One in ten? We don't know....

In the 2020s, major governments throughout the world were committed to two remarkably implausible policies...First, they were 'transitioning' to a post-fossil-fuel economy, setting a specific temperature target for the planet. Second, they were funding their programs with "printing press" money.

None of the major powers - Europe, America, Japan, or China - had any real money.

The real money - backed by gold - was eliminated in 1971, when Richard Nixon closed the gold window. Thenceforth, the U.S. government would no longer honor its promise to redeem dollars for gold presented by foreign central banks. Since then, they were all flying blind....

By 2021, all the world's major economies were running large deficits and headed for bankruptcy. And yet, rather than reverse course and let them recover, policymakers doubled down - especially in the energy sector.

Internal combustion engines were penalized. Electric vehicles were subsidized. Power plants were decommissioned. Oil pipelines were shut down. New oil wells weren't drilled. Storage tanks were abandoned....

Energy from solar and wind struggled to keep up. Unlike oil-fired generators, they were idle much of the time. At night, for example, the solar panels were worthless. And there was no guarantee that they wouldn't be idle just when you needed them....

On paper, the supply of energy - much of it coming from highly subsidized, inefficient, and centrally controlled new 'renewable' sources - was adequate. In practice, the system - like the Soviet economy - was rigid and brittle.

Then, one especially cold night"¦ with no sun"¦ and no wind - and temperatures falling below zero in half the country - it failed completely. The power system collapsed. Valves froze up. Fuses blew. Ice-covered wires fell. The dark passage had begun."

Davos Is Making The Central Bank Case For Gold -Zero Hedge

"Now, we have policy clarity from the Fed. They will be tapering QE and they will be raising rates in 2022. Now the markets can begin the task of readjusting themselves into year-end.

With that in mind, it makes perfect sense to see gold, which has been a losing trade all year under pressure just from tax-loss selling alone, no less expectations of a stronger U.S. dollar.

It also makes sense for high-flying equities to take a hit along with junk bonds which were yielding less than inflation. There are trillions in misallocated capital out there that go far beyond the simple idea that the Fed's only mandate is to prop up the equity markets....

This week we saw two major announcements by two very different central banks vis a vis gold. Singapore has now joined the ranks of Russia, Turkey, Hungary, Serbia, Poland and others in adding to their central bank gold reserves. This is a very significant move because this is the first country outside of those in Russia's nominal orbit....

If Singapore is worried, like everyone else is about a collapse of the current financial system which is expressly on the table via Davos and the Great Reset, then those with the gold will be in a much better position to defend their currencies during a crisis and maintain a relatively stable global exchange rate.

Since Singapore aims to be the independent broker between East and West, especially now that Hong Kong has all but been taken over by China, this move is very interesting to say the least....

What's the only real weapon the central banks have to maintain credibility? Their gold reserves. This is the essence of why Davos, I think inadvertently, is creating the new role for gold during these times of change."

Omicron Brings Another Round of Pointless Travel Restrictions -Reason

"We're long past the point in the COVID-19 pandemic when politicians are doing much more in response to viral scares than engage in rituals to soothe a fearful public and enhance their own power. With the new omicron variant spreading across the world, travel restrictions seem to be the response of choice because they're politically popular.

Never mind that closing borders is ineffective at anything other than further burdening already hobbled families and economies. The actual danger posed by omicron remains uncertain, but the policy response is as pointless as it was preordained....

New York Gov. Kathy Hochul (D) promptly declared a state of emergency granting her extraordinary power. More worryingly, a world already suffering severe disruptions started closing its borders in irrational ways.

Following in the footsteps of the United Kingdom, the U.S. banned travelers from South Africa and seven neighboring countries, even though omicron was already in the Netherlands and elsewhere well before the variant was revealed to the world. In fact, the new variant was well-established in the countries announcing travel restrictions, including the U.S....

Official reaction seemed crafted more to further separate families and impoverish an already troubled world than to address a bug that was already loose. Health experts make exactly that point.

'Travel restrictions may play a role in slightly reducing the spread of COVID-19 but place a heavy burden on lives and livelihoods,' the World Health Organization's Africa office warned as travel bans proliferated. 'If restrictions are implemented, they should not be unnecessarily invasive or intrusive, and should be scientifically based.'....

Omicron has already spread to dozens of countries. Travel restrictions at this point aren't going to delay anything except the already-interrupted flow of goods and people needed to keep the world functioning.

So, what's the point of closing borders when it's too late to keep the bug out? The real effect of otherwise pointless measures is to accumulate power to politicians who covet just that, and to appease a public that demands somebody do something about a virus that shows every sign of becoming a permanent part of life."

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12.6.21 - Fed's Inflation Pivot Catastrophic for Stocks

Gold last traded at $1,779 an ounce. Silver at $22.29 an ounce.

NEWS SUMMARY: Precious metal prices steadied Monday on mild profit-taking and a weaker dollar. U.S. stocks rose as investors looked past the emerging threat from the omicron Covid-19 variant.

Gold rises 1% as virus jitters, lower yields lift demand -CNBC

"Gold prices rose nearly 1% on Friday as uncertainty sparked by the Omicron coronavirus variant and a dip in U.S. Treasury yields boosted the safe-haven metal's appeal....

'Gold is benefiting from a flight-to-safety as investor worries around a faster Federal Reserve taper and the COVID situation as both Delta and Omicron pose a risk to short-term growth outlook,' Edward Moya, senior market analyst at brokerage OANDA.

'Gold's end of week performance is significant as it coincides with curve flattening that includes high expectations for a faster Fed taper.'

Sentiment in wider financial markets remained weak, with the Nasdaq tumbling over 2%, as mixed U.S. jobs data and fears around the Omicron coronavirus variant weighed.

Further lending support to gold, the U.S. 10-year bond yield dropped below 1.4% for the first time since September, reducing the opportunity cost of holding non-interest bearing gold."

revolution Outrageous Predictions 2022: Here comes a revolution -Saxo Group

"1. The plan to end fossil fuels gets a rain check - Policymakers kick climate targets down the road and support fossil fuel investment to fight inflation and the risk of social unrest while rethinking the path to a low-carbon future.

2. The US mid-term election brings constitutional crisis - The US mid-term election sees a stand-off over the certification of close Senate and/or House election results, leading to a scenario where the 118th Congress is unable to sit on schedule in early 2023.

3. US inflation reaches above 15% on wage-price spiral - By the fourth quarter of 2022, US CPI inflation reaches an annualized 15% as companies bid up wages in an effort to find willing and qualified workers, triggering a wage-price spiral unlike anything seen since the 1970's.

4. Facebook faceplants on youth exodus - The young abandon Facebook's platforms in protest against their mining of personal information for profit; the attempt by Facebook parent Meta to reel them back in with the Metaverse stumbles.

5. EU Superfund for climate, energy and defense announced, to be funded by private pensions - To defend against the rise of populism, deepen the commitment to slowing climate change, and defend its borders as the US security umbrella recedes, the EU launches a bold $3 trillion Superfund to be funded by pension allocations rather than new taxes -

6. Women's Reddit Army takes on the corporate patriarchy - Mimicking the meme stock Reddit Army tactics of 2020-21, a group of women traders launch a coordinated assault on companies with weak records on gender equality, leading to huge swings in equity prices for targeted companies.

7. India joins the Gulf Cooperation Council as a non-voting member - The world's geopolitical alliances will lurch into a phase of drastic realignment as we have an ugly cocktail of new deglobalising geopolitics and much higher energy prices.

8. Medical breakthrough extends average life expectancy 25 years - Young forever, or for at least a lot longer. In 2022, a key breakthrough in biomedicine brings the prospect of extending productive adulthood and the average life expectancy by up to 25 years, prompting projected ethical, environmental and fiscal crises of epic proportions.

9. New hypersonic tech drives space race and new cold war - The latest hypersonic missile tests are driving a widening sense of insecurity as this tech renders legacy conventional and even nuclear military hardware obsolete. In 2022 a massive hypersonic arms race develops among major militaries as no country wants to feel left behind.

10. Spotify disrupted due to NFT-based digital rights platform - Musicians are ready for change as the current music streaming paradigm means that labels and streaming platforms capture 75-95 percent of revenue paid for listening to streamed music. In 2022, new blockchain-based technology will help them grab back their fair share of industry revenues."

The end of the party is just getting started -Briefing

"The Q&A portion of Fed Chair Powell's testimony on the Coronavirus and CARES Act before the Senate Banking Committee this week was chock full of market-moving insight....

The Omicron variant is not a risk that has been embedded in the Fed's current forecasts, but even so, Fed Chair Powell made it sound as if the bigger risk related to Omicron is more on the inflation side than on the labor market side of things.

Hence, he made it a point to highlight in his prepared remarks that a reduced willingness to work in person could intensify supply-chain disruptions, from which we can infer that there is an expectation that it would contribute to inflation pressures lasting longer....

The implication of the Fed chair's remarks before the Senate Banking Committee is that the Fed knows it missed the mark with its transitory inflation view, that it needs to speed things up with its tapering plan, and that the shift is on from a dovish policy stance to a less dovish policy stance....

Now, with the Fed chair suggesting he thinks the tapering pace should happen faster, there is a residual expectation that rate hikes will follow relatively soon after the tapering is complete.

When the first rate hike does happen, the policy rate will still be extraordinarily low. Nonetheless, the abrupt pivot by Fed Chair Powell is tantamount to issuing the first signal that the 'party like it's 1999 vibe' is coming to an end."

Fed's inflation pivot could be catastrophic for stocks -CNBC

"Federal Reserve Chairman Jerome Powell's retirement of the term 'transitory' to describe inflation could have an unexpectedly bleak knock-on effect on risk assets, according to Cole Smead, president and portfolio manager at Smead Capital Management.

Powell surprised markets earlier this week by altering his previously consistent tone on inflation, telling U.S. lawmakers that 'it's probably a good time to retire that word (transitory) and try to explain more clearly what we mean.'....

Speaking to CNBC's 'Squawk Box Europe' on Thursday, Smead said Powell's comments amounted to a 'mea culpa,' or an admission that he was wrong, and that the potential effect it could have on Fed policy and the value of assets might be underappreciated.

'Most equities have been punished the last couple of days, and we can talk about the omicron [Covid variant], but I really think it's people somewhat fearful of the Fed's pivot to being wrong.'....

He argued that the U.S. consumer is seeing 'incredible inflationary pressures,' and real yields - interest rates adjusted to remove inflation - are going to spike if the Fed tightens.

'We're going to watch real yields go from the most negative levels we've seen since like 1974 to a meaningful real yield, and that is catastrophic for risk assets,' Smead concluded."

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12.3.21 - The Fed's Perilous High-Wire Act

Gold last traded at $1,784 an ounce. Silver at $22.53 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on mixed data and a firmer dollar. U.S. stocks fell, after a disappointing November jobs report, ending a roller-coaster week driven by Covid omicron variant fears.

Gold price at $10k, silver at $500 due to 'a decade of shortage' -Kitco

"This will be a 'decade of shortage' defined by high inflation and a failed attempt to raise rates - the perfect combo to trigger a massive rally in gold, said Goehring & Rozencwajg Associates managing partner Leigh Goehring.

Next year, inflation could already be pushing 9%, and it could get a lot worse, Goehring told Kitco News in an interview.

'We're getting closer to the explosion of gold prices to the upside. I'm a big believer that inflation is not going away. It's going to continue to be a problem. We could be looking at a black swan event in inflation. It could be an oil shock, natural gas shock or agricultural shock,' Goehring said.

Federal Reserve Chair Jerome Powell already shocked the markets this week by dropping the phrase that 'inflation is transitory' and stating that the U.S. central bank will be discussing accelerating the pace of tapering at the upcoming December meeting.

An inflationary black swan event could kick-start that inflationary psychology, which has been missing despite annual U.S. inflation running hot at 6.2%....

How big of a bull market will it be? Goehring is expecting gold to reach $10,000 an ounce by the end of the decade. And for silver to eventually catch up and trade around $500 an ounce.

'By 2028, gold could be over $10,000. If gold is over $10,000 and we go back to the 20:1 gold-silver ratio. That's $500 silver,' he said. 'It will be the decade of shortages, and everyone's going to get poorer except for the people that own physical gold and silver.'"

The Fed's high-wire act just got even more perilous -CNN

"Investors were spooked by the discovery of the new Omicron variant of the coronavirus. Now, they're contending with another wrinkle in the outlook: The Federal Reserve could be prepared to roll back stimulus measures faster than planned because of persistent inflation.

What's happening: Stocks fell sharply on Tuesday after Fed Chair Jerome Powell told Congress that plans to taper asset purchases by $15 billion each month may no longer be appropriate, and the central bank may need to move quicker. The S&P 500 and Dow both closed down 1.9%, while the Nasdaq Composite finished the day 1.6% lower.

In a note to clients, strategists at UBS laid out the current situation this way: 'Omicron + taper = volatility.'

The Fed already had an incredibly difficult job on its hands. Its preferred measure of inflation, released last week, showed consumer prices climbing at the fastest pace in three decades.

The central bank has said it will start rolling back crisis-era measures to keep the economy from running too hot - though it doesn't want to jeopardize the recovery in the US job market, where unemployment still sits at 4.6%. Before the pandemic, the unemployment rate was at 3.5%.

The arrival of the Omicron variant has made assessing the situation even harder. While scientists are rushing to determine whether the strain is more transmissible and if vaccines remain effective in protecting against severe disease, economists worry that it could cause more people to stay home or even force the closure of some venues again. That would hurt the jobs comeback.

Powell sounded hawkish on Tuesday despite this development. Goldman Sachs' team notes that Powell 'stated three times, with increasing firmness, that it would be appropriate to discuss accelerating the pace of tapering.'"

CEOs and insiders sell a record $69 billion of their stock -CNBC

"CEOs and corporate insiders have sold a record $69 billion in stock in 2021, as looming tax hikes and lofty share prices encourage many to take profits.

From Satya Nadella at Microsoft to Jeff Bezos and Elon Musk, CEOs, founders and insiders have been cashing in their stock at the highest pace on record. As of Monday, sales by insiders are up 30% from 2020 to $69 billion, and up 79% versus a 10-year average, according to InsiderScore/Verity, which excludes sales by large institutional holders.

The selling is likely to increase even more as December is often an active month for sales due to tax planning....

Some market watchers see insider selling as a warning sign and signal of a market top...The bulk of this year's sales have been highly concentrated among a few large sellers, including Musk and Bezos, who each sold around $10 billion in stock this year....

Taxes and high valuations are also fueling the sales. Microsoft CEO Satya Nadella sold off nearly half of his Microsoft shares last month for about $285 million. The company said in a statement that the sale was for 'personal financial planning and diversification reasons.'"

Can Media Cover 'Build Back Better' Fairly When It Awards Them Gov Goodies? -CNSNews

"It might come as a surprise to the media establishment and even government legislators that the First Amendment protection for freedom of the press also applies to all Americans. Basically, every American is a member of the press.

When government bestows special status and privileges to 'journalists' that aren't provided for all citizens, the nation enters the dangerous realm of press exceptionalism. That's the notion that journalists play such a unique role in American democracy that they need to be on pedestals. The problem is that journalists can't be surrogates of rank and file Americans when they are being bought off and compromised by governmental entities privileging the reportorial class.

The journalism industry is being made part of the establishment by an increasing flow of government enticements. The Biden Administration's Local Journalism Sustainability Act is part of the Build Back Better package. It is working its way through Congress now.

The bill helps fund payroll expenses of news outlets, and generates revenue for those outlets by giving tax incentives to advertisers and subscribers. This ill-conceived legislation is super-charged press exceptionalism that will take the teeth out of the press' historic watchdog role....

News coverage of Biden's spending package is now necessarily compromised since news organizations stand to benefit from its passage. Journalists and politicians have historically kept an arms-length, and at times adversarial, relationship. Journalism executives should recognize government handouts for precisely what they are - attempts to maneuver and manipulate press sympathies to the government's advantage.

States also want to patronize and exploit the media with special perks. California's Gov. Gavin Newsom has signed a new law that gives reporters unfettered access to demonstrations and protests otherwise closed off by the police....

Instead of looking for government favors, the press would be better off to focus on improving the service it was designed to provide for news consumers. Credibility ratings for the press are near record lows."

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12.2.21 - How State Govt Can Help the Economy

Gold last traded at $1,763 an ounce. Silver at $22.33 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Thursday on profit-taking and a firmer dollar. U.S. stocks rebounded from a sell-off in the previous session spurred by the arrival of the latest Covid variant on U.S. shores.

Gold Swings on Omicron's Widening Spread, Inflation Worries -Bloomberg

"Gold rebounded from a three-week low as traders weighed the spread of the omicron coronavirus variant against comments by Federal Reserve Chair Jerome Powell on the need to curb inflation.

Researchers worldwide are racing to understand the full impact of the strain, first identified in South Africa and detected in countries from the U.K. to Brazil. It's prompted a raft of travel restrictions in an effort to curtail its spread, and sparked concerns about whether it could evade the protection of vaccines and fuel new surges in infections....

'Whatever Powell's position is, that's not enough to cripple the gold price,' said Tom Price, an analyst at Liberum Capital Ltd. 'It's a nicely balanced market between people who are worried about inflation and those who are worried about tapering.'....

The U.S. central bank is currently scheduled to complete its asset-purchase program in mid-2022 under a plan announced at the start of November to slow buying by $15 billion a month."

buy and sell Have You Ever Heard of Bonner's Law? -Rogue Economics

"Since the Money Madness began in earnest in March 2020, consumer spending - as measured by real retail sales - has gone up 13.5%. That's thanks to the feds' giveaways, stimmies, non-repayable loans, deficits, and other money-shuffling claptrap.

According to Say's Law, real demand (purchasing power) comes from output. In other words, you gotta have something to spend. And you get it by having something to sell (labor, product, service, etc.).

In the same period, real output (real personal income less transfer payments) went up, too - but by less than 1%. So demand (based on phony money-printing, not output) rose more than 13 times faster than supply.

What should happen under these circumstances? Prices should rise. Which is exactly what happened. Last month, the median price of a new house climbed to over $400,000 - a 27% increase over two years ago....

Not equal to Supply and Demand, or Say's Law, but still on the books, is Bonner's Law and its corollary.

Bonner's Law says that 'when the money goes, everything goes.' The corollary tells us that things in the financial world, especially, get a little funky.

So, when the Fed added another $5 trillion (no point in trying to be precise, we're talking trillions here), it was bound to set off some weird stuff.

And in these Diaries, we enjoyed laughing at many of them - cryptos, NFTs, Meme stocks, SPACs"¦ Cathie Wood"¦ Elon Musk"¦ et al. And they keep coming!....

The 'greater fool' approach is as reliable as any other. It rests upon the assumption that there is always someone dumber than you, ready to buy your assets for more than you paid for them.

The creators of the Snowdog token weren't taking any chances. If there were greater fools out there, they would find them. So they put out the word that they were going to spend $40 million buying the coins back in eight days. A 'game theory experiment,' they called it.

Only someone with an IQ substantially lower than his body temperature would believe such a thing. But many did; the Snowdog token rose to be worth more than $6,000. Then, the insiders quickly exchanged their holdings for other cryptos, taking out some $10 million worth in a matter of hours.

This 'rug pull' sent the price of the poor Snowdog down 99%. This must have come as a shock to the buyers. The cute little puppy didn't come when they called it. Instead, it pooped on the carpet, bit the hand that fed it, and took off running."

Passing the Spending Bill Could Doom Biden's Presidency -Reason

"One of the strangest ticks of left-leaning punditry over the last year has been the contention that if Democrats in Congress didn't join together to pass some sort of climate and social spending bill - the various multi-trillion-dollar reconciliation packages that have gone under the label Build Back Better - then President Joe Biden would have presided over a failed presidency.

The idea was that without this legislative package, Biden would have no accomplishments, no legacy, and nothing to show for his years in office with congressional majorities. Without the spending bill, Biden and the Democratic Party were doomed.

On the contrary, the evidence suggests that Biden is already presiding over a failed presidency - and passing the spending bill could further cement that failure.

A new poll from Echelon Insights puts Biden's predicament in rather stark relief. Over half of voters disapprove of the way Biden is handling the economy, foreign policy, and his job as president. Similarly, inflation is among the top concerns for voters right now, and 52 percent of registered voters believe Biden is making inflation worse....

And here we are, the better part of a year later. Inflation has indeed accelerated and is likely to continue to accelerate in the near future. Combined with supply chain problems, this is causing Americans economic pain and frustration in their daily lives, pain that is highly visible in the prices at gas stations and supermarkets in the form of obviously higher prices for certain staples. Indeed, inflation has risen so rapidly that it has effectively destroyed this year's wage gains for workers. They're earning more - and they're still worse off....

Biden and his fellow Democrats in Congress are doubling down on a strategy of ignoring voter problems in favor of mostly irrelevant party priorities.

This was always a recipe for a failed presidency, one incapable of adapting to the moment or addressing genuine voter needs - and so it is no surprise that as Biden has followed that recipe, his presidency has flailed and faltered. And as long as he sticks to this course, his failures are all but certain to continue."

How State Governments Can Help the Economy -City Journal

"The economy added 531,000 jobs in October, but many Americans aren't going back to work. As of last month, employment across the United States was still 2.8 percent below its pre-pandemic peak, which translates into 4.2 million missing jobs. Even more concerning is that the U.S. economy seems to have cooled down considerably, growing at a 2 percent annual rate in the third quarter, down from over 6 percent in the second quarter of 2021.

Most of the employment recovery is concentrated in a few states, and Covid-19 vaccination rates seem to have nothing to do with it. States with the highest vaccination rates - Massachusetts, Maine, and Vermont - have recovered as many jobs as have many states with below-average rates, such as West Virginia, Alabama and Mississippi.

What do seem to be driving the differences in Americans getting back to work are state and local government policies. More affordable and business-friendly states are near or above pre-pandemic employment levels. States with the lightest regulatory burdens - Utah, Idaho, and Arizona - have already surpassed their pre-Covid employment levels. Red tape kills job creation; occupational licensing rules mostly raise consumer prices while limiting employment opportunities....

Taxation and spending policies factor in as well. Support from the federal government meant most states' finances recovered quickly. Eleven states, including Arizona, Iowa, New Hampshire, Missouri, Montana and Wisconsin, reformed their income-tax systems to reduce residents' overall tax burden. They cut taxes to provide relief for residents and to jump-start their economies.

But debt repayment and public-employee retirement costs constrained states such as Connecticut, Illinois and New Jersey. They had trouble preventing business failures, providing additional tax breaks for cash-strapped businesses, and avoiding cuts in state and local government payrolls - all factors that hurt labor demand....

States can help get Americans back to work by reducing barriers to entry and unnecessary red tape, lowering the cost of new investment and shifting budget priorities to focus on public investments that boost economic potential."

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12.1.21 - Omicron: An Economic Threat?

Gold last traded at $1,782 an ounce. Silver at $22.33 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on upbeat jobs data and a weaker dollar. U.S. stocks rebounded as volatility sparked by omicron variant continues.

Gold price firmer as risk aversion quickly resurfaces -Kitco

"Gold and silver prices are higher in early U.S. trading Tuesday, on safe-haven demand and more short covering by futures traders. 'Risk-off' trading and investing attitudes have returned to the general marketplace after a one-day respite Monday....

Risk aversion is keener Tuesday as there are still major unknowns regarding the new Omicron strain of the coronavirus, including how effective current vaccines are at fighting it. Regeneron Tuesday morning said its antibody drug is less effective on the Omicron strain. Moderna said Omicron's many mutations suggest a new vaccine will be needed.

Traders and investors will closely monitor comments from Fed Chairman Jerome Powell and Treasury Secretary Janet Yellen in their testimony to the Senate Banking Committee today - especially in light of the new Omicron scare. The new coronavirus strain is prompting new worries about major economies once again being crimped by business lockdowns and reduced consumer demand.

The Federal Reserve could be forced to dial back its recently announced tapering of its bond-buying program, due to concerns about another slowdown in the U.S. economy if Omicron surges in the U.S. Gold and U.S. Treasuries are benefiting Tuesday from safe-haven demand."

IRS What's in Your Wallet? -Law & Liberty

"To help foot the bill for the 'Build Back Better' budget reconciliation bill - originally slated to cost $3.5 trillion - the Biden administration proposed an unprecedented measure for collecting revenue: conscripting banks and credit unions to help the IRS set up a financial profile for nearly everyone in America.

In a May list of proposals for raising revenue, the Biden Treasury Department laid out a plan to force financial institutions - including banks, credit unions, brokerages, and payment apps such as Venmo - to calculate and report to the IRS the gross inflows and outflows of every account with annual transactions totaling $600.

When this proposal received pushback from banks and credit unions of all sizes and individuals concerned about privacy, the administration and prominent Democrats such as House Speaker Nancy Pelosi (D-CA) and Sen. Elizabeth Warren (D-MA) defended it as a means of targeting the wealthy....

Given the obvious fact that $600 in a bank account does not make someone wealthy, Democratic leaders sent signals in mid-October that they would modify the threshold to $10,000. But that would still leave the IRS free to financially profile a vast swath of Americans who are not wealthy....

The proposal also seems poorly designed to catch criminals, who routinely use pseudonyms and fake Social Security numbers or avoid the banking system altogether. In fact, the only purpose of the proposal seems to be to ease surveillance on generally law-abiding citizens in whom government bureaucrats, for whatever reason, suddenly take an interest....

What's more, the mandated calculation and reporting of nearly every depositor's total inflows and outflows would impose a crushing compliance burden on community banks and small credit unions.

The Independent Community Bankers of America (ICBA) states that the proposal 'would create a costly and complex new reporting burden for community banks that already carry significant data collection and reporting obligations for the federal government, effectively acting as uncompensated agents of the government.'....

Instead of new ill-conceived information collection mandates that subvert the spirit of the Fourth Amendment, we should consider ways to root out existing laws and regulations that effectively turn banks and credit unions into spies against ordinary American consumers."

The End of Free Money -Project Syndicate

"Surging inflation across the European Union should be a clear signal to policymakers and central bankers that the time to stop financing public-debt binges was yesterday. Most likely, the continent is heading into a period of stubborn inflation that will be familiar to anyone who lived through the 1970s.

Although the US Federal Reserve is now thinking about tapering its monthly asset purchases in light of increasing inflation figures, European Central Bank President Christine Lagarde continues to insist that no sustained inflation risk exists.

The currently measured inflation, she says, is a temporary problem that will disappear once supply bottlenecks are overcome, so the ECB will not be changing its policies. It is like a coachman who refuses to tighten the reins when his horses are bolting, because they will eventually tire themselves out....

The current supply bottlenecks owe much to the quarantine measures in ports - particularly, but not exclusively, in China. Arriving ships cannot unload their cargo and therefore also cannot be loaded with the intermediate products that Europe's economy must be able to supply to its customers.

Freight rates for international maritime transport have increased eightfold since 2019. But the bottlenecks also reflect the domestically imposed lockdowns in European economies last winter and spring, which led to shortages even of local timber and other building materials produced in Europe....

Never before has Europe experienced stimulus programs on such a massive scale. But given the supply bottlenecks, policymakers were effectively slamming on the gas with the hand brake still on. The result was a particular form of economic overheating that economists call stagflation.

Given these circumstances, European economies and the ECB must be given a clear signal to stop any further monetized debt binges...Today's inflationary surge marks the end of the pipe dream of resources created from nothing. The good life financed by the euro system's printing press is over once and for all "

How Much of a Threat Is the Omicron Variant to the Economy? -The New Yorker

"What a difference a few days makes. This time last week, retail analysts were looking forward to a bumper holiday-shopping season, the stock market was making new highs seemingly by the day, and economists were predicting that annualized G.D.P. growth could top eight per cent in the final quarter of the year. T

he Delta-variant surge in COVID-19 cases, which had been rapid during the summer, seemed to be behind us. Speaking at a White House event where President Joe Biden announced that he was nominating Jerome Powell for a second term as the chairman of the Federal Reserve, Powell said, 'Today, the economy is expanding at its fastest pace in many years, carrying the promise of a return to maximum employment.'

Then came the news of the Omicron variant, which prompted the worst Black Friday sell-off on Wall Street since 1931 and a distinct change in tone from Powell. 'The recent rise in COVID-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation,' he said, in prepared congressional testimony that the Fed posted on its Web site on Monday afternoon. 'Greater concerns about the virus could reduce people's willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions.'

For once, the market reaction was reasonably rational. The discovery of a new variant, possibly a more contagious one, and the immediate imposition by many governments of new travel restrictions, created a lot of uncertainty about the global economy. Because investors had been pricing in a 'new normal' in which COVID-19 didn't go away but did become manageable, a wave of precautionary selling and profit-taking was inevitable. Similarly, given how little we really know about Omicron, Monday's pause to assess things also made sense....

For an extremely bad economic outcome to materialize, there would have to be another wave of widespread and lengthy lockdowns - either compulsory ones imposed by governments or voluntary ones caused by people retreating to their homes out of fear. Such a set of events is conceivable, but it would likely have to be preceded by a big wave of hospitalizations and deaths in areas where Omicron is circulating, not merely more cases....

For now, the Biden Administration and other governments are extremely reluctant to impose more lockdowns, which would be politically controversial and economically damaging....

If a severe fourth wave does materialize, hiring could appreciably slow again, but short-term inflationary pressures could also conceivably increase as disruptions to the supply chain intensify. The year-end meeting of the Fed will be held in a couple weeks. Between now and then, Powell and his colleagues will be watching the news anxiously. Just like the rest of us."

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11.30.21 - Gold Rises on Omicron Fears

Gold last traded at $1,775 an ounce. Silver at $22.76 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday amid declining consumer confidence and a weaker dollar. U.S. stocks tumbled as investors reassessed risks associated with the new omicron Covid variant.

Gold rises as Omicron fears offset strength in dollar -Reuters

"Gold prices edged higher on Monday as concerns over the impact of the Omicron coronavirus variant offset a stronger dollar, with investors assessing whether the emergence of the variant could change the U.S. Federal Reserve's hawkish stance....

With new cases of the Omicron variant found in the Netherlands, Denmark and Australia, more countries imposed travel restrictions to try to seal themselves off.

'Given the uncertainty around whether this new variant is more dangerous than the Delta variant, gold's downside should be protected,' Harshal Barot, a senior research consultant for South Asia at Metals Focus, said, adding that it could trade between $1,780 and $1,830.

Barot also said while it was too soon to gauge if virus concerns have eased rate hike expectations, there is an upside risk for gold that the variant eventually leads the Fed to scale back on its stimulus tapering and rate rise plans."

FOMO Growing Accustomed to Fear -Wealth of Common Sense

"The S&P 500 fell 2.3% on Friday. It was the first time the market was down 2% in a day since the end of September. Before that the last time we had a 2% down day was mid-May.

This one felt different though.

Most of the time the stock market is more or less random, especially on a daily basis. Investors often make up stories to justify the market moving up or down but this move lower was clearly caused by the emergence of a new variant of Covid.

No one knows yet if this variant will have a lasting impact or not.

I hate to admit it but my dumb finance brain didn't really get nervous about it until I saw the stock market react negatively. The stock market has a decent track record throughout this whole ordeal....

I'm more concerned about the psychology behind living through a pandemic for nearly two years....It's a bizarre feeling but at this point, most people are numb to this stuff.

If it's not impacting people on a personal level, it's easy to ignore it. If you haven't got the virus you probably feel invincible at this point.

How you feel about the pandemic has a lot to do with your personal experience with the virus. Right or wrong, getting Covid and having it rip through my family has changed the way I personally view it....

My experience of getting Covid after being vaccinated and being relatively careful throughout the pandemic led me to the conclusion that we're basically all going to get it at some point. Maybe I'm wrong but that was my takeaway....

It is depressing we're still dealing with such high Covid case counts nearly two years after it changed all of our lives.

The pandemic has changed the world in numerous ways. Beyond the economic, market, health and work-related changes, I'm interested in what the lasting impact will be on our collective mental health."

A Difficult Choice -HumbleDollar

"FEAR OF MISSING OUT, or FOMO, seems to be everywhere. We suffer it when we read about our friends' fabulous experiences on social media. We can also suffer it when investing, as we fret that our friends are making more on their investments than we are.

My own concern in recent months, however, hasn't been FOMO, but FOLB. No, it doesn't roll off the tongue like FOMO. It's my own invention - and it stands for fear of losing big, a particular worry of mine.

The U.S. stock market is near record highs. With my regular rebalancing, my stock allocation sits at 60%. When I look at the dollar value of that 60%, and think about the possibility of losing 30% to 40% of it in a bear market, I hear alarm bells....

I've lived through several bear markets. I'd learned to look at them as buying opportunities. I also have sufficient cash reserves to go several years without having to sell a stock or stock fund....

I have a difficult choice. I can either sell more stocks and accept the low returns that come with holding cash or bonds. This may lead to FOMO if stocks continue to climb. Or I can stick with a higher stock allocation and suffer bouts of FOLB.

I have no plans to make a radical shift, but I expect to continue selling stocks if the market keeps rising. I'll hold more cash than I otherwise might, waiting for the next buying opportunity. Whenever it arrives."

Immense Spending and Poor Poll Numbers Have Biden In Dire Straits -American Consequences

"They call it the 'Build Back Better' plan, but it's also simply the Biden agenda"¦ And the future of the Biden presidency - as well as the Democratic party - may hang in the balance.

The basic idea is to spend a massive amount of money"¦ trillions of dollars"¦ and hope that it turns around the plummeting Biden poll numbers that are making the midterm elections look increasingly grim for the president.

Despite the fact that Democrats have a razor-thin margin in Congress, they are proceeding as though they have a mandate. Speaker of the House Nancy Pelosi managed to keep enough Democrats in line last week to pass a roughly $2 trillion spending package that has large elements dealing with social services and climate change....

There's a lot of lofty rhetoric about 'climate justice' in the White House descriptions of the bill, and the vagueness in its aims seems to be a feature rather than a bug.

One way they have tried to sell it to the American people is to constantly claim that the cost of the spending bill will be 'zero.' Now, as a budgetary matter, that is theoretically true, as reflected in the recent Office of Management and Budget analysis.

But in reality, the bill is riddled with accounting gimmicks to make it seem less costly to the taxpayer than it will be. The assumption that some of the major spending mechanisms will be phased out - instead of extended - is only credible to someone who knows nothing of how Congress generally spends the taxpayers' money.

As a practical matter, the Build Back Better agenda is going to involve massive increases in taxation. They are going to raise the corporate income tax, including a new corporate minimum tax, and raise taxes on high-income individuals.

Most concerningly, a major part of the Biden agenda seems to be supercharging the Internal Revenue Service.....And in the background over the entire Biden agenda is the specter that could bring this presidency down: inflation.

We already are seeing the highest inflation in three decades, and the response of the Biden White House and Pelosi Democrats seems to be a desire to make inflation worse"¦ The Biden spending plan- assuming it gets through the Senate - will expand government debt by 25% over the course of its spending provisions, and lower long-term GDP by 2.8%, according to the Penn-Wharton Budget Model.

And so it seems the response of the Democrats to too much money in circulation chasing too few goods and services appears to be adding even more cash into the mix"¦.

This may pay political dividends in the short run, but history shows that high gas prices and galloping inflation have brought down much more adept presidents than Joe Biden when the people are finally able to cast their judgment at the ballot box."

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11.29.21 - All I Want for Christmas is Au

Gold last traded at $1,783 an ounce. Silver at $22.83 an ounce.

NEWS SUMMARY: Precious metal prices steadied Monday as upbeat economic data boosted the dollar. U.S. stocks rebounded from a major sell-off last week spurred by concerns over the Covid omicron variant.

All I want for Christmas is Au -Quartz

"Frankincense and myrrh aren't setting the commodities markets on fire, but gold is in high demand-as both Christmas gift and investment - for the second mid-pandemic holiday season in a row.

Daniel Fisher, the CEO of Physical Gold, which sells gold coins and bars, saw it first in November 2020. He called it an 'extraordinary' time, in which his turnover jumped 2,000% compared to November 2019....

Coins and 5g bars were of particular interest to customers who called Physical Gold last November to make their purchases. "These were people talking about how they worried about inflation, given how much money the government was printing for furlough programs during the pandemic," Fisher said.

'Some people wanted to pass down money to their kids or grandkids in a way that it didn't lose its value over time, or they wanted them to learn the value of investment.' One man, Fisher recalled, spent a long time discussing how he could best shrink his inheritance tax by gifting his grandchildren gold. 'The conversation landed on coins, because those are also free of capital gains tax,' Fisher said. 'He ended up gifting his grandkids 30 or 40 coins apiece.'

People weren't buying these coins last year because they couldn't purchase other gifts-because supply chain snafus had delayed PlayStation deliveries or rendered Razor scooters out of stock....

North American gold retailers have been having a bumper pandemic. Last November and December, the Canadian firm Kitco Metals saw a 50% spike in sales compared to the same period in 2019 and 2018. Stefan Gleason, the president of Money Metals Exchange, a US dealer in precious metals, saw demand for gold double from Nov. 2019 to Nov. 2020 - and double again from Nov. 2020 to Nov. 2021.

'People who buy gold as gifts probably would not spend more thaIn $1,000 per purchase, and I think I'm being generous with that,' said Bart Kitner, the president of Kitco. 'Investors, on the other hand, will easily buy bars and coins for anywhere from $10,000 to $50,000 at a time. Approximately 5-10% of gold investors will spend upwards of $500,000 on bullion'."

wall street Wall Street Calm Is Finally Shattered as Stock Fear Gauge Spikes -BNN Bloomberg

"Volatility traders are rushing to bet on turmoil in the U.S. stock market as fears over a new strain of the coronavirus look set to finally end weeks of tranquil trading.

The Cboe Volatility Index, or VIX, jumped as much as 9 points on Friday morning, the biggest intraday move since February, according to data compiled by Bloomberg. It was 7.7 points higher at 26.3 as of 5:40 a.m. in New York, the highest level in more than six months on a closing basis.

The index, often referred to as Wall Street's 'fear gauge,' measures the implied volatility of the S&P 500 over the next month. Futures for America's equity benchmark slumped 2.27% on Friday amid a global pullback sparked by a new Covid strain emerging in southern Africa.

This is the first drop of more than 1% for the S&P 500 since the start of October, and the biggest decline in almost two months. The gauge has enjoyed a relatively calm few weeks as traders focus on monetary policy and the pace of growth, rather than the virus. The VIX move looks set to ripple through the volatility complex."

Major cryptocurrencies tumble amid concern about new COVID variant -MarketWatch

"Major cryptocurrencies plunged on Friday amid a broad sell-offs of risky assets, after a new variant of COVID-19 was detected in South Africa.

Bitcoin fell more than 7% over the past 24 hours, recently trading at $54,162 early in the New York trading day. The cryptocurrency is down more than 20% from its all-time high of $68,990 on Nov. 10, according to CoinDesk data. Ether dived roughly 9% over the past 24 hours, recently trading at $4,017.

Binance coin recorded a loss of 9% over the past 24 hours, recently trading at $579.5. Solana dropped 10.4% over the past 24 hours to $190, while Cardano fell 9.4% over the past 24 hours to $1.5. XRP plummeted 9.4% over the past 24 hours to $0.95.

Dogecoin is trading at around $0.206, with an 8.4% loss over the past 24 hours. Shiba Inu fell 6% over the past 24 hours to $0.000038.

The crypto market sell-offs are in line with other risky assets. Dow Jones Industrial Average futures slumped 905 points, or 2.53%, to 34899.

The World Health Organization is meeting on Friday to assess the new COVID strain B.1.1.529."

This could finally be Sears' and Kmart's last holiday shopping season -CNN

"This Black Friday could very likely be the start of the final holiday shopping season for Sears and Kmart, two brands that once proudly dominated the US retail landscape.

The two chains are only a shell of what they were when the holding company that owns both emerged from bankruptcy less than three years ago.

At the time, the holding company - given the overly optimistic name Transformco - still had 223 Sears and 202 Kmart stores nationwide. That was already down 87% from the 3,500 stores between the two brands when they merged together in 2005 to form Sears Holdings. But the percentage drop in stores since the company emerged from bankruptcy in February of 2019 has been even steeper.

Today there are only 21 full-line Sears stores left in the mainland United States, and two more in Puerto Rico, according to the store locator on the Sears website, once recent closings are eliminated. Another seven stores listed on the site are limited to selling appliances, and in some cases, mattresses, rather than the full range of offerings that once was a hallmark of both chains.

And by the end of the year there will be only six Kmarts left in the mainland United States, along with six more in Puerto Rico, Guam and the Virgin Islands.

'To me it always felt like a liquidation. This has been going on for years,' said Reshmi Basu, an expert in retail bankruptcies at Debtwire.

Many retail experts blame Eddie Lampert, the primary owner of Transformco and Sears Holdings, for the demise of two chains."

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11.24.21 - When Government Ignores Consequences

Gold last traded at $1,785 an ounce. Silver at $23.47 an ounce.

NEWS SUMMARY: Precious metal prices drifted lower Wednesday on mixed economic data and a firmer dollar. U.S. stocks fell as higher yields and downbeat retail earnings pressured high-flying stocks.

Latest gold selloff could be a buying opportunity ahead of Q1 rally -Kitco

"The gold market's latest price drop could be a buying opportunity as the Federal Reserve is still expected to be in no hurry to raise interest rates despite who is sitting at the head of the table, according to one analyst.

In a report published Friday, Suki Cooper, precious metals analyst at Standard Chartered Bank, said that she sees higher prices for gold through the first quarter of 2022 as the market continues to focus on rising inflation pressures and lower real bond yields.

'We believe that many of gold's headwinds have been priced in - from USD strength to the Fed tapering timetable - and prices have held up well. While these headwinds could re-emerge, downside risks to growth, plus elevated inflation and our expectations for the USD to weaken and real yields to remain deeply negative, suggest price dips are likely to be viewed as good buying opportunities,' Cooper said in the report....

Cooper added that gold has been responding to the rising inflation threat. She noted that markets will get another critical inflation report later this week with the release of the Personal Consumption Expenditures Index. She said that Standard Chartered expects PCE to rise 4.2% for the year, the highest reading since 1991.

'The gold market is concerned about elevated inflation risk but also does not believe that central banks will react hawkishly to high inflation prints immediately,' she said."

fire What to Expect When the Government Ignores Consequences -Rogue Economics

"The Federal Reserve printed up nearly 5 trillion brand-spanking-new dollars between August 2019 and today.

Surely, there must have been at least one alert economist among the 1,000 Ph.D.s on the Fed's payroll who noticed that they were about to cause the whole economy to go up in flames.

But what was he thinking? Was he thinking at all?

This was classic monetary inflation on an unprecedented scale. Never before had any government 'printed' so much money in such a short period of time.

But nowhere in the history of the economics profession is there an instance where such prodigious effort on the part of the money-printers led to genuine prosperity.

Instead, many centuries of history show us that monetary inflation leads to price inflation"¦ which then leads to bubbles and busts"¦ confusion"¦ and finger-pointing.

And if it's not stopped, it can lead to hyperinflation, depression, hunger, poverty, riots, and revolution....

Supply chain disruptions were relatively unknown back in March 2020, when the spree of money-printing began in earnest. Now, they're as common as strip malls.

How came they to be? When the offices, restaurants, and bars closed, people turned to their home computers"¦ found that they had stimmy money from the feds in their accounts"¦ and determined to spend it.

Some ordered consumer goods. But since America doesn't make much anymore, these had to be shipped from the other side of the world.

And in a few months, the ships were backing up in the harbors"¦ docks were stacked with containers"¦ and trucks labored night and day to deliver them to every Middlesex, village, and town in the country.

Hence, the 'supply chain disruptions.' It seems so obvious, now. Shouldn't our man at the Fed have seen it coming?....

Compensating workers is the number one expense of U.S. industry. So, any rise in labor costs is important"¦ and must be passed along.

It is also the most 'sticky' of cost increases. Prices for raw materials may go up and down, but once an employee gets a raise, it is hard to take it back; there's nothing 'transitory' about it.

And thus it was that prices rose"¦ not for any mysterious reason, but for an obvious one - people were buying stuff.

But not with real money that they earned (which would have increased the supply of goods and services as well as the demand for them). They were spending fake money delivered unto them by the Fed.

It would have taken years of advanced study"¦ and perhaps at least a master's degree in economics"¦ not to see it coming.

And so, we'll prompt our Ph.D. friend at the Fed. Here's a question to put to your comrades now? 'Well, what did you expect?'"

The supply chain crisis should change our holiday shopping habits -Vox

"Black Friday, the Friday after the Thanksgiving holiday, once marked the start of the holiday shopping season. In recent years, though, the event has begun to feel like something of a bygone tradition. The holiday retail calendar begins a little earlier every year, but 2021 was especially notable: Some retailers started dishing out early-bird sales and reminder emails as early as September.

Shoppers were encouraged to order their gifts as soon as possible or risk having packages arrive late, due to rampant supply chain disruptions and mailing delays. Even books (yes, books!) weren't safe from the impending shortages.

The pandemic briefly curbed consumer spending, but not for very long: As the country opened back up, Americans felt the urge to get out and shop, an impulse that retailers and marketers happily indulged. The early fall holiday shopping schedule was billed to benefit customers by reducing their annual holiday stress, which is likely compounded by supply chain delays. Yet retailers are still banking on shoppers turning out on Black Friday, despite launching monthslong campaigns urging them to shop early.

Early holiday shopping sprees are good news for retail corporations, logistics companies, and the US economy, which all stand to profit from a protracted shopping period. Consumers, in turn, are conditioned to buy without a second thought, a habit that is bad for the millions of workers caught up in manufacturing, distributing, and shipping the tons of junk we order every day. This year on Black Friday, perhaps we should reconsider America's great shopping addiction.

When the stuff we want is so hard to get ahold of, why go to such great lengths to buy it? Consumers have the option to not order items manufactured overseas, to source things locally from small businesses or artisans. We also have a choice that eliminates the potential for shipping or supply chain mishaps: We can just buy less."

2021's Cost of Traditional Thanksgiving Dinner 14% Higher Than 2020 -Political Calculations

"The cost of providing a traditional Thanksgiving turkey dinner to 10 people in 2021 is 14% higher than a year ago. The same food that cost $46.90 in 2020 now costs $53.31.

That's according to the results of the American Farm Bureau Federation's annual survey of the cost of a Thanksgiving dinner were released one week before Thanksgiving 2021....

Rising by $4.60 from 2020's $19.39 to 2021's $23.99 for a 16-pound bird, turkey alone accounts for nearly 72% of the year-over-year increase in the total cost for the meal.

Why are turkeys so much more costly in 2021? Here's a partial explanation:

'The USDA's Turkey Market News Report showed that smaller 8- to 16-pound frozen turkeys were selling for $1.41 per pound, up from $1.15 the year before, a 22 percent increase...Gregory Martin, a poultry educator with Penn State Extension, points to larger inflation concerns. 'Prices are going to go up simply because of the cost to get the birds in the store,' he told Lancaster Farming."

**We will be closed Thursday and Friday in observance of the holiday. Happy Thanksgiving from the Swiss America family to yours!**

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11.23.21 - 'Build Back Better': Eco-Socialism

Gold last traded at $1,789 an ounce. Silver at $23.67 an ounce.

NEWS SUMMARY: Precious metal prices extended losses Tuesday on short-term profit-taking amid rising interest rates. U.S. stocks traded mixed as higher interest rates put pressure on tech stocks.

Latest Treasury, Fed and BIS Reports Confirm: All Twisted Paths Lead to Gold -Gold Switzerland

"The facts keep piling up, and recent BIS, Treasury and Fed reports confirm that all twisted paths lead to gold.

In a recent article, I posed the rhetorical question of when will policy makers finally stop lying and allow honest facts and natural market forces to return?

Unfortunately, as we examine the two latest working papers from the Fed/Treasury Dept cabal and the Bank of International Settlements, each confirms that lies are officially the new normal.

Over the years, we've tracked popularized delusions masquerading as policy with evidence rather than awe, addressing such topics as the open fictions of CPI inflation reporting and its 'transitory' myth to the latest sample of double-speak spewing out of the Fed or White House....

History's patterns confirm that the more a system implodes under the weight of its own self-inflicted extravagance (typically fatal debt piles driven by years of war, wealth disparity, currency debasement and political/financial corruption), the powers-that be resort to increasingly autocratic controls, distractions and automatic lying....

Needless to say, more liquidity, and more inflation, joined by more rate repression, truth destruction and currency debasement means gold's recent bump north is just the beginning of the ride up...As we've said with consistent conviction and hard facts, not to mention spot-on inflation reporting, gold's golden era has yet to even begin."

federal reserve An Estimate of the Future -The Aleph Blog

"In some ways, the Federal Reserve is the whipping boy of Congress. Congress can't decide on anything significant, so the Fed fills in the blanks, and keeps things moving, even if it creates humongous asset bubbles in the process.

That is what we are facing today. Overvalued stocks, housing, corporate bonds, private equity, and more. Inflation in goods and services may be transitory, but asset inflation is a constant. Whether by QE or rate policy, the Fed tries to end the possibility of recessions by making financing cheap, and blowing asset bubbles in the process.

What of the future? The Fed will be dragged kicking and screaming to tightening. It will follow the stupid Alan Greenspan highway of 25 basis points per meeting. It will be all too predictable, which has little to no impact until it is too late, creating pro-cyclical economic policy, something the Fed specializes in.

The Fed will be surprised (again) to see that the long end of the yield curve does not respond to their efforts. Are they stupid? Yes. the yield curve hasn't worked in the classical way for over 20 years. In an overindebted economy, long rates are sluggish. Can the Fed abandon the dead orthodoxy of neoclassical economics to embrace the reality of overindebted economics?....

Conclusion: The Fed will tighten and fail, returning us to the same morass that we are in now. Financial repression via the Fed will continue to create inequality with no smoking gun. Stupid people will finger other causes, when the real cause is the Federal Reserve. We need to eliminate the Federal Reserve, and cause Congress and the Executive Branch to take responsibility for their failed policies."

"˜Build Back Better' Is Climate-Change Socialism, Not The Smaller Government We Need -Issues & Insights

"Just 10 months into his administration, Joe Biden is seemingly a man on a destructive mission: everything he touches augers spectacularly into the political dirt and his approval rating reflects the country's dismay.

Last week, consumer prices jumped the highest in 31 years owing to non-stop stimulus checks, big government spending and energy sector 'climate change' subsidies to electrical vehicle (EV) promoters and manufacturers.

Everything from food prices to used cars increased faster than paychecks. If a working person didn't receive a 6.2% pay raise this year, he/she is losing money, plain and simple. There hasn't been a measurement this dramatic in decades....

'The climate crisis can't wait any longer,' skewed Biden's press flack Jen Psaki in response to questions regarding policies driving energy prices higher. The Biden team has made it clear: his agenda is to use the Green New Deal to restructure our society....

As the Biden/Socialist policies assault America it's clear that government at all levels is too large, invasive and corrupting of good policies. The proper alternative for vigorous policy debate for the nation's future is to identify how government at all levels can be cut from its current size of roughly 40% of GDP to 20% of GDP, which would dramatically increase the rate of economic growth for the benefit of all our citizens."

Inflation's Back! -Newsmax

"This is no time for inflation doves.

Biden may confront the fate of presidents injured, even politically crippled, by inflation. Consider the political careers of Johnson, Nixon, Ford and Carter, all presiding over inflation, all seeing their presidencies terminated with extreme prejudice.

Coincidence? Not really. As the first celebrity economist, John Maynard Keynes, wrote in The Economic Consequences of the Peace:

'Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth.'...

'Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction and does it in a manner which not one man in a million is able to diagnose.'

Inflation - felt as rising prices yet really a sinking dollar - is politically lethal. Most politicians mishandle it. It's that insidious.

President Biden? You are a self-proclaimed champion of capitalism and equity. So, now, pivot to good monetary policy to preempt 'all the hidden forces of economic law' from settling 'on the side of destruction.'....

By far most of it [destruction] was about monetary policy (noting the advantages of the gold standard for quelling inflation and creating equitable prosperity)."

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11.19.21 - U.S. Selling Strategic Petroleum Reserve to Asia?

Gold last traded at $1,849 an ounce. Silver at $24.73 an ounce.

NEWS SUMMARY: Precious metal prices eased Friday on mild profit-taking despite a weaker dollar. U.S. stocks traded mostly lower as concerns over a Covid-19 resurgence weighed on global markets.

Gold-O-Mania is Coming -GoldSwitzerland

"As exuberance continues to dominate intoxicated stock market investors, they haven't yet noticed that all is not well on the perilous seas. Still, most markets continue to respond positively to the printing press rather than to the underlying fundamentals.

Printing presses don't create real value, instead they create bubbles full of worthless air. But sadly intoxicated investors confuse air, which is free and has no value, with real, intrinsic values....

Since the time we made substantial investments in the physical gold market in 2002 at $300, I have never worried one day about the value of gold. History told us that gold, with normal fluctuations, would always reflect constant purchasing power.

And since I back then predicted that risk in the financial system would increase dramatically, physical gold was, and still is, the obvious wealth preservation investment....

Gold must not be held for speculation or instant gratification. Instead, hold physical gold and some silver for wealth preservation purposes.

Physical gold and silver will not just preserve your wealth but substantially enhance it as the world economy enters a very troubled time.

So will we have Goldomania? Yes, very likely.

This means that gold (and silver) could become overvalued and overloved at some point in the next 5-10 years like in all manias. That might be the time to swap some gold and silver to undervalued and unloved assets which could be stocks, or land or solid businesses. Such situations can create fantastic opportunities but first we must go though some cleansing and difficult times."

money and gold Gold Breakout Imminent! -Zero Hedge

"By now, readers are tired of my description of gold trading as range-bound between $1,700 per ounce on the low side and $1,900 per ounce on the high side, with $1,800 per ounce as the central tendency...

This pattern emerged in November 2020 after gold fell from its all-time high of $2,069 per ounce on Aug. 6, 2020....

What's next for gold? That's where the good news begins. Yes, gold has been range-bound, but the range is getting smaller. While swings of 5% in a matter of days were common as recently as last summer, that volatility has cooled off. Gold still moves up and down in price, but the swings are much more compact....

The first piece of evidence is that the real price of physical bullion today is not $1,864 per ounce...but closer to $2,000 per ounce according to my gold bullion dealer sources....

It's a reflection of scarcity, delivery delays and other logistical issues in getting actual physical bullion instead of paper gold contracts. $1,925 per ounce is the real price of real physical bullion. Everything else is just paper....

The second fundamental factor is that Russia is back in the game. As readers know, Russia has increased its gold reserves by 1,700 metric tonnes since 2009...a 283% increase in the past twelve years....

And of course, China has acquired massive amounts of gold in recent years, which has been part of a concerted overall strategy. And recently, Chinese gold imports from Hong Kong hit a five-month high, up nearly 60% in September.

These central bank purchases were in anticipation of a declining dollar and higher dollar inflation. The central banks are buying gold to stay ahead of the curve. Shouldn't you do the same?"

Something very peculiar is happening with our Strategic Petroleum Reserve -American Thinker

"It's no secret that Americans are paying record prices at the gas pumps. Rapidly ascending prices also affect the cost of all the goods and services that are an integral part of the American economy. Farmers, manufacturers, delivery companies, repair people...you name it: they're paying more to do their jobs, and they're passing those costs to consumers.

So why now, of all times, is the Biden administration selling off America's Strategic Petroleum Reserve (SPR) to Asia?

As the name suggests, the SPR is America's emergency backup supply of oil. The reason we have it is because of the energy crisis in the early 1970s. According to Wikipedia, which is probably accurate about this, '[t]he United States started the petroleum reserve in 1975 after oil supplies were interrupted during the 1973-1974 oil embargo, to mitigate future supply disruptions.'

Fast-forward to 2021. Upon entering the Oval Office, one of the first things Biden did was to shut down the Keystone XL pipeline. Henceforth, rather than flowing safely through a pipeline, Canadian oil will come the expensive way, over land, whether in trucks (which are in short supply) or on trains.

At the same time, Biden halted new oil, gas, and coal leases on federal lands, something that's being fought in the courts. As long as the suit continues, no sane business would start to drill....

Practically overnight, America went from oil independence and being a net oil importer to suffering shortages and, as noted, rising prices. When asked about the problem, Biden blamed OPEC and Russia. Meanwhile, Jennifer Granholm, the energy secretary, simply cackled maniacally and claimed that the administration was helpless.

Biden is now under pressure to tap the SPR to relieve some of the pressure on fuel prices. (Again, remember that Biden birthed this problem by squashing American fuel production, thereby creating the shortage...Even Chuckie Schumer wants to lower prices by chipping away at our SPR emergency supply, despite our having vast, untapped resources beneath American land.

It turns out that Biden is already tapping into the SPR; he's just not doing it to help Americans. A report in investment circles is finally trickling down into the mainstream news: Biden is selling massive amounts of SPR oil...to Asia!

As far as I can tell, the administration has not explained why, with Americans struggling to keep up with rising fuel prices, it's shipping our SPR to Asia."

Biden's approval dips to 36 percent in new Quinnipiac poll -The Hill

"President Biden's job approval rating is down to just 36 percent in a new Quinnipiac University poll, signaling trouble for Democrats as they head into 2022.

The president's current approval rating is down a point from 37 percent last month, according to the poll. Disapproval with his job performance also ticked up slightly to 53 percent from 52 percent in October.

Biden gets his worst reviews on his handling of the economy and foreign policy, with 34 percent and 33 percent approving, respectively. Fifty-nine percent of respondents say they disapprove of his handling of the economy, while 55 percent disapprove of his performance on foreign policy.

Just 37 percent of respondents say the president has good leadership skills, compared to 57 percent who believe he does not. And a slight majority - 51 percent - say they do not believe the president is honest, while 42 percent say he is....

When it comes to Biden's response to the coronavirus pandemic, 45 percent of Americans say they approve of his performance, while 50 percent disapprove. Likewise, 41 percent give him positive marks on climate change compared to 48 percent who disapprove.

The latest numbers from Quinnipiac's national poll offer a gloomy outlook for Democrats, who are preparing to defend their slim House and Senate majorities in 2022."

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11.18.21 - 46% of Americans Expect to Retire in Debt

Gold last traded at $1,862 an ounce. Silver at $24.94 an ounce.

NEWS SUMMARY: Precious metal prices steadied Thursday on bargain-hunting and a weaker dollar. U.S. stocks traded mixed as investors grappled with seasonal Covid worries and ongoing inflation concerns.

Gold firms as inflation risks persist -CNBC

"Gold prices rose on Wednesday as concerns about inflation kept some investors on edge, while expectations that rising prices may prompt central banks to increase interest rates strengthened the dollar and capped bullion's advance....

'Investors are afraid of inflation going out of control and (are) therefore buying gold to hedge against that risk,' said Carlo Alberto De Casa, external analyst at Kinesis Money.

Rate increases remain a potential risk for gold and only a clear break above $1,875 may drive further gains, De Casa added....

The U.S. Federal Reserve began phasing out its bond-buying this month and expects to end purchases altogether by mid-2022. Its next policy-setting meeting is in mid-December."

fear and greed Greed outpacing fear in world markets, Goldman Sachs CEO says -Yahoo Finance

"Greed is outpacing fear in world financial markets as investors respond to the pandemic recovery, Goldman Sachs Chief Executive David Solomon says, adding that such periods of exuberance are usually not long-lived.

Solomon told Bloomberg's New Economy Forum in Singapore on Wednesday the global economy was facing a 'complicated time' as activity began to strengthen after the sudden shutdown in many parts of the world in 2020 because of coronavirus.

The unprecedented levels of stimulus ordered by governments and central banks, he said, had led to exuberance in certain markets.

'I think markets generally when I step back and I think about my 40 year career, there's been periods of time when greed has far outpaced fear. We were in one of those periods of time,' Solomon told the Singapore event....

'Something will rebalance it and bring a little bit more perspective. And given it feels like inflation is running above trend, chances are interest rates will move up and that will take some of the exuberance out of certain markets,' he said."

The Current State of the Economy & Markets -A Wealth of Common Sense

"Let's do a quick rundown of the current state of the markets and the economy....

The U.S. stock market all-time highs. Housing prices are at all-time highs. Retail sales are at all-time highs. The net worth of American households is at all-time highs...Job openings are at all-time highs, meaning it's probably never been easier to find employment.

People are quitting their jobs at the most rapid rate ever, a sign of confidence in their finances or future employment prospects. Wages are finally rising substantially, especially for people in the lowest income bracket. Interest rates remain near all-time low levels.

All of these data points would seem to present an economy that is booming...Yet the consumer sentiment numbers are falling off a cliff.

How can this be? Everything is amazing and no one is happy?

It's been 3 decades since we've dealt with inflation at these levels....It's becoming quite apparent that people really hate inflation, even when just about everything else is humming along.

Inflation can cause rapid price changes in a short period of time. Change can freak people out. Gas prices are now as high as they've been since 2014....

We live in a weird economy right now where things are simultaneously booming and annoying."

Retirement insecurity: 46% of Americans expect to retire in debt -CNBC

"Most people are used to living with debt. Retiring in the red is another story.

Maintaining enough cash on hand to cover recurring bills with interest is harder on a fixed income and adds another obstacle to the challenge of living comfortably.

And yet, 46% of all Americans expect to retire in debt, according to a survey by personal finance site MagnifyMoney....

These days, older Americans owe more than ever before. The total debt burden for Americans over age 70 increased 614% through 2021 from 1999, to $1.27 trillion, according to data from the Federal Reserve Bank of New York....

The U.S. Department of the Treasury has said the Social Security trust fund will run out of money sooner than expected due to the Covid pandemic.

The outlook threatens to shrink retirement payments and increase health-care costs for older Americans."

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11.17.21 - Sudden $400 Billion Crypto Price Rout

Gold last traded at $1,863 an ounce. Silver at $24.98 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on safe-haven buying and a weaker dollar. U.S. stocks retreated as investors weighed strong earnings reports from big-box retailers against growing inflation concerns.

Analysts are looking for more upside in gold -Kitco

"Bloomberg recently released an article outlining a bullish case for the yellow metal. In the article, the analysts look at inflation in comparison to real interest rates and some technical factors that could push up the price of the precious metal.

The article said, 'gold may outperform the S&P 500 Index about 20% as the threat of stagflation becomes real.' It then went on to say, concerns over peak economic growth are coinciding with rising inflation, which pushed the real yield on Treasuries to record lows.

The high correlation between the real yield and gold suggests bullion is undervalued. Trading signals based on 20-week moving averages imply a potential breakout rally over the next year....

On the technical analysis side, the article takes us on a quick tour of Bollinger Bands, which plot lines above and below a simple moving average at a specified number of standard deviations to identify periods of high and low volatility. Currently, the weekly candle is breaking out of the upper trading band....

Historically speaking there have been five cases where gold crossed above its 20-week moving average with bandwidth below 6 over the past two decades. On average, bullion outperformed S&P 500 by 19% over the next 52 weeks with no loss record. The sixth signal is still counting.

Bloomberg concludes, 'if this pattern repeats, gold is well primed to outshine S&P 500 next year.'"

car Market Pulse: Paging George Katona -Alhambra Investments

"Consumer sentiment hit a decade low last month, falling 6 points from an already low level. The culprit? Inflation, which we learned last week hit a 3 decade high in October. And if the founder of the University of Michigan consumer sentiment survey is right, the next thing we'll see is an economic slowdown.

George Katona was a psychologist who applied psychological principles to macroeconomics in devising the consumer sentiment survey. He's kind of the godfather of behavioral economics and one of his main theses was called the Katona Effect. In short, it says that there is a relationship between consumer spending and the volatility of inflation.

As inflation volatility rises, consumers pull back, saving more and spending less and vice versa. So far, despite the drop in sentiment, consumption seems to be fairly robust. But the longer this burst of higher prices persists, the more likely it is that we'll see a retrenchment....

Since the labor market continues to look pretty good, consumer confidence remains fairly high. Meanwhile, consumers cited rising prices for homes, vehicles, and durable goods as negative more frequently than they have in 50 years. Their personal situation may not be that great but they are still confident in the economy overall.

I don't know whether we'll be able to avoid the worst of the Katona effect but we did see an immediate impact in markets last week from the hot inflation reports...The bad news is that I don't think we've seen the high print on CPI yet, although I hope I'm wrong about that. Higher rents and housing prices are starting to feed through to CPI and that isn't going to end soon either....

The most interesting move last week was gold which finally responded positively to the drop in real yields....States are flush with cash and politicians make drunken sailors look prudent. So, we'll see, but my guess is that the inflation headlines are not over."

Sudden $400 Billion Crypto Price Rout Sees Bitcoin Crash Under $60,000 As Ethereum, BNB, Solana, Cardano And XRP Plummet -Forbes

"Bitcoin and cryptocurrency prices have fallen sharply over the last 24 hours, with the bitcoin price crashing under $60,000 per bitcoin.

Other major cryptocurrencies, including ethereum, Binance's BNB, solana, cardano and Ripple's XRP, have also fallen back - all losing between 7% and 10% of their value.

The sudden crypto price crash has wiped around $400 billion from the combined crypto market, which last week touched a record high of around $3 trillion.

'Cryptocurrencies have experienced a sell-off, taking major cryptos below recent short-term support lines,' Alex Kuptsikevch, senior financial analyst at FxPro, said in emailed comments.

'A stronger dollar against major currencies and a desire to lock in profits triggered a strong but relatively even sell-off overnight. The cryptocurrency market capitalization collapsed 7.5% over the past 24 hours to $2.66 trillion, breaking a long consolidation.'....

Ethereum, the second-largest cryptocurrency after bitcoin, had also hit an all-time high of almost $5,000 per ether last week. The ethereum price has now dropped back to around $4,100."

The Empty Nest and Kitchen Table -Wisdom Well

"I've been thinking a lot about our kitchen table lately. Well-worn and inexpensive, it's one of the centerpieces of furniture in our house, partly because it's in the kitchen eating area, but more because it is where so much of our life has happened.

No matter how busy our lives became over the years, I always prioritized sitting down together for dinner as a family. Family meetings to discuss important things like upcoming vacations or issues that needed resolving happened at the kitchen table.

As we approach the emptying of our nest in a couple of days, I have strongly considered getting rid of the kitchen table. Not because it's beat up (it is). But because its empty chairs boldly broadcast the fact that the kids are gone. Sitting down to dinner with just one or two of us seems too sad....

As I was cleaning the table today, noticing its familiar nicks and scratches, the circles where something too hot or too acidic or too wet sat for too long, I went more slowly. More tenderly. More thoughtfully. No longer seeing it as a functional workhorse, but as a silent witness to the life that has played out on, around, and under it, I decided it needs to stay for a while longer. If for no other reason than as an invitation for future chapters to be written upon it."

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11.16.21 - Inflation: A Noxious, Distortionary Tax

Gold last traded at $1,852 an ounce. Silver at $24.85 an ounce.

NEWS SUMMARY: Precious metal prices steadied Tuesday as upbeat economic data boosted the dollar. U.S. stocks rose after a strong October retail sales report in the face of rising prices.

Gold 10x Upside: A Trade Idea From Goldman -ZeroHedge

"Is gold about to have a new chance to shine? According to a recent burst of pro-gold articles, golden sentiment may be about to shift.

As Bloomebrg writes today, 'gold may outperform the S&P 500 Index about 20% as the threat of stagflation becomes real.' It elaborates:

'Concerns over peak economic growth are coinciding with rising inflation, which pushed the real yield on Treasuries to record lows. The high correlation between the real yield and gold suggests bullion is undervalued. Trading signals based on 20-week moving averages imply a potential breakout rally over the next year.'

One of the factors cited by Bloomberg is that gold has a strong inverse relationship with the U.S. real interest rate, which has resumed its slide into negative territory since March....A so-called volatility squeeze...suggests a significant increase in volatility ahead, potentially in favor of gold. And, as Bloomberg further notes, a trading strategy that follows the weekly crossover with a volatility squeeze has helped gold to beat S&P 500.

Bloomberg concludes, 'if this pattern repeats, gold is well primed to outshine S&P 500 next year.'....A far more convincing pitch for gold also on Friday came from none other than Goldman's head of energy research Damien Courvalin who repeated the bank's recent optimistic talking points on the yellow metal in an interview with Bloomberg in which he said that 'gold is set to boom' far higher from its current price."

inflation Inflation Is a Noxious Tax -Rogue Economics

"Democracy is best described as 'two wolves and one lamb voting on what to have for dinner.' But after they've fully digested the lamb, the wolves are still hungry. What do they do?

First, they borrow. And when that source is exhausted (excess borrowing raises interest rates, which depresses the whole economy"¦ and lowers tax receipts)"¦ they print.

Inflation is just another way to squeeze blood out of a population of turnips. It is a tax levied on consumers. It's a particularly noxious tax, in that it distorts and damages the entire economy.

And when a country relies too heavily on it, it soon becomes a god-awful mess.

Take our favorite basket case, Argentina, for example. Runaway debt? Out-of-control inflation? Pandering to the masses? Buying votes? Corruption"¦ incompetence"¦ absurdity - the Argentines have been there and done that for the last 70 years....

Even today, the inflation rate is around 50%"¦ where it has been for several years. The U.S. dollar trades on 'white,' 'black,' and 'blue' exchanges - at very different rates.

Businesses routinely keep at least two different sets of books - one for the government and one for themselves. They trade invoices with each other to manage their tax burdens. And rich people flee to Uruguay or Florida.

Still, life goes on"¦ tolerably well, for many people. But a deeper crisis is coming. The Argentine government is broke. No one will lend it money. And if it keeps printing more money, it risks a Venezuela-style catastrophe."

Biden admin faces backlash from inflation, Build Back Better -New York Post

"The experience of the last Democratic president who presided over a significant bout of inflation wasn't a happy one, and if the Biden White House isn't haunted by that precedent, it isn't paying attention.

Arguably, galloping inflation did more than anything else to unravel Jimmy Carter's presidency.

Of course, we aren't anywhere close to the late 1970s, when inflation hit double-digits. But the latest numbers - with prices increasing 6.2 percent, the biggest annual increase in more than 30 years - should be a fire-bell in the night for Democrats.

There have been two crises President Joe Biden created or exacerbated, at the southern border and in Afghanistan, and the latest numbers point to the possibility of a third and even more consequential one.

Large-scale forces are at play in the rising prices. His policy program has tended to make the problem worse rather than better, though, and the eroding buck is going to stop with him regardless.

For the longest time, the White House's response to inflation concerns was to high-handedly dismiss them. The White House scoffed at economist Larry Summers when he warned earlier this year that fiscal stimulus on a World War II-scale might 'set off inflationary pressures of a kind we have not seen in a generation.'....

Biden is now redefining his infrastructure and Build Back Better proposals as anti-inflationary, though no one ever mentioned this when the bills were being conceived or sold over the past year.

Biden's best bet is that his jawboning and pushing at the ports and other points along the supply chain can make a difference, while companies untangle the mess over time. In the meantime, the global energy crunch could resolve itself as supply catches up to demand.

That would presumably diminish inflation next year. What is not going to work is trying to talk people out of the lived reality of higher prices."

Entirely possible that we'll see low interest rates forever -CNBC

"Interest rates could remain at their record lows 'forever,' according to one asset manager, despite a recent rush to normalize policy by many of the world's central banks.

GAM Investments' Julian Howard told CNBC's 'Squawk Box Europe' last week that he believed it was 'entirely consistent historically to talk about low rates forever.'....

Howard cited research by economic historian Paul Schmelzing, who was a visiting scholar at the Bank of England when the paper was published in 2020.

The research looked at interest rates globally dating back to the 14th century, identifying a downward trend, with Schmelzing predicting that 'real rates could soon enter permanently negative territory.'....

He pointed to the economic damage caused by the coronavirus pandemic and climate change, which is set to have a 'very, very negative effect on interest rates,' he added.

'There's no context in which a central bank will be able to normalize, sort of 1990s style normalize, interest rates when there's going to be absolutely no growth,' Howard explained.

Howard expected that the Federal Reserve would probably only start raising interest rates in the second half of 2022.

Rep. Jim Himes, D-Conn., told CNBC Tuesday that low interest rates and the 'free money' that we had seen for many years, risked creating asset bubbles.

This is when the price of an investment rises rapidly, but the jump not necessarily reflecting the asset's underlying value."

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11.15.21 - Gold: 'Explosive Move' Coming in 2022

Gold last traded at $1,863 an ounce. Silver at $25.33 an ounce.

NEWS SUMMARY: Precious metal prices steadied near 5-month highs Monday despite a firmer dollar. U.S. stocks traded mixed after the S&P 500 broke a five-week winning streak on Friday.

'Huge explosive move' coming in 2022, this sector has 100% upside -Kitco

"Chris Vermeulen, chief market strategist at TheTechnicalTraders.com discusses with David Lin, anchor for Kitco News, the stock market sectors with the largest upside potential for the New Year, as well as the sectors investors should avoid.

'GDX and SLV were in a bear market just a week ago,' Vermeulen said. 'They have moved to a recovery stage. Now they're in yellow, which is accumulation. They're starting to just get some momentum in them, and they're starting to get into another bull market. Gold should rally to $2,600. Gold miners, I think, will have a huge, explosive move.'

Vermeulen noted that gold and the mining stocks...will rally separately from the stock market....Once gold breaks out of its current range, the mining stocks will follow and 'go ballistic,' seeing potentially 100% returns in the next bull cycle, Vermeulen said."

money The Nothingness of Money -MoreToThat.com

"When I was in junior high school, I heard a riddle that blew my mind.

It went something like this: 'Rich people need it. Poor people have it. If you eat it, you die. And when you die, you take it with you. What is it?'

Feel free to sit with the question for a moment...The answer is... NOTHING.

Back then, I enjoyed the riddle for its cleverness. But today, I enjoy it for its simple profundity. The claim that 'rich people need nothing' is not a literal one, but it points to how the pursuit of money is the unifying struggle of the modern era.

At the same time, however, the riddle states another truth: Nothing passes through the great wall of death. Whether you're a billionaire or a homeless person, everything goes to null in the face of the great equalizer.

The only thing you may be able to preserve is a legacy, but that legacy is for other conscious minds to perceive, which is no longer a luxury you have upon hitting that wall.

So herein lies the Great Tension: Money is a required pursuit for life, but a pointless pursuit upon death....

Wisdom is the co-existence of contradictory truths, and money is the clearest example of this. We must internalize its importance while also recognizing its pointlessness. We must operate within the story of money while also understanding that it's a fairy tale.

The problem is that we often fail to see the illusory nature of this story, and treat it as gospel until it's too late. But by punctuating our days with an awareness of the Nothingness of Money, we can make choices that don't place finances at the helm.

We can take a leap to do something beautiful. We can choose fulfilling work over mind-numbing jobs. We can set aside our portfolios and be present with our loved ones.

Ultimately, we can live our lives according to what will be written on our tombstones. And given that a dollar sign won't be on it, it's time we stop inscribing one onto our minds as well."

Consumer sentiment hits 10-year low while workers quit jobs in record numbers -CNBC

"Consumer confidence hit a 10-year low in November as inflation climbed to the highest levels since the early 1990s, complicating efforts from policymakers to sell the case that the current surge of price increases is temporary.

The plunge in sentiment happened as workers quitting their jobs hit a fresh record in a labor market that has nearly three million more positions available than there are people looking or jobs.

In a sign of confidence in the labor market, 4.43 million people quit, part of what some have called 'The Great Resignation,' the Labor Department reported Friday. That number topped August's 4.27 million and bought the quits rate as a percentage of the labor force to 3%, also a record.

At the same time, the University of Michigan Consumer Sentiment Index tumbled to 66.8 for November, according to a preliminary reading Friday. That was the lowest since November 2011 and well below the Dow Jones estimate of 72.5. October's reading was 71.7, meaning that the November level represented a 6.8% drop.

The survey showed consumers expecting still-higher rates of inflation, with the 12-month forecast nudging up to 4.9%."

Biden says COVID stimulus checks fueled spike in inflation -New York Post

"President Biden on Wednesday conceded that inflation is at a three-decade high because 'people have more money now' as a result of his $1.9 trillion COVID-19 stimulus legislation, recognizing a central point made by people who are arguing against a nearly $2 trillion sequel.

Biden unexpectedly endorsed the stance of his critics who have said the US dollar is losing its buying power as a result of the government printing money to cover COVID-19 aid.

The president said stimulus funds that he signed into law are in part to blame for demand exceeding the supply of goods, causing a backlog at major US ports and the highest rate of annual inflation since 1990.

'The irony is people have more money now because of the first major piece of legislation I passed. You all got checks for $1,400. You got checks for a whole range of things,' Biden said during a speech in Baltimore....

Earlier Wednesday, Biden urged Congress to tackle the highest annual inflation rate since 1990 by approving a bill with nearly $2 trillion in new social and environmental spending. That spending arguably would be paid for by tougher and broader IRS enforcement and new taxes on businesses and the rich."

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11.12.21 - Yellen Insists High Inflation is No Big Deal

Gold last traded at $1,865 an ounce. Silver at $25.33 an ounce.

NEWS SUMMARY: Precious metal prices extended gains Friday amid declining confidence in the Fed and a weakening dollar. U.S. stocks traded slightly higher, but are on pace to snap a winning streak after hotter-than-expected inflation data.

Why gold prices today have surged to 9-month high -Mint

"Gold rates today surged...to nine-month highs...after hot US inflation numbers pushed investors towards the safety of the precious metal.

Amit Khare, AVP- Research Commodities, Ganganagar Commodity: 'Hot inflation numbers from the U.S. and China fueled buying interest in the precious metals markets today, as traders and investors are seeking out hard-asset hedges against rising prices.'

Analysts say gold, which is seen as a hedge against inflation, would be well supported as long as inflation fears continue to dominate sentiment. Data released on Wednesday showed US consumer prices in October rose at their fastest pace in 31 years.

Manoj Dalmia, founder and director-at Proficient Equities Limited, said though gold's rally has been fueled by an unexpectedly bigger inflation number in US and subsequent worry of rising interest rate, yet it was in line with the intermediate uptrend.

'Gold was actually getting stronger once it surpassed the Aug high...and its primary downtrend had exhausted clearly. From season's perspective as well, Gold is entering into a bullish phase as the months of December and January are traditionally bullish,' he added.

Strength in the metal came despite the dollar hitting an over 15-month high, making gold more expensive for holders of other currencies."

super powers Stunning News on Inflation Shatters the Illusion of a Transitory Problem -New York Post

"The increase recorded in consumer prices - soaring 0.9% just for the month of October alone and 6.2% for the past 12 months - is stunning news. It is the fastest pace in over 30 years.

And I have to say that last month's results really, really undercut the idea that inflation is temporary or transitory or whatever excuse the Federal Reserve is making. By the way, if you look under the hood of the report, energy was up nearly 5% for the month and 30% for the last year.

Art Laffer makes an important point, that the CPI seems to be following the PPI, which is the Producer Price Index, or what, in the old days, we called the wholesale price index. PPI is now up 8.6% in the past year. Art's point is that when the two indexes are moving up in tandem, that strongly suggests a deep rooted inflation problem....

Inflation is becoming embedded in our economy. That suggests it might well be higher and longer than a whole lot of people - including myself - might have thought five or six months ago. As I often say, put aside the politics. Just look at the numbers. And they are not good. This story goes beyond pandemic-related supply chain problems.

Now, the White House with it's usually penetrating analysis, blames price gouging from oil companies and presumably gas stations. This is exceedingly nonsensical. If this were remotely true, you'd have to have price gouging in: energy, food, shelter, transportation, medical care, sporting events, postage stamps, recreation, used cars, new cars, car and truck rentals, and hotels.

'By all accounts the threat posed by record inflation to the American people is not transitory and is getting worse,' Senator Joe Manchin tweeted today. 'From the grocery store to the gas pump, Americans know the inflation tax is real.'"

Price Inflation Hits a 31-Year High as Janet Yellen Insists It's No Big Deal -Mises

"The producer price index for commodities in October was up 22.2 percent, year over year, reaching a 48-year high. We must go back to November 1974 to find a higher PPI increase - at 23.4 percent.

Asset price inflation has naturally continued unabated at well, with the result being rising housing costs. In addition to the CPI's 31-year high, home prices in the second quarter surged near to a 42-year high.

According to the Federal Housing Finance Agency's home price index, home price growth reached 11.9 percent in the second quarter of this year. Since 1979, only the second quarter of 2005 - also with 11.9 percent growth - showed home-price growth as high.

This is troubling information indeed, given that average real weekly earnings have turned negative this year, with inflation-adjusted earnings down 0.5 percent from September to October. It is increasingly clear that wages are not keeping up with rising prices for a great many Americans....

But some in the administration are sticking to their narrative that there's nothing at all to see here. Janet Yellen, for example, declared on Tuesday that 'I'd expect price increases to level off, and we'll go back to inflation that's closer to the 2% that we consider normal.' She insists the Fed is very much in control of the situation and won't allow 1970's style inflation to occur.

What Yellen fails to mention is that even if inflation rates of, say, four to six percent, last only a year, middle class workers won't make up these losses later just because inflation falls again at some point to 'to the 2% that we consider normal.' After all, this year's declines in real average weekly wages means real hardship for many people, even if Janet Yellen will be just fine with her private driver shuttling her from her luxury home to opulent cocktail parties all the while."

'We'll see lower prices': Biden says passage of his agenda will tame inflation -MarketWatch

"Republican senator: 'Biden's trying to convince people that inflation will go away after he spends another $1.75 trillion that we don't have'.

President Joe Biden on Wednesday touted his economic agenda in a speech at the Port of Baltimore, saying his plans will help with rising prices after an October reading on inflation came in hotter than expected.

'With the bill we passed last week, and the steps we're taking to reduce bottlenecks at home and abroad, we're set to make significant progress,' Biden said, referring to the bipartisan infrastructure bill approved by the House, as well as other priorities for his administration such as a new 'action plan' for ports."

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11.11.21 - Gold Hits 9-mo. High on Hot Inflation

Gold last traded at $1,863 an ounce. Silver at $24.25 an ounce.

NEWS SUMMARY: Precious metal prices reached 9-month highs Thursday on safe-haven buying despite a firmer dollar. U.S. stocks traded mixed after hot inflation data and surging bond yields sparked a sell-off in technology stocks on Wednesday.

Gold price rallies to 5-mo. high on hot U.S. inflation report -Kitco

"Gold prices are solidly higher and hit a nearly five-month high in early U.S. dealings Wednesday, following a hot U.S. inflation reading. There were also hot inflation numbers coming out of China Wednesday. December gold was last up $16.30 at $1,848.00 and December Comex silver was last up $0.282 at $24.58 an ounce.

The just-released U.S. consumer price index for October came in at up 0.9% and up 6.2%, year-on-year. The CPI was expected to come in at up 0.6% from September and up 5.9%, year-on-year. The October numbers are the highest U.S. CPI readings in over 30 years. Tuesday's U.S. producer price index showed a rise of 8.6%, year-on-year.

Meantime, weekly U.S. jobless claims fell 4,000, to 267,000 in the latest reporting week. Those numbers were close to trade expectations. The weekly jobless claims report was released a day early due to the U.S. Veterans Day holiday on Thursday."

fortune teller "Fair Share"? Here's Every State's Top Tax Rate Under Biden's Massive Spending Bill -ZeroHedge

"If the Democrats' tax-and-spend reconciliation bill is enacted, the average top tax rate on personal income would rise to 57.4 percent, according to the Tax Foundation.

This would give the U.S. the highest tax rate in the developed world, and stick all 50 states with a combined federal-state tax rate higher than 50 percent.

The combined federal and state top marginal income tax rates for each state under the Democrat bill are listed below:

New York: 66.2%, California: 64.7%, New Jersey: 63.2%, Hawaii: 62.4%, Washington, DC: 62.2%, Oregon: 62%, Minnesota: 61.3%, Maryland: 60.4%, Vermont: 60.2%, Kansas: 59.6%, Delaware: 59.3%, Ohio: 59.1%, Wisconsin: 59.1%, Kentucky: 58.9%, Iowa: 58.6%, Maine: 58.6%, Connecticut: 58.4%, South Carolina 58.4%, Pennsylvania: 58.3%, Montana: 58.2%, Nebraska: 58.2%, Michigan: 58.1%, Idaho: 57.9%, Illinois: 57.9%, West Virginia: 57.9%, Missouri: 57.8%, Indiana: 57.5%, Rhode Island: 57.4%, Arkansas: 57.3%, New Mexico: 57.3%, Georgia: 57.2%, Virginia: 57.2%, North Carolina: 56.7%, Alabama: 56.4%, Massachusetts: 56.4%, Mississippi: 56.4%, New Hampshire: 56.4%, Utah: 56.4%, Oklahoma: 56.2%, Colorado: 56%, Arizona: 55.9%, Louisiana: 55%, North Dakota: 54.3%, Alaska: 51.4%, Florida: 51.4%, Nevada: 51.4%, South Dakota: 51.4%, Tennessee: 51.4%, Texas: 51.4%, Washington: 51.4%, Wyoming: 51.4%."

A Fourth Mandate for the Fed? -New York Post

"That President Biden just interviewed the vice chairman of the Federal Reserve, Lael Brainard, for promotion to chairman doesn't worry the current chairman, Jerome Powell. Nor does the fact that inflation is edging closer to 6% than 5%. Nor that the central bank's balance sheet is at 40% of gross domestic product. No, it turns out that Mr. Powell spent the morning opening a Fed conference on 'gender and the economy.'

Call it the fourth mandate. The first three so-called mandates of the Fed - stable prices, full employment, and moderate stable long-term interest rates - were legislated by Congress. Say what you will, at least Congress holds the constitutional grant of between 99% and 101% of the monetary powers of the government. The mandate to address gender issues, in contrast, is a fiat mandate conjured, like the fiat dollar, out of thin air.

Not that we oppose addressing gender issues. We're for inclusion and accommodation as inherent in the American spirit. We fail, though, to see the logic, or authority, in delegating gender to the Fed. Particularly when the Fed is failing at its statutory job. In the less than three years since Mr. Powell has been sworn as chairman, the value of the dollar has plunged a staggering 28% to under an 1,830th of an ounce of gold.

The accommodation we'd like to see at the Fed is the inclusion of dissenting, or classical, views of monetary policy. And a seat for those who are not necessarily convinced that it was a good thing to abandon even the indirect link to gold that was ordained in the Bretton Woods system or specie money itself. This is the point we kept making in respect of the nomination of Judy Shelton to be a governor of the Federal Reserve....

We've heard Republican sages say that it would be better to have a wishy-washy figure like Mr. Powell than such a leftist economist as Lael Brainard. Then again also, too - why?

What kind of difference does it make in an age of fiat money? Either one of them would issue dollars that are not defined in law, nor redeemable in anything but other dollars of the same type. Neither one of them appears to be open to diversifying the views of the governors who oversee the central bank. The only men or women they seem prepared to welcome to the Fed board are those who favor irredeemable electronic paper ticket scrip."

US household debt climbed to a new record of $15.24 trillion last quarter -CNN

"American households are carrying record amounts of debt as home and auto prices surge, Covid infections continue to fall and people get out their credit cards again.

Between July and September, US household debt climbed to a new record of $15.24 trillion, the Federal Reserve Bank of New York said Tuesday. It was an increase of 1.9%, or $286 billion, from the second quarter of the year.

'As pandemic relief efforts wind down, we are beginning to see the reversal of some of the credit card balance trends seen during the pandemic,' such as lower spending in favor of paying down debt balances, said Donghoon Lee, research officer at the New York Fed.

Now that the stimulus sugar rush has worn off, consumers are going back to their old ways of spending with their credit cards. Credit card balances rose by $17 billion, just as they had during the second quarter....

Americans are spending big at the moment. Economists' explanation is, for the most part, 'because they can'....Inflation is sitting at multi-year highs thanks to supply chain disruptions that have increased the costs of shipping and raw materials. At the same time, consumer demand is also going through the roof."

*The Swiss America family offers our sincerest gratitude to our great country's veterans and their families. Today we honor your loyalty and sacrifice. Our debt to you can never be repaid. God Bless America!*

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11.10.21 - In a Free Economy, Prices Would be Going Down

Gold last traded at $1,846 an ounce. Silver at $24.70 an ounce.

NEWS SUMMARY: Precious metal prices shot up to 5-month highs Wednesday following hot consumer inflation despite a firmer dollar. U.S. stocks traded flat as investors shrugged off the biggest jump in inflation in more than 30 years.

Gold near 2-month high as U.S. inflation data in focus -CNBC

"Gold prices held near a two-month high on Tuesday, drawing support from lower U.S. yields in the run-up to data that could shed more light on the U.S. inflation picture....

'In the near-term, the market will be scrutinising economic data to find out if central banks will move quicker or later,' said Quantitative Commodity Research analyst Peter Fertig.

'If the market sees that the consumer price index number is above expectations then the argument will certainly go that the Federal Reserve must now hike quicker,' Fertig said. But 'the Fed is not following a rule book,' he added.

Key central banks last week indicated interest rates would remain low in the near term, boosting the appeal of non-yielding gold and helping the metal post its best week since late August....

'A rise through $1,825 (in gold) could trigger a technical pattern that could take gold back to the $2,000 zone,' Jeffrey Halley, senior market analyst at OANDA, said in a note."

prosperity In a Free Economy, Prices Would be Going down, Not Up -Mises

"Whenever politicians and media outlets discuss inflation, they invariably use the Consumer Price Index (CPI) as their measure. The CPI is only one of several price indices on top of the various measures of the money supply that underlie aggregate price changes.

Strictly speaking, the CPI does not measure inflation per se, but rather the consequences of monetary expansion on consumer products. The CPI is one of the key indicators of economic health, and it is this inflation measure that economists use to calculate real GDP. Naturally, the accuracy of the CPI as a measure of the consequences of credit expansion is critically important, yet the measure is controversial among investors....

When explaining inflation measures to their students, the typical economics professor will emphasize that we measure a basket of goods - the average of the prices of several hundred items in a given category - in an attempt to capture the 'underlying inflation' in the economy.....

Price indices cannot measure the consequences of monetary inflation because the downward pressure on prices that these innovations exert across the economy operates independently of the upward pressure on prices generated by credit expansion.

In other words, the consequences of monetary expansion are far deeper than the rise in consumer prices suggests. When the CPI is low, we pay only a little more for consumer goods than we did the year before. But without monetary inflation, we would be paying significantly less.

This, in fact, is precisely what occurred through most of the nineteenth century, until the Federal Reserve charter mandated a monetary policy that would stabilize prices, which is a positive-sounding way of describing a policy of propping up prices that would otherwise fall as capital infrastructure expands and productivity increases. Roughly speaking, where we've seen a 4 percent annual increase in the CPI since 1971, we should have seen a 7 percent annual reduction in prices....

The CPI is merely the observable consequence of monetary expansion on prices, but it serves to mask the far greater unseen consequence: the foregone gains in living standards that should have come from the gradual reduction in prices that results from innovation and capital accumulation."

Today's Most Popular Faith Is Climate Change -Rogue Economics

"We begin today's dot-connecting with an admission: We don't know whether the world's weather is getting better or worse.

The experts say the Earth is warming. But warmer temperatures are not necessarily a bad thing. And what if there is a runaway heat effect that leaves the survivors sweating on hilltops?

Nobody knows what cover stories TIME Magazine readers will find most alarming next year. But at least the world's climate scientists, green energy hustlers, scolds, and busy-bodies gathered in Glasgow last week had a hypothesis: The more CO2 (carbon dioxide) emitted by human activity, they claim, the higher the temperatures will go.

Is that true? Maybe. Maybe not....The Industrial Revolution increased the use of fossil fuels"¦ and CO2 emissions"¦ leading to the 'greenhouse effect.' But over the longer term of the geologic record, there's no proof that rising CO2 causes rising temperatures.

For millions of years, CO2 levels were higher"¦ with higher temperatures, too. Then, there were millions of years when CO2 levels were lower"¦ and temperatures went up and down. If there is any correlation at all, it is much too imprecise to draw any public policy conclusions....

Would it make sense to force everyone to lower his standard of living in order to try to stabilize the world's climate? Who knows? And even if it were effective, would it be worth it? Again, unknowable....

In the face of so many known unknowns"¦ not to mention a boatload of unknown unknowns"¦ and many other things about which we have no damn clue, sensible people hesitate.

They take it for granted that some things are beyond our ken and outside of our control. The wisest course of action is to leave them alone, at least until we have a better handle on them.

Some people, however, are not hampered by uncertainty, but empowered by it. They simply replace convincing evidence with Revealed Truth. Their claims and guesswork are asserted as though they were facts"¦ and taken up by the masses as religious dogma....

Today's most popular faith is Climate Change....Higher standards of living increased lifespans. Better sanitation"¦ better nutrition"¦ better access to medical care - all were made possible by stored-up solar energy, in the form of oil, gas, and coal. Millions of lives have been saved by the Industrial Revolution."

A false sense of certainty -Abnormal Returns

"Acknowledging that you are wrong is a superpower. Even considering the idea that you are wrong is powerful. This is especially the case in the financial markets where we are constantly bombarded with new, potentially contradictory information. Some of this viewpoint has to do with getting older and having been proven wrong plenty of times.

One need not look far for things that contradict your world view. Skim through the news from a year ago and you will see plenty of things you thought were important but ultimately you have long since forgotten. This isn't always fun, but the more we can exercise this muscle the better. Let me leave you with some thoughts from Barry Ritholtz at the Big Picture on why we should be humble in the face of our collective ignorance.

'It is truly astonishing how many of the things we take for granted are simply untrue. Much of our investment beliefs (indeed, our lives) are based on thinking things that turn out to be either unproven or outright false. That should be very humbling to anyone in this business.'

Acknowledging that we are all just stumbling around the dark may help you from stubbing your toe."

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11.9.21 - Gold Powers to 2-month High on Inflation Fears

Gold last traded at $1,830 an ounce. Silver at $24.31 an ounce.

NEWS SUMMARY: Precious metal prices held near 2-month highs Tuesday ahead of fresh inflation data. U.S. stocks retreated as investors took some profits and awaited CPI data on Wednesday.

Gold price powers to 2-mo. high on inflation concerns -Kitco

"Gold and silver prices are modestly up in early U.S. trading Monday, with gold notching a two-month high. It appears the metals traders have turned their focus from the bearish aspects of a tighter U.S. monetary policy, to the bullish prospects of rising and even problematic price inflation in the coming months.

Global stock markets were mixed in overnight trading. The U.S. stock indexes are pointed to mixed openings when the New York day session begins. The U.S. indexes hit record highs last Friday. There remains little risk aversion in the global marketplace at present. The U.S. House of Representatives late Friday approved a pared-down U.S. government spending plan.

In other weekend news, China reported its October imports were up 20.6%, year-on-year, which was less than expected. However, China's exports in the period were higher than expected, at up 27.1%....

The key outside markets today see the U.S. dollar index weaker after hitting a new high for the year last Friday. Nymex crude oil prices are higher and trading around $82.15 a barrel."

seize cash The high cost of innocence when police seize cash -TheHill

"Miami mother Miladis"¯ Salgado fought back and won when federal agents raided her home and seized her life savings. But victory came at a price.

Salgado, who did nothing wrong and faced no arrest or criminal charges, had to pay thousands of dollars in attorneys' fees and waste hundreds of hours in lost productivity to prove that her money was clean - all while working two jobs and caring for two children.

The ordeal started with a bad tip that Salgado's estranged husband was dealing drugs. In reality, he earned legitimate income as the owner of a garment sales company, but the Drug Enforcement Administration (DEA) showed up anyway on May 11, 2015. While searching the home, agents found no contraband but they discovered a shoebox containing $15,000 in the back of Salgado's closet....

The agents seized the money using civil forfeiture, which allows the government to take and keep cash, cars and other valuables without prosecuting anyone.

All the government must do to win is link assets to wrongdoing, essentially putting inanimate objects on trial rather than humans. The law enforcement maneuver forces property owners into civil court, rather than criminal court, where they have no right to counsel and fewer protections against weak allegations.

Despite this, Salgado persevered and recovered her money after two years. But by then her daughter's once-in-a-lifetime birthday celebration was spoiled and Salgado was stuck with legal bills that consumed about one-third of her savings. Unfortunately, she received no apology or restoration of what rightfully belonged to her.

Other property owners report similar injustices following civil forfeiture, which invites abuse by allowing police and prosecutors in most jurisdictions to keep up to 100 percent of the proceeds for their own agencies. Many agencies employ stall tactics to outlast resistance."

The 3 Levels of FOMO -A Wealth of Common Sense

"Warren Buffett once said the reason bubbles exist is because people see neighbors dumber than they are getting rich. It sure seems like a lot of dumb stuff is making people rich these days.

The fear of missing out, otherwise known as FOMO, has to be at an all-time high....I've developed tiers of FOMO to show why this time feels so much different when it comes to wealth watching. Here are my 3 levels of FOMO...

Level 1. Long-term FOMO -This is the kind of FOMO that only exists in hindsight. It was difficult to see at the time because it was a slow, boring way to build capital, despite the fact that returns were ridiculous over this time frame.mLong-term FOMO isn't all that difficult to deal with because it requires time, patience, discipline and a time machine to truly play the "˜what if?' game.

Level 2. IPO FOMO - Amazon is the ultimate example of a company you wish you would have bought when it went public and just held on for the ride. IPO FOMO stings because it's the kind of investment you wish you had in your back pocket to brag about.

Level 3. Get Rich Overnight FOMO - The current FOMO is being driven by start-up success to some extent but also the massive wealth that's being created in crypto. Now everyone wants to find the next Shiba or Doge or whatever else is up a million percent in the past 3 weeks.

The FOMO from this cycle is going to mess with people's brains in ways we probably can't even comprehend at the moment. The sheer amount of wealth that's been created, mainly by young people, in recent years is sure to have some bizarre unintended consequences in the years ahead."

Janet Yellen Admits The "Net Zero" Grand Reset Price Tag Will Be $150 Trillion -ZeroHedge

"For those who missed it, here is an excerpt of what we wrote back on October 14, shortly after Bank of America published the definitive compendium on climate change and the coming Net Zero (i.e., great reset) world, and which we discussed in depth:

While it is handy to have a centralized compendium of the data, a 5 minute google search can provide all the answers that are "accepted" dogma by the green lobby. But while we don't care about the charts, that cheat sheets, or the propaganda, what we were interested in was the bottom line - how much would this green utopia cost, because if the "net zero", "ESG", "green" narrative is pushed so hard 24/7, you know it will cost a lot.

Turns out it does. A lot, lot.

Responding rhetorically to the key question, "how much will it cost?", BofA cuts to the chase and writes $150 trillion over 30 years - some $5 trillion in annual investments - amounting to twice current global GDP!

This week during the Keynote Remarks from US Treasury Secretary Janet Yellen, who was speaking at the COP26 'net zero' climate change conference in Glasgow. Here are the key excerpts:

'Rising to this challenge will require the wholesale transformation of our carbon-intensive economies. It's a global transition for which we have an estimated price tag: some have put the global figure between $100 and $150 trillion over the next three decades. At the same time, addressing climate change is the greatest economic opportunity of our time.'....

These numbers are simply staggering, and as Yellen concedes, 'The gap between what governments have and what the world needs is large, and the private sector needs to play a bigger role.'"

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11.8.21 - Labor Shortage Threatens U.S. Recovery

Gold last traded at $1,825 an ounce. Silver at $24.51 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday as inflation fears weakened the dollar. U.S. stocks rose after Congress approved the $1.2 trillion infrastructure spending package.

Gold Offers a Glittering Opportunity -Barrons

"So far, the revulsion to paper currencies has been expressed in a flight to cryptocurrencies, rather than into bullion and mining shares, the traditional redoubts from inflation. Meanwhile, fans of gold and its producers arguably are the most contrary investors, and perhaps the loneliest....

Among the yellow metal's few, proud believers is Trey Reik, managing member of Bristol Gold Group, a consultancy for institutional investors. Indeed, he says that gold equities shape up as the trade of the decade, at least for those willing to buck the consensus.

But more importantly, Reik says, just a 2% to 3% asset shift by institutional investors would create a tidal wave of money that would swamp the relatively tiny group. The entire precious-metals mining industry has a stock market capitalization of $580 billion, which is dwarfed by the $2.5 trillion of a megacap stock such as Apple....

Reik says that gold is acting as a store of value for now. But for a 'hockey-stick takeoff' in the group, the broad market would have to stop setting new highs almost daily."

greenflation The Case for Greenflation -Evergreen Gavekal

"This week we are running a special podcast edition of David Hay's recent interview on MacroVoices with hedge fund manager, Erik Townsend. The conversation shines the spotlight on a phrase coined by Dave, 'Greenflation', but also touches on stocks, precious metals, and more. For time-pressed EVA recipients, below is a summary of Dave's key comments, basically an abbreviated transcript.

In my view, Greenflation is hugely important and plays a significant role in the debate about whether inflation is transitory or it's much more enduring. Frankly, based on the Fed's (not so great) forecasting record, and the fact they're saying inflation is transitory, it's probably not.

Greenflation is based on the reality that policies in the West have evolved to the point that we are in a great green energy transition. It's the first time in human history we're moving from more efficient fuel sources to less efficient fuel sources. And, we're trying to accomplish this daunting task on an, arguably, overly ambitious timeframe.

The futures on oil also look very attractive based on the extremely tight supply of the commodity. Due to ESG, along with Wall Street pressures not to explore for oil and gas, the usual increased supply response (like new drilling) to higher prices isn't happening....

I believe the Fed is not doing QE like many think - we are in a full-blown MMT (Modern Monetary Theory) environment. Not only has the US government spent $1.2 billion ($14 trillion total) every hour since Covid-19 started, creating a $6 trillion cumulative deficit over that period, the Fed has been buying most of the debt, directly and indirectly, with its Magical Money Machine. This is full-blown debt monetization and is classic MMT. The Federal Reserve appears to have printed itself into a very tight corner....

During the next serious market sell-off, I believe the Fed is going to print money to buy stocks just like they rescued the bond market by announcing in March of 2020 that it was buying corporate bonds with money it fabricated....

Though it may be a jagged ride up, I do think gold is probably headed much higher. In particular, gold mining stocks provide a very solid bang for your buck, plus you get the dividend kicker. Almost every foreign central bank has been aggressive accumulators of gold, and I think they're on the right track.

The big question for me over the next 12-24 months is whether the global economy is in an inflationary boom or an inflationary bust."

If the labor shortage continues, the US economy won't be able to recover -CNN

"After enhanced unemployment benefits expired and schools re-opened in person, many expected workers to go back to work and the nation's labor shortage to ease significantly by September. But recent data suggest that, if anything, the shortage is getting more severe. And though the risk of a severe shortage continuing into 2022 is not the most likely scenario, the chances of it are increasing. That means we could see significantly lower economic growth next year.

A majority of small firms (51%) say that they have job openings they are unable to fill, according to a September survey by the National Federation of Independent Business. The Conference Board CEO Confidence survey revealed that the percentage of firms citing difficulty attracting qualified people jumped from 57% in the second quarter of 2021 to 74% in the third. And the ratio of job openings to hires, a proxy for the average time to fill positions, is at a series high, according to the Bureau of Labor Statistics, as is the rate at which workers voluntarily quit their jobs....

Many working-age Americans have become more selective in terms of the jobs they are willing to consider, or have decided to stop working altogether. Of course, how selective people can be depends on how long they can survive without a paycheck.

And in the last 20 months, a significant share of households was able to increase their savings because of reduced spending, enhanced government support and a large increase in home and stock prices. But these savings will not last forever. The most likely scenario is that many Americans will return to the labor market in the coming months, leading to some easing in labor shortages....

For the first time in decades, the scenario of a wage-price spiral, where higher prices and rising wages feed each other, leading to faster growth in both, could actually hinder economic growth. In such an environment, the Federal Reserve will be forced to raise interest rates multiple times in 2022 and materially slow GDP growth by more than what is already currently being forecasted."

House Finally Passes Bipartisan Infrastructure Bill -ZeroHedge

"After weeks of infighting between progressives and Democratic moderates, the House finally passed the $1.2 trillion bipartisan infrastructure bill, after enough progressives broke ranks with their caucus to push it through. To be clear, the only reason it passed was the 13 Republicans who voted for it.

Now we wait for the Congressional Budget Office to render an opinion on Biden's social spending package. If it checks out, expect a second vote in a few weeks. And while Democrats gave themselves a standing ovation following the vote, needless to say, not everyone was happy....

The deal between the Congressional Progressive Caucus, moderate Blue DOg Democrats, and the Congressional Black Caucus, would see the House finally pass the $1.2 trillion bipartisan infrastructure package, along with a promise to vote in the future on Biden's $1.75 trillion social spending package which House moderates insisted the Congressional Budget Office (CBO) weigh in on first.

In the face of Tuesday night's election results, moderates are already calling again for passage of infrastructure bill. But if the votes are not yet there for the Reconciliation bill, many Democrats will have to decide whether a morale-improving legislative victory is worth breaking their promise that both bills would move more or less simultaneously."

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11.5.21 - The Fed's Assault on Savers Continues

Gold last traded at $1,814 an ounce. Silver at $24.11 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on bargain-hunting despite a firmer dollar. U.S. stocks rose after the October jobs report came in better than expected, boosting optimism about the economic recovery.

Gold price holding on to solid gains as U.S. jobless claims falls to new pandemic low -Kitco

"The gold market is seeing a modest push higher, unfazed by steady positive momentum in U.S. labor market.

Thursday the U.S. Labor Department said that weekly jobless claims fell to a new pandemic low, dropping by 14,000 to 269,000. The previous week's estimate was revised up to 283,000 claims.

The latest labor market data slightly beat market expectations as economists were looking for a print of about 273,000 claims....

The gold market was holding solid gains before the latest employment data was released and prices have pushed higher in initial reaction. December gold futures last traded at $1,789.50 an ounce, up 1.45% on the day."

piggy bank The Federal Reserve's Assault on Savers Continues -Mises

"In 2020, when the US economy imploded under the lockdown orders of the federal government and state governors, the Federal Reserve's balance sheet exploded from $4.17 trillion in February 2020 to $8.48 trillion in October 2021. In other words, the Federal Reserve bought more than $4 trillion in mortgage-backed securities and US Treasury debt in less than two years.

This increase in the Fed's balance sheet in eighteen months is more than was purchased in the first hundred-plus years of its existence. This unprecedented 'money printing' has had enormous consequences for the economy and the American people, not the least of which is accelerating price inflation.

As the new money created by the Fed diffuses throughout the economy prices rise in an uneven fashion....M2 increased from $15.4 trillion in February 2020 to nearly $21 trillion dollars in September 2021 - nearly a 33 percent increase in liquid assets that the American people have at their disposal to buy goods and services in the marketplace.

Any PhD economist should have been able to conclude that opening up the monetary spigot full blast to 'stimulate' because of the lockdowns would raise prices down the road. We are now down that road. Price inflation will probably continue for at least two more years....

The interest rate on bank money market accounts is 0.02 percent at my bank. Inasmuch as I have a substantial amount of cash reserves - funds for the proverbial rainy day - I and tens of millions of Americans are losing hundreds of billions of dollars in interest due to the Federal Reserve's super easy money policies.

To rectify this highway robbery I propose the Congress pass and President Biden sign the Savers' Protection Act. The act would state that if the interest rate on savings accounts, money market funds, and other short-term instruments are less than the rate of inflation, savers will deduct the lost savings on their tax return....

For example, if someone has $100,000 in a money market fund the account should pay at least the rate of inflation for the year. Today that would be about $5,000. I propose a tax credit of at least 50 percent of the lost interest, $2,500 or more.

If the federal government does not protect the American people from the Fed's reckless monetary policies, which have caused prices to accelerate and have blown up another financial bubble, then the public "could go on strike" and withdraw their money until banks pay us a market rate of interest."

Fed to begin removing support for the economy as inflation worries mount -CBS News

"The Federal Reserve will begin dialing back the extraordinary economic aid it has provided since the pandemic erupted in early 2020, a response to high inflation that now looks likely to persist longer than it did just a few months ago. As expected, the central bank left rates unchanged.

In a statement Wednesday after its latest policy meeting, the Fed said it will start reducing its $120 billion in monthly bond purchases in the coming weeks by about $15 billion a month, though it reserved the right to change the pace of tapering....

Much watched among investors and economists were the Fed's comments about inflation, which Fed Chair Jerome Powell has consistently described as 'transitory.' Yet the consumer price index - which measures the cost of items such as housing and cars - has been elevated since April, with inflation hovering between 4% to 5%.

Many economists expect the supply-chain bottlenecks contributing to higher inflation to persist well into 2022. But the Fed on Wednesday maintained its stance that inflation is 'transitory,' although it slightly softened that view.

'The statement does add a little more to the inflation assessment, but the language is still surprisingly dovish,' Paul Ashworth, chief U.S. economist at Capital Economics, told investors in a research note....

If the pace of Fed tapering is maintained, the bond purchases would end altogether in June. At that point, the Fed could decide to raise its benchmark short-term interest rate, which affects many consumer and business loans....

The Fed now faces the delicate task of winding down its low-rate policies, which it hopes will slow inflation, without doing that so rapidly as to weaken the job market or even cause another recession."

Shrinking the role of government is needed to get the economy back on track -The Hill

"Congress is gearing up to spend over $2 trillion on what is being labeled as a 'transformative agenda to provide for the American people.' In reality, Speaker Pelosi and President Biden are planning a radical expansion of our government, and to raise your taxes to pay for their social spending plans.

They maintain their proposal will promote strong economic growth, create jobs, and cost $0. However, every American knows this proposal will cost the government trillions of dollars and increase already rising prices.

Simply spending taxpayer dollars will not generate the type of economic growth we need right now. In fact, creating new government programs will inevitably lead to more individuals staying at home on the sidelines.

Our government's policy and fiscal actions must focus on expanding access to capital, providing flexibility for investment, and allowing small businesses to address the unique needs of their workers and communities. Better targeting government assistance, instead of bluntly expanding its size and scope, will unleash the power of American innovation, ingenuity, and markets to create jobs and an inclusive economic recovery.

Policies to grow the economy, like tax reform, encouraged investment in our workforce and created record wage and job growth. In 2018 and 2019, we saw record growth in wages for women, Blacks, and Hispanics. Right now, we are watching rising prices outpace wage growth for workers and seeing labor force participation stagnate with businesses unable to fill vacancies.

The $1.9 trillion in so-called COVID-19 relief passed earlier this year was a direct cause of this. Yet we are still watching Congress debate the need to pass another massive spending bill that, unlike previous packages, is explicitly intended to expand government permanently....

Unfortunately, policies coming out of Washington are working to make permanent the emergency measures that were necessary during the COVID-19 pandemic without regard for the long-term economic impacts. Expanding government won't solve the underlying issues creating the economic distortions we are currently experiencing, and it could even exacerbate them."

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11.4.21 - Today Gold is a Cheap Hedge

Gold last traded at $1,792 an ounce. Silver at $23.77 an ounce.

NEWS SUMMARY: Precious metal prices rose sharply Thursday on dovish Fed comments despite a firmer dollar. U.S. stocks traded mixed as investors digested the Federal Reserve's delay on raising interest rates.

Gold price is a cheap hedge as Fed can't control supply-side inflation pressures -Kitco

"The Federal Reserve is on the cusp of shifting its monetary policies, but it won't be enough to stop the growing inflation pressures, and it is only a matter of time before investors return to gold to protect their wealth, according to one market strategist.

As the Federal Reserve starts its two-day monetary policy meeting, expectations are growing that the central bank will reduce its monthly bond purchases. At the same time, markets are pricing in a rate hike as early as June.

However, Robert Minter, director of investment strategy at abrdn (formerly Aberdeen Standard Investments), said, in a recent telephone interview with Kitco News that the new hawkish tones in the Federal Reserve won't be able to stop inflation from rising.

'Tighter monetary policies won't solve the backlog in the Ports; it won't bring new microchips online,' he said. 'All they are going to do is create a new hurdle to grow cap-ex when it is actually needed. Federal Reserve policies can't fix supply-side issues.'

Minter added that the ultimate risk is that rising inflation leads to stagflation as global consumption drops.

'The ultimate sweet spot for gold is stagflation because you have higher inflation and a lower U.S. dollar,' he said. 'Right now, investors aren't quite convinced that stagflation is the scenario that plays out going forward but could quickly change. You certainly cannot take stagflation out of the realm of possibilities.'

Looking at the gold market, Minter said that he expects it's only a matter of time before the current price attract investors looking for protection and value.

'If you look at where real yields are right now, it looks like gold prices should be closer to $1,900 than $1,800 an ounce. Gold right now looks cheap to us,' he said."

bull Fear and Loathing in Cryptoland -Of Dollars And Data

"Last week FOMO in the world of crypto reached a new fever pitch. This time though it wasn't for Bitcoin, but for Shiba Inu coin (SHIB), a dog-based cryptocurrency that is a parody of Dogecoin (a cryptocurrency started as a joke). SHIB surged over 200% in a week and is up over 850% over the last month and over 84,000,000% over the last year.

It may be the greatest time-adjusted investment return of all time.

With such a sudden rise in price, Twitter quickly realized that there were some very rich SHIB holders. For example, Morning Brew pointed out one SHIB wallet with $5.7 billion of SHIB on it. The original investment was for $8,000. Another man posted an emotional video on TikTok explaining how he would have $1 billion in SHIB if he hadn't sold so early. It was FOMO, FOMO, and more FOMO.

With everything happening right now in what I am calling Cryptoland (cryptocurrency, decentralized finance/'DeFi', web3, and the Metaverse), it can feel like you are missing out on a completely new world. I felt this especially strongly last week after Facebook changed its name to Meta and Packy McCormick wrote an incredible piece on the cultural revolution going on in this space.

If you feel left behind, you aren't alone. I own some crypto, but I am still on the outskirts of Packy's Scenius. I have little interest in the Metaverse and decentralized apps. I don't care much about cryptocurrency except for the returns they can provide to a portfolio. And I'm still unsure about all the use cases being advertised.

In fact I see far too many parallels between the DotCom bubble and crypto. There is so much outrageous behavior in these markets that it is hard for me not to see it this way....Once the initial, unbridled optimism has cooled a bit, then we will be able to take stock of how Cryptoland will actually change society.

Unfortunately, right now there is so much polarization on both sides that any reasonable debate on this topic is taken as idiocy by one side or the other. Almost everyone I know is either a bull (the old world) or an ape (the new world) and rarely in between. This distinction became more apparent a few weeks ago when someone placed a giant ape statue across from the famous Charging Bull statue on Wall Street....

We don't need to be facing off against each other. It doesn't need to be us versus them. The new world and the old world can coexist together....Cryptoland won't solve all of our problems, but it will solve some of them. Figuring out which ones is the next step in the journey. Whatever happens, I'm truly excited to see how it all plays out."

Eyes on the Federal Reserve -RealClearMarkets

"Investors will be focused on the Federal Reserve this week and our expectation is that it will finally announce an overdue tapering of quantitative easing. In addition, we expect Chairman Jerome Powell to make it clear in the press conference that he expects tapering to be completed by mid-2022.

Inflation is clearly a problem. The CPI is up 5.4% from a year ago. When October data arrive the year-ago comparison will likely be 5.7%, the largest increase since the early 1990s. Some of this is "transitory," but not all of it, not by a long shot.

Housing rents were held down artificially until early September, due to limits on evictions. Once nationwide eviction limits ended, rents escalated in September and we expect more of the same for the foreseeable future. That's important because rents make up more than 30% of the CPI....

The current economic environment doesn't just warrant tapering, but rate hikes. Unfortunately, rate hikes aren't happening anytime soon. We wouldn't be surprised by just one rate hike at the very end of 2022, but the start of a hiking cycle could also be postponed until 2023.

First, the Fed is very unlikely to raise rates until after it's done tapering, so that alone delays hikes until at least mid-2022. Second, we think the Fed will be reluctant to start hiking a few months before the mid-term elections. And third, personnel changes at the Fed will likely give the Fed a more dovish tilt in 2022....

As long as the Fed doesn't regurgitate the extra money, the cow isn't going away, which, in this case, means a devaluation of money relative to goods and services. That doesn't mean higher inflation forever, but it does mean a prolonged period of higher inflation until the extra M2 is fully digested by the economy."

The wheels are coming off the Biden economy -Washington Examiner

"A good friend who owns a major auto dealership in the Dallas area recently told me he typically has about 500 to 1,000 cars and trucks on his lot. Now, he has 15. That's how severe the supply chain problem has become.

He said people are buying cars over the sticker price. You usually haggle down the price for a new car. Now, you haggle up the price! Welcome to Bidenflation.

But now, the Commerce Department has reported that the high-flying U.S. economy with a 6.5% growth rate for the first half of this year has crash-landed in the third quarter with an anemic rate of just 2% growth. Those lousy numbers predate the supply chain crisis that emerged in October.

At the start of the year, the Philadelphia Federal Reserve Bank predicted 7% growth. So, that's quite a downgrade we are seeing.

Car sales, for example, are way down because of microchip shortages. The carmakers also don't have the metals they need to make the cars. Don't try to buy a used car, either. Those prices in many parts of the country are up by more than 20% - even for clunkers. Many grocery stores now have empty shelves of produce and vegetables.

It means we have slow growth while inflation has hit its highest level in more than a decade at 5.6%. In addition, consumer confidence in the economy has tumbled.

All of this is a bit reminiscent of the economy of the 1970s. Does anyone remember the term stagflation? ....

So, if Congress and the White House are afraid of the forces of stagflation, as they should be, what should they do? The first and most urgent step to contain stagnation is to defeat Biden's $4 trillion spend, tax, borrow, and print money scheme.

This week's GDP report is a five-alarm siren warning that the Biden debt binge has to stop now. Hopefully, temporary stagflation doesn't turn into runaway stagflation."

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11.3.21 - BofA Sees Oil at $120 By June, or Sooner

Gold last traded at $1,773 an ounce. Silver at $23.51 an ounce.

NEWS SUMMARY: Precious metal prices fell Wednesday on unexpectedly upbeat manufacturing data. U.S. stocks traded mixed as investors awaited a decision from the Federal Reserve on its move to start withdrawing support.

Gold price and silver price to 'eclipse' record highs in 6 months, this is the trigger -Kitco

"It's been 'a mad world' out there with record-high equities, real estate and more. But the long-awaited surge in gold and silver is coming in the next six months, said Mike Larson, senior analyst at Weiss Ratings.

'If you're in a world where many assets are over-valued, where real estate is extremely highly valued, stocks are extremely highly valued, and so on. What hasn't run up and remains relatively cheap? The biggest, most obvious answer to me is precious metals. And of course, the shares of the companies that mine them,' Larson told Michelle Makori, editor-in-chief of Kitco News.

What's been holding gold and silver back this year is the fear that the Federal Reserve will have to act aggressively and raise interest rates quickly in order to fight off inflation.

But that is not going to happen, according to Larson. 'There's going to be a realization in early 2022 that the Fed is not going to be able to be aggressive. People need to realize that this Fed is very tentative. It's a Fed that has a lot of political pressure to favor the employment side of its mandate over inflation.'

This tightening cycle will be very different from the previous ones, and gold with silver are in the best position to benefit, Larson noted. 'As we head into next year and get halfway through, we're going to see that next move up in gold and silver because people won't have to fear the Fed so much anymore....'

Larson's price outlook is quite bullish, projecting for both gold and silver to hit new record highs in the next six months.

'The highs that we saw 14 months ago in gold and silver will likely be eclipsed next year. It's not going to be $4,000 gold, but $2,200, $2,300, $2,400. And a corresponding move in silver is likely on the table,' he specified. 'It's going to come from that release of that Fed fear that's been keeping people from getting involved.'"

zillow Could Zillow buy the neighborhood? -Vox

"Anything can be done online. Some tech companies, like Zillow and Redfin, think they can even buy and sell houses online, and are dreaming of becoming the Amazon of what has come to be known as 'iBuying.' But they're finding out that buying and selling assets worth hundreds of thousands of dollars is a bit harder as an online industry than buying and selling books.

Last week, Zillow made a startling announcement that it would stop buying homes for the rest of the year, self-reportedly due to a 'backlog of renovations and operational capacity constraints' that it blamed on the supply chain issues plaguing the economy.

This news made a splash in the world of iBuying, a relatively new industry in which companies like Zillow, Redfin, Offerpad, and Opendoor allow homeowners to avoid the tedious process of listing and staging homes by selling directly (and quickly) to them....

Today there is a growing fear that housing is becoming less like shelter and more like a risky financial asset traded on Wall Street. This anxiety is not new but has become electrified over the course of the pandemic as a hot housing market and a historic undersupply of housing have locked out young and first-time homebuyers.

iBuyers are growing quickly. According to University of Colorado Boulder's scholar-in-residence Michael DelPrete, in 2018 iBuyer companies made up roughly 0.2 percent of the market; in 2019, his numbers show that iBuyers accounted for roughly 31,000 purchases or 0.5 percent of the U.S. market. According to research by Zillow, in Q2 of this year iBuyers' market share reached 1 percent for the first time....

In 2019, DelPrete's research showed that in the largest iBuyer market, Phoenix, they'd reached a 5.5 percent market share. However, Zillow data from Q2 of this year indicates that that number hasn't shifted much with market share at 5.7 percent in Phoenix. Other cities with a relatively high share include Atlanta (5.3 percent), Charlotte (5.3 percent), and Raleigh (5.0 percent)....

The bottom line: iBuyers are providing a service. It's not clear they've really figured out how to make money. Understanding it as a fledgling industry in need of oversight rather than a behemoth manipulating the housing market is important to understand where the power really lies: in the hands of regulators.

Whether iBuyers end up being an option for homeowners or usher in an institutional investor frenzy that harms renters too is a regulatory question."

The Rapid Increase in Rents Continues -CalculatedRisk

"Today, I'm going to update some of the data that shows rents are accelerating....

The Zillow measure is up 9.2% YoY in September, up from 8.4% YoY in August. And the ApartmentList measure is up 15.1% as of September, up from 12.5% in August. Both the Zillow measure (a repeat rent index), and ApartmentList are showing a sharp increase in rents.

This sharp increase in new leases should spill over into the consumer price index over the next year...U.S. single-family rent growth increased 9.3% in August 2021, the fastest year-over-year increase in over 16 years, according to the CoreLogic Single-Family Rent Index (SFRI)....

Clearly rents are increasing sharply, and we should expect this to spill over into measures of inflation in 2022. The Owners Equivalent Rent (OER) was up 2.9% YoY in September, from 2.6% in August - and will increase further in the coming months."

Bank Of America Sees Oil Hitting $120 By June; Could Rise Much Higher -ZeroHedge

"Brent oil will hit $120 per barrel by the end of June 2022, Bank of America's commodity analyst Francisco Blanch said in a research note from Oct 29.

The catalyst for BofA's increased price forecast is the same one that has prompted every other bank to turn bullish on commodities - the current global energy crisis that has seen prices for crude oil, coal, natural gas, and LNG skyrocket as the market tightens....

Just a month ago, BofA forecast that oil could reach $100 over the next six months, and that was only if we had a 'very cold winter.' At the time, this was expected to be the most important driver of the global energy markets.

Fast forward one month and BofA feels even more confident now that the global oil demand recovery will continue to outpace supply over the next year and a half, resulting in dwindling inventories that set the stage for higher oil prices....

With COVID-19 having a disproportionate impact on mobility, the biggest price laggards in the energy space have been gasoline, jet fuel and diesel, otherwise the usual summer and winter season leaders. Yet things have started to change in recent months, with gasoline and distillate demand firming up ahead of winter....

'A combination of rapidly growing gasoline demand and an ongoing recovery in middle distillates, coupled with refinery constraints, could squeeze oil prices higher in 2022. For this reason, we also raise our end-1H22 Brent oil price target to $120/bbl.'

In BofA's ominous conclusion, Blanch writes that should COP26 fail to reassure the market that energy demand is on a clear decarbonization path over the next decade, oil could join gas in the final episode of the energy squeeze game, even as a China slowdown, supply chain issues, and an SPR (Strategic Petroleum Reserve) release are near-term downside risks for oil."

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11.1.21 - Inflation Notches Fresh 30-Year High

Gold last traded at $1,791 an ounce. Silver at $23.99 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday as downbeat economic data flattened the dollar. U.S. stocks traded mixed after markets emerged from the historically tough seasonal period successfully.

Gold holds ground as investors eye Fed meeting -Marketwatch

"Gold futures ticked marginally higher early Monday, finding their footing as the U.S. dollar held steady and investors looked ahead to this week's Federal Reserve meeting....

Gold was pressured last week as the dollar rallied. A stronger dollar can be a negative for gold and other commodities priced in the unit, making them more expensive to users of other currencies.

The Federal Reserve, in a two-day meeting set to conclude Wednesday, is expected to announce plans to begin tapering its monthly bond buys.

"Inflation continues to worry central bank officials, with lingering supply chain issues and high energy prices making a protracted rise in consumer prices more likely than previously thought," said Ricardo Evangelista, senior analyst at ActivTrades, in a note."

Inflation notches a fresh 30-year high as measured by the Fed's favorite gauge -CNBC

"Annual inflation rose at its fastest pace in more than 30 years during September despite a decline in personal income, the Commerce Department reported Friday.

Headline price pressures as gauged by the personal consumption expenditures price index including food and energy increased 0.3% for the month, pushing the year-over-year gain to 4.4%. That's the fastest pace since January 1991....

The continued inflation jump came as personal income declined 1% in September, more than the expected 0.4% drop. Consumer spending increased 0.6%, in line with Wall Street estimates.

The headline inflation rate was pushed by a 24.9% increase in energy costs and a 4.1% gain in food. Services inflation rose 6.4% on the year while goods increased 5.9%.

The inflation and income numbers come as the Fed is grappling with the specter of higher prices and lower growth. Gross domestic product increased at just a 2% annualized pace in the third quarter, the slowest since the recovery began off a recession that ended in April 2020."

The G-20 becomes the showpiece for a dysfunctional global order -Washington Post

"This weekend, the Group of 20 major economies will convene for a top-level meeting in Rome. The bloc's nations represent some two-thirds of humanity, 85 percent of all global economic output and all of the world's biggest greenhouse gas emitters.

They encompass the world's most powerful governments and many of its biggest multinational corporations. Where the G-20 goes, the rest of the planet is inextricably bound to follow.

That's especially true now, as the G-20 deliberations function as a de facto precursor to next week's United Nations COP26 climate summit in Glasgow, Scotland. The latter has been cast by organizers and activists alike as a defining moment for climate action, though expectations have lowered amid major gaps between various governments and environmental campaigners on the way forward....

The G-20 has been sluggish in its response to the coronavirus pandemic, even though its countries have secured the vast majority of the world's vaccine supply. Political differences between countries now drown out shared economic interests, with bloc members bearing their hatchets to Rome.

The G-20"²s organizing philosophy - tethered around support for international cooperation and rejection of protectionist policies - has weakened in the face of ascendant nationalists around the world....

What happens in Italy will be a major sign for what can be accomplished in Scotland. 'In some ways we'll know how this movie is going to turn out by the end of the G-20 summit in Rome,' Alden Meyer, a senior associate with research group E3G, told Bloomberg News.

'Either we're going to have agreement and we go into Glasgow with a tail wind, and we're able to figure out how to start to implement it. Or we go in with a pretty big split and it being very difficult to resolve those differences.'"

U.S. in Talks to Pay Hundreds of Millions to Families Separated at Border -Wall Street Journal

"The Biden administration is in talks to offer immigrant families that were separated during the Trump administration around $450,000 a person in compensation, according to people familiar with the matter, as several agencies work to resolve lawsuits filed on behalf of parents and children who say the government subjected them to lasting psychological trauma.

The U.S. Departments of Justice, Homeland Security, and Health and Human Services are considering payments that could amount to close to $1 million a family, though the final numbers could shift, the people familiar with the matter said.

Most of the families that crossed the border illegally from Mexico to seek asylum in the U.S. included one parent and one child, the people said. Many families would likely get smaller payouts, depending on their circumstances, the people said."

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10.29.21 - Progressive Policies Helped Ruin Venezuela

Gold last traded at $1,781 an ounce. Silver at $23.87 an ounce.

NEWS SUMMARY: Precious metal prices fell Friday as interest rates and the dollar were boosted by inflation data. U.S. stocks slipped as shares of major technology companies suffered following disappointing earnings reports.

Gold gains footing as U.S. bond yields, dollar slip -Reuters

"Gold prices edged higher in seesaw trading on Wednesday, buoyed by a fall in U.S. bond yields and a softer dollar....

'We are in a consolidation period for gold, but I think that eventually the policy tightening and inflation concerns should be positive for the metal,' said Edward Moya, senior market analyst at brokerage OANDA....

Helping gold, the dollar index dipped 0.2% against its rivals. Benchmark 10-year U.S. Treasury yields slipped below 1.6% to a near two-week low, decreasing the opportunity cost of holding non-yielding bullion.

Investors are now awaiting the U.S. Federal Open Market Committee policy meeting on Nov. 3 for more clues on the tapering timeline."

Popular Progressive Policies Helped Ruin Venezuela. They Won't Work Here Either. -Reason.com

"Democrats say President Joe Biden won 'a strong mandate.' His government can do all sorts of good things!....

Democrats control Congress, and that may give them power to shove their worst ideas down our throats. Those include: No. 1: Hate speech laws. No. 2: Expanding the Supreme Court. No. 3: Gun control. No. 4: Spending much more.

Unfortunately, they don't seem to have noticed that these 'reforms' were just tried in a country near us.

Venezuela became progressives' 'it' country when Hugo Chavez became president. Celebrities like Danny Glover, Susan Sarandon, and Michael Moore showered him with praise. Sean Penn called him 'one of the most important forces we've had on this planet.'

'You have to be blind to believe that,' responds Andres Guilarte of The Fund for American Studies. Guilarte is one of many Venezuelans who risked his life to protest socialist rule. When the protests failed, he came to the United States as a refugee.

Today, protest is even riskier in Venezuela, because of progressive reform No. 1: the 'Law Against Hatred.' Half of America's Democrats support that, says a YouGov poll. They should rethink what they want, says Guilarte, because 'the ruling party"¦[gets to decide] what hate speech is.' In Venezuela, critics of the government now face jail time.

No. 2: Some Democrats want to add four new justices to the Supreme Court. Sen. Ed Markey (D-Mass.) says the new justices would "restore balance' after years of Republican rule.

Chavez added justices to Venezuela's Supreme Court. He 'changed it from 20 people to 32 people,' says Guilarte. After that, 'the court never ruled against him.' It let him shut down opposition media and confiscate 1,000 private businesses.

No. 3: American Democrats want gun control. In Venezuela now, only the army, police, and certain favored groups may have guns. That made it even easier for officials to come to people's homes and take their property....

No. 4: The most important lesson from Venezuela is the idea that governments can fund whatever they want to do simply by printing more money....

Venezuela printed money and won praise from progressives by spending some on programs they said would help the poor. But the poor and the middle class were crushed by the inflation that followed: 20 percent"¦then 100 percent"¦3,000 percent"¦40,000 percent! This destroyed Venezuela.

Let's learn from socialism's failures. The idea that massive government spending and other progressive feel-good policies will help America, when these same ideas failed horribly elsewhere, is a dangerous myth."

Are we living in the 1970s all over again? -The Evidence-Based Investor

"So are we really living through the '70s all over again? Has government debt spiraled out of control? Will we see prices continue to rise? Indeed, are we heading for 'stagflation' - that fiendish combination of economic stagnation and rocketing living costs? And what does all this mean for our investments? Let's take a closer look.

Financial markets, which for the past decade have spent more time worrying about too little inflation rather than too much, are suddenly alert to the prospect of a more generalized and entrenched upsurge in price pressures....

One of the central signals of an inflation renaissance are soaring energy prices. Commodities like coal and natural gas have been hitting record highs amid the twin pressures of resurgent demand and a supply crunch. China has begun limiting electricity use. In Europe, some governments have introduced subsidies for consumers hit by eye-popping power bills. In the UK, the National Grid has warned of possible power cuts this winter.

But that's just one side of the 1970s echo we are hearing. The other is that rising prices are occurring alongside faltering economic growth, which is what the 'stagflation' bogeyman adds up to. Renewed shutdowns in many economies amid the virulent Delta strain of the coronavirus have reduced growth expectations from where they were earlier in 2021.

Responding to recent events, the International Monetary Fund has revised down its global economic growth forecasts in 2021, warning that the recovery remains hobbled by the pandemic and its impact - partly due to the uneven distribution of vaccines....

There are clearly short-term pressures on the global economy from the energy crunch, associated inflationary breakouts and the delicate balancing act of encouraging the post-pandemic recovery via policy stimulus while avoiding unanchoring inflation expectations....

As the IMF and others have noted, risks are evident on both the upside and the downside, which means an appropriate response for most investors is to stick to the core principles of diversification and discipline."

A U.S. Wealth Tax Would Force Wealth Out of the U.S. -RealClearMarkets

"In Amazon's first twenty years as a public company, its stock went on a wild ride. During seventeen of those twenty years, Amazon's shares corrected downward to the tune of 20% at least once a year.

Please think about the volatility of Amazon in concert with the recent wealth-tax proposal rolled out by Oregon Sen. Ron Wyden, but that is really the brainchild of Bernie Sanders and our 46th president, Joe Biden. Wyden, Sanders and Biden would like to see billionaire wealth annually taxed at the long-term capital gains rate of 20%. This tax would fall on unrealized capital gains.

Please stop and think about if this levy had been around in the year 2000. Amazon founder Jeff Bezos was already a billionaire on paper by then, but big believer that he was and is in his creation, he largely held on to his shares. So imagine an implementation of the tax as the 21st century began. If so, Bezos would have handed over hundreds of millions (at the low end) to the IRS. All well and good? Billionaire fleeced? Well, not so fast.

Indeed, while the price per share of the Seattle online retailer soared to over $100 in 2000, by the fall of 2001 Amazon's price per share was back down to the single digits.

In Bezos's case, he would have paid hundreds of millions in 'wealth' taxes in 2000, only to see his net worth plummet the following year. Would the IRS have then owed taxes paid back to Bezos to reflect his reduced condition? The answer to the above question is arguably moot, and for obvious reasons that extend well beyond the obvious impracticality of the Wyden proposal, not to mention its constitutionality....

Regarding the entrepreneurs of tomorrow whose innovations will eventually render Amazon, Apple, and Tesla yesterday's news, does anyone seriously think they would keep their talents stateside in order to eventually have the proceeds of their genius fleeced? Please think again. It's not happening, and this is true regardless of the political leanings of tomorrow's entrepreneurs....

Capital migrates to where it's treated well. It's as basic as that. And since no other developed country taxes wealth in the aggressive way that the Democrats are proposing, passage of their proposed tax would result in a massive flight of human and financial capital out of the United States."

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10.28.21 - What Is The Fed Hiding From Us?

Gold last traded at $1,800 an ounce. Silver at $24.09 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on safe-haven buying as disappointing GDP data weakened the dollar. U.S. stocks rose as strong earnings from major companies bolstered the equity markets.

Bitcoin, gold or dollar for a rainy day? Here's what the bosses at Bridgewater, BlackRock and Goldman choose -MarketWatch

"Our call of the day circles back to that crypto as we eavesdropped in on the fifth Future Investment Initiative running from Tuesday to Thursday in Saudi Arabia. Also known as 'Davos at the Desert,' a simple question on the opening panel may have revealed insight into big money managers' feelings about cryptocurrency.

In attendance were Blackstone co-founder Stephen Schwarzman, Goldman Sachs CEO David Solomon, BlackRock CEO Larry Fink, Bridgewater Associates founder Ray Dalio, Mubadala Investment CEO Khaldoon Al Mubarak, African Rainbow Capital founder Patrice Motsepe, and Ana Botín, executive chairman of the Santander Group.

The group was posed a question at the end of the panel, that if they could be paid a dividend by an imaginary board, would they choose dollars, euros, some gold or bitcoin to "put under your bed for a rainy day?"

The first to answer was Dalio. 'I would take the gold"¦I would like to sprinkle a little bit of bitcoin into that mix too,' he responded....

Next up was Blackstone's co-founder Schwarzman, who said he just wanted to 'own earning assets"¦as long as you can make things better and own wonderful things, you can come out and you can own dollars or you can own whatever you want to convert that currency into'....

Santander's Botín said she would take '50 cents in euros and 50 cents in dollars.' Also less bitcoin-keen was the response of BlackRock's Fink, who responded: 'In using Ray's statement about technology and innovation and what Steve said, I'd put 100% in dollars.'

African Rainbow Capital's Motsepe said as he's got 50,000 mine workers on the company's mines, his choice would be gold. 'I'll take bitcoin hedged in gold,' joked Mubadala Investment's Al Mubarak."

federal Reserve What Is The Federal Reserve Hiding From Us? -ZeroHedge

"The Federal Reserve has three mandates per their Congressional charter. They are to effectively promote maximum employment, stable prices, and moderate long-term interest rates. The Fed has met the first goal, employment is largely maximized. As far as the other two, the Fed is running monetary policy consistent with destabilizing prices and doing it with interest rates that are well below moderate.

Why are they employing the 'most inappropriate monetary policy' that famed investor Paul Tudor Jones has seen in his lifetime? Maybe the better question is, is such an aggressive policy, which purposely goes against their mandate, hiding something?....

The Fed conducts monetary policy via manipulating the Fed Funds rate. In 2008, when the rate hit zero, the Fed wanted to do more. Unwilling to lower rates below zero, they introduced quantitative easing or QE. QE effectively lowers rates by buying Treasury and mortgage securities. The reduction of supply leads to higher prices and, therefore, lower interest rates and yields....

Since the birth of QE, the graphs above do not paint a complete picture of monetary policy. To do that, we must factor in QE and the effect it has on interest rates.

Ex Fed Chairman, Ben Bernanke, estimates every additional $6-10bn of excess reserves held by banks (a byproduct of QE) is roughly equivalent to lowering interest rates one basis point.

The 'Bernanke adjustment' to Fed Funds results in the effective level of Fed Funds being 5% below the current level. To repeat, Fed Funds are effectively at -5%. Looking back at the last ten years, Fed Funds were effectively 2.00 to 2.50% lower than the stated rate....

With the data above showing the unprecedented nature of monetary stimulus, we must ask why the Fed continues to drag its feet and maintain extreme crisis level policy. Maybe Congress should ask Powell why is he ignoring their mandate?

We think there are two answers.

First, the financial system is highly fragile. QE helps stabilize falling markets and provides a solid tailwind for asset prices....Second, fiscal prudence is a joke, as we were recently reminded when Congress raised the debt ceiling for the 81st time....

The Fed does not want to pierce multiple asset bubbles or force the Treasury to pay normal market interest rates. The financial markets are extremely fragile, and the debt situation is unsustainable. Hiding such actions under the guise of appropriate monetary policy seems to be their modus operandi."

Is the Market Always Right? -Compound Advisors

"One of the most popular sayings which can also be one of the most dangerous. Why? Because 'the market' can be very wrong at the worst possible time....

For example; When interest rates peaked at over 15% in the early 1980s, hyperinflation was the biggest fear in markets. Over the next 39 years, both inflation and interest rates would fall, with 10-year yields hitting an all-time low of less than 1% in 2020.

At the bubble peak in 1989, Japanese stocks were trading at a CAPE ratio of 77, and the Tokyo Imperial Palace was reportedly worth more than the real estate in all of California. From there, the Nikkei would fall 82% before bottoming in October 2008. It remains more than 20% below its 1989 high today, 32 years later.

During the biggest bubble in US stock market history, the Nasdaq more than tripled in the 17 months leading up to its peak in March 2000. Technology stocks were all the rage and represented 65% of the index at the time. The subsequent decline of nearly 80% wiped out years worth of gains and the index would not hit new highs again for 15 years....

When the US housing bubble peaked in 2006, homebuilder stocks were thought to be the best way to participate in a continued rise in home prices. They would proceed lose over 80% of their value over the next few years....

The markets are highly efficient but they are not entirely so, and that's because a purely efficient market requires investors to be rational at all times. And as we can see from these examples, investors are anything but rational at extremes. They are instead highly emotional beings, prone to greed and fear....

For investors who maintain a diversified portfolio, rebalancing is an unemotional tool that can reduce your exposure to bubbles and take advantage of crashes."

Does God Play a Role in the Failing U.S. Economy? -Rogue Economics

"It's wonderful"¦ how caring you can be when you can print money ad infinitum. And now, with so much caring going on"¦ the U.S. slips and slides"¦ stumbles and falls.

This week, we looked for someone to blame. Two suspects came readily to mind: God or man.

We made our case against man. But God bears some of the guilt, too. He created the world"¦ and man"¦ and death. No one"¦ and no empire"¦ escapes.

And today, in what we believe is a first for the newsletter business"¦ if not for the entire publishing industry"¦ we put God Himself on the witness stand"¦ and let Him defend Himself.

Be still. Yep. It's Me, God. Representing Myself. I don't need no jackass ambulance chaser to give My side of the story. I'll do it Myself.

I first put man into a paradise"¦ Adam. I gave him a wife"¦ Eve. And the two of them cavorted, naked as jaybirds, in the Garden of Eden. You'd think they'd have been grateful.

Instead, they got together and thought they were pretty hot stuff"¦ and they didn't need Me to tell them what to do.

That was the beginning of the trouble. I had to banish them from the garden. The easy living was over; now, man had to live by the sweat of his brow.

But he was never a straight-shooter. He was always robbing Peter to pay Paul"¦ looking for shortcuts"¦ for aces up his sleeve"¦ and loose change in his pocket. And he had that scoundrel, Lucifer, to tempt him.

I tried to lead man"¦ I tried to teach him"¦ and even to create a better model. Once, I was so disgusted, I drowned almost all of them...And then, I gave the dirty work to the Jews"¦ and told them to exterminate the other tribes.

Mixed results there, too. You win some; you lose some....

Okay"¦ yes"¦ I admit"¦ I'm to blame for the ebb and flow"¦ the yin and yang"¦ and the rise and fall of nations.

And yes, My creature, man"¦ never comes upon a banana peel without slipping on it....

What is My fault? There are some basic laws that govern all my creations"¦ and some rules of the road, 'traffic lights,' as you call them.

Nobody gets out alive, for example. It doesn't matter what you do or what you think. And you can't get something for nothing. And whether you call it 'democracy' or armed robbery, ripping people off is not a good idea. And you can't just print up 'money' and pretend it's real wealth.

Yes"¦ I imposed 'limits.' You can't spend more than you earn - not for long. You can't beat a royal flush with a pair of eights....

Bill has shown that Americans have ignored the limits for a long time. They've sown the wind, to coin a phrase. Now, they're reaping the whirlwind.

He's shown why they can't back up"¦ why they can't change direction"¦ and why the result will be the worst financial calamity the world has ever seen. But it's not just the USA.

Almost all modern economies are headed for the same crisis. They're running into My limit"¦and it's going to be one Helluva crash.

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10.27.21 - Federal Gov't Actively Eroding Liberties

Gold last traded at $1,797 an ounce. Silver at $24.14 an ounce.

NEWS SUMMARY: Precious metal prices steadied Wednesday on a weaker dollar. U.S. stocks fell as the momentum from a strong earnings season started to fade.

The Fed won't be able to get inflation under control, gold price is going much higher -Kitco

"Investors are once again turning to gold, pushing prices back above $1,800 an ounce, and one firm expects gold prices to continue to move higher as it is unlikely the Federal Reserve will be able to get the inflation under control anytime soon.

In a recent interview with Kitco News, Wade Guenther, managing partner at Wilshire Phoenix, which launched the Wilshire wShares Enhanced Gold Trust earlier this year, said that it's not surprising that gold has been lackluster through most of the summer as bond yields have been rising.

The yield on 10-year notes is holding near its highest level in three months. At the same time, Guenther noted that the yield on 10-year notes has roughly doubled from last year....

However, Guenther also said that rising inflation and the growing threat of stagflation are forcing many investors to reevaluate their need for inflation and safe-haven hedge. For the past five months, the U.S. Consumer Price Index has been above 5%....

However, instead of supporting gold prices, the inflation pressures have driven expectations for the Federal Reserve to tighten its monetary policy. Economists are expecting the Federal Reserve to reduce its monthly bond purchases before the end of the year. At the same time, markets are pricing in a rate hike as early as June of 2022.

'It feels like people still have faith in the Fed and I just, but I just, I don't see the Fed getting in front of the inflation curve,' said Guenther....With gold prices back over $1,800 an ounce, Guenther said that he expects that it is only a matter of time before the market sees new bullish momentum."

big government Biden-Wyden Wealth Tax Would Break Campaign Pledge, Run Afoul of Constitution -New York Sun

"Joe Biden got himself elected president partly by opposing the billionaires' wealth tax proposed during the primary campaign by Senators Elizabeth Warren and Bernie Sanders. Now, in a reversal, President Biden is preparing to embrace the idea. And it wouldn't be the first time that a presidential candidate's plans changed after getting elected.

The shamelessness of the way that Mr. Biden has shifted on the issue, though, is something else. It risks undercutting the President's claim to being a voice of moderation. It also might reinforce voter cynicism. How's democracy supposed to work if a politician, once elected, brazenly abandons one of the policy positions that won him the job?

Mr. Biden told wealthy donors during the campaign that they shouldn't expect a tax cut from him, 'But! No punishment, either.' Yet that promise may not survive the Senate, which is readying what the New York Times describes as 'a proposal by Senator Ron Wyden, an Oregon Democrat and the Finance Committee chairman, that would raise hundreds of billions of dollars with a wealth tax on just 600 to 700 people - America's billionaires.'....

The constitutional challenges that such a plan would face are considerable. The number of persons subject to such a tax is small enough that it could be subject to the Constitution's prohibition, in Article I, against a bill of attainder.

The 16th Amendment that gave Congress the power to tax income applies to income taxes, not wealth taxes. Imposing a wealth tax, then, may not even be among the enumerated powers of Congress. Hence the effort by Secretary of Treasury Yellen to deny that the Biden-Wyden Wealth Tax even is a wealth tax.

'I wouldn't call that a wealth tax,' she said, according to the Wall Street Journal. Her colleagues among the congressional Democrats are more plainspoken. 'We will probably have a wealth tax,' Speaker Pelosi said, according to the same Wall Street Journal article.

It's possible that Mr. Biden himself is secretly hoping that some future court strikes the billionaires tax down as unconstitutional....A veto of the billionaires tax would let Mr. Biden keep his 'no punishment' campaign promise - and would also honor his inauguration day oath."

"Transitory" Shortages & Inflation Are Actually Your Quality Of Life Being Stolen Right Before Your Eyes -Zero Hedge

"There's no doubt our country has all of a sudden slipped into the most precarious state we've been able to readily confirm with our own two eyes in decades.

We are suffering from runaway inflation, we have a monstrous labor shortage, and products we normally would have abundant access to are missing from store shelves. The country doesn't produce anything anymore, we have doubled our Central Bank's balance sheet in under two years and the money supply has gone parabolic.

It appears we can either go one of two directions when we try to deduce the cause of these issues.

The first direction we can go in is to point to monetary and fiscal policy and look at their direct effects on the state of the country and our economy. This, I believe, is the pragmatic approach to solving the issues our nation faces.

The second direction, according to a new Washington Post op-ed, is apparently to blame and shame ourselves for being greedy and assuming that we ever deserved such a quality of life to begin with.

The Post recently published a piece called 'Opinion: Don't rant about short-staffed stores and supply chain woes', which put this argument on the table, basically telling people to shut up and be thankful for the little they have....

On a day by day basis, quality of life can be washed away by things like shrinkflation, higher prices, and exactly what Maynard is arguing for in her op-ed: lowered expectations.

The convenient thing about lowered expectations is it makes it easier to not notice when your quality of life is being stolen from you. And I say 'stolen' because if you are a normal productive, taxpaying member of the country, you would assume that your quality of life should improve or at least hold steady....

I think it is appropriate to always be thankful and humble about what we have, but we should stand firm in the expectation that we want our quality of life to continue to progress instead of regress.

The left swears that socialism and Marxism are the best ways to help those in our country and outside of our country who are in need. But the truth is we can best help the rest of the world - and humanity as a whole - by ensuring that our own two feet are firmly planted in the ground first, and that our quality of life remains, at worst, steady."

Our federal government is actively eroding both economic and civil liberties -Washington Times

"Is the U.S. on a road to destruction? The U.S. became the preeminent economic, political, and military power after the decline of the U.K., with what turned out to be a feeble challenge by the Soviet Union. But now, the U.S. seems to be following the same fatal mistakes of other great nations.

Up to about 200 years ago, the average person could not expect any improvement in their standard of living over their lifetimes. Real per capita incomes were stagnant, and people were living no better, and oftentimes worse, than the average citizen of ancient Rome. In 1800, the average Frenchman lived on average to age 35, the average Englishman lived to 40, and the average American, where food was much more plentiful, lived to 45.

But then the 'Industrial Revolution' occurred - first in Britain in the mid-1700s, then slowly in Europe, and rapidly in America. For the first time in human history, children could expect to live better and longer than their parents. Innovations in iron making, textile manufacturing, and notably the development of the steam engine changed the world. Man was liberated from having to use human and animal muscle power to make things and travel....

It was not accidental that the industrial revolution began in England. From the time of King John and the Magna Carta in 1215, increasing numbers of Englishmen had gained property rights. By 1707, with the unification of England and Scotland to create the United Kingdom, and the influence of the Scottish Enlightenment on creating the rule of law, basic rights, and due process, the U.K. was well-positioned to make a great leap in economic progress....

The British legal and financial system was so superior to what most of the rest of the world had developed, that by 1913 almost a quarter of the world's people and land - even with the loss of the American colonies - was governed by the British, with a remarkably small number of troops. The British had been on the gold standard - which became the world monetary standard - in the century before WWI. The result was stable global money with no inflation, or foreign exchange risks, or costs....

The U.S. currency, even though untied from gold, was functionally stable as long as U.S. government debt was less than 100 percent of GDP. But now, that benchmark has been broken, and the Fed continues to expand money in a way that will add more fuel to the rising price level.

Congress has abandoned any pretense of fiscal discipline, which will only guarantee that people will get poorer as their savings are taxed explicitly or through inflation and then used for transfers rather than real productive investment....

Margaret Thatcher stopped the decline of the U.K., and Ronald Reagan stopped the decline of the U.S. Will a new real leader emerge before it is too late?"

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10.26.21 - Get The Fed (and Gov't) Out of Stocks

Gold last traded at $1,792 an ounce. Silver at $24.08 an ounce.

NEWS SUMMARY: Precious metal prices back-peddled Tuesday amid upbeat economic news and a firmer dollar. U.S. stocks climbed to record levels as major corporations continued to turn in solid quarterly results.

Gold price up as it appears inflation genie out of the bottle -Kitco News

"Gold prices are moderately higher in early U.S. trading Monday, supported by increasing worries about problematic price inflation. More and more economists and veteran market watchers are saying the bout of rising global inflation is something more than just transitory....

It's another big week for U.S. corporate earnings, which have generally been very positive and are helping push the indexes solidly higher from their early October lows. For the moment the upbeat earnings reports are overshadowing worries about 'stagflation,' which means rising prices and stagnant global economic growth. The mainstream media has recently highlighted the shipping bottlenecks, especially on the U.S. west coast.

News reports over the weekend said the Biden Administration may be getting closer to having the Senate votes for a pared down government spending plan.

The key outside markets today see the U.S. dollar index firmer. Crude oil prices are higher and trading around $84.50 a barrel after hitting a seven-year high overnight. Don't be surprised if continually rising energy prices heading into the Northern Hemisphere winter start to sap trader and investor sentiment. Meantime, the 10-year U.S. Treasury note yield is presently fetching 1.656%....

Technically, December gold futures bulls have the overall near-term technical advantage as prices are in a four-week-old uptrend on the daily chart. Bulls' next upside price objective is to produce a close above solid resistance at the September high of $1,836.90."

markets Get The Fed (and Government) Out of the Stock Market -Pragmatic Capitalism

"The Federal Reserve has announced a sweeping set of strict rules to prohibit its employees from owning individual stocks, holding investments in individual bonds, holding investments in agency securities, or entering into derivatives.

This is fantastic news following last week's reports of rampant trading by Federal Reserve officials in recent years that create, at a minimum, the appearance of a conflict of interest.

But these law changes do not go nearly far enough as the Fed remains far too involved in the financial markets and the US government, more broadly, maintains widespread conflicts among policymakers.

This set of regulations will hopefully result in sweeping changes not only within the Fed, but also across all of Congress. Reports of insider trading within Congress have been rampant for years. The fact that policymakers are allowed to hold securities that they can directly impact via policy is preposterous....

This is just basic common sense, but nothing changed in Congress even after it became evident that several US Senators sold millions of dollars of stock after being briefed about the dangers of COVID in early 2020. It's time for Congress to follow the Fed's lead and ban the ownership of these securities.

But we shouldn't stop here. There is a growing trend around the world where Central Banks and governments have become increasingly involved in owning public stocks through policies such as Quantitative Easing...

Following COVID the Fed purchased billions of dollars of high yield bonds and other ETFs. These policies set several alarming precedents that are potentially harmful:

1) They reduce the free float of secondary market shares in a world where the Central Bank is already suppressing rates....

2) It perpetuates the ineffective policies of QE which we now know are far less effective than we might have originally believed.

3) It potentially boosts asset prices thereby resulting in short-term booms that could lead to long-term busts.

We should not only ban policymakers from intervening in their own private portfolios. We should also ban them from increasingly impacting public markets via policies that are ineffective at best and contribute to busts at worst."

The Beast of Burden of Inflation -Charles Schwab

"In fairly short order the narrative has shifted from an age of abundance to an age of scarcity. Another shift that may have occurred is from pro-cyclical to counter-cyclical inflation. Pro-cyclical inflation occurs when stronger economic activity drives prices up.

The initial impact of the pandemic was deflationary as demand fell faster than supply. But since the broad reopening of the economy, demand outpaced the recovery of supply. Counter-cyclical inflation occurs when high prices drag economic activity down, which is what has happened more recently.

Today's inflation is not a traditional monetary result tied to excess borrowing for the purpose of consumption. Instead, it's about import price inflation as a result of pandemic-specific factors. This is a sharp reversal from import prices being the source of disinflation in the United States since the mid-1990s....

Related to those long cycles, there have been two distinct and lengthy eras when looking at the correlation between bond yields and stock prices. As shown below, for three decades until the late-1990s, the correlation was mostly negative. That meant that when bond yields were rising, stocks were falling. The inflationary backdrop was such that higher yields often signaled higher inflation more so than higher economic growth....

High inflation is actually a form of tightening as it's contributing to weakening growth expectations (counter-cyclical inflation). Economics 101 teaches that the best cure for high prices is high prices. Some cooling in demand from high prices could help alleviate supply pressures; hopefully before any impulse from the Fed to tighten more aggressively than what's built into expectations....

When the psychology changes, and inflation expectations become imbedded, workers find themselves with the power to push for higher compensation, while companies find themselves with the power to pass along higher costs to their end customers. That's how the spiral unfolds. We may not be there yet, but those psychological shifts can happen quickly."

Housing Market Shows Cracks With Price Cuts in Pandemic Boomtowns -Finurah

"No city exemplifies the mania of the pandemic U.S. housing market better than Boise, Idaho, where prices have surged by more than 30 percent in the past year. But in a sudden reversal, buyers are now the ones with power.

Asking prices for houses are being slashed. Bidders no longer have to waive inspections to win over sellers juggling multiple offers. Demand has slowed so much it's like a light switch suddenly turned off, said Dominic Zimmer, a local Realtor.

'You're seeing the fear of missing out switching from buyers to sellers,' Zimmer said. 'Now sellers are afraid of not scoring the way they saw their neighbors do a year ago.'

The cracks in one of the nation's hottest housing markets mark an early sign that the U.S. boom - fueled by low mortgage rates and remote-work moves - is losing intensity. While much of the country is still seeing record price increases and plunging listings, in some destinations builders who could hardly put up homes fast enough now have inventory sitting.

The slowdown is particularly pronounced in areas away from major urban hubs where buyers were seeking affordability and picturesque havens during the pandemic. That demand has ebbed as people have more reasons to stay put this fall, with the return of in-person school and more companies ordering workers back to the office, or at least requiring them to be somewhere in the vicinity.

The result: Prices are running up against the reality of local economic fundamentals....

Across the U.S., home-price appreciation slowed for a second straight month in September as part of a modest cooldown, Zillow Group Inc. reported this week. The number of homes with price cuts is growing, with counties near Denver, Salt Lake City and Indianapolis seeing more than half of listings get reductions, according to Redfin.

Even some of the hottest areas where workers from large urban cities sprawled out to, such as the counties including Portland, Maine, and Tacoma, Washington, have had cuts on more than 40% of listings, Redfin data show....

The boom remains strong in many Sun Belt havens such as Phoenix and Austin, Texas, where jobs are growing fast."

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10.25.21 - Gold: "˜Violent' Run-Up Ahead

Gold last traded at $1,807 an ounce. Silver at $24.56 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday as investors sought shelter from rising inflation. U.S. stocks churned as investors prepared for a major week of earnings from heavyweight tech companies.

Gold's Inflation-Haven Appeal Means "˜Violent' Run-Up May Be Ahead -Bloomberg/Yahoo Finance

"One after another, commodities from aluminum to natural gas have surged as pandemic aftershocks rattle supply chains. Gold could be next, although for very different reasons.

That's the view of two of the biggest names in Canadian mining - the former chiefs of Goldcorp Inc., David Garofalo and Rob McEwen - who predict investors will catch on soon that global inflationary pressures are less transitory and more intense than central bankers and consumers price indexes suggest.

When that realization sets in, gold's inflation-protection appeal probably will send prices to $3,000 an ounce, from about $1,800 now, according to Garofalo, who ran Goldcorp before it was gobbled up by Newmont Corp. and now heads Gold Royalty Corp. Such a run-up would be a 'down-payment' to McEwen's $5,000 long term prediction....

If other metals are any indication, the gold rally, when it comes, will be dramatic, Garofalo said in an interview Friday alongside McEwen. 'I'm talking about months,' he said. 'The reaction tends to be immediate and violent when it does happen. That's why I'm quite confident that gold will achieve $3,000 an ounce in months not years.'

The global monetary and debt expansion to cope with the pandemic, as well as secondary drivers associated with supply disruptions, will have people turning back to traditional methods of protecting wealth, said McEwen....

'It's not just the dollar,' he said. 'All currencies are buying less than what they were buying a year ago. So I look at that as an unprecedented development at least in our lives that is going to affect the value of fiat currencies around the world.'

Its universality and 4,000 year-old history mean gold is better positioned than crypto-currencies as a hedge against an inflationary environment that 'will have deep and meaningful impacts on our capital,' Garofalo said."

inflation The Inflation Catch-Up Game -Project Syndicate

"As price increases accelerate, policymakers at leading central banks are slowly starting to move away from the narrative of "transitory" inflation that has already cost them the policy initiative. But the needed pivot is far from complete and not nearly quick enough, particularly at the US Federal Reserve.

Inflation is now on the front page of newspapers around the world, and for good reason. Prices of more and more goods and services are increasing in a manner not seen for decades. This inflationary spike, accompanied by actual and feared supply shortages, is fueling both consumer and producer anxiety.

By also threatening to worsen inequality and derail a much-needed sustained and inclusive economic recovery from the COVID-19 pandemic, it is also becoming a hot political issue....

Inflation will be much more pronounced than top Fed officials had thought when they repeatedly dismissed increasing price pressures as a temporary phenomenon. Even today, their inflation forecasts - despite having been revised up several times already - still underestimate what lies ahead. Survey-based inflation expectations compiled by the New York Federal Reserve have risen above 4% on both a one- and three-year time horizon. "

The new Fear and Greed -The Reformed Broker

"'All through time, people have basically acted and reacted the same way in the market as a result of: greed, fear, ignorance, and hope.'

Jesse Livermore said this a hundred years ago. It's still true. But I want to modify it somewhat to account for the things I am seeing on a daily basis out there. I used to think of Fear and Greed as being the fear of losing money and the greed for making more money.

The Fear I see these days is a fear of becoming a relic of the past. A fear of seeing your peers catapult themselves ahead of you. A fear of missing out, which has been well documented and has become the spirit of the times we live in. This has come to be as a result of the Nasdaq having gained an average annual 25% since the end of the last real bear market in 2009 - a 1500% return....

The type of fear that now drives most market activity (because it drives most market participants) is something different than the fear we've been accustomed to from reading about history. I would label this type of fear Insecurity. The fear of being left behind and looking like a fool. It's no surprise that Have Fun Staying Poor or #HFSP has become one of the most enduring memes of the moment we're in now....

The other driving force in the markets, traditionally, has been Greed. I think we're witnessing a variation on Greed that I would label Envy....Even the people winning - that's not enough for them. The money is beside the point. They also need others to feel the pain of not having been right. I told you so, should've listened to me. The public victory laps and displays of haughtiness seem almost purposely staged to provoke hostile reactions from the crowd. Like it's a sport....

Envy will make you take wild risks with a portfolio. Especially when all you see around you are so many people you have such little regard for profiting off of things you know they themselves barely understand. The more exposure we have to the way others are investing, the more we begin to look at their returns as though that's the appropriate benchmark. All sense of reason and perspective is left behind....

Today we learn about rappers making reaping ten-figure profits on IPOs via text alerts from TMZ. And in the midst of this miasma, with trillions of dollars being accumulated in full view of everyone, it's no surprise that two feelings consistently bubble up to the surface - Insecurity and Envy - over and over again."

Investing Lessons From a Dog, Hypnotist, and Convicted Felon -American Consequences

"The best pieces of investment advice I got at the Stansberry Conference came from a dog, a hypnotist, and a convicted felon.

Mike Ritland is a former Navy SEAL, professional dog trainer, and founder of Trikos International, a firm that provides bomb-sniffing, drug-detecting guard and patrol dogs for SEAL teams, the Department of Homeland Security, the Department of Defense, and private security services.

A good 'warrior dog' and a good investor turn out to be made the same way - with breeding, training, and sticking to the plan....

Mike brought his dog Rico out on stage. Rico did everything Mike told him to do as soon as Mike told him to do it, the way a well-bred, well-trained dog should. But Rico was so well-bred and well-trained that when Mike put a thick padded sleeve on his left arm and gave the command, Rico attacked his own master!

Was there ever a better lesson for investors? No matter how much you love an investment and no matter how good that investment has been to you in the past, when the command comes from economic laws, market forces, and common sense, bite the hand that feeds you.

Joel Silverman gave a hypnotic presentation...Just the fact that hypnosis exists gives investors something to ponder. We can all get hypnotized by the markets. 'Watch the market go back and forth, back and forth, back and forth. You are falling into deep s&^%.'

Joel snapped us out of it with a brilliant exhibition of his skills....My favorite was when the volunteers were told that 'ladies and gentleman' was a filthy, disgusting, and utterly offensive phrase. Then Joel turned to the auditorium and said, 'Thank you, ladies and gentlemen"¦ ' The volunteers jumped to their feet and began yelling at Joel, telling him to be ashamed of himself, to apologize to everyone in the room, to never say anything like that again....

Joel showed how the subconscious is the reservoir of everything we have in our mind. Be careful what you put in your reservoir. The subconscious can be tapped to provide us with great powers of concentration, focus, and endurance. But you need more than just your 'gut instincts.'

Then came the convicted felon, Andrew Fastow. He gave the Stansberry Conference's final - and to my mind, most powerful - talk. Fastow is the former CFO of Enron who spent six years in federal prison for"¦ following the rules.

Fastow was the architect of the preposterously complex and amazingly opaque 'off-balance-sheet special purpose entities' that Enron used in its quarterly balance sheets to conceal the corporation's massive losses....

Fastow knew what he was doing was deceptive, but he didn't think it was 'wrong.' He had consulted Enron's lawyers and outside counsel and Enron's bookkeepers and independent auditors. They all told him that his financial shenanigans obeyed the letter of the law....'I followed the rules,' Fastow said, 'but I forgot the principles.'

How did a dog, a hypnotist, and a convicted felon make the Stansberry Conference so valuable to me? Use your 'warrior dog' nose to sniff out good investments. Be sure that those investments come from a great business bloodline that obeys the commands of free enterprise. Apply all the powers of your conscious and subconscious mind to your investment strategy. And always remember that good principles are at the heart and in the soul of good investing."

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10.22.21 - Do You Want the IRS Spying on You?

Gold last traded at $1,793 an ounce. Silver at $24.32 an ounce.

NEWS SUMMARY: Precious metal prices shot up Friday on weaker-than-expected economic data amid rising inflation. U.S. stocks traded mixed amid mostly upbeat earnings despite weakness in major social media shares.

Venezuelans Break Off Flakes of Gold to Pay for Meals, Haircuts -Bloomberg

"Today, only the poorest Venezuelans - those who lack easy access to dollars or other currencies - still use bolivars. People prefer any currency over the bolivar. In parts of southeastern Venezuela, that currency is gold....

The small-time operators of illegal mines typically pay day laborers in gold nuggets, so there's plenty of bullion to be had. That steady supply, coupled with Internet reception that's so shoddy that digital transactions are nearly impossible, makes gold the least-bad option for locals.

They use hand tools to break shards off nuggets and then carry them in their pockets, often wrapped in bolivar bills -- one of the few remaining uses for the currency. Stores have small scales, but some shopkeepers and consumers feel so comfortable handling the metal at this point that they evaluate the flakes by sight.

The use of gold is slowly expanding into nearby cities, including Ciudad Bolivar, the state capital nestled along the banks of the Orinoco. Miners regularly travel there to sell their bullion when they want to cash out, and stores in shopping malls exchange it for dollars....

The owner of a small hotel in town - he'd only give his first name, Omar, out of concern for his safety - says he pays his staff with gold, using the flakes he is handed by customers. He charges half a gram a night for a room.

About two-thirds of customers pay with gold, Omar estimates. He'll also take dollars and other foreign currencies from those who don't have gold on them. And what about bolivars? By law, he can't say no, so he takes them reluctantly, he says, and then unloads them fast."

crypto The potential danger at the center of the crypto economy -Slate

"Two good things about gambling: It's social - at least if you do it in person - and you can drink alcohol while doing it. Sometimes you win, sometimes you don't, but you get time with fellow humans, an adrenaline rush, and a story to tell later. As long as you're doing it with money you can afford to lose and you know the risks involved, it's usually fine.

One place where it looks increasingly not fine is the cryptocurrency industry, which Securities and Exchange Commission Chairman Gary Gensler has compared to betting in unlicensed, unregistered casinos. 'We've got a lot of casinos here in the Wild West,' Gensler said in a chat last month with the Washington Post. 'And the poker chip is these stablecoins.' In this casino, the chips themselves might be just as risky as sitting down at the blackjack table.

A stablecoin is a digital currency whose value is directly linked to another asset, kind of like the dollar under the gold standard. The value of a stablecoin is supposed to remain constant. Such cryptocurrencies are useful because converting fiat money into and out of a cryptocurrency like Bitcoin can be slow and cumbersome; if you load up on stablecoins, you're dealing in the coin of the realm and can make your transactions quickly.

The most popular stablecoin by a country mile is Tether. According to a recent study, 70 percent of Bitcoin trading is done in Tethers. On any given day, Tether is by far the most-traded coin, its volume often double that of Bitcoin. If you want to gamble at the crypto casino, you need Tethers.

Each Tether (or USDT) is pegged at $1, and there are approximately 69 billion Tethers in circulation. A lot of informed industry observers - and some U.S. government officials - seem to think there may be less than $69 billion of fiat cash underwriting all those Tethers. Perhaps a lot less.

But it's hard to know for sure: The company has never produced an audit, though earlier this year, Tether released an "attestation" from a Cayman Islands firm that said the company had about 3 percent of its reserves in cash; subsequent releases have claimed that the company has about 10 percent in 'cash & bank deposits.'

The reason this matters is that Tether is one of the primary engines driving the crypto economy, enabling all kinds of transactions and arbitrage opportunities. Crypto prices are frequently listed in terms of Tethers, which can be purchased on most major exchanges. It's a vehicle for everyday transactions and sophisticated high-frequency trading...If Tether were to somehow collapse or face a major regulatory crackdown, market liquidity would likely dry up, and a lot of people could lose a lot of money....

Tether almost certainly faces a near-term showdown with government authorities or criminal investigators. Last week, the CFTC reached a settlement with Tether, which included a $41 million fine (Bitfinex was also fined $1.5 million). According to the CFTC, Tether lied about its coin being fully backed by dollars....

The recent blockbuster investigation in Bloomberg Businessweek memorably described Tether as 'practically quilted out of red flags.' The company has been compared to an unlicensed shadow bank and an offshore hedge fund....Regulators and industry observers have repeatedly voiced concern that Tether's shaky financial footing could lead to the crypto equivalent of a bank run, potentially causing a cascade of market instability - not just in the crypto world but in the mainstream, regulated financial sector....

For those who look past all this and end up on the losing end if this $2 trillion bubble pops, it might be catastrophic, especially as crypto exchanges increasingly resemble unlicensed banks...For the average investor/gambler (is there a difference anymore?), one would be best advised to heed a popular saying in Vegas: Look around the poker table; if you can't spot the sucker, you're it."

Do you want the IRS spying on your bank account to go after 'the rich'? -TheHill

"As sure as night follows day, when politicians claim to want to go after 'the rich,' it is the middle and lower classes who should guard their pocketbooks.

One of the latest and most egregious examples is the proposal to have the federal government, via the Internal Revenue Service, spy on every American with a bank account whose combined inflows and outflows add up to over $10,000 per year, including summaries for cash. Senate Democrats on Tuesday changed the amount from the $600 originally proposed by the Biden administration.

Still, the revised number and guidelines are distinctions without much of a difference. The justification for mass surveillance of the average American's bank accounts is littered with disingenuous obfuscation. According to the Treasury Department, the IRS absolutely needs to comb through everyone's transactions in order go after wealthy individuals who underreport their tax liability....

Everyone, from the struggling sole proprietorship fighting to survive in the era of COVID-19 to mom-and-pop retailers, will find themselves in the IRS's crosshairs. Based on the data about small businesses, the desire to target them is chilling for the entire economy.

More than two-thirds of the over 30 million small businesses in the U.S. (as of 2018) are individually operated, with the owner as the sole employee. It may surprise some to know that 99 percent of American businesses are small, and that 120 million Americans - nearly half of all workers - are employed by small businesses....

All of this makes it a farce that the IRS will be able to execute this proposed regulatory regime 'using information that financial institutions already possess, without imposing any burden on taxpayers whatsoever.' The costs of implementation - to community banks, credit unions, and even gig economy app services - will be enormous and will be passed on, like other costs, to account holders. The costs will fall disproportionately on people with lower incomes."

Impending Super-Cycle Commodity Signal Argues Against Transitory Inflation -Pring Turner

"Aging demographics, technological innovation and an ever -expanding debt overhang are three reasons why inflation has been largely kept under wraps in the last three decades. They are still relevant, so why not extrapolate a benign inflation trend into the future?

One reason might lie in the Fed's extraordinary monetary easing, a by-product of which has been zero money market rates. Another might be record deficit spending as far as the eye can see. It just may be that this unprecedented stimulation will be sufficient to tip the long-term balance to a more inflationary one.

Unfortunately, we are in uncharted waters on many fronts, so no one can really answer that inflation/deflation question with any degree of certainty. We can however, look to the technical condition of commodity markets for guidance, since they have usually, acted as a barometer for more generalized swings in inflationary and deflationary pressures.

One event that could be defining, is April's breakout in the annual core inflation rate above a 30-year trading range. Similar multi-year breakouts are not confined to the 12-month time span but can also be observed in longer-term time frames extending well in excess of 96-months (8-years). To us, that represents a warning sign that something fundamental has changed in the post 1981 'deflationary' environment....

The secular commodity bull market that took place between 2001 and 2011 did not disturb the secular downtrend in yields, as it did not spill over into the CPI in any meaningful way. However, the recent 30-year breakout indicated in the chart represents one piece of evidence of a reversal in the 40-year secular bear for yields should inflation not prove to be transitory.

Trends in commodity prices have often given advanced warnings of a forthcoming more generalized inflationary environment...The latest 'bear' has taken the form of a 10-year trading range, which is brief by historical standards. If an inflationary outcome is to materialize, it is likely to initially show up in the form of a reversal in this secular trend and confirmation that a new super cycle bull market began last year....

Commodity prices look poised to signal a new secular bull market, which would likely broaden out to result in the highest more generalized inflation rates since the 1970's.

If that proves to be the case, the implications for stock investors would be tremendous...More importantly, history shows, that as secular commodity bull markets mature, their consequential economic distortions trigger secular bear markets for stocks in general."

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10.21.21 - Congress Should Say No To IRS Power Grab

Gold last traded at $1,780 an ounce. Silver at $24.06 an ounce.

NEWS SUMMARY: Precious metal prices steadied Thursday following recent inflation-related gains. U.S. stocks traded mixed despite mostly upbeat third quarter corporate earning reports.

Gold Rises After Fed Official Plays Down Rate Hike Prospects -Yahoo Finance

"Gold rose for a second day following commentary from a Federal Reserve official that played down the possibility of imminent rate hikes.

Governor Christopher Waller said Tuesday the Fed should begin tapering its bond-buying program next month, though interest-rate increases are probably 'still some time off.'

Upcoming speeches and discussions by officials including Randal Quarles, Mary Daly and Chair Jerome Powell will also be keenly watched ahead of the central bank's meeting next month.

Bullion has fluctuated recently as traders attempt to gauge the pace at which pandemic-era stimulus will be reined in by central banks.

Ongoing inflation, driven by high energy prices and snarled supply chains has sparked concerns rate hikes could come sooner than expected...Governor Waller said that if inflation remains above 2% well into 2022 he would favor an earlier liftoff."

camels Investors Should Prefer Camels to Horses -Behavioral Investment

"There is a common decision-making adage that states: 'a camel is a horse designed by a committee.' Although there is some doubt over its origin it is thought to have been first uttered by Sir Alec Issigonis, designer of the iconic Mini car. The ungainly camel represents the flaws of committee-led design, which is often defined by indecision, competing interests and compromise.

The sleek horse is the result of individuals or small teams operating with focus and a distinct purpose. Although it is a wonderfully salient maxim, it is deeply flawed. Camels are a design / adaption marvel and in areas such as investing they provide invaluable lessons about how best to deal with uncertainty.

The idea that a camel is a poorly conceived horse does a huge disservice to a fantastically versatile creature. Adapted for desert living, camels must deal with dramatic temperature extremes from +50 °c to -40 °c. This means that they cannot use fat as insulation, but instead store fat in humps and have insulating fur.

The energy stored in their humps mean they can go for sustained periods without food; whilst their technique for processing water allows them to survive for days in the severest droughts.

Although not as rapid as the fastest horse they are no slouches with certain species able to run up to 40mph. They are also ideally suited to long distance toil. Bactrian camels can carry 200kg (440lbs) for 50km (31 miles) per day....

The preference for the alluring features of a horse over the unwieldy camel is also suffered by investors. Most of us have long-term objectives requiring a portfolio that can withstand extreme variability in the environment and cope with material uncertainty....

A prudently diversified portfolio is akin to a camel; it is not the most attractive choice and at any given time there will always be a superior option to deal with the current circumstances. It feels like we are always making concessions and carrying unnecessary burdens...

If we are asked to undertake a long journey along an unpredictable path we should take lessons from the design of a camel, not a horse."

Watch as a Great Empire Stumbles and Falls -Rogue Economics

"What a marvelous time to be alive"¦ with a front-row seat to watch a great empire stumble and fall! It only happens once every hundred years or so"¦ So pull up a chair and enjoy the show.

Here's the big news, from Bloomberg: 'Production at U.S. factories fell by the most in seven months in September, in part reflecting a sharp pullback in the manufacturing of motor vehicles as well as broader backlogged supply chains and materials shortages.'

Supply chain? What's happening is much more than just a weak link. Adjusted for inflation, real industrial production has been going down for half a century and now is only a third of its 1968 level.

The U.S. enjoyed a fake prosperity for the last 30 years - but only because China picked up the burden of manufacturing and sold goods to Americans at discount prices, keeping inflation in check.

And now, the U.S. no longer has the good jobs, the infrastructure, or the know-how to make things Americans want. Instead, appliances and geegaws are shipped across the Pacific Ocean - at enormous cost - while the discounts disappear....

Yes, here in the U.S., 'inflation' is now out in the open"¦ and the whole scam is coming apart....

As we've been saying"¦ the whole thing is a fraudfest. From the most basic premises - that wise guys in Washington can make decisions better than consumers, producers, and investors"¦

...That American 'democracy' follows the 'will of the people'"¦ and adapts to its needs....That you can spend more than you earn, year after year, and cover the deficits with 'printing press' money"¦and that this fake money actually 'stimulates' the economy - it's a 'bezzle.' From start to finish. Dishonest. Corrupt. Incompetent....

The U.S. squandered trillions on its misbegotten wars and social programs. Now, it's got a $3 trillion deficit - even without a recession. And this week, Republicans and Democrats consider the next trillion-dollar-plus programs"¦ while the printing presses run hot to pay for them."

Congress Should Say No To An IRS Power Grab -RealClearMarkets

"A recent survey conducted by Gallup found that Americans' view that the IRS was doing an "excellent" or "good" job has dropped from 50 to 37 percent in the last two years. It's puzzling then that - with all the pressing issues facing our country today - some members of Congress are choosing to prioritize expanding the power and authority of the IRS at the expense of taxpayers and their privacy.

Progressive members of Congress, led by Senator Elizabeth Warren (D-Mass.), are pushing to give the IRS the power and responsibility to prepare tax filings on behalf of all Americans, even though the private sector currently provides this service cheaply - many times at no cost - and efficiently. Frankly, anyone who has had to deal with the IRS knows first-hand why this is a bad idea.

First, and foremost, the primary function of the IRS is to raise and collect revenue for the federal government. An IRS-run 'free' filing system would likely be built to represent government interests and would have no incentive to maximize taxpayer deductions or protect taxpayers from audits.

On the other hand, certified professionals and tax preparation companies have every reason to help taxpayers take advantage of every deduction available to them. Many current tax filing services even provide refunds to users if another service gets them more money back.

Such a program would likely cost billions of dollars. TechNet recently published a white paper written by former Federal Chief Information Officer Tony Scott. Scott found that, 'any effort to have the IRS prepare Americans' tax returns would be operationally impractical, prohibitively expensive, and likely fail to deliver the promised benefits.'

Taxpayers shouldn't be expected to foot the bill for a massive new government program that the private sector has already successfully accomplished, especially with Congress pushing for massive new spending programs elsewhere.

The Biden administration is already pushing for a law that would require banks to report transactions over $600 to the IRS. A government-run 'free' file system would further require the IRS to collect troves of information from taxpayers that it currently doesn't have access to. Both proposals should be concerning to privacy advocates and taxpayers.

The IRS has already proven that it can't be trusted with confidential information. In 2016, hackers breached the IRS and stole more than 700,000 Social Security numbers. In a 2017 legal settlement, the IRS apologized for using its authority to audit and unfairly scrutinize conservative organizations. Just this year, the IRS leaked sensitive tax records of the wealthiest Americans, records that showed absolutely zero wrongdoing, to the press....

Time is running out to prevent Congress from granting the IRS a massive increase in authority. Sen. Warren and her progressive allies in Congress are attempting to push this proposal into the massive spending package currently being debated in Washington."

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10.20.21 - The $150 Trillion Crusade Against Climate Change

Gold last traded at $1,786 an ounce. Silver at $24.37 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday as investor inflation worries grew and weakened the dollar. U.S. stocks traded mixed despite better-than-expected earnings reports and a new record for bitcoin.

Gold gains on weaker dollar, treasury yields -Reuters

"Gold rose on Tuesday, with a weaker dollar and U.S. bond yields providing some support to the precious metal, even as central banks move towards easing economic stimulus....

The dollar index hit a two-week low, making bullion cheaper for buyers in other currencies. U.S. benchmark 10-year Treasury yields also weakened, reducing non-yielding bullion's opportunity cost.

'Though gold is range-bound, if it holds above $1,760, it could rise to $1,782 and possibly even $1,800,' said Nicholas Frappell, global general manager at ABC Bullion....

The Bank of England was gearing up to raise interest rates as inflation risks mount, Governor Andrew Bailey said on Sunday.

Gold is often considered an inflation hedge, though reduced stimulus and interest rate hikes tend to drive up government bond yields, raising non-yielding bullion's opportunity cost.

'Economic growth is getting hurt and if risky assets start showing a correction, then gold is going to shine bright,' said Kunal Shah, head of research at Nirmal Bang Commodities, Mumbai, adding that gold could hit $1,850-$1,860 by end-November and bullion could rise even if yields move higher."

perception Perception vs Reality -Alhambra Investments

"'It was the best of times, it was the worst of times...' -Charles Dickens, A Tale of Two Cities

There is the America of shareholders and homeowners and there is the America of paycheck to paycheck. Or, increasingly during COVID, from stimulus payment to stimulus payment or unemployment check to unemployment check. The economy is in a very different state depending on your position in this hierarchy.

For those of us who are able to keep doing our jobs from our spare bedroom, the last 18 months have, for many, been a boom time. For those in service businesses that were victims of the shutdowns, the last 18 months have been a time of high anxiety.

In truth, for many Americans, the high anxiety is not new. COVID merely accelerated trends that were already in place. Economic growth is ultimately about two things: workforce growth and productivity growth. Both have been weak for at least a decade and really quite a bit longer....

Why is this happening? That is a question with many answers - it isn't just one thing and I don't think you can say that all of it is 'bad'. Baby boomers retiring is not something that is bad (in most cases) and that is certainly part of this. Some portion of this, especially since the onset of COVID, is about couples reassessing their life and deciding that the cost of a two-income household is actually pretty high in ways that aren't all economic.

Some portion of it is due to the opioid epidemic. Some of it is due to an increase in the time people spend in college; 13.1% of the population has a master's degree, up from 8.6% in 2000. There is also an anger - call it wealth inequality or elite snobbery or envy or just a sense of fairness, it's all the same - that manifests itself in the political arena....

It is ironic too that the provision of fiscal largesse during COVID may have finally pushed the economy to a tipping point. With help wanted signs everywhere, labor appears to have finally gained the upper hand. 10,000 workers went on strike at Deere last week and 1400 are out at Kellogg.

There may or may not be an intentional work slowdown/sickout going on at Southwest Airlines. 32,000 nurses are considering a strike against Kaiser Permanente. American Airlines pilots are picketing in Miami. A strike was barely averted in Hollywood by backstage workers after they got basically everything they asked for....

This problem of perception versus reality is important for investors. Your reality does not necessarily bear on how the economy is perceived by the majority. Even objective reality doesn't really matter for the markets in the short run - which can be a lot longer than you think.

Markets tell us how the majority perceives it, not necessarily its real condition today. We have to invest based on that perception, not on reality, until we believe the gap between the two is so large that the current perception becomes untenable and has to shift to something new. And we need to understand that it is often the perception that creates the reality, the markets that shape the economy rather than the other way round....

Our economy, the global economy, is undergoing a profound shift right now. Some of the trends that were in place prior to COVID have accelerated (labor market) and some may be reversing (investment and productivity). I do not believe there is any way to know how these changes will shape our economy and markets in the coming years."

Bank Reveals The Dismal Truth About The $150 Trillion Crusade Against Climate Change -ZeroHedge

"Last week, Bank of America sparked a firestorm of reaction amid both the pro and contra climate change camps, when it published one of its massive 'Thematic Research ' tomes, this time covering the 'Transwarming' World, and which serves as a key primer to today's Net Zero reality, if for no other reason than for being one of the first banks to quantify the cost of the biggest economic, ecologic and social overhaul in modern history.'

The bottom line: no less than a stunning $150 trillion in new capital investment would be required to reach a "net zero' world over 30 years - equating to some $5 trillion in annual investments - and amounting to twice current global GDP.

Needless to say, the private sector has nowhere near the capital required to complete this investment which is why Bank of America generously estimate that all or parts of the bill would have to be footed by central banks in the form of tens of trillions in QE.

And since QE is essentially debt monetization, and since $150 trillion in new debt would have devastating consequences on the economy, BofA was kind enough to share its calculation of just how inflationary this billionaire pet project would be: the 'full monetization' scenario, where central banks inject $5 trillion in liquidity every year via QE for 30 years, would result in incremental 3% of inflation for a good decade. This is inflation over and above whatever is already coming down the pipeline.

Which is where we get to the punchline, because as BofA admits, the crusade against climate change, the ESG doctrine, the 'Net Zero' world, whatever one wants to call it, it's all about greenlighting the biggest QE episode in history, one wrapped in the 'noble' veneer of fighting for the most important cause in the history of civilization, but in reality it's just the biggest wealth transfer scheme in history."

The Great Reset Button on Humanity Gets Hit Again. -Wisdom Well

"The 2001 dot-com bust made me question everything I believed to be true. In just one year, I was laid off, the twin towers fell on 9/11, and my dad was diagnosed with Stage III colon cancer.

I was hit by waves of VUCA (volatility, uncertainty, complexity, ambiguity). And with each moment of loss and grief, I realized that the money/title/status weren't that important to me anymore.

I began asking myself, 'What would I do if I didn't fear failure?' and 'What would I do if money didn't matter?' These questions led me on a journey to discover my true values and purpose, so I can be authentic to the core of who I am.

That journey included co-founding Delivering Happiness with the late Tony Hsieh, a consultancy that applies the science of happiness to impact workplace culture and profits in positive ways....

In 2020, almost 20 years after the first wave of VUCA, the Great Reset button on humanity was hit again. Again, existential questions bubbled up, but this time it wasn't about the tech world in Silicon Valley, or feelings of safety in America. The whole world was asking the same questions, at the same time....

Over 4 million people quit their jobs in April 2021 (in the US alone) because they finally began answering those existential questions and rediscovered personal values that they weren't willing to give up.

With more burnout than ever, the Great Resignation - or Great Awakening (depending on how you choose to see it) - is a call to rethink how we design our businesses to enrich lives for all, not just the few. The awakening is about being grounded with authenticity so that we can grow more greenhouses as we nurture our own.

The future of work is here, and it's human. Let's not let these months of VUCA and reflection go to waste. As leaders, we're all the wiser to bring resilience to our work/lives, encourage everyone to show up as their most authentic selves, and embed happiness and humanity into our workplaces....

It is a casting call for true community - to be kinder and more real with ourselves and each other - knowing the shifts we make today will stay, regardless of how many times the reset button may get hit again."

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10.18.21 - Americans Suddenly Want Smaller Gov -Gallup

Gold last traded at $1,767 an ounce. Silver at $23.26 an ounce.

NEWS SUMMARY: Precious metal prices steadied Monday on a flat dollar. U.S. stocks traded mostly lower amid downbeat economic data as investors awaited fresh earnings reports.

Stagflationary concerns send gold to the key $1800 level -Kitco

"Since the beginning of Q4, the gold price has been biding its time until key inflation reports were issued this week, trading in a tight $30 range no matter what has happened. Each time the bears made a push towards $1750, buyers showed up quickly. And each time the bulls took gold towards resistance at $1780, sellers came in to knock the price back down.

But the gold action beginning this Wednesday was different, as both gold and silver broke higher out of a month-long consolidation surrounding the issuance of the U.S. Consumer Price Inflation (CPI) report an hour before the U.S. stock market opened....

The volatile price action mid-week showed investor demand for bullion overwhelmed the short-term trader selling, which could be the sign of an important shift in the precious metals market. Both gold and silver have developed an inverted head and shoulder pattern on their respective daily charts. This bullish technical pattern could be targeting the descending trend line at the $1840 level in gold.

Meanwhile, worsening supply chain disruptions and a raging energy crisis have joined forces recently to reawaken fears of a stagflationary blow to the global economy. With energy bills skyrocketing, companies are seeing profit margins get squeezed and passing those costs down to consumers, at a time when supply bottlenecks are already restraining growth as central banks are moving towards higher rates....

In its World Economic Outlook, the IMF said its 2021 global growth forecast is now at 5.9% from the previous July estimate of 6%.

For now, however, inflation risks are 'skewed to the upside,' while growth risks are 'tilted to the downside,' the report pointed out. 'Inflation risks are skewed to the upside and could materialize if pandemic-induced supply-demand mismatches continue longer than expected.'

The IMF is warning the Federal Reserve to prepare to tighten its policy. These statements by the IMF echo what took place in the 1970's, which describes an environment of higher inflation and lower growth, known as stagflation when gold thrives."

inflation Monetary policy is a slow-motion train wreck -Calafia Beach Pundit

"Recessions usually happen when nearly everyone is feeling optimistic. Today there again is no shortage of things to worry about, and the market is within inches of its all-time high. Most disturbing, however, is that neither the Fed nor the administration nor Congress nor the bond market are very worried about inflation. Inflation and all its nasty consequences are, arguably, big things to worry about today....

Fed policy, as laid out in today's FOMC minutes, is amazingly blasé about the risks of higher inflation. The Fed currently plans to begin 'tapering' its purchases of Treasuries and mortgages sometime next month, and to finish tapering by mid-2022. That's not a tightening of monetary policy; it's only making policy less accommodative over a prolonged period....

This is almost certainly an unsustainable situation. The Fed and the bond market are almost certainly underestimating the risks of higher-than-expected inflation.

How do I know this? It's all about incentives. Today, the incentives to borrow are huge. Short-term interest rates are below the current level of inflation and will likely remain so for at least the next year....

As for Biden, his approval rating is now down to an abysmal 38%. His administration has committed a series of blunders, most notably with the Afghanistan withdrawal. His top priority now is to pass two bills chock full of new social spending and new taxes which he preposterously claims will cost the economy 'zero.'

Meanwhile, inflation has risen to multi-decade highs, yet both the administration and the Fed keep insisting it's just transitory. Things will almost certainly get worse if trillions of new taxes and spending, additional layers of bureaucracy, and hundreds of billions of dollars of new handouts and subsidies get lavished on the middle class. My good friend and talented artist Nuni Cademartori sums it up in this cartoon."

Americans suddenly want smaller government, Gallup has found. -Washington Post

"Inconvenient but true: Americans want government to do less. Not more. Democrats cannot afford to just hand-wave this problem away.

In the first few months of the Biden administration, fawning media coverage declared that the president had inspired a new "paradigm" or "consensus" for robust, active government, harking back to the New Deal or Great Society. Or at least maybe the pre-Reagan era....

Since 1992, Gallup has been asking whether government should do more to solve the country's problems. Late last year, the share answering in the affirmative surged. For the first time ever, more than half of respondents (54 percent) said they wanted more from their government....

Fast-forward to today. Gallup conducted this poll again a month ago - and found that the share saying government should do more to solve problems has fallen back down to earth. Only 43 percent of Americans support more active government. That's fairly close to the long-term average.

Respondents of all political persuasions, Democrats included, expressed weaker support for ambitious government than they had a year earlier. Independents showed the biggest decline, with 38 percent saying they wanted government to do more, down from 56 percent in 2020....

Gallup is not the only pollster documenting such patterns. The Pew Research Center also found that Americans' demand for more robust government reached a high-water mark in August 2020, and had receded by the time it asked again in April 2021.

This is likely to present a problem for the Democratic Party, which is trying to pass a cradle-to-grave expansion of the welfare state."

How the Fed's Easy Money Spurred Today's Financial Frenzies -Mises

"The Fed's persistently loose monetary policy forces even the most risk-averse portfolio managers to take on equity premiums previously outside their comfort zone...This is because beyond the speculation cheap money facilitates among the most risk tolerant of asset managers, persistently low effective federal funds rates and Treasury yields cause yield compression.

That is, long stretches of low interest on supposedly 'safe' US Treasury securities force investors to 'reach for yield,' a euphemism for taking on a higher risk premium by investing in less certain financial instruments or equities because of the lowered rate of return on safer investments....

Today's enormous equity bubble is in no small part a direct result of this phenomenon. With an average cyclically adjusted price-to-earnings ratio (CAPE) across the three major indexes of almost 40 - that is, companies on the three major indexes are trading at an average price of forty times their earnings per share as averaged out over the last ten years - it is little wonder that Fed minutes have become arguably the single most important macroeconomic determiner of equity futures. As anyone who follows the particularly overweight tech sector knows, even a small and brief spike in rates or Treasury yields causes the NASDAQ to tumble.

The story is a familiar one. Looking at the past thirty years, we find Fed policy tinkering first creating and then bursting bubbles: keeping rates too low for too long before aggressively jacking them up. Far from 'solving' the ups and downs of the business cycle, the so-called great moderation of the 1990s was a result of Alan Greenspan's overactive monetary policy, unleashing a torrent of cheap money and facilitating takeovers at any hint of trouble. Whether it was a currency crisis in Mexico, a government debt default in Russia, or even the Y2K scare, the answer was always the same: cheaper central bank liquidity. What followed was the dot-com bust and recession....

The real wonder is that the twin pillars of fiscal and current account deficits holding up the roof have held up as long as they have. How long they will continue to do so is anyone's guess."

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10.15.21 - Stagflation Is Already Here

Gold last traded at $1,767 an ounce. Silver at $23.32 an ounce.

NEWS SUMMARY: Precious metal prices slipped back on normal profit-taking amid upbeat economic data. U.S. stocks rose on better-than-expected retail sales and third-quarter earnings reports.

Gold Gains as Traders Seek Haven Amid Persistent High Inflation -Bloomberg/Yahoo Finances

"Gold rose to the highest in a month as investors sought haven amid stubbornly high inflation and the looming reduction in stimulus.

The U.S. consumer price index rose in September by more than forecast, resuming a faster pace of growth and underscoring the persistence of inflationary pressures in the economy. The yield on 10-year Treasuries fell after an initial increase following the data released Wednesday, boosting demand for non-interest bearing bullion.

'Real interest rates fell and that supported gold,' said Giovanni Staunovo, a commodity analyst at UBS Group AG. 'There is a rising perception in the market that inflation could stay elevated for longer.'

Data on Thursday showed China's factory-gate prices grew at the fastest pace in almost 26 years in September, adding to global inflation risks. The U.S. producer price index rose less than expected, according to a report.

Meanwhile, minutes of last month's Federal Reserve meeting showed that officials broadly agreed they should start tapering bond purchases in mid-November or mid-December amid increasing concern about inflation. The pandemic-era stimulus measures were one of the key pillars in bullion's rally to a record last year."

stagflation Looks Like Stagflation Is Already Here -Issues & Insights

"On the same day the International Monetary Fund cut its growth forecast for the U.S. economy, Atlanta Federal Reserve President Raphael Bostic warned that the 'transitory' bout of inflation 'won't be brief.' How do you spell stagflation? B-i-d-e-n-o-m-i-c-s.....

The economy isn't building back better under Biden. It might not be building back at all....The first GDPNow estimate, produced in late July, had growth topping 6%...But then a flood of new data came out showing the economy had sharply decelerated. The 'nowcast' suddenly dropped to below 3% growth. The latest 'nowcast' has GDP growth for Q3 at a mere 1.3%....

Meanwhile, the latest jobs report, which came out Friday, was an enormous disappointment - Barron's called it 'ugly' - showing just 194,000 jobs being added in September, despite predictions of 500,000....

Those of us here who weren't born yesterday - unlike most pundits on TV and everyone commenting on Twitter - remember that the last time we saw sluggish growth and high inflation, along with energy crises and foreign policy crises. It was called stagflation and it crippled the economy.

'Investors should also be aware of stagflation risk, which is a combination of inflation with slow economic growth and the market reaction to stagflation is not typically favorable to investors, as many asset classes tend to fall in value at the same time during stagflation,' Nancy Davis, founder of Quadratic Capital Management, told The Street.

It's starting to look like the only thing Biden is 'building back' with his combination of reckless spending and massive tax hikes is the misery of the 1970s."

How the Fed Finances U.S. Debt -Wall Street Journal

"Look behind the federal books to see the ways monetary policy has come to abet runaway spending.

Last week's deal in Congress to raise the debt ceiling through early December may offer another few weeks of partisan wrangling, but it won't solve the deeper problems of funding the government.

Such is the sorry state of America's hand-to-mouth finances that White House officials have launched apocalyptic warnings about imminent financial collapse, along with hallowed invocations to preserve the full faith and credit of U.S. Treasury debt.

The White House Council of Economic Advisers, run by Cecilia Rouse, said: 'If the United States were to default, tens of millions - including families with children, retirees, and veterans - would quickly, even overnight in some cases, face the prospect of losing the regular Federal payments that help them to make ends meet.'

Defense Secretary Lloyd Austin declared: 'If the United States defaults, it would undermine the economic strength on which our national security rests.'"

High Inflation Is Here To Stay -Reason

"News that the September Consumer Price Index (CPI) rose by 5.4 percent on a year-over-year basis should be evidence enough for Federal Reserve Chair Jerome Powell, White House economists, and even the president to admit that we have more than a temporary inflation uptick on our hands. Better yet, it's proof that we should avoid adding fuel to the fire, even if it means cutting back on President Joe Biden's multi-trillion-dollar American Rescue Plan....

Avoiding the hard truth or waiting before countering inflationary forces carries a cost. In this case, delays could mean harsher action later when, for example, the Fed hits the money brakes harder to cool the economy. In such a case we might see interest rates head to the ceiling, construction activity and high-tech investment plummet, and the economy roll into a recession....

Needless to say, Washington leaders have long been reluctant to call a spade a spade. But today, the no-no isn't depression or even recession. It's referring to unqualified inflation. No one in authority wants to admit that the dollars we hold are systematically losing their purchasing power. We are being quietly robbed by Washington's dollar-printing press, with politicians calling the shots. The presses are not operating without drivers.

The price increases are widespread, which suggests they are embedded. No matter how analysts choose to slice and dice the data, the answer is the same: The U.S. inflation rate calls for taking offsetting actions, such as avoiding direct distributions of stimulus or minimum family income dollars (though not harsh, invasive measures to cool off the economy).

Let us not forget that inflation is not about rising prices. The rising price level is the result of an inflated money supply - all those trillions of stimulus dollars now out and chasing harder after goods and services.

So, what should our esteemed political leaders do? Gazing into a crystal ball and talking about things that may be transitory is what soothsayers and fortunetellers do. Just give the public the unvarnished story."

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10.14.21 - Why is Biden Making Banks a Tool of the IRS?

Gold last traded at $1,796 an ounce. Silver at $23.54an ounce.

NEWS SUMMARY: Precious metal prices rose to 4-week highs Thursday as rising inflation flattened the dollar. U.S. stocks rose following better-than-expected earnings reports from Bank of America and other major companies.

Gold prices gain as inflation concerns grow -Reuters

"Gold prices rose on Tuesday, as rising inflation fears dulled risk appetite and boosted demand for the safe-haven metal, although an advancing U.S. dollar limited bullion's gains....

A global energy crunch has threatened economic outlook and fanned inflation fears, driving some investors toward safer assets.

'We see undertones of support coming from the general idea that inflationary pressures are going to be enough to hold gold up in the midst of an environment where we see the Federal Reserve slowly moving towards reducing asset purchases,' said David Meger, director of metals trading at High Ridge Futures....

'There's more risk aversion in the market and gold is benefiting from that, coupled with concerns about inflation and cooling of the global economy,' Commerzbank analyst Daniel Briesemann said.

If stagflation talks come to the fore increasingly, gold could clock $1,900 by year-end as interest rates should remain relatively low even if the Fed starts tapering, Briesemann said."

IRS Why is the Biden administration seeking to make banks a tool of the IRS? -TheHill

"In an effort to catch tax evaders, the Biden administration is proposing requiring banks to report individual account transaction flows above $600 to the Internal Revenue Service (IRS). A related proposal would increase this threshold to $10,000.

Banks are a critical component of the economy that, thanks in no small part to the federal government via FDIC insurance, provide people a trusted place to protect their wealth from loss, theft or damage. The administration's proposal seeks to exploit this status and is a significant intrusion of consumer privacy.

It's also cumbersome, unlikely to achieve whatever legitimate goal the administration may have, and even a threat to the public's respect for the rule of law - something that may further erode what market discipline exists in banking. In other words, it's a bad idea.

The threat to privacy is the most objectionable consequence of this proposal. Current Supreme Court precedent may not provide a constitutional privacy protection for this type of financial exchange, but the breadth of intrusion into the citizenry's personal accounts is excessive and unwise.

The administration estimates the provision would help raise about $500 billion in tax revenue over the next 10 years. While it is unclear where this number comes from or how accurate it is, it is not enough to justify a huge diminution in practical privacy.

The proposal's supporters argue that banks already provide significant information to the federal government. While this is true, it is more an indictment of the status quo than a justification for compounding the error.

The 'Suspicious Activity Reports' (SARs) that banks are obligated to provide to the federal government give a view into the limited benefit and extensive burden the new proposal would put upon the banking industry.

For example, a 2016 Heritage Foundation report found that compliance with anti-money laundering rules costs at least $7 million per conviction. It's entirely possible that the new proposal could involve costs in multiples of this amount, and that it would make preventing tax evasion through its massive search method a money-losing proposition....

To their credit, the banking trade groups have so far generally opposed the proposal."

As CPI Looms, Inflation Is Starting To Impact Equity Returns -ZeroHedge

"Fed funds futures for 2022 and 2023 have broken out to new highs, likely on the back of rising inflation expectations. As things stand now, the market is looking for three hikes by the end of 2023, with the effective fed funds moving from 8bps today to 85bps.

Just yesterday the New York Fed released its monthly inflation expectation survey, and it climbed to new highs.

Today we get September CPI readings and expectations are that it remains around the current level of 5.3%. The US CPI is pretty well correlated with China's PPI which appears to be continuing higher. Given this relationship it is hard to see US inflation dropping until it does in China.

And here the news is somewhat disconcerting. With thermal coal prices making new highs, odds are this continues to create upward pressure on China's PPI and in turn, the US CPI.

It is clear the specter of rising rates in response to the less-than transient inflation is starting to bite into the equity market."

The myths of "˜income inequality' -OC Register

"It is an article of faith among progressives that income inequality is getting worse in California. In fact, claims of a widening gap between rich and poor are used nationally to justify raising taxes and accelerate the redistribution of wealth.

But like other urban myths, such as how Prop. 13 supposedly starved local governments, it is easily debunked by critical analysis of the data. As it turns out, while the rich are in fact getting richer, so are the poor.

First, no one disputes the tautological argument that the wealthy have more money than the poor. But policy leaders need to ask some important questions. For example, is that gap actually expanding? How do we measure "income?" If the standard of living is increasing for those at the bottom rung of the economic ladder, does it really matter how rich the wealthy become?....

In any discussion of income inequality, it is important to define the terms. Much of the most widely""‹cited work by mainstream media which 'proves' increasing disparity is misleading because of the definitions they employ.

Take, for example, the work of economists Thomas Piketty and Emmanuel Saez, two darlings of the left. How they defined 'income' ignored several variables that substantially inflate U.S. income inequality. Those variables include whether corporate income should be attributed to individuals (it should), whether after-tax income is a better metric (it is), and whether the value of employee benefits should be counted (it should).

In short, the work of Piketty and Saez has been substantially discredited by other economists. But it is unlikely that you'll ever read about that in the New York Times.

Moreover, even if economists could agree on definitions, there remain many questions about income inequality. For example, is California's relatively high disparity between the rich and poor the result of its progressive policies?

Although the data is not clear on this, there is little denying that high taxes and heavy regulations result in the outmigration of the middle class, leaving the state with many poor (highest effective rate of poverty in America) and many wealthy with a sizable gap in between.

More fundamentally, even assuming the income gap between rich and those classified as poor was growing, is this even a problem? Shouldn't the real inquiry be whether those on the bottom rung of the economic ladder have both an increasing standard of living as well as access to opportunities which would allow them to move up?....

Both Presidents Kennedy and Reagan repeated the saying that 'a rising tide lifts all boats' to describe how a vibrant, free market economy benefits all citizens. Today, that saying is derided as simplistic hyperbole by progressives even though it is as true today as it was when uttered by the two former presidents.... Equal opportunities, not equal outcomes. Government policies to achieve the latter sink all boats, not raise them."

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10.13.21 - The Southwest Airlines Rebellion

Gold last traded at $1,792 an ounce. Silver at $23.06 an ounce.

NEWS SUMMARY: Precious metal prices shot up Wednesday on safe-haven buying as rising inflation weakened the dollar. U.S. stocks rose as investors digested fresh inflation data and third-quarter earnings reports.

Stagflation rears its ugly head -WGC

"Over the past two months, economic growth has disappointed even as inflation has exceeded expectations. A real risk of stagflationary conditions, with rising costs amid lower growth, appears to be on the cards.

Stagflation, if severe, can be damaging to both the economy and financial markets. But we don't need a repeat of the 1970s for assets to be affected. Our analysis shows that even mild stagflationary conditions can have similar asset impacts to those in more severe stagflations.

Stagflation has historically hit equities hard. Fixed-income returns have been variable, while both commodities and gold have fared well. Gold's historically strong performance can be attributed to: higher inflation and market volatility- supporting capital preservation motives and lower real interest rates - supporting both opportunity cost and growth risk motives....

Gold's strong performance since 2018 could be a headwind, but our analysis shows that it need not be. Gold hasn't benefited from record-low real rates and high inflation in 2021. We believe this has to do with rosy expectations about inflation, growth and equities.

Record low yields might constrain bonds' hedging potential in a risk-off event, offering gold an opportunity to command some of those defensive flows, should a shock to risk assets materialize."

southwest The Great Southwest Airlines Rebellion -American Consequences

"The vaccine mandate backlash has been bubbling just under the surface, but now it has spilled out into the open, threatening to completely derail an already crumbling economy and to obliterate a deeply unpopular U.S. president and administration.

Seemingly out of nowhere, what appears to be a Southwest Airlines rebellion has taken flight this weekend.

According to media reports, scores of pilots and other Southwest employees have coordinated the taking of 'sick days' to use them up in advance of a Southwest Airlines mandate to get the jab or lose the job.

Over Saturday and Sunday more than 2,000 flights have been cancelled, with airports experiencing full-on mayhem.

The Southwest Airlines Pilots Association is suing the airline over the imposed vaccine mandate, bolstering the claim that there is a "sick out" underway among angry Southwest pilots....

Will other pilots, such as at American Airlines, follow suit? Rumors are circling that this is only the beginning"¦Over the past few weeks, thousands of nurses, medical workers, and first responders have either quit or been fired for refusing to receive a medical treatment they do not want or need.

The 'nursing shortage' that Democrat politicians and the mainstream media had been blaming on 'rising COVID cases' has been in reality a man-made disaster of historic proportions.

The nursing crisis is not caused by COVID - cases have been in decline in the U.S. for weeks. It is caused by the firing of medical personnel who refuse to take the experimental COVID shots....

History may record this weekend as the turning point against the Biden administration's COVID tyranny. From nurses to pilots to truckers to even Amtrak workers, it appears that America is standing up and saying 'enough!'"

Southwest Airlines apologizes for flight cancellations, says operations are stabilizing -CNBC

"Southwest Airlines apologized for canceling more than 2,000 flights since Saturday, saying the airline's operations are starting to stabilize after disrupting travel for tens of thousands of customers....

The Dallas-based airline since Saturday has canceled close to 2,400 flights, FlightAware data showed. The airline said bad weather and air traffic control issues in Florida kicked off the problems, which snowballed due to its own staffing shortfall, particularly a lack of backup pilots and flight attendants to step in when things go wrong. Other airlines had relatively minor cancellations....

Southwest last week said it would enforce the Biden administration's policy that employees of federal contractors, which includes major airlines like Southwest, American and others, must be vaccinated against Covid-19, though he told CNBC he doesn't think companies should mandate vaccines.

The disruptions sparked speculation on social media that employees were calling out sick in protest. The airline has called that unfounded and told CNBC Tuesday that that wasn't a cause or contributing factor in the disruptions....

Over the weekend, 2,176 Southwest flights were canceled because of unavailable crews, the pilots' union told members late Tuesday....It also said that sick calls are higher compared with previous Octobers."

The Distorted Market for Woke Capitalism -Law & Liberty

"The founder of modern economics, Adam Smith, was no fan of the merchants of his time. He regarded them as among the most responsible for how 'the mercantile system,' as Smith called it, accorded legal privileges to politically connected producers over the interests of consumers.

Nor did Milton Friedman have a particularly sympathetic view of the business leaders of late-twentieth-century America. 'The two greatest enemies of free enterprise in the United States,' he wrote, 'have been, on the one hand, my fellow intellectuals and, on the other hand, the business corporations of this country.'

To be pro-market is not the same as being pro-business. The two are at odds in some very important ways.

This is one way of understanding the phenomenon of 'woke capitalism,' and it features in Vivek Ramaswamy's 'Woke, Inc: Inside Corporate America's Social Justice Scam'. For if there is anything that characterizes woke capitalism, it is the desire - like the mercantilists of old - to exclude (ironically, in the name of tolerance, diversity, equality, etc.) particular individuals and groups from 'their' markets and corporate America in general.

In the case of woke capitalists, the excluded is anyone who doesn't embrace all the usual progressive orthodoxies or who won't play the woke game to go along to get along.

Ramaswamy provides other insights into the underlying rhyme and rhythm of the woke capitalist phenomenon that have long needed wider attention...Woke capitalists, thanks in part to their impeccable connections with the political class, are able to marshal considerable resources behind their beliefs. And it's not just consumers who pay the price. It's the American body politic as well....

Throughout Woke, Inc., Ramaswamy offers various suggestions for addressing these problems. Some involve removing various regulations that effectively insulate woke managers, CEOs, and boards from pressures of investors who know what's really going on. In these cases, Ramaswamy is intent upon bringing the power of market forces to bear upon woke practices....

The process of awakening corporate America from wokeness will need to be as much a cultural enterprise as it is an exercise in returning business to its proper function in the economy and society more generally. That endeavor may take years, and the opposition will be formidable. But in the end, America will be better for it."

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10.12.21 - Gold Price Headed to $5,500 in the Long Term

Gold last traded at $1,759 an ounce. Silver at $22.54 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on safe-haven buying despite a firmer dollar. U.S. stocks churned in volatile trading following two straight losing days.

Gold price headed to $5,500 in the long term as central banks won't be able to exit unorthodox monetary policies -Kitco News

"In a report published Tuesday, investment bank Jefferies Group said that gold and Bitcoin remain essential hedges as the threat of stagflation - an environment of low growth and higher inflation - continues to grow.

Although the market continues to struggle in the near-term, analysts at Jefferies said that their long-term forecast remains in place for gold prices to push to $5,500 an ounce.

'This has been derived by comparing the January 1980 peak gold price of US$850/oz with the increase in US nominal personal disposable income per capita since then. The gold price was then equivalent to 9.9% of US disposable income per capita which was $8,547. The gold price is now $1,757/oz or 3.2% of US disposable income per capita of $54,671,' the analysts said.

The firm remains bullish on gold as central banks discover that it is easier to embark on unorthodox monetary policies than it is to exit them.

'The long-term view here remains the same as it has been for many years. That is that G7 central banks, including most importantly the Federal Reserve, will not be able to exit from unconventional monetary policy in a benign manner and will ultimately remain committed to ongoing central bank balance-sheet expansion in one form or another.'

'Such policies will increasingly discredit those central banks which have pursued unconventional monetary policy, threatening the stability and indeed integrity of the current fiat-paper-money system,' the analysts said."

tax payers Green energy: A bubble in unrealistic expectations? -Evergreen Gavekal

"This week's EVA provides another sneak preview into David Hay's book-in-process, 'Bubble 3.0' discussing what he thinks is the crucial topic of 'greenflation.' This is a term he coined referring to the rising price for metals and minerals that are essential for solar and wind power, electric cars, and other renewable technologies.

It also centers on the reality that as global policymakers have turned against the fossil fuel industry, energy producers are for the first time in history not responding to dramatically higher prices by increasing production. Consequently, there is a difficult tradeoff that arises as the world pushes harder to combat climate change, driving up energy costs to painful levels, especially for lower income individuals.

What we are currently seeing in Europe is a vivid example of this dilemma. While it may be the case that governments welcome higher oil and natural gas prices to discourage their use, energy consumers are likely to have a much different reaction.

Summary: BlackRock's CEO recently admitted that, despite what many are opining, the green energy transition is nearly certain to be inflationary.

Even though it's early in the year, energy prices are already experiencing unprecedented spikes in Europe and Asia, but most Americans are unaware of the severity.

To that point, many British residents being faced with the fact that they may need to ration heat and could be faced with the chilling reality that lives could be lost if this winter is as cold as forecasters are predicting.

Because of the huge increase in energy prices, inflation in the eurozone recently hit a 13-year high, heavily driven by natural gas prices on the Continent that are the equivalent of $200 oil.

It used to be that the cure for extreme prices was extreme prices, but these days I'm not so sure. Oil and gas producers are very wary of making long-term investments to develop new resources given the hostility to their industry and shareholder pressure to minimize outlays.

I expect global supply to peak sometime next year and a major supply deficit looks inevitable as global demand returns to normal.

In Norway, almost 2/3 of all new vehicle sales are of the electric variety (EVs) - a huge increase in just over a decade. Meanwhile, in the US, it's only about 2%. Still, given Norway's penchant for the plug-in auto, the demand for oil has not declined.

China, despite being the largest market by far for electric vehicles, is still projected to consume an enormous and rising amount of oil in the future."

Wage inflation is a monetary policy problem in the making -Briefing

"The Federal Reserve has a problem on its hands, or what we should say is that it has another problem on its hands.

The first problem is knowing when it should start tapering its asset purchases. That shouldn't be a problem. The Fed should have started tapering months ago since the conditions that drove the Fed down another quantitative easing path aren't anywhere close to being as bad as they were when the Fed went down that path....

The other problem now on the Fed's hands is wage inflation. It keeps showing up in the employment reports.

The COVID pandemic has created a lot of distortions. That was plain to see in the average hourly earnings growth in the early stages of the pandemic. It skyrocketed as lower wage earners were disproportionately affected by job cuts when business activity cratered with lockdown/shutdown measures and stay-at-home preferences.

Average hourly earnings growth fell sharply, though, as the economy reopened more fully with the introduction of the COVID vaccines and as lower wage earners went back to work.

What the September employment report showed is that there are still a lot of people who aren't back at work. In fact, there are 3.1 million fewer people in the civilian labor force than there were at the start of the pandemic.

It's a confounding reality given related reports that indicate job openings are at a record high. Meanwhile, one company after the next seems to be calling attention to labor shortages as a factor that is curtailing production/service capabilities and driving up labor costs....

These aren't going to be temporary wage increases either. They will be sticky even when the labor supply improves. Average hourly earnings were up 4.6% year-over-year in September. That wasn't because lower-wage earners weren't a big part of the labor mix either....

This wage inflation is going to persist -- or so it seems. While supply chain issues are a problem for most companies, most companies are also still extolling the strong demand they are seeing and their ability to pass through price increases to help offset their higher costs....

Higher prices, and increased demand among workers for higher wages to deal with those increased prices, could become a toxic policy problem for the Fed, whose hand may be forced to move more aggressively with tapering and tightening action to keep elevated inflation pressures in check.

It is a problem the Fed doesn't want on its hands and it is a problem the stock market doesn't want on the Fed's hands. It's becoming more evident, though, that it's a problem in the making."

Let's Be Serious, There's No Such Thing As A $1 Trillion Coin -Forbes

"Thoroughly confused members of the Left are presently opining that an easy solution for President Biden on the matter of the debt ceiling would be for him to mint a trillion dollar coin. Presto. Debt limit evaded in concert with $1 trillion in new spending power.

It all sounds so simple. For those who naively believe money is wealth, the easy answer to a lack of money is to create it.

Except that money isn't wealth. Money is an effect of wealth creation. We produce or provide goods, services, and labor with an eye on attaining commensurate goods, services, and labor for our production.

Money is merely an agreement about value among producers that we producers seek in return for our production. Since it's an agreed upon measure of value, there's subsequent 'getting' when our work results in monetary compensation.

What's important about this is that absent production, there's quite simply no consumption. Consumption is what happens after production. It's the consequence.

Applied to the economic fantasizing of some on the Left, President Biden can in no way create $1 trillion in spending power, or 'new' demand. You can't print demand. Put another way, there's no such thing as a $1 trillion coin....

Real economic growth is what makes government spending possible. Assuming there were a constitutional way for Biden to mint $1 trillion in spending, it would only be possible insofar as the 46th president extracted $1 trillion in private sector production.

Once again, without work money is meaningless. Which is why currencies tend to shrink to nothing when errant governments presume that they can print wealth....

The lesson seems to be that politicians exist to spend, and regardless of ideology. It's not about deficits, or surpluses, or the oft-stated bit of nonsense of what we as a nation can 'afford;' rather it's about production.

Government can print dollars, but it can't create demand. Only the private sector can. There's no government spending, nor are there $1 trillion coins. There's just government waste of precious, privately created wealth."

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10.11.21 - Fantasy Investing & Modern Money Madness

Gold last traded at $1,754 an ounce. Silver at $22.61 an ounce.

NEWS SUMMARY: Precious metal prices steadied Monday on rising commodity prices despite a firmer dollar. U.S. stocks churned to start the week as oil prices popped and energy stocks gained.

The Case for Gold and GOLD -Yahoo Finance

"Inflation rates continue to rise to levels not seen for a decade or more. US CPI exceeded 5% for the third month in a row in August. In Canada, August's CPI showed a 4.1% jump from last year at the same time.

US core inflation, which excludes food and energy, apparently on the assumption that consumers don't need to eat or heat or cool their property or drive anywhere, is still running over 4%....

Gold is traditionally regarded as a safe haven when inflation is rising. But this time around, gold seems to be missing in action. Gold briefly top $2,000 per oz. last summer and it's now back below $1,800. Miners have done even worse, even though they have been recording substantial increases in profits.

Any well diversified portfolio should contain assets that are non or negatively correlated with other asset classes to both reduce volatility, and to improve overall returns if one major class is suffering. Gold has preserved its purchasing power over the last three millennia, unlike cryptocurrencies, which have barely a decade of history.

With gold down almost 10% and gold miners off over 25% in the last year, despite excellent results, now is a good time to either establish or increase a position in the sector."

With its world class portfolio of mines, the majority in politically stable jurisdictions such as the US, Canada, Mexico and the Dominican Republic and major new projects such as Goldrush, Pueblo Viejo, and Donlin in Alaska due to come on stream in the next few years, Barrick Gold (GOLD) is well positioned to grow its output."

white house The US has never defaulted on its debt - except the four times it did -The Hill

"Every time the U.S. government's debt gets close to the debt ceiling, and people start worrying about a possible default, the Treasury Department, under either party, says the same thing: 'The U.S. government has never defaulted on its debt!' Every time, this claim is false.

Now Treasury Secretary Yellen has joined the unfailing chorus, writing that 'The U.S. has always paid its bills on time' and 'The U.S. has never defaulted. Not once,' and telling the Senate Banking Committee that if Congress does not raise the debt ceiling, 'America would default for the first time in history.'

This is all simply wrong. If the United States government did default now, it would be the fifth time, not the first. There have been four explicit defaults on its debt before. These were:

1) The default on the U.S. government's demand notes in early 1862, caused by the Treasury's financial difficulties trying to pay for the Civil War. In response, the U. S. government took to printing pure paper money, or 'greenbacks,' which during the war fell to significant discounts against gold, depending particularly on the military fortunes of the Union armies....

2) The overt default by the U.S. government on its gold bonds in 1933. The United States had in clear and entirely unambiguous terms promised the bondholders to redeem these bonds in gold coin. Then it refused to do so, offering depreciated paper currency instead...In 'American Default,' Sebastian Edwards concludes that it was an 'excusable default,' but clearly a default.

3) Then the U.S. government defaulted in 1968 by refusing to honor its explicit promise to redeem its silver certificate paper dollars for silver dollars. The silver certificates stated and still state on their face in language no one could misunderstand, 'This certifies that there has been deposited in the Treasury of the United States of America one silver dollar, payable to the bearer on demand.' It would be hard to have a clearer promise than that.

4) The fourth default was the 1971 breaking of the U.S. government's commitment to redeem dollars held by foreign governments for gold under the Bretton Woods Agreement...President Nixon announced this act 'to suspend temporarily the convertibility of the dollar into gold.' The suspension of course became permanent.

To paraphrase Daniel Patrick Moynihan, you are entitled to your own opinion about the debt ceiling, but not to your own facts about the history of U.S. government defaults."

Fantasy Investing and Other Modern Money Madness -Rogue Economics

"Last week was dominated by the debt ceiling hoax"¦ in which one party earnestly tried to save the nation"¦ while the other was determined to send it into a dark spiral of default and catastrophe. At least, that's the way the elite press described it.

Actually, there was never any danger of default. The feds get plenty of money from taxes to cover debt payments.

And there was never any real danger that they would fail to raise the debt ceiling. After all, debt - selling U.S. bonds to the Federal Reserve (aka 'printing money') - is mother's milk to both Republicans and Democrats"¦ and the whole ruling elite. None of them want to be weaned....

As intended, low interest rates forced investors to take their money out of real investments and move them to options, tech fantasies, memes, and razzmatazz speculation.

Last year, for the first time ever, option trading exceeded stock transactions.

In yesterday's report, we looked at how profitable investing in the stock market has been - with the S&P 500 up nearly 30% over the last 12 months"¦ and some university endowments up over 50%.

But since the economy is growing at"¦ maybe"¦ 5% - using our estimate of GDP growth as the measuring stick - these gains cannot possibly be coming from real increases in profits or win-win wealth.

Instead, they must be casino-style winnings"¦ from a win-lose, zero-sum game"¦ where one player wins and the other goes home with a sad face and an empty pocket.

It caused us to wonder. With so many happy faces in view"¦ where are all the sad ones? Oh, Dear Reader, you know"¦ don't you? They're in tomorrow's news, aren't they? When stocks crash"¦ and consumer prices soar.

The Fed added about $4 trillion to its balance sheet (new money!) since March 2020. Someone will have to pay for it."

Can I Work While on Social Security? -Motley Fool

"When you take benefits while you're still working, Social Security may withhold part of your benefit depending on your income if you haven't reached full retirement age. Your full retirement age is between 66 and 67 if you were born from 1943 to 1959; it's 67 if you were born in 1960 or later.

Social Security will withhold benefits at the following rates in 2021: $1 for every $2 of earned income above $18,960 until the year you reach full retirement age.... $1 for every $3 of earned income above $50,520 the year you reach full retirement age until the month before you're eligible for your full benefit....

The key to understanding Social Security's rules about working and benefits is that everything changes when you reach the date when you can fully retire. After that point, you can earn as much as you want and still keep all your benefits. Earlier, though, you can give up some of your benefits.

If you've reached full retirement age and you're still working, you don't need to worry about any earnings limits. Social Security will not withhold money from your monthly benefit. Social Security also won't take money out of your checks if you claim early but your income is below the thresholds listed above....

If you want to maximize your monthly Social Security checks, the simplest retirement strategy is to wait until full retirement age before claiming your benefits. That way, you'll be able to earn an unlimited amount without losing a penny of your Social Security....

Finally, if you're expecting to work on a part-time basis, it's smart to look at the earnings limits and how they compare with your pay. If it looks like you might trigger the provisions, then you might decide to work a little less to keep all your benefits."

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10.8.21 - As Central Banks Taper, Take Cover

Gold last traded at $1,759 an ounce. Silver at $22.75 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday as downbeat economic data weakened the dollar. U.S. stocks traded mostly lower on weak jobs data despite optimism about a short-term debt ceiling.

Will Gold Reach Unthinkable Heights? -Gold Switzerland

"In these epic stock markets what purpose does it serve to hold gold? Firstly physical gold is the best asset to hold for wealth preservation purposes....

No other asset in history has acted as the perfect insurance for 5,000 years. Land is arguably also a good long term wealth preservation asset but it is not transportable, not easily divisible and not liquid.

Risk in financial markets is now greater than anytime in history as we approach the end of the Epic Everything Bubble....

My colleague Matt Piepenburg recently covered Why Gold Is Not Rising in an excellent article. In that he stated that gold will reach new highs of $4,000 before the end of the decade. I believe that he based that on the In Gold We Trust Report by our good friend and MAM advisor Ronni Stoeferle who has a $4,800 target by 2030.

Personally I believe that target is much too conservative. I am on record for more than 10 years saying that gold will reach $10,000 in today's money."

future of money Book Review: Eswar Prasad's 'The Future of Money' -RealClearMarkets

"With trade, it's always and everywhere products and services for products and services. Money is just the claim ticket that producers of goods and services take in return for what they've created so that they can get roughly equal value in the marketplace....

This and much more came to mind while reading Cornell profess Eswar Prasad's very interesting and very worthwhile new book, The Future of Money: How the Digital Revolution Is Transforming Currencies and Finance. 'Excellent' would be attached to Prasad's latest, but for his tendency to embrace economic fallacy that is widely accepted in the economics profession, but that his very own book contradicts....

As Prasad sees it, the paper money that the Chinese invented in the 7th century is on the verge of being replaced by digital notes. Cash is yesterday. The future of money isn't paper money.

So what's going to push cash into the proverbial dustbin of history? Prasad imagines crypto-style currencies will write the obituary, along with a rapidly evolving financial sector more broadly. In Prasad's words, the 'Fintech revolution has far more disruptive potential because it is affecting some of the foundational elements of finance.'....

Which brings us to cryptocurrencies. Prasad addresses the elephant in the room with respect to Bitcoin in the The Future's opening pages...In Prasad's words, 'Such volatile values mean cryptocurrencies like Bitcoin are not reliable mediums of exchange, a key attribute of any workable currency.'

Prasad is clear that the 21 million coin limit foretells BTC instability. Which is his unwitting way of saying that Bitcoin is what limits currency supply, not gold. Gold merely defines. Nothing else.

Prasad's analysis of Bitcoin's volatility is an unwitting endorsement of gold as the money measure par excellence (Karl Marx), but for Prasad to go public with what is rather obvious would be for him to once again be tossed from the economist fraternity that he's an elite member of. Too bad....

Once again, The Future is a very interesting, very informative book that could be an excellent one if Prasad weren't weighed down by so much econo-speak. Alas he is. And this limits his obvious skill as a thinker....

Money is simple. Producers want equal value for their production, plus they want to delay consumption (save) of some of their production. Good, stable money facilitates both. Amazon, Walmart, and yes, Facebook, could design credible, widely circulated currencies between breakfast and lunch.

The good ones might - gasp - be defined in terms of gold. Prasad will obviously be a player in the future of money, but the money will only be great if he's willing to anger his fellow economists."

As Central Banks Taper, Investors Should Take Cover -Wall Street Journal

"Previously, the European Central Bank and the Fed offset each other's impact. No such luck this time.

Do you have too much money? Losing sleep over that ballooning bank account? Perhaps not. But spare a thought for Jerome Powell and Christine Lagarde, who must lead us all out of a global monetary glut.

Facing essentially the same pandemic-era problem, the Federal Reserve and the European Central Bank have come to the same solution: drastically cut monthly net asset purchases.

Unfortunately for financial markets, they will be pulling back at the same time, setting up 2022 as the year of the 'taper tandem' - the fastest liquidity drain in a decade.

Monetary data indicate that advanced economies are awash in money, thanks to central banks' voracious buying of financial assets. In March 2020, amid financial panic over Covid-19, the New York Fed was creating money to buy up to $75 billion of assets every day.

Around the same time, the ECB announced an emergency program targeting €1.85 trillion ($2.15 trillion) of purchases in total. Plentiful liquidity helped governments, businesses and households survive lockdowns. Cash flows collapsed but bankruptcies barely increased. Asset markets and the real economy exited the crisis on a strong footing."

The January 6 Insurrection Hoax -Imprimis

"Notwithstanding all the hysterical rhetoric surrounding the events of January 6, 2021, two critical things stand out. The first is that what happened was much more hoax than insurrection. In fact, in my judgment, it wasn't an insurrection at all.

An 'insurrection,' as the dictionary will tell you, is a violent uprising against a government or other established authority. Unlike the violent riots that swept the country in the summer of 2020 - riots that caused some $2 billion in property damage and claimed more than 20 lives - the January 6 protest at the Capitol building in Washington, D.C. lasted a few hours, caused minimal damage, and the only person directly killed was an unarmed female Trump supporter who was shot by a Capitol Police officer. It was, as Tucker Carlson said shortly after the event, a political protest that 'got out of hand.'....

I know this is not the narrative that we have all been instructed to parrot. Indeed, to listen to the establishment media and our political masters, the January 6 protest was a dire threat to the very fabric of our nation: the worst assault on 'our democracy' since 9/11, since Pearl Harbor, and even - according to Joe Biden last April - since the Civil War!....

On the contrary, what happened that afternoon, and what happened afterwards, is only intelligible when seen as a chapter in the long-running effort to discredit and, ultimately, to dispose of Donald Trump - as well as what Hillary Clinton might call the 'deplorable' populist sentiment that brought Trump to power....

The indisputable fact about January 6 is that although five people died at or near the Capitol on that day or soon thereafter, none of these deaths was brought about by the protesters. The shot fired by Capitol Police Officer Michael Byrd that hit Ashli Babbitt in the neck and killed her was the only shot fired at the Capitol that day. No guns were recovered from the Capitol on January 6. Zero....

One melancholy lesson of the January 6 insurrection hoax: that America is fast mutating from a republic, in which individual liberty is paramount, into an oligarchy, in which conformity is increasingly demanded and enforced."

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10.7.21 - Texas is the Future of America -NYT

Gold last traded at $1,756 an ounce. Silver at $22.60 an ounce.

NEWS SUMMARY: Precious metals traded steady Thursday as investors digested economic data and a weaker dollar. U.S. stocks rose as Congress struck a deal to raise the debt limit in the short term and avoid a government default.

Poland Central Bank To Buy 100 Tons Of Gold In 2022 -Zero Hedge

"In a time when institutions are increasingly shifting away from fiat currency and looking toward cryptos, it is worth recalling that at least when it comes to central banks, there is no digital gold. There is just gold.

To be sure, in a time of unprecedented economic and social turmoil, central bankers' appetite for gold continues to grow, providing a bright spot for the traditional haven as investor interest ebbs.

According to the World Gold Council, global reserves expanded 333.2 tons in the first half of 2021, 39% higher than the five-year average for the period. Strong purchases by Thailand, Hungary and Brazil stood out, with WGC analyst Louise Street predicting that If central banks continue to buy at the levels seen recently, it will provide a supportive element for the market....

According to Poland's Gazeta Wroclawska, Governor Adam Glapinski - the head of the country's central bank, the National Bank of Poland - plans to increase gold reserves by 100 tons next year to strengthen country's financial stability.

In the interview, Glapinski said his plan may take effect when he will be re- elected as Governor as his current term ends in mid-2022.....Glapinski has been good for Poland's gold reserves: during his term, the amount of gold in reserves has more than doubled to 229 metric tons."

trillion coin Trillion-dollar platinum coin could be minted at the last minute -Axios

"A trillion-dollar platinum coin could be minted 'within hours of the Treasury Secretary's decision to do so,' Philip Diehl, former director of the United States Mint, tells Axios.

Why it matters: Congressional solutions to the debt-ceiling problem could take weeks to implement, especially if the reconciliation process is used - and time is running out. In case of emergency, a trillion-dollar coin could be deployed to bridge any gap between the money running out and the debt ceiling being raised.

How it works: The U.S. Mint, which Diehl ran from 1994 to 2000, already produces a one-ounce Platinum Eagle and has no shortage of platinum blanks already in stock.

Producing a trillion-dollar Eagle would require only the denomination to be changed. 'This could be quickly executed on the existing plaster mold of the Platinum Eagle,' says Diehl. Then an automated process would transfer the new design to a plastic resin mold.

Even if Janet Yellen, the Treasury secretary, has no intention of minting such a coin, there is no reason for her not to quietly instruct the Mint director to take those steps a day or two in advance.

At that point, a coin could be struck in minutes at the West Point mint. Even if it then needed to be physically deposited at the New York Fed, that's only a short helicopter ride away.

'Voila, we'd have bought ourselves the equivalent of a trillion-dollar increase in the debt limit, without any impact on inflation,' says Diehl."

Texas Is the Future of America -New York Times

"California is 'America on fast-forward,' it is often said. Liberals quote the maxim with pride, pointing to the state's diversity and its outsize share of economic output, technological innovation, venture capital and growth.

Conservatives put scare quotes around it, warning about the dystopia that awaits if America becomes any more like California, with its high taxes and housing costs, challenged schools, dwindling water supply, devastating wildfires and permanent Democratic majority.

But if you're really looking for a bellwether state that offers a glimpse into the country's economic future and engines of growth as well as its political fault lines in the long run, it's not California. It's Texas.

That's what the 2020 census tells us, along with the last 20 years of economic and demographic data. Many Americans are moving to cities; Texas is urbanizing even faster than California. And we hear a lot of talk about what will happen to our politics when the United States becomes a majority-minority country, but like California, Texas has already reached that demographic horizon....

Here is what you have to understand about Texas. First, it is growing. It added 4.2 million residents between 2000 and 2010, and another four million in the last decade for a growth rate of almost 40 percent - double that of the country as a whole....

For every new white resident that Texas welcomed over the past decade, there have been three Black residents, three Asians, three people with multiracial backgrounds and 11 Hispanics....

Six of the 10 fastest-growing suburban counties in the United States are in Texas. Fort Worth is America's fastest-growing city with at least 500,000 residents; Austin is in second place....

What's striking about Texas is the outsize role that the private sector, P3s (partnerships between governments and the private sector), developers and businesses of all sizes expect to play in policymaking....

They genuinely value the idea of 'limited government' and having a seat at the policymaking table. This is why we're seeing so many California companies moving to Texas, or at least expanding into it - in the past year, for example, Oracle, Tesla and HP....

The Texas model of public-private cooperation with its mutual focus on growth is potentially one that other states could follow...As goes Texas, so will the United States - for better or for worse."

Why I Just Sued Facebook -American Consequences

"I just sued Facebook. I didn't want to sue. I hate lawsuits. I tried for a year to reach someone at Facebook to fix things, but Facebook wouldn't.

Here's the problem: Facebook uses 'independent fact-checkers' to try to reduce fake news on their site. That's a noble goal.

Unfortunately, at least one Facebook 'fact-checker' is a climate-alarmist group that cleverly uses its Facebook connections to stop debate.

Facebook is a private company. It has every right to cut me off. But Facebook does not have the right to just lie about me, yet that's exactly what Facebook and its 'fact-checker' did. That's defamation, and it's just wrong....

The defamation started with the fact-checker, a group called Climate Feedback. They didn't like that my video reported facts suggesting that government mismanagement probably played a bigger role in causing California's wildfires than climate change.

Climate Feedback got Facebook to censor this as 'misleading' and link to a page that still declares the following quote misleading: 'Forest fires are caused by poor management. Not by climate change.'

As if that were something I said. But I didn't! I never said that. In fact, I said: 'Climate change has made things worse. California has warmed 3 degrees.'

I've worked at NBC, CBS, ABC and Fox. All would have fired me if I falsely attributed a quote!....I hope my lawsuit will make them think twice about doing it again - to me or to anyone else."

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10.6.21 - IRS Wants to Look at Your Bank Account

Gold last traded at $1,759 an ounce. Silver at $22.45 an ounce.

NEWS SUMMARY: Precious metal prices steadied Wednesday as rising bond yields boosted the dollar. U.S. stocks declined amid concerns over rising rates, higher inflation, the state of the reopening and the debt limit.

Deficits + Debasement + Decadence = Death of Dollar & Rising Gold -GoldSwitzerland

"In this compelling interview with Patrick Vierra...Matterhorn founder, Egon von Greyerz, bluntly addresses the blunt forces of policy absurdity and the cyclical adversity now facing debt-wild global markets and financial regimes, against which precious metals offer a timeless protection.

Egon opens by addressing the embarrassing and clear mismanagement of pandemic policy responses, citing his direct experience in the clearly superior hands-off approach of Sweden vs. the total confusion and mismanagement in places like the UK.

The increasingly discredited 'Big Brother' minority has taken away both the choices and voices of a once freer majority, as now evidenced in the direct censorship seen on media platforms like YouTube and Twitter. As statues fall and voices are deliberately muzzled, we see a tragic canceling of rights and history itself, which ironically points to a sad muzzling of history's lessons and thus a repeating of its errors.

As for such history repeating itself, the most obvious yet largely ignored and misunderstood example is history's cyclical warnings of what always happens to nations and markets completely over their skis in debt, which from ancient Rome to modern times means only one thing: The increasing expansion and hence debasement of sovereign currencies and the inevitable implosion of grossly bloated debt markets (i.e., a failure to service the same), which leads to a contagion implosion in nearly all asset classes. Except, of course, timeless currency insurers like increasingly scarce and soon rising gold and silver.

As for precious metal protection and pricing, Egon reminds that when measured against the broad money supply, these metals are as underpriced today as they were in 1971 (gold at $35) or 2,000 (gold near $300).

Sadly, however, most investors tend to buy high and sell low, waiting for rising gold price confirmation rather than obvious value windows (like now) to acquire precious metal assets. Of course, history will once again reward those who heed its warnings, despite a Big Brother 'new abnormal' attempting to muzzle the same."

bear vs bull Wall Street's wild party in jeopardy as Fed threatens aid cutoff -Politico

"Massive support from the Federal Reserve has sent U.S. stocks and bonds soaring and enriched investors ever since markets almost collapsed at the onset of the pandemic. Now, the party may be ending.

The central bank plans to begin yanking back its extraordinary assistance to the economy as early as next month, and many Fed officials are open to increasing interest rates next year - far earlier than expected - driven by fears that production and shipping delays will continue to stoke inflation.

Chair Jerome Powell has sounded increasingly pessimistic over the past week about those supply chain disruptions, a concern shared by central bankers around the globe.

The Fed's withdrawal comes at a particularly precarious moment for the economy. The trillions of dollars in relief passed by Congress over the past 18 months is rapidly wearing off.

Washington is on a knife's edge over a new wave of longer-term spending on infrastructure and social programs. And globally, major economies such as China are sending worrying signals - all while the world struggles to get through the resurgent coronavirus.

The central bank's pullback has sparked jitters in financial markets, with the benchmark S&P 500 stock index in September recording its worst month since March 2020....

'The training wheels are kind of off for the economy,' said Michael Feroli, chief U.S. economist at JPMorgan Chase, the country's biggest bank. 'If the party's going to go on, the Fed's got to let it go on.'

That's not likely to happen for much longer. Powell acknowledged at a conference on Wednesday that inflation pressures are likely to continue into next year, even as he expects them to eventually ease....

Powell has said the Fed expects to start slowing its bond purchases in November and is aiming to stop them entirely by the middle of next year, which could set up a rate increase in the second half of 2022."

The IRS Wants to Look at Your Bank Account -Wall Street Journal

"On your next trip to the ATM, imagine that Uncle Sam is looking over your shoulder. As if your annual tax filing wasn't invasive enough, the Biden Administration would like a look at your checking account.

Charles Rettig, commissioner of the Internal Revenue Service, wants banks to report annual cash flows for ordinary account holders. Treasury Secretary Janet Yellen is promoting the plan, and the House Ways and Means Committee is debating whether to include this mandate in the Democrats' $3.5 trillion spending bill.

Ms. Yellen says the reporting will help to catch wealthy tax dodgers. In a recent letter to the committee she said the plan would reveal 'opaque income streams that disproportionately accrue to the top.' Treasury and congressional Democrats hope taxpayers will report income more accurately if they know the feds have their account information.

Yet the IRS plans to review every account above a $600 balance, or with more than $600 of transactions in a year. So every American with a job could get looked over. A group of 41 industry groups recently warned congressional leaders that the plan "is not remotely targeted" to detect major tax avoidance.

It's also a privacy breach waiting to happen. Not long ago the confidential tax records of Jeff Bezos, Mike Bloomberg and other wealthy Americans were exposed by ProPublica. Whoever leaked or hacked those records committed a crime, but the IRS has revealed nothing from its promised investigation. Adding bank account info to the IRS trove would risk the disclosure of savings and spending information of political adversaries in the same way.

Twenty-three state treasurers and auditors signed a letter last month opposing the plan, calling it 'one of the largest infringements of data privacy in our nation's history.' Nebraska Treasurer John Murante says his state won't comply if the reporting rule takes effect."

Fed Prepares To Launch "Review" Of Central Bank Digital Currency That Could Render Cash, Privacy Obsolete -ZeroHedge

"For years now, and in response to similar projects at central banks in Europe and - more importantly - China with the PBOC, the Fed has been hemming and hawing about whether to take the possibility of creating a 'FedCoin' more seriously.

Senior officials have been pretty tetchy about carefully weighing the 'pros and cons' of a system that would, in theory, enable the Fed to deposit money directly into the 'digital wallets' of regular Americans, a power that could ultimately render the entire private banking system obsolete.

And so, as we wait for the Fed to take the next tenuous steps toward developing a CBDC, WSJ has offered yet another leak confirming that the Fed is finally ready to release its official 'report' on CBDCs, which will serve as the start of a long-promised 'review' of the pros and cons of CBDCs that's supposed to allow for public feedback. The report could drop 'as early as this week'.

Some more compassionate proponents of a FedCoin argue it could create a kind of 'parallel' system where the Fed would be able to directly and easily dispense FedCoins to the public (the ideal of 'helicopter money', finally achieved), without relying on banks or the IRS as intermediaries, which could make delivering this type of aid faster and cheaper....

It could also be the greatest weapon in the war to make cash obsolete."

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10.5.21 - The Biggest Fed Scandal

Gold last traded at $1,762 an ounce. Silver at $22.63 an ounce.

NEWS SUMMARY: Precious metal prices eased Tuesday on profit-taking and a firmer dollar. U.S. stocks rebounded following a technology-centered market rout in the previous session.

How To Invest In Gold -Forbes

"Throughout history, few investments have rivaled gold in popularity as a hedge against almost any kind of trouble, from inflation, to economic upheaval or currency fluctuations, to war....

When most people think about investing in gold, bullion is what they think of - big, shiny gold bars locked away in a vault.

Gold bullion comes in bars ranging from a few grams to 400 ounces, but it's most commonly available as one- and 10-ounce bars....

Due to gold bullion's high price, it's especially important to use a reputable dealer and to pay for delivery - with insurance - or to shell out for storage at a large vault or in a safe deposit box.

If you choose to invest in gold with bullion, it's also a good idea to stay up to date on the price of gold, so you can pick the right time to buy-most dealers update their prices based on current spot prices....

Collectible coins, such as South African Krugerrands, Canadian Maple Leafs and American Gold Eagles, are the most widely available type of gold coins....

Gold coin prices may not entirely align with their gold content, though. In-demand collectable coins frequently trade at a premium."

inflation The Biggest Federal Reserve Scandal -American Consequences

"Following revelations that Federal Reserve officials made trades in financial assets while the Fed was taking extraordinary efforts to 'stimulate' the economy, Federal Reserve Chairman Jerome Powell ordered a review of the Fed's ethics rules.

While these trades appear problematic, they pale in comparison to the biggest Fed scandal - the Fed's impoverishment of ordinary Americans, enrichment of the elites, and facilitation of government debt and deficits.

The depression induced by coronavirus, though really caused by so-called public health actions government took in response, was the official reason for the Fed's increased asset purchases last year.

However, the Fed actually started ramping up its money creating activities in September of 2019, when it began pouring billions a day into the repo markets, which banks use to make short-term loans to each other, in order to keep repo market interest rates low.

Coronavirus was just a convenient excuse for the Fed to do more of what it was already doing"¦ Now, the Fed is using the limited reopening as a scapegoat for rising prices.

Of course, anyone who understands Austrian economics understands that rising prices are a symptom, not a cause, of inflation. Inflation is the very act of money creation by the Fed....

Rising prices that diminish the average American's standard of living are not the only result of the Fed's manipulation of the money supply. The manipulation distorts economic signals, producing results including booms, bubbles, and busts.

Inflation has always benefited the well-connected elites who receive the Fed's newly created money before the new money causes widespread price increases....

Another major scandal involving the Fed is Congress' refusal to pass the Audit the Fed bill and let the American people know the truth about the Fed's operations....It is time to end the scandal of allowing a secretive central bank to have so much power over the economy and our liberty. It is time to audit, and end, the Fed."

Soaring Wealth Inequality Sets The Stage For Soaring Opportunity -Forbes

"Imagine if Jeff Bezos were a centibillionaire 150 years ago. Or even a billionaire. His life would have obviously been grand, but just as spending even a billion in today's world is no simple feat, it would have been near impossible in the 1870s. What would you have purchased with $1 billion, let alone over $200 billion?

There were no cars to buy, no air conditioners, no home movie theaters to build, and realistically very little entertainment to purchase overall. No doubt there were castles to purchase the world over, but to what purpose? Since airplanes were many decades away, a jet-setting lifestyle wasn't a realistic aspiration.

Since the provision of food occupied the days of most of the world, few had time to specialize outside of farming. To be clear here, most born in the 19th century knew what they would do when they grew up. Life was spent trying (often in vain) to produce enough food to survive.

Realistically the only intelligence that mattered in the 19th century was agricultural. Since work in many ways had a singular quality to it, intelligence outside farming wasn't of much consequence. It was a cruel world....

Taking it closer to the present, it's easy to make a case that Bezos's intelligence would have meant quite a bit less in 1970 versus now. Since technology was so primitive 50 years ago, there really would have been no way for Bezos to bring to life his remarkable vision for meeting the needs of people the world over: Bezos stands on the shoulders of rich, innovative, business giants of the past. And that's not an insult. It's just a statement of the obvious. And it's a very happy one. Progress begets progress.

It's something to think about amid all the relentlessly dour commentary about soaring inequality....

As production of luxuries and necessities soars thanks to the unequal growing rich through mass production, more and more of us are freed to showcase our unique intelligence in an increasingly specialized marketplace. Since survival and rising living standards are a given, we're freed to do what we do best.

Which calls for optimism. Commercial advances are set to redefine intelligence by freeing millions from the work of the past. Agricultural intelligence mattered in 1870, but doesn't much today when technological intelligence seems to be of greatest importance. Rest assured that lightly regarded (or unknown) skills will muscularly inform the commerce of tomorrow.

In short, the kinds of individuals set to eclipse the economic achievements of Bezos in 2070 and beyond are very likely not seen as intelligent today. The future is bright for all manner of people for whom the present is bleak. Thank inequality for this beautiful future."

Gradually, Then Suddenly -The Big Picture

"Incremental changes occur at a very deliberate pace.

Winter snow melts, the runoff water follows gravity downhill, it washes away soil, then clay, and eventually, cuts into the bedrock itself. Winter, Spring, snow, melt, year after year. Hardly visible over decades or even over centuries; after a few millennia, barely the smallest of changes are noticeable. But give it 5 million years, you end up with the Grand Canyon....

Big changes are obvious, easy to spot, unavoidable even. Fire, the wheel, the printing press, electricity. When massive change occurs, nearly everyone notices. But the intriguing changes are smaller, incremental, occurring without your awareness, beneath our collective notice.

This is how the world changes, slowly, a little bit at a time - but it adds up. In Ernest Hemingway's 'The Sun Also Rises,' a character is asked how he went bankrupt: 'Gradually, then suddenly.' Name me a better 3-word phrase that can explain nearly everything. The closest I can think of is Willam Goldman's 'Nobody knows anything.'....

Changes compound, just as surely as dollars do. A mathematical sleight of hand that also occurs at a near geologic pace. But miraculous all of these changes are. This is how the world changes.

'Gradually, then suddenly.' Perhaps that should be the mantra of investors."

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10.4.21 - "Bear Market has Begun" -Gartman

Gold last traded at $1,766 an ounce. Silver at $22.61 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on bargain-hunting and a weaker dollar. U.S. stocks took steep losses to start the week as investors continued their rotation out of technology stocks amid rising bond yields.

Gold's strategic role could shine as Chinese economic pressure intensifies -WGC

"China's economy is facing challenges. Recently, many industries in major provinces have been impacted by power rationing and enforced cuts in a drive to meet targets for reducing energy and emission intensity.1 And this could last for some time, placing further pressure on the supply side of the economy which is already showing signs of a slowdown.

Meanwhile, the demand side of China's economy is weakening. The y-o-y growth in China's retail sales fell to 2.5% in August, a sharp drop from previous months. Growth in real estate investment, sales and new constructions are also rapidly trending down. This could be due to a combination of the Delta variant's resurgence and tighter regulations in the property market.

This downward pressure on China's economy has two major implications. First, a weakening economy could potentially increase equity market risks - which was partially reflected by recent increase in equity market volatility. Gold, with its unique relationship with the Chinese stock market and the independence from China's economy, could be an effective tool for investors.

Second, amid supply restrictions, commodity prices might continue to soar, leading to further inflationary pressure at factory gates. Consequently, retail price indices of many categories such as home appliance and transportation rose significantly. But at the same time, demand remains weak.

This could signal a potential threat of stagflation. And our research shows that RMB gold tends to outperform other major RMB asset classes during stagflation-alike periods. This, we believe, could make gold a valuable addition to investors' portfolios."

the fed Fed's Favorite Inflation Signal Surges At Fastest Pace In 30 Years As Savings Slump -ZeroHedge

"Today's August print for personal income and spending was expected to show modest gains in both (with income growth slowing and spending growth increasing) and they were right with incomes growing 0.2% MoM (slightly worse than the 0.3% expected) and spending rising 0.8% (slightly better than the 0.7% MoM expected).

It appears the good days are behind us as stimmies run dry and Americans are once again left to rely on their earning power (or credit cards) to fund their excess spending.

Year-over-year wage growth slowed overall with Private wages up 11.0% Y/Y, down from 11.6%; and Government Wages up 6.6% Y/Y, down from 8.1%...

All of that means that the savings rate dipped to 9.4% (from a revised higher 10.1%)...

And all those personal savings from stimmies have gone (down to $1.7TN SAAR from a peak of $6.4TN in April 2020)...

Finally, we note that The Fed's favorite inflation indicator - Core PCE Deflator - rose 3.6% YoY (unchanged from July but hotter than the expected 3.5% YoY)...

Those are 30 year highs!! Get back to work Mr.Powell!"

Stock, Bond and Real Estate Prices Are All Uncomfortably High -DNyuz

"The prices of stocks, bonds and real estate, the three major asset classes in the United States, are all extremely high. In fact, the three have never been this overpriced simultaneously in modern history.

What we are experiencing isn't caused by any single objective factor. It may be best explained as a result of a confluence of popular narratives that have together led to higher prices. Whether these markets will continue to rise over the short run is impossible to say.

Clearly, this is a time for investors to be cautious. Beyond that, it is largely beyond our powers to predict. Consider this trifecta of high prices:

Stocks. Prices in the American market have been elevated for years, yet despite periodic interruptions, they have kept rising. A valuation measure that I helped create - the cyclically adjusted price earnings (CAPE) ratio - today is 37.1, the second highest it has been since my data begin in 1881....

Bonds. The 10-year Treasury yield has been on a downtrend for 40 years, hitting a low of 0.52 percent in August 2020. Because bond prices and yields move in opposite directions, that implies a record high for bond prices as well....

Real estate. The S&P/CoreLogic/Case-Shiller National Home Price Index, which I helped develop, rose 17.7 percent, after correcting for inflation, in the year that ended in July. That's the highest 12-month increase since these data begin in 1975. By this measure, real home prices nationally have gone up 71 percent since February 2012. ...

It would be prudent, under these circumstances, for investors to make sure their holdings are thoroughly diversified and to focus on less highly valued sectors within broad asset classes that are already highly priced."

Gartman: "The Bull Market Has Ended And The Bear Market Has Begun"¦In Earnest" -Zero Hedge

"With bulls panicking as visions of a big market drop - if not crash - suddenly dancing in their heads amid the confused babble of growing stagflation risks, an imminent start to tapering, Chinese property sector defaults, a global energy crisis and a looming debt ceiling showdown, an unexpected boost to their optimistic views has emerged courtesy of Dennis Gartman who in his latest Gartman Letter (now available only to 'close friends and family') writes that the bull market is over and the 'bear market has begun in earnest.'

We excerpt the key sections below:

'I begin this week by noting that the term 'transitory' has itself become transitory as Fed Chairman Powell stated clearly before Congress that inflation is now proving to be more serious and likely to remain extant far longer than he had previously thought and had promoted. Stocks and the bond market responded as they should: manifestly bearishly and that having been said I shall state for the record that the bull market in equities has ended and that the bear market has begun"¦in earnest.'

RECOMMENDATIONS: Regarding equities, we have been in"¦until quite recently"¦. what I've referred to in the past as a late-stage speculative overindulgence. This has not quite been a Bubble but it has been very close to one, predicated upon and indeed highly dependent upon a steadily expansionary federal reserve policy....

The Buffett Indicator compares the value of the Composite Market to our GDP. This indicator peaked at the top of the Dot.com Era at 150%; it is now approaching nose-bleed territory in late September of 225%! Stocks are expensive and are shockingly so."

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10.1.21 - Democrats Deny Basic Economics

Gold last traded at $1,757 an ounce. Silver at $22.52 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on bargain-hunting and a weaker dollar. U.S. stocks rose to start October after the S&P 500 notched its worst month since March 2020.

Gold rises, but still on shaky ground as Fed taper looms -Reuters

"Gold stabilized on Thursday after two days of losses, helped by a slight pullback in the dollar, but gains were kept in check by expectations that the U.S. Federal Reserve would soon start tapering its monetary support.

Gold is being offered some reprieve from the dollar taking a breather, said Han Tan, chief market analyst at Exinity.

But heightened prospects for the Fed's tapering, now widely expected to commence in November, and chances of Treasury yields continuing to gain are expected to heap more downward pressure on the zero-yielding precious metal, Tan added.

The dollar index paused on Thursday, but expectations that the Fed will start winding down its stimulus this year kept the U.S. currency near its highest in a year....

While factors including the U.S. debt ceiling impasse, rising global inflation and the Evergrande crisis should normally support gold, bullion remains under pressure from a strong dollar - an alternate 'safe-haven' - and rising yields, Ricardo Evangelista, senior analyst at ActivTrades said in a note."

bear vs bull 'YOLO' generation of investors is ready for anything, even a crash -Yahoo News

"Wall Street has been a booming place over the past year and a half even as the wider US economy has suffered - a trend that an entire generation of young investors has both noticed, and cashed in on.

Known as the YOLO generation - after the saying 'you only live once' - the good fortune these new entrants to stock trading have had is sometimes viewed with skepticism by older investors who have seen the market boom and bust in the past.

There's also the fact that young traders are some of the most eager proponents of soaring 'meme stocks' like GameStop and AMC.

Outsiders may dismiss investors under the age of 35 as dangerously optimistic, but they generally see themselves as better informed than their elders and ready for anything - even a crash.

Most are too young to have seen their portfolios sunk by the dot-com bubble's bursting in 2000, or perhaps even the 2008 financial crisis....

In June, a survey showed 72 percent of investors under the age of 34 felt confident in their portfolio decisions, according to E-Trade.

'For their entire adult life, the market has gone up,' marketing professor Scott Galloway said in a recent interview with The Wall Street Journal, adding that many seem to believe this will continue."

Stock Market's September Slump Exposes Messy Underside -Wall Street Journal

"Markets are closing out the quarter on a tumultuous note.

Stocks have pulled back from all-time highs. Shares of large, fast-growing companies are heading toward their worst month since the pandemic-fueled selloff of March 2020, and Treasury yields have shot up to their highest level since June.

It is hardly the sanguine end to the quarter that investors had hoped for. Many money managers say they are heading into the final few months of the year feeling on edge.

Central bankers who had thought this year's rise in inflation would wind up being a short-term phenomenon aren't sure how long transitory pressures will persist. Strategists who had predicted another strong quarter of economic growth are cutting estimates because of supply-chain bottlenecks and the highly contagious Delta variant of Covid-19.

Economic data have also been falling short of expectations. Citigroup's Economic Surprise Index, which tracks how much U.S. reports have been exceeding or undershooting estimates, fell this month to its lowest level since June 2020.

All told, the S&P 500 is still up 16% for the year and on course to notch a sixth straight quarter of gains...All but one of the S&P 500's 11 sectors are down for the month of September.

'Sometimes the narrative is clean and easy,' said Keith Lerner, co-chief investment officer of Truist Advisory Services. But now, 'I feel like you're having to find opportunities in a market where not everything is moving together anymore.'....

One of the most vexing issues for investors and analysts over the past few months has been how quickly the market has churned through winners and losers."

Democrats Are Denying Basic Economics -Reason

"The simplest way to understand economics is that it is a reckoning with unavoidable tradeoffs. If you spend money on something, you may obtain something in return - but you lose the ability to use those resources on something else. In the world of politics, economics helps us weigh the merits of those tradeoffs...To acknowledge this is merely to acknowledge reality.

Under President Joe Biden, however, Democrats in Washington have decided that they can simply wish those tradeoffs away by declaring that they do not exist. Over and over again, they have argued that their policies do not or should not have any costs whatsoever.

Just this week, for example, White House press secretary Jen Psaki responded to a question about the tax impact of the $3.5 trillion spending plan now working its way through Congress by declaring that 'there are some"¦who argue that in the past companies have passed on these costs to consumers"¦we feel that that's unfair and absurd and the American people would not stand for that.'

When taxes are raised on corporations - the 'companies' in Psaki's response - corporations often respond by passing that tax on to others. In some cases, they pass costs to consumers....

Empirical research has consistently shown that a large portion of corporate tax increases is actually paid by labor down the line. There are some reasonable academic debates about the precise percentage of the tax paid by labor, and how that might change under certain circumstances. But there is little real debate about whether or not some of the costs are passed on. The point is that it happens. Workers, not owners, pay at least some share of higher corporate taxes."

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9.30.21 - DC Swamp: Swampier Than Ever

Gold last traded at $1,755 an ounce. Silver at $22.15 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on bargain-hunting and a weaker dollar. U.S. stocks rose slightly as investors get set to close out a volatile and losing month for stocks.

The gold and silver bull market is not over -Kitco

"CPM discusses the economic and gold and silver fundamental factors that suggest that the weaker gold and silver prices since their peaks in early August 2020 do not represent the end of the bull market and the beginning of a cyclical bear market.

Instead, CPM concludes after reviewing real economic trends, inflation, interest rates, currency markets, equities, and the metals themselves, the current sideways movements in prices appear more likely to be consolidation phases.

Between a first leg upward from 2016 to 2020 for gold and from 2019 to 2020 for silver, and a second leg most likely to commence sometime after 2022"¦ just as CPM has been projecting since before 2010."

white house The DC swamp is back - and it's swampier than ever -The Hill

"As a presidential candidate, Donald Trump famously campaigned on 'draining the swamp.'...But with President Biden and Democrats pushing to hand out trillions of taxpayer dollars, pass dozens of new taxes and impose who knows how many new regulations, the swamp is back, baby....

The Democrats' agenda is making the swamp bigger than ever. As the old saying goes, you have to spend money to make money. Since Democrats want to hand out record amounts of cash, lots of companies and organizations are willing to spend big bucks to snag a slice of that multi-trillion-dollar pie.

According to a recent Washington Post story, a Center for Responsive Politics analysis of lobbying found that nearly 2,000 companies and organizations spent nearly $426 million lobbying Congress and the Biden administration - and that's just the first half of the year and primarily focused on the infrastructure bill. Even more money is flowing now as Democrats try to decide what to include in their $3.5 trillion reconciliation package....

What we're seeing is the essence of 'crony capitalism,' defined as 'an economic system in which individuals and businesses with political connections and influence are favored (as through tax breaks, grants and other forms of government assistance) in ways seen as suppressing open competition in a free market.'

Both Republicans and Democrats have practiced crony capitalism at times, even as everyone denounces it. But the Democrats' $3.5 trillion budget has raised crony capitalism to a new level.

The hypocrisy is that Democrats regularly decry the negative influence of big money in politics. But it's their efforts to grow big government that leads to big money being spent....

The solution to this problem is simple to understand, though difficult to implement: If you want to drain the swamp, first drain big government."

Warren Is Right, Powell Is Dangerous... So Is The Whole Fed -Rabobank/Zero Hedge

"In keeping with Bond themes, and it was also finally time for "˜No Time To Die', other bangs were heard in DC. Treasury Secretary Yellen emphasized the cash runs out on 18 October, the US government will shut down, and could default on its debts, which would be "catastrophic".

Of course, that can be avoided if the Democrats raise the debt ceiling, which they have the votes to do, even over a Republican filibuster, by using "˜reconciliation'. However, they don't want to: it takes weeks of painful committees at best. The debt ceiling could be linked to other bills - but the Democrats don't have the votes for them.

Progressives oppose the bipartisan $1.2trn infrastructure bill alone, including AOC...Moderates won't vote for the $3.5trn Build Back Better Bill. This is all boring and explosive in equal measure - probably like "˜No Time To Die'(?)

So was testimony from the Fed's Powell, who came closer to admitting he doesn't understand what is going on with global supply chains. That was underlined by him saying the logistical snarls behind the surge in inflation have actually worsened (No!); that this is all broader and more structural than earlier this year (Never!)... If you read supply-chain news, they think differently - and more so if US stimulus bills are eventually passed: Maersk says 'demand must ease' to resolve matters.

Other shooting saw a Senator suggest a bill to ban Fed stock trading --what about for members of Congress?-- and then Senator Warren oppose Powell's renomination for a second term as Fed Chair, calling him a 'dangerous man'...Indeed, the danger lies in bonds; and loans; and derivatives; and crypto; and QE - though it was specifically Powell's watering down of post-financial crisis bank regulations that triggered Warren to pull her trigger....

So, yes, Warren is right. Powell is dangerous. So is the whole Fed; and other central banks; and the whole of Congress; and our global neoliberal obsession with free-market economies of scale, near-term cost-saving, and de facto monopoly/oligopoly centralisation over fail-safes and resiliency; and people trading and hoarding digital farts like zhetons. They are ALL dangerous.

And things can get much more dangerous ahead for all of us if appropriate policy responses are not made - which are not the ones the market is endlessly talking about."

Democrats' Plan to Tax the Poor -Wall Street Journal

"Doubling the excise tax on cigarettes won't make a dent in millionaires' wallets.

You knew it was too good to be true. President Biden promised that Democrats could push through massive new spending programs without raising taxes on anyone making less than $400,000 a year.

But despite Democrats' best efforts to keep the tax increases a secret, the details are leaking out. Some tax hikes are going to hit Americans in the lowest socioeconomic categories.

One item likely to be included is a doubling of the federal excise tax on cigarettes, from $1 to $2 a pack. The purpose of such 'sin' taxes is to influence behavior by raising the cost and thus discouraging the purchase of cigarettes.

But this policy has diminishing returns. Most smokers who are willing and able to stop have already done so, thanks to a decadeslong public-education campaign and the easy availability of smoking-cessation options."

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9.29.21 - October Market Crash Ahead -Kiyosaki

Gold last traded at $1,723 an ounce. Silver at $21.52 an ounce.

NEWS SUMMARY: Precious metal prices eased back Wednesday amid rising bond rates and a firmer dollar. U.S. stocks rose as the rapid increase in the 10-year Treasury yield cooled, leading investors to buy some beaten-up tech stocks on the dip.

Robert Kiyosaki warns of 'giant' October market crash as he holds gold, silver, bitcoin -Kitco

"A massive market crash is coming in October, that's according to Robert Kiyosaki, the best-selling author of 'Rich Dad Poor Dad'.

Kiyosaki's warning of a potential U.S. stock market meltdown comes with some investment advice - hold on to your gold, silver and bitcoin positions and use cash to bargain hunt.

'Giant stock market crash coming October. Why? Treasury and Fed short of T-bills. Gold, silver, Bitcoin may crash too,' Kiyosaki tweeted Sunday. 'Cash best for picking up bargains after crash. Not selling gold silver Bitcoin, yet have lots of cash for life after stock market crash. Stocks dangerous. Careful.'

Kiyosaki also talked about the looming U.S. debt crisis and the dangers of a government shutdown if the debt ceiling is not raised this week.

'US Gov out of money. Shutdown looming. Dems blame Republicans for the problem. Evergrande Chinas biggest property developer with 800 projects in 200 cities out of money. Get the message? Get gold, silver, Bitcoin, ethereum before the biggest crash in history. Take care,' he said in another tweet."

corruption Two Fed Presidents Resign In Disgrace; Are Powell And Pelosi Next? -Zero Hedge

"No sooner did I ask this morning whether or not Dallas Fed President Robert Kaplan would be joining Boston Fed President Eric Rosengren in resigning, than Kaplan did exactly that.

Embroiled in the controversy surrounding what can only be described as frequent daytrading amongst Fed Presidents, Robert Kaplan announced after the bell today that he would also be resigning.

Remember, Kaplan was reported to be an 'active buyer and seller of stocks' in 2020, per the Wall Street Journal. He is also to reported to have purchased and sold lots worth more than millions of dollars in S&P futures....

And what would be a resignation in the face of total controversy without attesting to your innocence one last time. Kaplan wrote: 'During my tenure, I have adhered to all Federal Reserve ethical standards and policies. My securities investing activities and disclosures met Bank compliance rules and standards.'

Fed Chair Eric Rosengren also announced today that he would be taking an early retirement from his post as Boston Federal Reserve President, just days after major conflict of interest questions were raised about Rosengren's trading record during the pandemic.

Rosengren 'made frequent or substantial trades in 2020,' according to Reuters. Bloomberg expounded on Rosengren's trading, noting that he dealt in REITs, not trading in a blind trust, that hold mortgage backed securities....

Now, I think resignations of Jerome Powell and Nancy Pelosi could be forthcoming."

Evergrande Isn't China's "Lehman Moment." It Could Be Worse than That. -Mises

"The bankruptcy of the Chinese real estate company Evergrande is much more than a 'Chinese Lehman.' Lehman Brothers was much more diversified than Evergrande and better capitalized. In fact, the total assets of Evergrande that are on the brink of bankruptcy outnumber the entire subprime bubble of the United States.

The problem with Evergrande is that it is not an anecdote, but a symptom of a model based on leveraged growth and seeking to inflate GDP at any cost with ghost cities, unused infrastructure, and wild construction.

The indebtedness chain model of Evergrande is not uncommon in China. Many Chinese companies follow the 'running to stand still' strategy of piling on ever-increasing debt to compensate for poor cash flow generation and weak margins. Many promoters get into massive debt to build a promotion that either is not sold or is left with many unsold units, then efinance that debt by adding more credit for new projects using unsaleable or already leveraged assets as collateral.

The total liabilities of Evergrande account for more than double its official debt figure (more than 2 trillion yuan). Evergrande's financial hole is equivalent to almost a third of Russia's GDP. Its annual revenues do not reach $70 billion, and it is more than debatable whether those revenues are real, since a relevant part comes from payment commitments whose collection is doubtful. Even if they were real, these revenues are not enough to address the bond maturities, which exceed $250 billion in the short term.

Evergrande is much more dangerous than it seems:

All the 'Keynesian' solutions that you are hearing these days have already been implemented. Massive liquidity injections, low interest rates, full implicit and explicit support from the Chinese government "¦ Let's not forget that Evergrande was the largest issuer of commercial paper in China, $32 billion issued in 2020, a 390 percent increase from 2015, according to Reuters....

The implications of an Evergrande collapse are far greater than what investment banks tell us.

The first risk is a domino effect in a very aggressively indebted sector. There is also a significant impact on all those banks exposed to China and emerging markets, where China has financed ruinous projects in recent years. And there is also impact on global growth and countries that export to China, because the slowdown was already more than evident....

Even worse, the Evergrande collapse only shows a dangerous reality in several Chinese sectors: excessive indebtedness without real income or assets to support it.

This episode comes at the worst possible time, after the government has launched a massive crackdown on large companies. International investors are already concerned about corporate governance and intervention in China and now the fears of credit contagion make the risk even worse."

Liberty option beats government control -Washington Examiner

"Even though it is the second-largest item in the federal budget behind Social Security, Medicare underpays healthcare providers - which is why many are dropping out of the program.

Medicaid reimbursements are so low that many Medicaid 'beneficiaries' struggle to find doctors who accept Medicaid. This may be one reason why several studies show that Medicaid patients receive low-quality healthcare. Government-run healthcare's third strike is Obamacare, which has trapped many Americans in high-cost, low-quality health plans.

Despite the manifest failures of government-run healthcare and the clear danger posed by the almost $29 trillion (and growing) federal debt, Congress is planning to spend as much as $1.355 trillion, expanding all three healthcare programs, as part of the 'human' infrastructure bill....

Instead of further empowering government bureaucrats, Congress needs to empower patients by creating a liberty option.

The liberty option would give individuals control over healthcare by giving them control over the healthcare dollar. It would do this via tax deductions, tax credits, and expanded access to health savings accounts.

The liberty option would thus allow individuals to use their own money to pay for routine medical expenses. They could, if they choose, pair their HSA with a catastrophic insurance plan or use part of their deduction or credit to buy a catastrophic plan. This would restore the true meaning of insurance, which is something used for unexpected major expenses, to healthcare. Auto insurance doesn't cover routine maintenance or minor repairs, so why should health insurance pay for routine checkups or minor treatments? ....

The liberty option would restore consumers' incentives to shop for high-quality care at an affordable price. This would create a competitive market in which healthcare providers compete on the basis of price and quality....

The only way to avoid a crisis is for Congress to start rolling back the welfare-warfare state. A good place to start is restoring individuals' responsibly for their own healthcare by replacing the government option with the liberty option."

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9.28.21 - Debt Standoff Could Force Emergency Action

Gold last traded at $1,733 an ounce. Silver at $22.45 an ounce.

NEWS SUMMARY: Precious metal prices retreated Tuesday as rising bond yields boosted the dollar. U.S. stocks fell with tech names dragging down the Nasdaq and the broader markets, as Treasury yields traded near three-month highs.

Oil, Gold Lift-Off May Depend On Powell And Yellen -Investing

"A retreating dollar and US bond yields sent oil prices to new opening highs for the week, with gold tagging along for the ride amid easing concerns about the debt crisis at China's property giant Evergrande.

The broad lift-off in commodities may, however, still depend on what the Fed and Treasury say or don't say about stimulus taper plans, inflation and the US debt ceiling in the next 24 hours.

That's because Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen will head to Capitol Hill on Tuesday to give their periodic testimony to the Senate Banking Committee....

Powell's Senate testimony could, however, force the reexamination of these targets, depending on how pundits, who try to read the tea leaves on the central bank policy, interpret them.

'Maybe (we should) label it Taper Testimony Tuesday?' economist Eamonn Sheridan asked in a post on ForexLive.

As for Yellen, her headache remains getting a realistic read on whether Congress will agree to a new US debt ceiling deal before the Sept. 30 deadline that will shut down the US government and put the country on the path to a potentially devastating debt default."

debt future Debt-limit standoff could force fed to revisit emergency playbook -Fox Business

"A crisis-management playbook Federal Reserve officials created years ago could guide their response this fall if the federal government can't pay all its bills because of a political standoff over raising the federal debt limit.

The options include the Fed buying Treasury securities in default on the open market and selling Treasurys owned by the Fed to counteract potentially severe strains in financial markets, according to the transcript of an October 2013 conference call.

Among the officials who said those steps shouldn't be ruled out were Jerome Powell - the central bank's current chairman who was then a Fed governor - and Janet Yellen - the current Treasury secretary who was then Fed vice chairwoman.

Powell called some measures 'loathsome' and others called them 'repugnant' or 'beyond the pale' for two main reasons. First, they would pierce the Fed's institutional preference to avoid directly financing the government, often referred to as its independence from fiscal policy. Second, Fed officials worried if such contingency planning became public, elected officials might feel less urgency to raise the debt limit.

'These are decisions you really, really don't ever want to have to make,' Powell said on the call. 'The institutional risk would be huge. The economics of it are right, but you'd be stepping into this difficult political world and looking like you are making the problem go away.'....

Similar standoffs in the past have often been resolved after going down to the wire, and some analysts say that has bred complacency that obscures the growing risks of a misjudgment this fall. One worry this time is a game of chicken in which markets stay placid because they assume Congress will act, and lawmakers don't act because they see no alarm in markets. Top Republicans have said they won't help Democrats raise the limit this year....

Last week, the think tank's director of economic policy, Shai Akabas, released projections showing the 'X Date' would fall between Oct. 15 and Nov. 4."

The Curtain Always Drops on the Kabuki Play -American Consequences

"This is a bubble. If you know me well"¦ you know 'this' is referring to stocks, of course.

When investors still pour record amounts of money into any asset trading at the highest valuation it has ever reached, it's a bubble. And that's happening with stocks today"¦

So far this year, investors have poured more than $400 billion into exchange-traded funds (ETFs)"¦ And it's on track to exceed $500 billion by the end of the year. If that happens, it'll be about 67% higher than the previous record of roughly $300 billion in 2017....

U.S. stocks have never been more expensive than they are today. At this point, warning everybody about a bubble in stocks - or even worse, bonds - makes me feel like that boorish guy at the party who won't stop bloviating about how much he hates some politician"¦ You just can't shut him up.

But I can't stress this enough"¦ U.S. stocks are more expensive by any meaningful measure than at any other time in history. And instead of being scared of stocks"¦Everybody wants to buy them. Sorry about the boorish thing, but what the heck do you expect me to tell you?....The S&P 500 has roughly doubled off the COVID-19 panic bottom of March 23, 2020.

Doubled! In roughly 18 months! And instead of exercising caution"¦ investors have reacted to this incredible, record-setting rally by pouring record amounts of cash into stocks through ETFs.

One of the main reasons folks think they need an indicator besides the market itself is because they're under the delusion that they can predict the market's short-term direction. They can't.

Don't predict, prepare"¦ It's the only reliable way to manage your own money and grow your wealth over the long term....

Like the richly costumed Kabuki dancers, the Fed's activity - and announcements of its activity - does what it's designed to do"¦ It distracts and entertains us.

Real Kabuki is an entertaining distraction you sign up for when you buy a ticket to the show. But you don't sign up for quantitative easing and the accompanying noisy narrative of a Fed-manipulated market. It's more like a tax"¦ It's the part of the price you pay that is forced upon you when you choose to get involved in the financial markets."

How 2020's Coronavirus Pandemic Affected Spending in the U.S. -Political Calculations

"The arrival of the coronavirus pandemic in the United States in March 2020 and, perhaps more significantly, the lockdown measures that state and local governments imposed on Americans as their response had a major impact on how Americans spent money in 2020.

That much is evident from the results of the 2020 Consumer Expenditure Survey, which saw the average annual expenditures of American 'consumer units' drop by 2.7% from their 2019 level. 'Consumer units' is the affectionate nickname given by the BLS' data jocks to what are predominantly made up of U.S. households.

The major categories of spending that rose in 2020 include housing; life insurance, pension savings and Social Security; and finally charitable contributions. Every other category fell, with the largest declines in expenditures for transportation; food; and apparel and other products.

This outcome confirms the extended negative impact of the various lockdown measures imposed by state and local governments. What's important to recognize here is that they continued in much of the country well beyond the two month-long recession that arrived when large population states first mandated their residents stay at home and shuttered businesses in March 2020 during the first wave of coronavirus infections in the U.S....

The most significant item here is housing, which jumped to represent 35% of the average American consumer unit household's spending, an all-time high for the data series."

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9.27.21 - Gold Higher on Haven Appeal

Gold last traded at $1,750 an ounce. Silver at $22.65 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on safe-haven buying despite a firmer dollar. U.S. stocks traded mixed as traders braced for the final week of a volatile September and Treasury yields rose.

Gold prices settle higher, as Evergrande woes boost the metal's haven appeal -Marketwatch

"Gold futures settled higher on Friday, a day after posting their sharpest daily loss in a week, as investors continued to digest the Federal Reserve's monetary policy plans, as well as China' s crackdown on cryptocurrencies and developments tied to property giant Evergrande....

China on Friday reiterated its crackdown on cryptocurrencies, with the People's Bank of China stating that virtual currency doesn't have the same legal status as legal currency.

The gold price will break past $1,840 resistance 'if and when there is confirmation that China will eradicate cryptocurrencies,' Chintan Karnani, director of research at Insignia Consultants, told MarketWatch. There has to be more 'clarity' on a potential crypto ban from China.

'History suggests that crypto currencies have risen sharply after any major price crash (irrespective of news), so it is wait and see for cryptocurrencies,' said Karnani.

Gold also found support after China property giant Evergrande's woes extended beyond China, with U.S. Evergrande investors reportedly not yet having received interest payments, said Edward Moya, senior market analyst at Oanda.

'It looks like China won't save Evergrande but will try to contain any systemic risks, which should lead to some safe-haven flows for bullion,' he said in a market update."

gold ring A Global Fiat Currency: "One Ring to Rule Them All" -Mises

"Human history can be viewed from many angles. One of them is to see it as a struggle for power and domination, as a struggle for freedom and against oppression, as a struggle of good against evil.

That is how Karl Marx (1818-83) saw it, and Ludwig von Mises (1881-1973) judged similarly. But unlike Marx, Mises recognized that human history does not follow predetermined laws of societal development but ultimately depends on ideas that drive human action.

From Mises's point of view, human history can be understood as a battle of good ideas against bad ideas....

With Lord of the Rings, J. J. R. Tolkien (1892-1973) wrote a literary monument about the epic battle between good and evil. His fantasy novel, published in 1954, was a worldwide success...What is Lord of the Rings about? In the First Age, the deeply evil Sauron - the demon, the hideous horror, the necromancer - had rings of power made by the eleven forges....

The ring in Tolkien's Lord of the Rings is not just a piece of forged gold. It embodies Sauron's evil, corrupting everyone who lays hands or eyes on it, poisons their soul, and makes them willing helpers of evil. No one can wield the cruel power of the One Ring and use it for good; no human, no dwarf, no elf.

Can an equivalent for Tolkien's literary portrait of the evil ring be found in the here and now? ....

The One Ring of power stands for the particularly evil idea of creating a state of states, a world government, a world state; and the creation of a single world fiat currency controlled by the states would pave the way toward this outcome....

If we want to fight for the good in this world, we know what we have to do: we have to fight for property and freedom and against the darkness that the state (as we know it today) wishes to bring upon us, especially with its fiat money."

Goldilocks Is Dying -Project Syndicate

"Given today's high debt ratios, supply-side risks, and ultra-loose monetary and fiscal policies, the rosy scenario that is currently priced into financial markets may turn out to be a pipe dream. Over the medium term, a variety of persistent negative supply shocks could turn today's mild stagflation into a severe case.

The recovery in the first half of 2021 has given way recently to sharply slower growth and a surge of inflation well above the 2% target of central banks, owing to the effects of the Delta variant, supply bottlenecks in both goods and labor markets, and shortages of some commodities, intermediate inputs, final goods, and labor.

Bond yields have fallen in the last few months and the recent equity-market correction has been modest so far, perhaps reflecting hopes that the mild stagflation will prove temporary....

While most market analysts and policymakers have been pushing the Goldilocks scenario, my fear is that the overheating scenario is more salient.

Given today's loose monetary, fiscal, and credit policies, the fading of the Delta variant and its associated supply bottlenecks will overheat growth and will leave central banks stuck between a rock and a hard place. Faced with a debt trap and persistently above-target inflation, they will almost certainly wimp out and lag behind the curve, even as fiscal policies remain too loose.

But over the medium term, as a variety of persistent negative supply shocks hit the global economy, we may end up with far worse than mild stagflation or overheating: a full stagflation with much lower growth and higher inflation. The temptation to reduce the real value of large nominal fixed-rate debt ratios would lead central banks to accommodate inflation, rather than fight it and risk an economic and market crash.

Today's debt ratios (both private and public) are substantially higher than they were in the stagflationary 1970s. Public and private agents with too much debt and much lower income will face insolvency once inflation risk premia push real interest rates higher, setting the stage for the stagflationary debt crises that I have warned about.

The Panglossian scenario that is currently priced into financial markets may eventually turn out to be a pipe dream. Rather than fixating on Goldilocks, economic observers should remember Cassandra, whose warnings were ignored until it was too late."

The trillion dollar coin idea is back as a wacky way to prevent financial Armageddon -CNN

"If it's debt ceiling crisis season, then it's also time for the craziest solution to the problem: Getting President Joe Biden to issue a $1 trillion coin.

The idea, which has been around for about a decade, is that the president can issue a $1 trillion 'commemorative' coin, deposit it with the Federal Reserve, and allow the government to keep paying its bills.

A US government default on its debt would deal a body blow to the economy, resulting in widespread job losses, higher interest rates and economic pain that would last for years. Treasury Secretary Janet Yellen has predicted a 'widespread economic catastrophe' if the debt ceiling isn't raised, with millions of Americans suddenly strapped for cash.

America is in danger of that scenario if a deadlocked Congress won't raise the debt ceiling in time. The $1 trillion coin solution could effectively bypass Congress....

'There is only one viable option to deal with the debt limit: Congress needs to increase or suspend it, as it has done approximately 80 times, including three times during the last Administration,' White House spokesperson Mike Gwin told CNN. He said the idea of issuing the coin is 'not being considered.'....

As bad as a default would be, most experts oppose the use of the trillion dollar coin. They say that such an audacious way of avoiding default would shake the confidence in the dollar and US Treasury as much or more than an actual default.

'The trillion dollar coin is a badly flawed effort to workaround the debt limit that will make a bad situation even worse,' said Mark Zandi, chief economist for Moody's Analytics, who has warned that a default would be 'financial Armageddon.'"

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9.24.21 - Gold Firms as Dollar Loses Ground

Gold last traded at $1,746 an ounce. Silver at $22.37 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on bargain-hunting despite a firmer dollar. U.S. stocks traded lower amid rising volatility as a move by China to ban cryptocurrencies weighed on the technology sector.

Gold firms as dollar loses ground post Fed verdict -Reuters

"Gold firmed on Thursday as the dollar gave up some gains that were driven by the U.S. central bank signalling faster-than-expected interest rate hikes, but receding fears over the Evergrande crisis limited interest for safe-haven bullion....

The dollar retreated from a one-month high as investors processed the outcome of this week's Federal Reserve meeting and subsequent statement by Fed chair Jerome Powell that a tapering of stimulus here measures was not far away.

Gold has stabilized as Powell didn't give any firm dates for the beginning of tapering or raising interest rates, cancelling the dollar's gains, said Ricardo Evangelista, senior analyst at ActivTrades.

But 'until something more concrete happens in terms of direction for the dollar, gold will be impacted more by the level of risk appetite or risk aversion,' he added. A weaker dollar bolsters gold's appeal for those holding other currencies."

welcome The Disaster at Our Southern Border -Imprimis

"In just a few short months, the Biden administration has created a disaster on the southern border of the United States. It did so by methodically - and by all indications intentionally - undoing every meaningful border security measure that had been in place.

As a result, we have had five straight months of over 170,000 illegal immigrants apprehended at the border. The number in June was the highest in over 20 years. And Immigration and Customs Enforcement (ICE) has been effectively shut down.

Our national discussion of border security is generally misleading, and it is designed to be misleading by those who favor open borders. They frame the issue as if the American people face a binary choice: either let all immigrants in because they are 'looking for a better life' or close our borders completely and inhumanely.

But this is a false choice. The unspoken alternative is to enforce the law, taking in immigrants who enter the U.S. legally while securing our borders against those who attempt to enter illegally - particularly those meaning to do us harm.

Illegal immigration is, of course, nothing new. It has been a problem in our country for many decades. What is relatively new is the total lack of concern we see in the Biden administration, especially in terms of the national security aspect of border control....

It is simply common sense to view border security as national security. If you make this point today, you risk being called a racist or worse. But it needs to be said over and over until we fight our way back to the point where we have a bipartisan consensus that immigration laws should be enforced.

This is not going to be easy. Even as the acting commissioner of Customs and Border Protection, I had my official government Twitter account blocked prior to the 2020 election for posting a photograph of the border wall and explaining that it is an integral part of effective border security. The powers-that-be eventually reversed this decision, but it is an indication of what the American people - who overwhelmingly support border security - are up against.

What we need is widespread active public involvement. Illegal immigration, border security, the erosion of the rule of law, and the loss of our nation's sovereignty are interconnected, and should be debated as important issues in local and state politics as well as national.

When I was the chief of U.S. Border Patrol in the Obama administration, Secretary of Homeland Security Jeh Johnson told us that 1,000 illegal immigrants a day is a bad day. Today that number is approaching 7,000, and nothing is being done about it. This can't be allowed to continue. A country that cannot control its borders is not a country, and I'm sad to say that we are facing that eventuality."

The Treacherous Road to Runaway Inflation -American Spectator

"The fourth president of the 21st century, Joe Biden, arrived with the worst economic ideas and they are systemically crippling our economy. He demanded more trillion-dollar spending, but that is not enough. He now wants $5 trillion in new spending paid for with new taxes....

Think of what is happening. Congress is going to tax every producer, reduce investment, and make small business very difficult so that the worst money managers on the planet (Congress) can go on a spending spree and reward the large, connected corporations and create an ever larger welfare state, which also seriously undermines America's ability to produce and has created trillion-dollar deficits, which undermine the dollar, the world's reserve currency.

Every working person and producer is stressed because of the government's polices favoring those who stay home, including 80 percent of unionized federal workers who are teleworking at taxpayer expense and cannot be rated or fired....

The stock market is taking notice. Many stocks are wildly overpriced by investors, on margin (borrowed money), and many will lose billions of dollars as the market corrects. These investors are encouraged by scam artists with no SEC discipline. Why does the SEC even exist?

Government works in slow time, while markets work in fast time. These corrections would have already occurred, except for endless government spending and a Fed that literally props up the market.

Every American with common sense knows inflation is a serious problem but not Joe Biden or Fed chairman Jerome Powell. They named inflation transitory, which is fundamentally dishonest and a lie....

The only cure is to stop spending and taxing and allow Americans to be free to produce. Joe Biden needs to do nothing but end his destructive executive orders and disastrous economic policies."

California Is Clueless About Homelessness -Reason

"'More money, more problems' might as well be the slogan for how San Francisco and Los Angeles approach homelessness.

Voters in both cities recently approved billions of dollars in new spending for supportive housing and services for homeless residents. Although the intentions are good and the resources are there, projects in both cities have suffered from major delays and cost overruns. Meanwhile, their homeless populations continue to grow.

San Francisco's 'safe sleeping' open-air tent encampments were supposed to get homeless people out of crowded, dangerous indoor shelters while still providing them with meals, showers, security, and social services. The funding for these sites came from Proposition C, a 2018 ballot initiative that imposed the largest tax increase in San Francisco's history, raising $300 million for homelessness services....

In contrast with Proposition C, Proposition HHH, which Los Angeles voters approved in 2016, had the enthusiastic backing of Mayor Eric Garcetti, who saw it as the cornerstone of his plan to turn back a rising tide of homelessness.

The $1.2 billion bond initiative included a much clearer spending plan and required that the city controller release an annual audit of its progress. It was supposed to build 10,000 new units of affordable and supportive housing over 10 years.

The city controller's reports have shown that Los Angeles can spend homelessness dollars about as effectively as San Francisco. Five years after Proposition HHH's passage, the city had managed to build only about 700 of the 10,000 promised units. In a recent ruling, U.S. District Court Judge David Carter said the city's 'inaction' on homelessness likely violates the 14th Amendment's Equal Protection Clause.

Both cities struggle with restrictive land use regulations that raise the costs and completion times of housing projects. Those rules have blocked private development and pushed rent prices up. The same red tape is now tripping up city officials who are trying to build shelter for the homeless."

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9.23.21 -Easier to Print Money Than Make Refrigerators

Gold last traded at $1,750 an ounce. Silver at $22.63 an ounce.

NEWS SUMMARY: Precious metal prices eased back Thursday on profit-taking despite a weaker dollar. U.S. stocks rose for a second day as fears around a crisis in China's property market eased and the Fed kept current monetary stimulus in place.

Time to say goodbye to the everything bubble -Gold Switzerland

"Will the autumn of 2021 be the end of the everything bubble? Are investment markets very soon coming to the end of market insanity....

In a world where everything is based on 'get rich quick' neither value investing nor wealth preservation enters the equation. Why worry about preserving your wealth when you could have made 14x your money on the Nasdaq since 2009 or 5,000x your investment on Bitcoin since 2011.

Calling tops is a mug's game. Some of us who look at risk have been worried about the everything bubble economy for quite a while. To us, since the end of the Great Financial Crisis in 2009, the world economy and asset markets have been an illusion....

We are now in a very critical period for the world since excesses of the magnitude we are now seeing must be corrected. Exponential moves in one direction are always corrected. And the corrections will be of a similar magnitude to the rise but happen much quicker. We are talking about falls of 90% or more in all major asset and debt markets....

So what is a Sleeping Beauty investment. Not difficult to guess. It is an investment that you can forget about for 100 years and when you wake up, it will have maintained its purchasing power....There is one investment which you could safely put away and forget about for 100 years. It is of course physical gold, safely stored.

As long as you store gold in a safe place and safe country, you know that it will maintain its REAL value as it has for 5,000 years. Yes, there are fluctuations, but gold's history tells us that it is not just the only money which has survived but also the only money which has maintained real purchasing power.

Gold today at $1,750 is as UNLOVED AND UNDERVALUED as in 1971 at $35 and in 2000 at $288....I have no doubt that gold will soon rectify the current undervaluation and reach levels that few can imagine. This is what both technicals and fundamentals are clearly indicating."

money It's Easier to "Print" Money Than to Make Refrigerators -Rogue Economics

"What we are wondering today is what's ahead for the U.S. economy - inflation or deflation? Maybe the Evergrande story will give us a clue.

To fully understand the Evergrande story, you almost have to understand the whole story"¦and how the switch created a boom in China"¦ and a bust in U.S. manufacturing (it's easier to 'print' money than to make refrigerators).

In an honest economy, pre-1971, the U.S. had to repatriate its dollars by offering equivalent quantities of goods and services to the Chinese"¦or risk having to settle up in gold.

But with the new system"¦ it could just print up more dollars"¦ which the Chinese, bless their hearts, used to buy U.S. bonds"¦

All this money created a boom in China"¦ which quickly got out its cement trucks...We saw the construction boom on our trip to China in 2014 - a breathtaking display of human industry and material progress....

Never in history had so much money been borrowed to make it happen. From $1.7 trillion of total debt in 2000, China now owes nearly $50 trillion. Its debt-to-GDP ratio now stands at 335%....

Property developer Evergrande saw the demand coming, and borrowed heavily to meet it...And now, it owes some $300 billion"¦ with no way to pay it....

And so we wonder: What other Evergrandes are waiting to be discovered? What other excesses are waiting to be reckoned with?....

There's a big difference between the debt bubble in the U.S. and the debt bubble in China. Evergrande built houses. And malls. And commercial buildings. And now that the supply for these things is greater than the demand, prices will fall....

What has the U.S. produced in abundance? Speculative investments! Techs. Cryptos. Meme stocks. Stonks. NFTs. High-yield bonds with negative real yields....And there is the bubble that is about to burst."

If You Looked Askance at a Rising China, A Declining One Will Terrify You -Real Clear Markets

"American brands are aspirational...American fast food outlets are where individuals in African countries go to celebrate special occasions. Yes, KFC is a luxury concept in some nations.

In China, a walk or ride through its crowded cities is defined by endless sightings of American fast food brands: McDonald's, Burger King, Carl's Jr., Dairy Queen, KFC, and so many others. Americana captivates the Chinese people in much the same way it excites people from other parts of the world.

It's something to think about as China's president Xi Jinping makes increasingly worrisome comments about capitalism in the rising country. According to a front-page Wall Street Journal report from yesterday, Xi 'is trying to roll back China's decadeslong evolution toward Western-style capitalism and put the country on a different path entirely.'

The report went on to say that while Xi 'isn't planning to eradicate market forces,' he 'is trying forcefully to get China back to the vision of Mao Zedong, who saw capitalism as a transitory phase on the road to socialism.'....

If Xi truly wants to achieve Mao's vision, then China will assuredly no longer be an economic player on the world stage. It will implode. John Lennon famously sang about the people starving in China, 'so finish what you got,' which is just a way of saying that Maoist China was tragic. Let's hope once again that Xi doesn't really want to blast a rising country back to its brutal, depressed past....

U.S. equities are priced to reflect a China set to grow and grow. Assuming a retreat, get ready for the mother of all market corrections....If a rising China has you up in arms and worried, start thinking bigger picture. Indeed, if a growing China terrifies you or angers you, just wait for a Chinese collapse. Only then will you really know terror and anger."

Biden seeks to quell Democratic party infighting with $4T economic agenda in limbo -Fox Business

"President Biden is slated to hold a series of meetings on Wednesday with Democratic lawmakers, including party leaders, as he attempts to head off an intraparty war between moderates and progressives that could derail his $4 trillion economic agenda.

Biden is expected to meet with House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer, as well as a broad range of Democrats from across the ideological spectrum, according to a person familiar with the matter.

The burst of meetings comes as Democrats jockey for control in a narrowly divided Congress, a battle that could ultimately derail both parts of Biden's agenda: The $1 trillion bipartisan infrastructure bill and a second, multitrillion-dollar package that Democrats plan to pass along party lines via budget reconciliation....

At the heart of the division is a fight for leverage over the size and scope of the reconciliation bill: Progressives say that $3.5 trillion is the bare minimum needed to vastly expand the social safety net and combat climate change.

Centrists, however, are wary of another multitrillion-dollar bill - funded by a slew of new taxes on wealthy Americans and corporations, no less - after the coronavirus pandemic pushed the U.S. deficit to a record high.

With their incredibly slim congressional majorities, Democrats face a delicate balancing act in pursuing their so-called 'two-track' agenda - approving both a bipartisan deal and a larger tax and spending bill - or they risk losing the support of either moderate or progressive members....

Moderate Democrats are also vowing to rebel if the left manages to upend the infrastructure bill that Biden has touted as a major bipartisan accomplishment. Democrats are still crafting the bigger spending bill as they haggle over the specifics of what to include and how to pay for it."

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9.22.21 - Will Beijing Have To Bail Out Evergrande?

Gold last traded at $1,783 an ounce. Silver at $22.71 an ounce.

NEWS SUMMARY: Precious metal prices inched higher on safe-haven buying ahead of the Fed statement. U.S. stocks attempted to snap out of their September slump.

Gold rises as Evergrande fears persist, market on standby for Fed -CNBC

"Gold gained on Tuesday as unease over China's Evergrande insolvency spurred safe-haven buying, ahead of a Federal Reserve meeting that could provide clues on the central bank's timeline for cutting its stimulus to the U.S. economy.

Safe-haven asset gold has gained on 'recent concerns about global economic growth, or more specifically, a Chinese economic slowdown,' which are enough to outweigh a recovery in equities, said David Meger, director of metals trading at High Ridge Futures....

Positive influences from a slip in the U.S. dollar and gains in crude prices were also lifting bullion, Wyckoff said.

The Federal Open Market Committee will release a policy statement and new economic projections at the end of its meeting on Wednesday. Some analysts believe it could announce the start of the tapering of its asset purchases in the fourth quarter."

too big How Evergrande Became Too Big To Fail And Why Beijing Will Have To Bail It Out -ZeroHedge

"While the world is obsessing with the fate of Evergrande, and more importantly when, or if, Beijing will bail it out, another just as interesting question is how did the company many call 'China's Lehman' get to the point of no return and become a global systematic risk...Beijing will have to, even if it is kicking and screaming, bail out Evergrande which, at its core, is just one giant shadow-banking black box whose time has finally run out.

For the past two months, hundreds of people have been gathering at the 43-floor Zhuoyue Houhai Center in Shenzhen, where China Evergrande Group's headquarters occupy 20 floors. They held banners demanding repayment of overdue loans and financial products. Police with riot shields had to be on site to keep things under control.

The demonstrators are construction workers at the property developer's housing projects, suppliers providing construction materials and investors in the company's wealth management products (WMPs). From paint suppliers to decoration and construction companies, Evergrande owes more than 800 billion yuan ($124 billion) due within one year, while it has only a 10th of that amount of cash on hand.

As of the end of June, Evergrande had nearly 2 trillion yuan ($309 billion) of debts on its books, plus an unknown amount of off-books debt. The property giant is on the verge of a dramatic debt restructuring or even bankruptcy, many institutions believe.

A bankruptcy would amount to a financial tsunami, or as some analysts put it, 'China's Lehman Brothers.' The venerable American investment bank's 2008 collapse helped trigger a global financial crisis.

Certainly Evergrande, one of China's three biggest developers, has a giant footprint in China.

Its liabilities are equivalent to about 2% of China's GDP. It has more than 200,000 employees, who themselves and many of their families have invested billions of yuan in the company's WMPs....

More than 500 of Evergrande's 800-plus projects across the country are now halted. The company has at least several hundred thousand units that have been presold and not delivered. It needs at least 100 billion yuan to complete construction and deliver the units, Caixin learned."

Time For A Taper Tantrum? -Alhambra Investments

"The Fed meets this week and is widely expected to say that it is talking about maybe reducing bond purchases sometime later this year or maybe next year or at least, someday. Jerome Powell will hold a press conference at which he'll tell us that markets have nothing to worry about because even if they taper QE, interest rates aren't going up for a long, long time.

That statement might have more credibility if the Fed had been right about just about anything over the last decade. But they haven't, and we are left to wonder how exactly Jerome Powell will be wrong this time.

Will the economy slow so quickly that he can't even credibly start tapering? Or will the economy re-accelerate to such a degree that he has no choice but to stomp on the brakes? I'm not sure but I think there are reasons to lean towards the latter over the next few months.

We are about to run a real-world economic experiment in the US labor market. Expanded unemployment benefits have now expired and we are about to find out what impact that has on the jobs market. Certainly, there are plenty of jobs available if the JOLTS report is anywhere close to accurate. You don't need a BLS report to confirm that; just talk to any business owner or see all the help wanted signs as you drive around your city.

The question is whether there really were a lot of people on the dole who would otherwise have taken those jobs. My guess is yes, but we'll find out for sure over the next few months....

Regardless of what happens with the economy and bonds over the rest of the year, I do think we are nearing peak exuberance in stocks. The rotation out of cash and into stocks - and bonds for that matter - is at least a little alarming. Inflows to global stocks this year are over $1 trillion and more than the last twenty years combined.

What worries me about that is that fund flows are not predictive. Inflows tend to happen after stocks go up and outflows accelerate after they've gone down. Notice that the absence of inflows over the last twenty years didn't prevent stocks from getting to all-time highs. I can't help but wonder if the massive size of the recent inflows will be proportional to the selloff that seems likely to follow....

We've reduced our risk exposure over the last few months because falling growth/rising dollar is our most difficult investing environment. It was also because stock markets are as overbought as I've ever seen in 30+ years of investing and momentum appears to be peaking.

I fully expect stock averages to fall back to their long-term trend. It may be coincidence but a pullback to the long-term trend would correspond to just about a 20% correction and fit neatly into our narrative of correction but not bear market. Yeah, maybe too neatly."

Is the Treasury Bond Market About to Wake Up? -Charles Schwab

"The bond market went into hibernation over the summer, with yields holding steady despite surging inflation, a looming battle over the federal debt ceiling, and the prospect that the Federal Reserve will begin reducing the size of its monthly bond purchases later this year. We see the potential for the market to awaken this fall, with yields moving up.

Currently, 10-year Treasury yields - which move inversely to prices - are sitting below 1.5%. It appears that investors are pricing in a return to lackluster growth and low inflation. We believe the market is too complacent and investors should be prepared for higher yields.

Federal Reserve Chair Jerome Powell and other members of the monetary-policy-setting Federal Open Market Committee (FOMC) have clearly indicated over the past few months that they plan to begin reducing the size of the Fed's bond purchases later this year.

The economy has recovered the output lost during the COVID-19 downturn, and inflation is well above the Fed's 2% target level. Job growth hasn't fully recovered, but enough steady progress is being made that the Fed is likely to pull back on some of the extraordinary stimulus measures it took in 2020. Consensus expectations are for the Fed to announce a plan to taper at the November meeting and begin the process soon afterward....

We see a greater likelihood that yields will rise because the economic growth and inflation will remain higher than expected.

Financial conditions, a measure of just how easy monetary policy is, are as loose as they have been in decades. This indicator bodes well for economic growth but could lead to excessive risk-taking and overheating. If the Fed tolerates too much inflation for too long, it could push yields higher....

In our view, the market may be too complacent about these risks over the next year. Ten-year Treasury yields below 1.5% don't provide much room for potential upside surprises in the economy or inflation. We anticipate a move up to the 1.75% to 2.0% level over the next six to 12 months."

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9.21.21 - Stock Market Volatility Suddenly Soars

Gold last traded at $1,774 an ounce. Silver at $22.49 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on safe-haven buying, rising volatility and a flat dollar. U.S. stocks failed to rebound in a volatile trading session following the S&P 500"²s worst day since May.

Industrial use of silver could increase in the next 5 years -Mark Cruise/Kitco

"The industrial use of silver will likely increase in the next five years, especially as we move toward a low carbon economy, said Dr. Mark Cruise, CEO of New Pacific Metals.

'Silver has got its usual store of value against inflation, and we certainly see a lot of global headwinds and inflationary pressures for gold and silver,' Cruise told David Lin, anchor and producer of Kitco News at the Denver Gold Forum.

'But what makes silver unique is its industrial end use as well. It's a critical commodity in basically moving to a low carbon economy, in particular solar and wind power.'

Cruise described the many uses of silver in the modern world. 'Silver has two main uses. Silver has very high conductivity, it is great for soldering electronics, and is used in solar power and wind generation.'

'Something people don't realize is that is has very strong antibacterial properties,' Cruise added. 'Silver is also impregnated in sports gear. And we see an increased use of silver in the medical field and in water filters. It's a bit of a unique metal, a store of wealth.'"

volatility Stock market volatility soars with VIX up 25%; Treasury yields slump (VIX) -Seeking Alpha

"Stocks are seeing volatile moves as investors pile out of risk and put cash to work in bonds.

The S&P VIX Index, often referred to as the fear gauge, is surging with the major averages tumbling on concerns about high commodity prices and contagion from China's Evergrande.

The gain of more than five points on the VIX would be the fourth-largest rise on record, according to Bespoke Investment Group. It was last this high during a spike in May.

'Prior pullbacks in February, March, and June also included brief periods of the index closing below the 50-day MA,' Craig W. Johnson, technical strategist at Piper Sandler, writes today.

'This week will be a key test for the buy the dip crowd as a failure to defend this area of support would suggest the broader market is at risk for a deeper pullback.'

'Momentum indicators have turned bearish amid the selling pressure. MACD remains in a sell position, while RSI has faded below the midline.'....Along with U.S. stocks, Evergrande is also taking its toll on the crypto space."

Stagflation rocked the economy before. Is it coming back? -CNN

"Mention the word 'stagflation' to someone who followed the economy in the 1970s, and you can expect a strong reaction.

The phenomenon - which describes a period of high inflation and stagnant economic growth - was a nightmare for policymakers, leaving them with few options to rein in runaway prices without damaging the economy. Federal Reserve Chair Paul Volcker was ultimately forced to jack up interest rates to unprecedented levels to get inflation under control.

Now for the bad news: Decades later, talk of stagflation is back.

'One can make a case that 'mild' stagflation is already underway,' the economist Nouriel Roubini wrote in a recent column. 'Inflation is rising in the United States and many advanced economies, and growth is slowing sharply, despite massive monetary, credit, and fiscal stimulus.'....

Economists closely watch inflation expectations because they could encourage workers to demand higher wages. If consumers are paid more, their purchasing power grows, and businesses may hike prices again - starting the entire cycle anew.

In a recent note to clients, Bank of America strategists Ohsung Kwon and Savita Subramanian also flagged concerns about energy prices. The 1973 oil crisis is widely seen as having exacerbated inflation problems.

'Stagflation has often been accompanied by oil shocks, and with crude prices recently jumping on supply chain disruptions, the risk of oil shocks has increased,' Kwon and Subramanian said."

Stop Vandalizing Reason: End The Worldwide Travel Bans -Forbes

"With a virus spreading, politicians and dictators the world over have literally ascribed to themselves the power to imprison their subjects in the countries they lead; that, or they've arrogated to themselves the power to limit the arrival of others into their respective countries. Their departure too.

Many countries have economies reliant on tourism, but it seems the businesses created to serve the tourists weren't asked their opinions about this overreach. It's worth adding that investment is the driver of all economic progress, but with travel limited, how many interesting concepts have been suffocated by a lack of exposure to the financiers whose allocations would, in normal times, propel them to greater heights.

The signs have seemingly come down for the most part, but growing up it wasn't uncommon to enter businesses with signs saying 'No Shirts, No Shoes, No Service.' Yes, the right to choose whom to associate with, and whom to serve was long so basic. Sadly, the right to freely associate has been erased, only for government to enter a needlessly created vacuum.

This has been particularly evident during the lockdowns. Since they began, politicians have arrogated to themselves decision making power over the businesses we could patronize, how we could patronize them (limits on entry, limits on customers once inside), and perhaps worst of all, power to shutter businesses altogether. This is what you get when political correctness erases free association in favor of government force....

Freedom is never foolhardy, but the taking of it always is. Always.

A virus is spreading, so let's limit the marketplace's (humanity) production of knowledge; production that would unearth how a virus spreads, what behavior is most associated with sickness, but also the behavior most associated with healthy outcomes. Instead, politicians chose to blind us.

Freedom also applies to travel. About it, think back to 'No Shoes, No Shirt, No Service.' Couldn't airlines have made provisions for letting on, or not letting on the sick?"

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9.20.21 - Why Gold Prices Could Double

Gold last traded at $1,761 an ounce. Silver at $22.18 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on bargain-hunting despite a firmer dollar. U.S. stocks began the week deeply in the red as investors continued to move to the sidelines in September amid several emerging risks for the market.

Gold price: Here's why the yellow metal could double and the best ways to buy it -Yahoo Finance

"For thousands of years, the most popular investment was gold: the prettiest metal you could bend, re-form, bury and reuse endlessly.

And even though investors have many more options nowadays, gold still has its champions.

One hedge fund manager, who predicted the metal's rise to an all-time high of $2,000 per ounce last summer, is confident the price could climb to $3,000 to $5,000 an ounce in the next three to five years.

With the yellow metal sitting near $1,750 after a more than $40 drop on Thursday ⁠- its biggest fall in six weeks - now might be an opportune time to follow his lead.

Diego Parrilla, manager of the defensive and gold-heavy Quadriga Igneo fund, is undaunted by the metal's tumble...'I think the drivers for gold strength not only remain but actually have been strengthened,' he told Bloomberg News last month....

'Central bank money printing isn't really solving problems, it's delaying the problem,' Parrilla says. 'Gold will benefit purely from being a physical asset that you cannot print.'

If Parrilla's argument is making sense, or you've got your own reasons for investing in gold, you have a few options available to you.

The most straightforward way to put your money in gold is to buy and store gold bars, coins or jewelry.

If gold forms part of your retirement plan, you can actually buy it through a gold Individual Retirement Account (IRA)."

inflation Losing the inflation anchor -Brookings Institute

"Monetary policymakers trying to judge whether elevated inflation this year will persist should - heeding past lessons from the United States and abroad - carefully track inflation expectations, suggests a paper discussed at the Brookings Papers on Economic Activity (BPEA) conference on September 9.

The author - Ricardo Reis of the London School of Economics - examined the expectations of consumers, professional forecasters, and markets for inflation in the United States during the late 1960s and early 1970s (when inflation started climbing), during the early 1980s (when inflation stabilized), and during the COVID-19 pandemic. He also looked at episodes in Brazil and South Africa between 2010 and 2016, and in Turkey after 2017.

'If expectations of inflation rise, households will buy more goods today, savers will shift away from nominal assets [such as bonds], workers will demand higher wages, and firms will post higher prices, all of which lead inflation to rise,' he writes in 'Losing the inflation anchor'. And he warns, 'if expected inflation rises, then only a deep recession can keep inflation down.'

He compared trying to anticipate future inflation to sitting on a beach trying to figure out, before it is too late, if a boat is drifting away from shore, and likened inflation expectations gauges to 'a grainy picture of the boat's anchor.'

After examining expectations data for last year and this year, he concludes 'the jury is out on whether inflation is going to drift away.'....

'Inflation is going to be quite high in 2021. Whether it is a short blip or whether inflation will get out of hand depends on expectations, and there are some worrying signs in the data right now,' he said in an interview with The Brookings Institution...Will the FOMC let the anchor drift or not?"

Inflation Is All Over the Place -Wall Street Journal

"Investors following inflation figures should accept that they can't extract a reliable signal from the wild swings, and just hope they continue to get lucky.

The U.S. inflation rate reached a 13-year high recently, triggering a debate about whether the country is entering an inflationary period similar to the 1970s....

It is always better to be lucky than right, and for the Federal Reserve and its view that high inflation is transitory, inflation figures lately have brought a big element of luck.

Digging into the numbers shows how easily that luck could go away. If it does, the quiet in markets could be upended."

Do You Know These Three Crucial Social Security Numbers? -Motley Fool

"There are a lot of misunderstandings surrounding Social Security. Some of them could lead to big mistakes when planning for how your retirement benefits will help support you in your later years.

To make sure you make the right choices about your benefits, here are three numbers that you need to know.

1. 66 and 2 months to 67 - This number refers to your 'full retirement age', which is important because the age when you claim benefits in relation to your FRA will determine the amount you receive....

For each of the first 36 months you claim benefits before FRA, your check will be reduced by 5/9 of 1%. For each month prior to that, your benefits will be reduced by 5/12 of 1%.For each month after FRA that you wait to claim, benefits will be increased by 2/3 of 1%....

2. $1,544 - This number is the average monthly Social Security benefit. Knowing it is important to develop a realistic expectation of what your benefits will do for you.

They probably aren't going to be sufficient to support you, and they're not designed to be. They'll replace only around 40% of pre-retirement earnings, while you'll need around 80% to 90% (or more) to live on....

3. 2034 - Finally, 2034 is important because that's the year automatic benefit cuts might take effect. This could happen because Social Security has a trust fund that's in danger of running dry. If that happens, benefits can only be paid with current tax revenue coming in, which could lead to a 22% benefit cut....

Future retirees need to be prepared for the possibility they could get less retirement benefits than planned, so they can make sure they aren't overly reliant on Social Security."

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9.17.21 - Getting Rich While Producing Nothing

Gold last traded at $1,752 an ounce. Silver at $22.44 an ounce.

NEWS SUMMARY: Precious metal prices attempted a rebound Friday following Thursday's upbeat retail sales data which boosted the dollar and sparked a short-term sell-off. U.S. stocks traded lower as investors remain cautious of a resurgent Covid virus and the Fed's meeting next week.

Once $30 silver price barrier breaks, $50 is next; What's the catalyst? Jim McDonald -Kitco video

"'The stage is set' for silver to break out, it's just a matter of timing, said Jim McDonald, CEO of Kootenay Silver.

McDonald told David Lin, anchor for Kitco News, that 'silver is going to break through that $30 barrier, and it's going to break a lot higher than $50.'

He added that the gold/silver ratio, which is currently at 77, could come as low as 30, implying a major upside outperformance by silver relative to gold.

For the catalysts of higher a silver price, as well as the future of the exploration sector, watch the video above."

war on cash The War On Cash, Is It A Real Thing? The Answer Is Yes -Bruce Wilds/AdvancingTime Blog

"One thing we continue to hear is that a war is being waged to eliminate cash. Not only are most people going along with this but many have embraced the notion.

Some people view carrying cash as dangerous or burdensome. This also dovetails with their desire to spend more than they can afford, when using a credit card it is far easier to continue spending money you do not have.

All things considered, when asked, is the war on cash a real thing being directed from those on high, sadly we must answer yes. Cash reflects 'options for the people' and it appears those in charge of such things want in gone.

Currencies were developed to facilitate and ease transactions between individuals and businesses. The war on cash is simply another way Washington can continue to show its favoritism towards big business.

Small businesses often rely more on small cash transactions and often lack the ability to process other forms of payment. It is ironic that while big businesses and companies like Amazon flourish with each move government makes, the small businesses on Main Street are left worse off.

A cashless society where records are made and kept reflecting every transaction we make even down to buying a candy bar also allows the government to monitor our every move....

Another place this 'war on cash' is showing its head is that as of July 1st my bank started to charge a 'cash handling fee' of 13 cents per hundred dollars. Simply put, banks want and feel they are in a position to charge customers for the 'inconvenience' of having their employees handle cash.

Let me be clear, banks, saving accounts, and other vehicles designed to hold cash are paying little or nothing in the way of interest. With the numbers just out that the CPI is up for the 15th straight month, cash is under assault. this reflects the fourth straight month above 5% on a year-over-year basis....

As we stare into the face of rising inflation and possibly lower negative interest rates the reality that all fiat currencies are in trouble and this is just one big Ponzi scheme becomes very apparent.

How fast events unfold is impossible to predict. Just as important is the order in which the four major currencies fail. We have good reason to be concerned about this because it has the potential to strip us of our wealth and cause major disruptions throughout society. Until then, which may be years away, cash has value and plays a very important part in our lives."

The Illusion of Getting Rich While Producing Nothing -Charles Hugh Smith

"By incentivizing speculation and corruption, reducing the rewards for productive work and sucking wages dry with inflation, America has greased the skids to collapse.

Of all the mass delusions running rampant in the culture, none is more spectacularly delusional than the conviction that we can all get fabulously rich from speculation while producing nothing.

The key characteristic of speculation is that it produces nothing: it doesn't generate any new goods or services, boost productivity or increase the functionality of real-world essentials.

Like all mass delusions, the greater the disconnect from reality, the greater the appeal. Mass delusions gain their escape velocity by leaving any ties to real-world limitations behind, and by igniting the most powerful booster to human euphoric confidence known, greed.

Lost in the mania of easy wealth from speculative trading is the absence of any value creation in the rotation-churn of moving bets from one table to the latest hot game: in flipping houses sight unseen, no functionality was added to the house. In transferring bets on one cryptocurrency to another or from one meme stock to another, no value to the economy or society was created.

In the mass delusion that near-infinite wealth can be generated without producing anything, creating value has no value: the delusion is that I can get rich producing nothing but speculative gains, and then I can buy all the stuff somebody else is making....

The speculative gains to be made in the collapse of the mass delusion will be spectacular. There's nothing like the collapse of a hollowed out, completely corrupt economy to generate outsized profits for nimble speculators."

Book Review: Adam Brandon's 'A Republic, Not a Democracy' -RealClearMarkets

"The challenges Reagan faced came to mind while reading Adam Brandon's excellent new book, A Republic, Not a Democracy: How to Restore Sanity In America....

Brandon's understanding of the political mind is a function of his understanding of economics. He understands that all economics is microeconomics, at which point he recognizes that incentives drive political action in much the same way that they drive commercial activity.

With incentives top of mind, he repeats with needed regularity how it's not enough for the politically focused to watch Fox News, or Newsmax where he hosts a show called Save the Nation, and just the same it's not enough to vote. Brandon calls for individual action....

Brandon's vision for more limited government is rooted in the belief that the latter is only possible insofar as the politically interested across the country are motivated, and willing to make calls, put on events, knock on doors, and yes, visit the offices of politicians. Brandon aims to change the way Washington works by changing the minds of voters. Politicians listen to voters far more attentively than they do to reason....

Brandon quotes the late Andrew Breitbart as saying that 'If you can't sell freedom and liberty, you suck.' Absolutely. Anyone truly arguing for freedom (as Brandon is) must be an optimist simply because the freedom argument so easily beats the authoritarian one, plus the freedom path is logically optimistic simply because anyone who truly understands it knows the personal and economic abundance that flows to those who are free.

Indeed, freedom by its very name is brilliant for the individual. Which means it's brilliant for the world. Read Adam Brandon's excellent book to see why all of this is true, and how to better make a case for what never fails us."

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9.15.21 - Dems Propose $3T Tax Hike on Working Families

Gold last traded at $1,792 an ounce. Silver at $23.77 an ounce.

NEWS SUMMARY: Precious metal prices eased back Wednesday on upbeat economic data and a flat dollar. U.S. stocks traded flat after the latest string of negative trading sessions.

What's Wrong With Gold? -Zero Hedge

"From spiking inflation, falling real interest rates, and massive money printing, it seems logical that gold, a touted inflation hedge, should be rising. Yet, so far this year, gold has done little.

So, what's wrong with this precious metal? Absolutely, nothing....

Investors tend to buy 'hard assets' when there is 'fear' of increasing debt, inflation, a dollar decline, recession, a market crash...there is presently no 'fear] present to drive investors into the psychological 'safe haven' of gold....

Will that eventually change? Absolutely. When? As soon as the market participants realize the error of their ways."

federal rate Dems Propose $3 Trillion Tax Hike on Working Families and Small Businesses -ATR

"House Democrats are proposing almost $3 trillion ($3,000,000,000,000) in tax increases including tax increases on small businesses and working families. This is the largest tax increase since 1968 compared to the size of the economy and the largest tax increase ever in nominal dollars.

Some of these tax increases include: Raising taxes on working families by increasing the federal corporate income tax rate from 21 percent to 26.5 percent. This tax increase will be passed along to working families in the form of higher prices, fewer jobs, and lower wages.

This will give the U.S. a combined state-federal rate of 30.9 percent, higher than our foreign competitors including China, which has a 25 percent corporate tax rate, and Europe which has an average rate of 21.7 percent. The developed world average (OECD) is 23.5%.

According to the Stephen Entin of the Tax Foundation, labor (or workers) bear an estimated 70 percent of the corporate income tax in the form of wages and employment. Similarly, a 2020 study by the National Bureau of Economic Research found that 31% of the corporate tax falls on consumers.

A corporate tax increase will threaten the life savings of families by reducing the value of publicly traded stocks in brokerage accounts or in 401(k)s. Individual investors opened 10 million new brokerage accounts in 2020 and at least 53% of households own stock. In addition, 80 million to 100 million people have a 401(k), and 46.4 million households have an individual retirement account...

$80 billion in new IRS funding to hire 87,000 new agents. This would allow the IRS to audit and harass small businesses and American families for an additional $787 billion. It would hire enough new IRS agents to fill Nationals Park twice."

Inflation alarm bells keep ringing -Washington Examiner

"On Sept. 10, the Bureau of Labor Statistics released its Producer Price Indexes report for Aug. 2021. It showed 'the largest advance since 12-month data were first calculated in November 2010.'

Moreover, 'The Producer Price Index for final demand increased 0.7% in August, seasonally adjusted"¦ On an unadjusted basis, the final demand index rose 8.3% for the 12 months ended in August.'

According to Investopedia, 'The producer price index focuses on the whole output of producers in the United States. This index is very broad, including not only the goods and services purchased by producers as inputs in their own operations or as investment, but also goods and services bought by consumers from retail sellers and directly from the producer.''

Conversely, "The consumer price index targets goods and services bought for consumption by urban U.S. residents.' In other words, the producer price index measures inflation from the perspective of producers while the consumer price index measures inflation from the standpoint of consumers....

This does not jive with what officials in the Biden administration are saying about inflation being a temporary blip.

In July, President Biden downplayed inflation while pitching his multi-trillion-dollar Build Back Better plan, stating, 'We also know that as our economy has come roaring back, we've seen some price increases. Some folks have raised worries that this could be a sign of persistent inflation. But that's not our view. Our experts believe and the data shows that most of the price increases we've seen are - were expected and expected to be temporary.'....

The bottom line, no matter what the Biden administration claims, is that inflation is here, getting worse, and far from temporary or transitory."

Litecoin tumbles on fake Walmart press release -Fox Business

"A press release, distributed by GlobeNewswire, touted the retail giant's alledged new payment option with Litecoin that turned out to be fake, according to Walmart.

The release has since been deleted...Walmart issued the following statement Monday afternoon.

'Walmart was the subject of a fake news release issued on Monday, Sept. 13, that falsely stated Walmart announced a partnership with Litecoin (LTC). Walmart had no knowledge of the press release issued by GlobeNewswire, and it is incorrect. Walmart has no relationship with Litecoin.'

GlobeNewswire issued a notice across its service confirming that journalists and other readers should disregard the news release, 'Walmart Announces Major Partnership With Litecoin (LTC)' issued September 13, 2021, over GlobeNewswire. All further questions should be directed to GlobeNewswire' it stated.

The price of Litecoin popped as high as $233.44 per coin Monday before turning lower on confirmation of the erroneous news."

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9.14.21 - 3M Warns Inflation is Here to Stay

Gold last traded at $1,804 an ounce. Silver at $23.84 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday as persistent inflation worries weakened the dollar. U.S. stocks shrugged off data showing inflation rose 5.3% Y-O-Y to trade modestly higher.

Gold edges up on weaker bond yields; focus on U.S. inflation -CNBC

"Gold prices nudged up on Monday drawing some support from weaker U.S. bond yields but a resurgent dollar kept the metal on a tight leash as investors awaited U.S. inflation readings later this week....

Investors are now eying U.S. consumer price data due on Tuesday which could have a bearing on the timeline the Federal Reserve adopts to withdraw its economic support.

The data comes on the heels of comments from several Fed officials that the central bank should begin tapering asset purchases this year.

'Price pressure for gold is still on the rise, but with growth not strong enough to really support a strong amount of tapering, let alone a rate hike in the U.S., the outlook is still positive once we get some momentum back,' Saxo Bank analyst Ole Hansen said."

landlord The Rapid Increase in Rents -Calculated Risk

"Over the last several months there has been a pickup in rents, especially for single family homes....

U.S. single-family rent growth increased 7.5% in June 2021, the fastest year-over-year increase since at least January 2005[1], according to the CoreLogic Single-Family Rent Index (SFRI).

The index measures rent changes among single-family rental homes, including condominiums, using a repeat-rent analysis to measure the same rental properties over time. The June 2021 increase was more than five times the June 2020 increase....

Typical U.S. rents grew 9.2% year-over-year in July, according to the Zillow Observed Rent Index (ZORI) - the fastest recorded by Zillow records in data that reaches back through 2015 - to $1,843/month....

'We are witnessing strong, broad-based demand for apartments as the U.S. economy continues to recover,' noted NMHC Chief Economist Mark Obrinsky. "Many U.S. gateway metros, which were among those hardest hit during the coronavirus pandemic, have now seen their occupancy rates return to near-pre-pandemic levels. Meanwhile, rent growth remains particularly strong in a number of Sun Belt and Mountain markets.'....

The Market Tightness Index increased from 81 to 96 - the highest index number on record - indicating widespread agreement among respondents that market conditions have become tighter....

A key impact of rising rents will be on inflation...The recent rent increases will boost OER later this year, and this will impact the measures of inflation."

3M Warns Inflation Is Here To Stay, Sees Auto Production Tumbling More Than Expected -Zero Hedge

"Profit warnings are coming thick and fast from American companies as they come to grips with Delta-fearmongered-demand weakness and COVID-scare-driven supply-chain chaos that is anything but transitory. The latest warning comes from massive multi-national conglomerate 3M.

Speaking at a Morgan Stanley conference this morning, 3M CFO Monish Patowala warned that the outlook is much more like the worst-case scenarios than any overly-optimistic view that markets appear to be imbibing....

Bloomberg reports (via excerpted transcript): 'All of us are experiencing the semiconductor shortages. I would say to automotive and electronics, but you starting to see it impacting a lot of Industries, the outbreak of the Delta variant continues to impact the world as well as hurricane idea (sic) has also put more stress now on already stress supply chains, causing a lot of inflation, as well as material availability across issues across the globe...

'Auto which was expected to see down -3% for the second half of the year or bills is now going to be down 6%, for the second half electronics is getting impacted....Moving over to raw materials. Again, I think the inflation is unprecedented. We are seeing inflation in the same areas I talked about earlier jobs, raw material, labor and logistics, raw materials again you go down to polypropylene, talk about resins, that inflation remains.

'I would say inflation, when you think about raw material and logistics, both are very high....I think inflation is way outstripping anything that we thought.

'Future will depend on when inflation starts tempering down and, my belief - and I may be wrong - is until we see demand and supply parity somewhere, we can continue to see inflation in raw material, and in logistics. And I think port congestion, as well as port shutdowns.

'In just talking to our OEMs, talking to multiple other people in the industry, we believe that this is going to go into 2022. I don't think it's a 2021 issue....'

The question is - will Jay Powell give 3M a quick call and tell them to stop fretting about the anything-but-transitory inflation they are suffering from? Or should we believe 3M's CFO - a person with real skin in the game - when it comes to the state of the real world?

As we warned last week, expect many more companies to 'unexpectedly' guide much lower for Q3 and Q4...the wheels are again coming off the US economy, with all of Biden's trillions in stimmies spent long ago, and just in time for the Fed's taper."

The Stock Market Fails a Breathalyzer -Wall Street Journal

"Joby Aviation, which plans to begin an electric air taxi service in 2024, is worth more than Lufthansa , EasyJet or JetBlue . Does that seem right? In this market, why not?

Heck, earlier this year, Tesla was worth more than the next nine car manufacturers combined, though now only the next six.

Beyond Meat, made with pea protein, is worth more than the entire market for peas eaten globally-like the bumper sticker says: Imagine whirled peas.

Do fundamentals even matter?

I can go on. Used-car sales platform Carvana is worth more than Volvo, Honda, Ford or Hyundai. Airbnb is worth more than Marriott and Hilton combined.

Crypto-exchange Coinbase is worth more than the Nasdaq. I live at the intersection of innovation and disruption, but when companies are worth more than any possible reality, watch out."

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9.13.21 - Gold: Next Upside Target $2,000+

Gold last traded at $1,792 an ounce. Silver at $23.73 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on safe-haven buying, rising inflation and a flat dollar. U.S. stocks traded mixed amid supply chain disruptions, COVID-19 variant risk and stickier-than-expected inflation.

Gold's Inverted Head-And-Shoulders Pattern Suggests $2000+ Is Next Upside Target -Investing.com

"After a moderately strong rebound from the $1,675 lows in early August, gold has clearly started to set up the right shoulder of what appears to be an inverted head-and-shoulders pattern.

The recent weakness in the U.S. dollar suggests any breakdown in the dollar below $91.70 will likely prompt a new bullish price advance in gold targeting highs above $1,900 and likely attempt to reach $2,100 or higher....

We believe the $91.70 level on the dollar is critical to the setup of the inverted head-and-shoulders pattern in gold and that gold may trail downward to levels near $1,775 before finding real support for the next upside price rally.

Once that right shoulder has completed, the next phase for gold is a very solid upside price rally that should rally above $1,845 fairly quickly and attempt to reach the $1,920 to $1,950 level before the end of 2021....

We believe the transition of the U.S. dollar throughout the end of this year will be key to understanding the type of rally we should expect in gold and precious metals. Once the U.S. dollar falls below the $91.70 level, the upside price pressure in precious metals should begin to accelerate. We believe the $91.70 level in the dollar is the key catalyst for gold to break out of this inverted head-and-shoulders pattern."

storm More Strategists Say a Storm Is Brewing in the U.S. Stock Market -Bloomberg

"Strategists from almost all the top Wall Street banks have come out this week with a nervous message about the U.S. stock market.

The latest views hail from Deutsche Bank AG and Goldman Sachs Group Inc., and echo earlier pronouncements from Morgan Stanley, Citigroup Inc. and Bank of America Corp.

While investment banks tend to be measured in their outlooks, there are common threads that underpin their predictions that the market is vulnerable. Valuations are at historical extremes, stocks have rallied non-stop for seven months, the economy looks soft and the Federal Reserve is preparing to taper stimulus.

'The risk that the correction is hard is growing,' wrote Deutsche Bank equity strategists including Binky Chadha. 'Valuation corrections don't always require market pullbacks, but they do constrain returns.'

Some of the market strain is already showing up. The S&P 500 has fallen about 1% in the past three sessions...Here's a rundown of commentary this week:

Binky Chadha, equity strategist at Deutsche Bank: 'Equity valuations at the market level are historically extreme on almost any metric.' Trailing and forward price-earnings ratios, as well as valuation metrics based on enterprise value and cash flow, are all in the 90th percentiles, he said.

James Congdon, co-head of Canaccord Genuity's research division Quest: 'Global stock markets may be entering a period of turmoil.' He added that investors should favor stronger businesses with robust cash flows over weaker and more speculative companies.

Dominic Wilson, strategist in economics research at Goldman Sachs: 'We think peak cyclical optimism in the U.S. may be behind us.' The strategists said hedges look attractive, especially on a shorter time horizon.

Andrew Sheets, cross-asset strategist at Morgan Stanley: 'We are going to have a period where data is going to be weak in September at the time when you have a heightened risk of delta variant and school reopening.' The bank cut U.S. equities to underweight and global stocks to equal-weight on Tuesday.

Savita Subramanian, head of U.S. equity and quantitative strategy at Bank of America: 'The S&P 500 has essentially turned into a 36-year, zero-coupon bond,' she said. 'If you look at the duration of the market today, it's basically longer duration than it's ever been. This is what scares me.'"

Fed Officials Prepare for November Reduction in Bond Buying -Wall Street Journal

"Phasing out the Fed's pandemic-era stimulus by the middle of 2022 could clear the path for an interest-rate increase.

Federal Reserve officials will seek to forge agreement at their coming meeting to begin scaling back their easy money policies in November.

Many of them have said in recent interviews and public statements that they could begin reducing, or tapering, their $120 billion in monthly purchases of Treasurys and mortgage-backed securities this year.

While they are unlikely to do so at their meeting on Sept. 21-22, Fed Chairman Jerome Powell could use that gathering to signal they are likely to start the process at their following session, on Nov. 2-3."

COVID and the Economy -Calculated Risk

"Just over a month ago, many Americans, and economic analysts, assumed COVID was mostly behind us. Unfortunately they were wrong, and COVID has impacted the economic outlook once again.

For example, on July 30th, Goldman Sachs wrote: 'we are launching our Q3 GDP tracking estimate at +9.0% '. Then in mid-August, they downgraded their forecast: 'We have lowered our Q3 GDP forecast to +5.5%, reflecting hits to both consumer spending and production.'

And this week, on September 6th, they downgraded their forecast again: 'We now expect GDP growth of 3.5% in Q3.' That is about one third of the real growth they expected just 5 weeks ago!

Other analysts have made similar downgrades for Q3. There are several reasons for the change: the surge in COVID cases has impacted some consumer spending, supply chain disruptions are ongoing and possibly some downgrades due to policy (expiration of unemployment benefits during a COVID wave).

Right now it is looking like new cases are peaking, but far above the 12,000 per day level we saw in June. And it looks like we might see another Winter wave for several reasons.

A severe winter COVID wave could be a significant economic drag in Q4, and Q1 2022. And the most vulnerable are losing their extended unemployment benefits, and could be facing eviction. Hopefully there won't be another wave."

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9.10.21 - Digital Currencies = Negative Interest Rates

Gold last traded at $1,788 an ounce. Silver at $23.78 an ounce.

NEWS SUMMARY: Precious metal prices were up Friday after the wholesale inflation index rose to 10-year highs. U.S. stocks attempted to rebound following four-straight days of losses amid investor economic rebound worries.

Price gains for gold, silver as bargain buyers step in -Kitco

"Gold and silver prices are moderately higher in early U.S. trading Thursday, on some perceived value-buying following this week's selling pressure. Short-covering by the shorter-term futures trades is also likely featured today. A weaker U.S. dollar index on this day is also a friendly outside market force for the metals markets.

The just-released results of the regular monetary policy meeting of the European Central Bank saw no changes in ECB interest rate policy, as expected, but the central bank did slightly reduce its monthly bond purchases at a 'moderately lower pace.'

Global stock markets were mostly down in overnight trading. The U.S. stock indexes are pointed to mixed openings when the New York day session begins. Trader and investor risk appetite is less robust this week. The resurgence of the delta variant of Covid in major economies has the marketplace more pensive....

In a Wall Street Journal interview, Federal Reserve Bank of Atlanta President Raphael Bostic said recent weaker U.S. economic data has likely pushed back the start of the Fed's tapering of its bond-buying program (quantitative easing), but added he still expects a U.S. interest rate hike in late 2022.

Technically, October gold futures bulls still have the slight overall near-term technical advantage but have faded and need to show more power soon to keep their edge. Prices are still in a four-week-old uptrend on the daily bar chart."

stocks Most stocks are duds (yes, you read that right) -The Evidence-Based Investor

"Highlighting the riskiness of individual stock selection, recent research has demonstrated that around the globe the majority of individual common stocks have generated long-run shareholder losses relative to a Treasury-bill benchmark.

The implication is that the large, long-term equity risk premium delivered by the broad stock market was attributable to outsize gains generated by a relatively few high-performing stocks. For example, in his study Do Stocks Outperform Treasury Bills?, covering the period 1926-2015 and all stocks on the NYSE, AMEX and Nasdaq, Hendrik Besssembinder found that:

-From the beginning of the sample or first appearance in the data through the end of sample or delisting, and including delisting returns when appropriate, just 42.1 percent of common stocks had a holding period return greater than one-month Treasury bills.

-Over their full life, only a minority (49.2 percent) of common stocks had a positive lifetime holding period return, and the median lifetime return was -3.7 percent.

-Even at the decade horizon, a minority of stocks outperformed Treasury bills.

-Despite the existence of a small-cap premium (an annual average of 2.8 percent), just 37.4 percent of small stocks had holding period returns that exceeded those of the one-month Treasury bill. In contrast, 69.6 percent of stocks in the largest decile outperformed the one-month Treasury bill.

-Reflective of the positive skewness in returns, 3.8 percent of single-stock strategies produced a holding period return greater than the value-weighted market, and only 1.2 percent beat the equal-weighted market over the full 90-year horizon....

Most common stocks do not outperform Treasury bills over their lifetimes. The research findings highlight the high degree of positive skewness (lottery-like distributions) and the riskiness found in individual stock returns. The implication is striking: while there has been a large equity risk premium available to investors, a majority of stocks have negative risk premiums.

This finding demonstrates just how great the uncompensated risk is that investors who buy individual stocks (or a small number of them) accept - risks that can be diversified away without reducing expected returns.

Such results help explain why active strategies, which tend to be poorly diversified, most often lead to underperformance. At the same time, the results potentially justify a focus on less-diversified portfolios by investors who particularly value the possibility of lottery-like outcomes despite the knowledge that the poorly diversified portfolio will most likely underperform.

The results from the studies we have examined serve to highlight the important role of portfolio diversification - which is said to be the only free lunch in investing. Unfortunately, most investors fail to use the full buffet available to them!"

Iran's Nuclear Weapons Weeks Away? -ZeroHedge

"Since the Biden administration assumed office, the nuclear talks with Iran have gone nowhere. Six rounds of negotiations have been concluded with no results. In contrast, two other issues have gone too far: the Biden administration's appeasement policies towards the Iranian regime, and the advancement of the mullahs' nuclear program.

When the Biden administration took office, it announced that it would curb Iran's nuclear program by returning to the 2015 nuclear deal -- known as the Joint Comprehensive Plan of Action (JCPOA), which by the way Iran never signed -- and by subsequently lifting sanctions against the Iranian government.

Apparently desperate to revive the nuclear pact, the Biden administration at once began appeasing the ruling clerics of Iran. The first concession was delivered when the administration changed the previous administration's policy of maximum pressure toward Iran's proxy militia group, the Houthis"¦.

From the perspective of Iran's mullahs, Biden's desperate efforts to resurrect the nuclear deal manifested his weak leadership and therefore a delectable opportunity for Tehran to buy time, get more concessions, advance its nuclear program and become a nuclear state.

Notwithstanding all these policies of incentives and appeasements, Iran's mullahs continued to make excuses seemingly to drag out the nuclear talks"¦. Iran's leaders are now saying that they are not likely to restart the nuclear negotiations for another 2-3 months"¦.

At the moment, the Iranian regime is reportedly 8-10 weeks away from obtaining the weapons-grade materials necessary for a nuclear weapon"¦.

Once again it seems that the mullahs of Iran are masterfully playing the Biden administration and the EU by stalling the nuclear talks, buying time to get more concessions, and accelerating their enrichment of uranium and nuclear program to reach a weapons-grade nuclear breakout."

Digital Currencies Pave Way for Deeply Negative Interest Rates - Wall Street Journal

"Investors have been ignoring progress toward government-issued electronic money, even as many countries are progressing rapidly toward their own online cash. They should ask two questions: Will the Federal Reserve issue a digital dollar? And will it eventually replace physical bank notes?

I think the answer to both questions is yes, and those who agree should be assessing the impact on future monetary policy already, because dramatic change is likely within the timespan of the 30-year Treasury.

The main monetary power of the digital dollar comes from the abolition of bank notes. If people can't hoard physical money, it becomes much easier to cut interest rates far below zero; otherwise the zero rate on bank notes stuffed under the mattress looks attractive. And if interest rates can go far below zero, monetary policy is suddenly much more powerful and better suited to tackle deflation....

Deeply negative rates won't come straight away. Initially, central-bank digital currencies will almost certainly be designed to behave as much like ordinary bank notes as possible, to make their adoption easy and minimize disruption, while use of physical cash will be allowed to wither away. But those close to the development agree that monetary caution is unlikely to last."

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9.9.21 - Social Security Reserves Depleted by 2033

Gold last traded at $1,794 an ounce. Silver at $24.04 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Thursday on bargain-hunting and a weaker dollar. U.S. stocks traded flat as investors remained cautious in considering the delta variant, the economic reopening and the Federal Reserve.

Gold regains some ground as growth concerns take center stage -CNBC

"Gold prices edged higher early on Wednesday after a steep fall in the previous session, as concerns about global growth slowdown weighed on risk sentiment while investors awaited the European Central Bank's tapering strategy....

'Gold is holding up quite well towards $1,800. There is bit of concern about growth and we are seeing some weakness in the in the equity market,' said Xiao Fu, head of commodity market strategy at Bank of China International.

'Gold prices are in a bit of range bound market because there's buying on dips. The demand is still very strong in the gold market when prices dip.'....

Austria's central bank chief Robert Holzmann, considered as a hawkish member of the ECB, said the central bank could tighten policy sooner than many expect as inflationary pressures could prove to be persistent.

'There may be some influence from the ECB meeting if the meeting is more dovish than expected,' Nicholas Frappell, global general manager at ABC Bullion said."

dollar 4 Under-Reported Signs Paper Money Is Dying -Zero Hedge

"Below, we look at four deliberately ignored reasons why extreme liquidity is drowning paper money.

Reason 1: The Taper Debate May Not be a Debate at All - Here, we look past the taper headlines and ask a simple question: Would a Fed 'tapering' of QE really matter? As we've written elsewhere, the Great Taper Debate is less of a debate than it is a pundit circus, forever fueling now classic yet complimentary debates on inflation vs. deflation, gold vs. the dollar and Fed-speak vs. honesty....

Reason 2: The IMF Signals More Liquidity - But if you think the Fed is the only monetary body growing more desperate and hence liquidity-clever by the day, let's not forget those Wunderkinder at the IMF nor Forest Gump's reminder that when it comes to dumping more paper money onto an already unsustainable debt pile, 'stupid is as stupid does.'....

Reason 3: The World Reserve Currency - Not So Exceptional - But as for such declining trust, political gaslighting and dollar-debasing trends, we can thank our so-called 'experts' rather than the Chinese or Russians, who are calmly playing financial chess while Powell, Lagarde and others struggle comically to master checkers....We're not suggesting that the U.S. Dollar's 'status' will change tomorrow, but we do believe strongly that owning real assets in general and precious metals in particular is simply commonsense realism in the backdrop of increasing currency fantasy spewing out of D.C.

Reason 4: Simple Math and the 'Not-So-Crazy' of Rising Inflation & Deeper Negative Rates - A core aspect of that realism comes down to inflation now surging past 'transitory' and morphing into just plain dangerous. As repeated so many times, negative real rates (i.e., inflation outpacing sovereign bond yields) have extraordinary implications for rising gold price....

As Voltaire quipped, eventually all paper money reverts to intrinsic value: zero. So, which asset do you want to own when the current fiat currency ship sinks like all who have come before it?"

Mortgage applications hit summer low -Fox Business

"Demand for mortgage applications fell 1.9% from a week ago, according to the Mortgage Banker's Association's survey. The Refinance Index decreased 3% percent and Purchase Index decreased 0.2%.

'Mortgage application volume fell last week to its lowest level since mid-July, as mortgage rates have stayed just above 3% for several weeks,' said Mike Fratantoni, MBA's senior vice president and chief Economist. 'Refinance volume has been moderating, while purchase volume continues to be lower than expected given the lack of homes on the market.'

The August nonfarm payroll report showed the U.S. economy added just 235,000 jobs, less than the 728,000 estimate. The unemployment rate fell to 5.2%.

'Economic data has sent mixed signals, with slower job growth but a further drop in the unemployment rate in August. We expect that further improvements will lead to a tapering of Fed MBS purchases by the end of the year, which should put some upward pressure on mortgage rates,' added Fratantoni."

Social Security reserves estimated to be depleted earlier than previously expected -The Hill

"The Social Security trust fund for retirement and survivors benefits is estimated to have its reserves depleted in 2033, one year earlier than previously projected, according to the trustees' report released Tuesday.

At the time of depletion, income flowing to the trust fund would be enough to pay 76 percent of scheduled benefits, the report said.

Senior administration officials said on a call with reporters that the earlier projected depletion date was due to the coronavirus-related economic downturn, particularly a near-term decline in revenue.

The Social Security trust fund that pays disability benefits is estimated in the report to have its reserves depleted in 2057, eight years earlier than was estimated in last year's report. The Social Security trust funds combined are estimated to have depleted reserves in 2034, one year earlier than had been projected last year.

'The pandemic and its economic impact have had an effect on Social Security's Trust Funds, and the future course of the pandemic is still uncertain,' Social Security Administration Acting Commissioner Kilolo Kijakazi said in a statement. 'Yet, Social Security will continue to play a critical role in the lives of 65 million beneficiaries and 176 million workers and their families during 2021.'

The trust fund for Medicare Part A, which covers hospital care, is estimated to have its reserves depleted in 2026, the same year that was projected last year. At that time, continued income would be able to pay 91 percent of scheduled benefits, the trustees reported."

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9.8.21 - Why a National Living Wage Doesn't Work

Gold last traded at $1,793 an ounce. Silver at $24.04 an ounce.

NEWS SUMMARY: Precious metal prices slipped Wednesday on profit-taking and a firmer dollar. U.S. stocks traded flat as investors reassessed the economic growth outlook for the remainder of the year.

Trove of 239 Rare Gold Coins Discovered in Walls of French Mansion -Smithsonian

"Three construction workers were busy renovating a historic mansion in Brittany, France, when they came across an intriguing find: a metal box embedded in a wall.

To their astonishment, the box opened to reveal a trove of centuries-old gold coins....

The following Monday, the trio discovered yet another cache of gold coins, this time wrapped in a cloth pouch that had been hidden above a wooden beam, reports Agence France-Presse.

All told, 239 rare gold coins were discovered on the property. The treasure will go under the hammer on September 29, per a statement from auction house Ivoire....

Archaeologists determined that the coins were minted during the reigns of Kings Louis XIII and Louis XIV, monarchs who ruled France from 1610 to 1643 and 1643 to 1715, respectively....

Per French law, the proceeds from the sale will be split in half, with half going to the married couple who owns the property and half to be split evenly among the three discoverers. Experts estimate that the sale of the coins will garner between €250,000 and €300,000."

wages Why a National Living Wage Would Never Work -Rogue Economics

"Of great interest to people in America on Labor Day - as indicated by the usual newspaper headlines - is how much the laborers earn.

No one - or almost no one - writing in the editorial pages works at McDonald's or earns the minimum wage. But practically every one of the elite has an opinion about how much the low-wage, non-elites should earn.

A 'living wage' is what they say they should have. Thirty thousand dollars a year is the amount we've seen discussed. They say it would help solve the inequality problem.

Of course, a national living wage is absurd. How much living you can do depends on where you do it.

You could live well in the Ozarks on $30,000 a year. In Manhattan, you might starve to death. And it is far less expensive to live with Mom and Dad than to have a place of one's own....

Logically, there are only two possibilities. Either wages are determined by a free give-and-take between those who offer their labor and those who want to buy it"¦ or someone else sets wages according to his own standards.

The do-gooders want to use other people's money to raise the wages of the least well-paid, but they make no mention of their own take-home. Nor do they offer to pay more for their hamburgers so that McDonald's can raise its wages....

But the price-fixers are so self-satisfied on the high road - driving along comfortably in their Subarus and Priuses - that they can't be bothered to look out the window. If they did, they would see that price fixing always - always! - makes people poorer, not richer....

If it makes sense to set the wages of the least among us, why not do likewise for the most, too?

If people not involved in a labor transaction can know better than the participants what the terms should be, why not set the salaries of editorialists"¦ publishers"¦ CEOs"¦ sports celebrities"¦ movie stars?

And if it makes sense to raise the wages on the low end"¦ wouldn't it make just as much sense to lower them on the other? Why not promote equality by taking the elite down a peg? You can see what a jolly undertaking this would be for a bureaucrat with a sense of mischief."

Everything Is Infrastructure Now -Reason

"'I truly believe we're in a moment where history is going to look back on this time as a fundamental choice that had to be made between democracies and autocracies,' President Joe Biden declared during a March 31 speech in Pittsburgh, Pennsylvania. What exactly could be so vitally important that not only America's future but the entire project of liberal democracy hangs in the balance?

Infrastructure. Well, 'infrastructure.'

In Biden's telling, everything hinged on passing a multi-trillion-dollar spending package that was ostensibly meant to upgrade America's basic infrastructure but that also contained a wide range of unrelated spending on new social programs, industrial policy, and other forms of federal bureaucracy.

Previous generations may have fought civilization-defining battles against tyrannical rulers and such toxic ideas as slavery and Nazism. But the fate of the free world, the president would have you believe, now depends on whether 50 senators (plus Vice President Kamala Harris) will vote for bigger Amtrak subsidies and expanded government-run internet service.

On one hand, you can't really blame Biden for overselling his infrastructure proposal. That's what presidents have to do to get Congress' attention, especially at a time when culture wars have come to dominate so much of the political discourse....

Biden's American Jobs Plan began its life in March as a $2.25 trillion proposal, but by mid-summer it had been split into two separate legislative efforts: a roughly $1 trillion bipartisan bill that includes about $550 billion in new spending, and a parallel, Democratic-backed $3.5 trillion budget proposal that encompasses many of the so-called 'human infrastructure' elements from Biden's original plan....

Only about a quarter of Biden's initial proposal was aimed at anything traditionally classified under that term, such as roads, bridges, railroads, ports, pipes, and power lines. The original package spent twice as much to expand government-run health care as it did on highway projects.

Some parts of Biden's plan would actually work against the stated goal of improving America's infrastructure. His push for 'Buy American' rules and union regulations would drive up prices for raw material and labor. That means taxpayers would pay more and get less....

Whatever your views on religious freedom, abortion, online speech, the minimum wage, or the legality of selling your own kidney, such debates should not be settled by legislation that's ostensibly about building bridges and airports. Infrastructure is important. Not every important thing is infrastructure."

The Silence of Economists about Lockdowns -Brownstone

"As professional economists, we have watched the response of much of the economics profession to COVID-era lockdowns with considerable surprise. Given the evident and predictable harms of lockdowns to health and economic well-being, we expected economists to raise the alarm when lockdowns were first imposed.

If there is any special knowledge that economists possess, it is that for every good thing, there is a cost. This fact is burned into economists' minds in the form of the unofficial motto of the economics profession that 'there ain't no such thing as a free lunch.' From the depths of our souls, economists believe that the law of unintended consequences applies to every social policy, especially a social policy as all-encompassing and intrusive as lockdown....

That lockdown would, in principle, impose overwhelming costs on the population at large is not surprising. The scope of human activity touched by lockdown is overwhelming. Lockdowns closed schools and playgrounds, shuttered businesses, and barred international travel.

Lockdowns told children they could not visit their friends, put masks on toddlers, and dismissed university students from campus. They forced elderly people to die alone and prevented families from gathering to honour their elders' passing. Lockdowns cancelled screening and even treatment for cancer patients and made sure that diabetics skipped their check-ups and regular exercise. For the world's poor, lockdown ended the ability of many to feed their families.

Economists, who study and write about these phenomena for a living, had a special responsibility to raise the alarm. And though some did speak, most either stayed silent or actively promoted lockdown. Economists had one job - notice costs. On COVID, the profession failed....

The moral zeal with which lockdown proponents pushed this idea undoubtedly played an important role in side-lining economists. No one wants to be cast as a heartless Scrooge, and economists have a particular aversion to the part. The charge was unfair given the costs in lives that the lockdowns have imposed, but no matter.

Second, economists belong to the laptop class. We work for universities, banks, governments, consulting agencies, corporations, think tanks, and other elite institutions. Relative to much of the rest of society, the lockdowns posed much less harm on us and maybe even kept some of us safe from COVID....

Rather than hide behind the false belief that lockdowns are a free lunch, it is crucial that economists soon evaluate the global impacts of rich countries' lockdowns. A better understanding of our lockdowns' global effects will facilitate a more compassionate COVID response in rich countries, and also a better response to future pandemics - the kind of response that values how our response in rich countries influences the economic and health outcomes in the less prosperous parts of the world."

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9.7.21 - An Experiment to Test Digital Currencies

Gold last traded at $1,797 an ounce. Silver at $24.37 an ounce.

NEWS SUMMARY: Precious metal prices fell Tuesday on a normal corrective pullback and firmer dollar. U.S. stocks traded lower on investor concerns over the delta variant's impact on the economic reopening.

Gold Technical Analysis - $1839.00 Next Trigger Point for Acceleration to Upside -FX Empire

"Gold futures closed higher on Friday, surging more than 1% to its highest level since July 29, as slower-than-expected U.S. jobs growth in August drove the U.S. Dollar lower, casting doubts on the Federal Reserve's tapering timeline.

Gains may have been capped by a rise in Treasury yields. That move was fueled by a surprise jump in Average Hourly Earnings, which fanned the flames of inflation. The Unemployment Rate fell to 5.2% as expected.

On Friday, December Comex gold futures settled at $1833.70, up $22.20 or +1.23%.

The price action on Friday suggests that traders are lifting short trades placed in anticipation of a September tapering by the Fed. The big question is whether speculative buyers have enough confidence to drive prices higher....

A sustained move over $1828.00 will indicate the presence of buyers. Taking out the two main tops at $1837.50 and $1839.00 will indicate the buying is getting stronger. This could trigger an acceleration to the upside with the next major target the June 8 main top at $1919.10."

taxes Biden to Impose Largest Tax Increase Since 1968 -Americans for Tax Reform

"The $3.5 trillion tax hike being pushed by President Biden and congressional Democrats would be the largest tax increase since 1968.

In nominal dollars, Biden's $3.5 trillion tax increase would be the largest in history. But even when comparing this tax as a percentage of the economy, this tax hike would be the largest in more than 50 years.

While Democrats claim this tax increase will fall on "˜the rich,' the proposal will raise taxes on small businesses and working families. Some of the tax increases proposed by Biden and Democrats include:

1. Raising the Federal Corporate Income Tax to 28 Percent - After accounting for state corporate taxes, Biden would give the U.S. a 32 percent corporate rate, a tax rate significantly higher than communist China's 25 percent tax rate....

2. Retroactive Tax Increases on Capital Gains and Dividends - President Biden has proposed doubling the capital gains tax rate. Under Biden, the average top capital gains rate will be 48.8 percent after state taxes....

3. Creating a Second Death Tax by Repealing Step-Up in Basis - Democrats are proposing the creation of a second Death Tax by repealing step-up in basis....

4. Increasing the Top Income Tax Rate to 39.6 Percent - This tax increase will hit small business that are organized as sole proprietorships, LLCs, partnerships and S-corporations....

5. Imposing a 15 Percent Minimum Tax on 'Book Income' - This tax increase will create a new minimum tax on American businesses and disallow important, bipartisan credits and deductions that help promote job creation and economic growth....

6. Imposing Global Tax Hikes That Will Make American Business Uncompetitive - Democrats have proposed several international tax increases on American businesses....

With a covid-wracked economy and rampant inflation, the last thing America needs now is an enormous tax increase."

Central Bank Digital Currencies to Be Tested in BIS Experiment -Bloomberg/Yahoo Finance

"The Bank for International Settlements will test the use of central bank digital currencies with Australia, Malaysia, Singapore and South Africa in an experiment that could lead to a more efficient global payments platform.

Codenamed 'Project Dunbar,' the study aims to develop prototypes for a common platform that will enable international settlement in digital fiat currencies issued by central banks, BIS said in a release Thursday. The system would allow direct transactions in central bank digital currencies, or CBDCs, between institutions, while reducing time and cost, according to BIS....

The rapid growth of cryptocurrencies - which are distinct from digital currencies issued by central banks - is posing a potential threat to existing monetary regimes and adding urgency to debates on handling cross-border money transfers.

Read: Why central bankers got serious about digital cash.

'We are confident that our work on multi-CBDCs for international settlements will break new ground in this next stage of CBDC experimentation and lay the foundation for global payments connectivity,' said Andrew McCormack, head of the BIS Innovation Hub Singapore Centre.

Results of the study are likely to be published early next year, BIS said"

A Ground Zero Chaplain Remembers 9-11 -Medium

"From Rubble to Redemption offers readers a fresh reflection on 9-11 - the greatest murder scene in American history - a generation later from a Ground Zero perspective.

Drawing from a lifetime of compassionate, spiritually-driven service, author, pastor and U.S. Navy Chaplain Jim Jenkins shares with readers his life-changing experience volunteering at Ground Zero just days after the tragic attack - which most of us witnessed vicariously through an incomplete media lens.

Jim helps readers fill in both the sensual and spiritual blanks of this national trauma that only first-hand observation, participation and revelation can provide.

From the darkness and haunting cricket-type sounds of the 300 First Responders body alarms who were buried in the rubble at the 'Pile'"¦ to the challenge of encouraging exhausted Morgue workers"¦ to ministering to grieving family members at the sprawling Family Assistance Center, Jim sweeps readers into the chaotic behind-the-scene post-9-11 world.

Jim recounts how often he saw 'the stare' - the look of someone reliving a horrible memory - when working on the 'Pile' or at the Morgue. 'I was so proud to be in the company of such amazing Americans who were fighting through their own pain,' writes Jenkins....

'The victim's families were so numerous that I was unable to give the care that I would instinctively want to give to every individual who was suffering. I still see their faces. I still see the stare.'

During a meal at the Family Assistance Center Jim remembers seeing one of the thousands of cards sent to NY Fire Department from NYC schoolchildren showing a rescue helicopter with a stick figure looking out on the falling tower. 'The stick figure was crying"¦ the child wrote: DEAR FIREMANS, I AM BOKEN HEATED. THAT IS ALL.'....

Jenkins offers readers keen insights on how to compassionately be present to both the tragedy and grief of others, as well as to our own 'pile' of rubble. Moving from tragedy to grace requires letting go and letting God transform temporal rubble in our lives into eternal redemption of our souls."

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9.3.21 - Gold Gains on Jobs, Weak Dollar

Gold last traded at $1,830 an ounce. Silver at $24.72 an ounce.

NEWS SUMMARY: Precious metal prices rose sharply Friday on safe-haven buying and a weaker dollar. U.S. stocks declined after the August jobs report came in short of expectations, showing the impact of the delta-fueled Covid resurgence.

Gold gains on sluggish dollar; U.S. jobs in focus -CNBC

"Gold prices rose on Friday after the dollar weakened, with investors awaiting the U.S. jobs data to gauge the Federal Reserve's plans to start tapering asset purchases, although for the week, the metal was headed for its first decline in four....

The dollar index fell to a one-month low, bolstering gold's appeal to those holding other currencies. The greenback was headed for second straight weekly decline.

'We're seeing minor pre-positioning for people that may be wanting to take a punt into the non-farm payroll,' said Stephen Innes, managing partner at SPI Asset Management.

A weaker number 'would be quite positive for gold, cause it reinforces (Fed Chair Jerome) Powell's more cautious outlook for the U.S. economy'....

Powell had said last week if job growth continues, the central bank could start to cut its asset purchases this year, but would remain cautious in decision to raise interest rates."

phone book Here we go again: Some shoppers are panic-buying toilet tissue -USA Today

"Please don't run straight to the supermarket, but some shoppers are buying up all the toilet paper - again.

Of course, this brings back distressing memories of spring 2020 and the onset of the coronavirus pandemic. Demand for toilet paper skyrocketed as Americans were faced with a possibly lengthy stay-at-home future.

Even though manufacturers eventually caught up with demand, there were occasional local and national shortages with shoppers again finding empty shelves where TP used to be.

This latest rebound in toilet paper demand comes as the delta variant drives COVID-19 cases and deaths up across the U.S., with some folks foreseeing another lockdown. Many Americans have used up their stockpiles and some have begun buying again in bulk, The Wall Street Journal reports....

Shoppers who find empty shelves can ask their store when shipments are expected, the Georgia-Pacific statement said. 'Our advice to consumers should they run into limited supplies at one location is not to panic, check other retail outlets "¦ and only purchase what you need.'

Meanwhile, people online are dreading the potential of another toilet paper shortage. 'Please don't tell me that we are doing this again,' read one tweet with a picture of empty store shelves."

COVID Hospital Admissions Fall For First Time Since June In Latest Sign Delta Wave Has Peaked -ZeroHedge

"In recent weeks, we have seen a barrage of evidence that the delta-variant-driven summer COVID 'wave' (amplified, as it was, by increased testing) has finally peaked. First, the CDC pointed to regional data from the south and the northeast to show that the COVID wave had peaked in the original 'hotspots'.

Then we shared research from BofA analyst Hans Mikkelsen, who showed that the delta of the delta wave had finally dropped into negative territory. And of course, the whole time, Dr. Scott Gottlieb has been sharing projections showing the wave was set to peak in late August or early September.

But now, as the latest CDC data show, it's not just cases, but also hospitalizations, that are showing signs of a peak. The latest daily data show hospitalizations declining for the first time since June.

According to the Epoch Times, hospital admissions for COVID-19 patients in the United States are declining for the first time since late June, suggesting the latest surge has peaked. The seven-day average of new daily hospitalizations with confirmed COVID-19 dropped by 2.4% from a week earlier to about 12,280 - the first such drop since around June 27, according to the Department of Health and Human Services. It comes as fewer hospitalizations are being reported in Florida, Texas, and other Southern states, the agency said.

If they continue to trend lower at their current rate, the drop in hospitalizations has been roughly in line with BofA's 'optimistic' scenario. And it's not just hospitalizations and cases that are showing signs of peaking. The CDC's COVID-19 tracker shows that the seven-day average for both deaths and cases appears to be leveling out.

Even though recent studies have showed that vaccines are far from perfect, roughly 74.4% of all US adults have received at least one dose of a COVID-19 vaccine. And natural immunity might be even more extensive than previously believed....A blockbuster study from Israel recently showed that natural immunity confers better protection against the delta variant than vaccine-induced immunity.

After all this, our biggest question is: why does the mainstream press only report on hospitals kinda-sorta nearing capacity in their ICUs, and the endless parade of cities and states imposing mask mandates and vaccine mandates, or bans on mask and vaccine mandates. Maybe it's time to cover some 'good news' related to COVID for a change?"

Learn to rewire instead of retire -Calgary Sun

"Aging isn't optional, but growing is, says Chip Conley, mega hospitality maverick and best-selling author, who's inspiring a new kind of midlife learning and living, and bringing attention to the benefits of rewiring, not retiring.

Conley, 60, is shifting negative mindsets on aging through frequent lectures on the benefits of age diversity in the workplace, along with his midlife wisdom school and regenerative communities....

'The technical definition of retirement is to move into seclusion while regeneration means to bring something back to life,' says Conley, and that's where purpose, instead of going out to pasture, comes in.

His social projects provide a place and the tools to reframe a lifetime of experience for a relevant 'middlescence,' including his Modern Elder Academy (MEA) in Baja California Sur, which offers workshops and sabbaticals to help master elderhood.

And he's re-imagining retirement communities. Wave goodbye to conventional and welcome intentional: Think golf courses being replaced by wisdom schools, says Conley, and regenerative communities of interconnected, inter-dependent living. The first of a collection of communities will open in 2023 in Santa Fe, New Mexico on 2,500 acres....

Aging isn't to be feared as long as you embrace purpose, wellness and community, says Conley, adding that Yale professor Becca Levy has shown in her research that when you shift from a negative or neutral perspective on aging to a positive mindset, you add 7.4 years of additional, happy life....

The idea of retiring and rehiring is big now. And there's a real opportunity to collaborate and transfer wisdom. Conley says we need to help companies see that age diversity on teams can make a big difference in companies while also 'acknowledging that everyone should be a 'mentern' - a mentor and intern at the same time.'"

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9.2.21 - Cryptos Eventually 'Worthless'

Gold last traded at $1,809 an ounce. Silver at $23.89 an ounce.

NEWS SUMMARY: Precious metal prices inched higher Thursday on safe haven buying and a weaker dollar. U.S. stocks rose after weekly jobless claims came in slightly better than expected.

Paulson says cryptocurrencies will eventually be "˜worthless' -Fox Business

"John Paulson, the hedge fund billionaire who made a fortune in 2008 when he shorted the housing bubble, said in an interview published Sunday that he believes cryptocurrencies will eventually go bust.

The 65-year-old told 'Bloomberg Wealth with David Rubenstein' that he wouldn't recommend the investment to anyone. He said there is a cryptocurrency bubble that will 'eventually prove to be worthless.'

'I would describe them as a limited supply of nothing,' he said. 'So to the extent there's more demand than the limited supply, the price would go up. But to the extent the demand falls, then the price would go down. There's no intrinsic value to any of the cryptocurrencies except that there's a limited amount.'

The Bloomberg report pointed out that Paulson is a big believer - and buyer - of gold despite digital assets outperforming the metal."

stagflation" The Stagflation Threat Is Real -Project Syndicate

"There is a growing consensus that the US economy's inflationary pressures and growth challenges are attributable largely to temporary supply bottlenecks that will be alleviated in due course. But there are plenty of reasons to think the optimists will be disappointed....

I have been warning for several months that the current mix of persistently loose monetary, credit, and fiscal policies will excessively stimulate aggregate demand and lead to inflationary overheating. Compounding the problem, medium-term negative supply shocks will reduce potential growth and increase production costs. Combined, these demand and supply dynamics could lead to 1970s-style stagflation (rising inflation amid a recession) and eventually even to a severe debt crisis.

The optimistic spin from Wall Street analysts and policymakers is that this mild stagflation will be temporary, lasting only as long as the supply bottlenecks do. In fact, there are multiple factors behind this summer's mini-stagflation. For starters, the Delta variant is temporarily boosting production costs, reducing output growth, and constraining labor supply....

But what if this optimistic view is incorrect, and the stagflationary pressure persists beyond this year? It is worth noting that various measures of inflation are not just well above target but also increasingly persistent. For example, in the US, core inflation, which strips out volatile food and energy prices, is likely still to be near 4% by year's end....

As I have argued before, negative supply shocks are likely to persist over the medium and long term. At least nine can already be discerned.

For starters, there is the trend toward deglobalization and rising protectionism, the balkanization and reshoring of far-flung supply chains, and the demographic aging of advanced economies and key emerging markets. Tighter immigration restrictions are hampering migration from the poorer Global South to the richer North. The Sino-American cold war is just beginning, threatening to fragment the global economy....

The continuation of loose monetary and fiscal policies could trigger a de-anchoring of inflation expectations. The resulting wage-price spiral would then usher in a medium-term stagflationary environment worse than the 1970s - when the debt-to-GDP ratios were lower than they are now. That is why the risk of a stagflationary debt crisis will continue to loom over the medium term."

Stuck in the Fed's Vicious Cycle -Rogue Economics

"Labor Day is coming up. So let us continue honoring the laboring man"¦ the salt of the Earth"¦ the rag-taggy people, who make the lattes and drive the trucks.

Upon his sweaty brow, the gray-suited grifters press down their thorny claptrap. And upon his back, they place the whole burden of their goofy plans.

Federal Reserve top dog Jerome Powell is howling for something he calls 'maximum employment:'

We have much ground to cover to reach maximum employment, and time will tell whether we have reached 2% inflation on a sustainable basis.'

He thinks everybody should be schlepping or toting, bussing"¦ or hod-carrying, helping us dig our way out of the hole he has dug for us. He believes his policies are the key to getting us all on the job....

And continuing in this delusional direction, perhaps the wackiest of all comes from economists themselves. Business Insider reports:

'It's inequality that dragged interest rates lower, not the other way around, NBER researchers said Friday...Wealthy Americans' booming income powered the decades-long decline in interest rates, economists Atif Mian, Ludwig Straub, and Amir Sufi wrote. That downtrend then lifted stocks and most recently powered the market's rebound from 2020 lows.'

'It is a vicious cycle, and we are stuck in it,' Mian wrote in a Tuesday tweet. In other words, it may not be the Fed's fault, which means it will be much harder to solve....

The Fed has spent $7.5 billion every day for the last 18 months - $4 trillion in total - intentionally pushing down interest rates by buying bonds. That is, for every dollar the working stiffs created in the real economy (GDP growth), the Fed printed more than three dollars and fed it into the financial industry.

The wavering millions saved their pennies. But they got nothing for their efforts. After inflation, they lost money on their savings accounts."

Stocks Shake Off Bad News to Rally for Seventh Straight Month -New York Times

"Bad news doesn't seem to bother Wall Street these days.

Deaths and hospitalizations related to the coronavirus are soaring, and many businesses have shelved plans to return to the office. Staffing shortages and supply-chain bottlenecks linger, while consumer confidence has fallen.

And yet, the stock market continued its quietly remarkable year in August, posting its seventh straight monthly rise. The S&P 500 index is up over 20 percent for 2021 and has more than doubled in value since it hit bottom in March 2020. The market has closed at a record high 53 times - the most by this point of the year since 1964, according to LPL Financial.

It's an ascent that looks out of step with the reality of the virus in many parts of the country, but most investors are confident of two things: The Federal Reserve will keep interest rates at rock-bottom levels, possibly for years to come, and the federal government won't be shy about spending heavily to keep the recovery going....

Not everybody expects the rally to continue unabated. And any disruption of investors' expectations about interest rates and governmental supports - or a big slowdown caused by Delta or some other variant - could alter the persistently sunny outlook."

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9.1.21 - Rent Costs Soar Nearly 13% YTD

Gold last traded at $1,812 an ounce. Silver at $24.14 an ounce.

NEWS SUMMARY: Precious metal prices consolidated recent gains Wednesday on a weaker dollar. U.S. stocks traded mixed, led by technology shares.

Mobius Says Hold 10% in Gold as Currencies Will Be Devalued -Bloomberg/Yahoo Finance

"Veteran investor Mark Mobius said investors should have 10% of a portfolio in gold as currencies will be devalued following the unprecedented stimulus rolled out to fight the coronavirus pandemic.

At this stage, '10% should be put into physical gold,' said Mobius, who set up Mobius Capital Partners after more than three decades at Franklin Templeton Investments. 'Currency devaluation globally is going to be quite significant next year given the incredible amount of money supply that has been printed.'

Bullion rallied to a record last year as the coronavirus pandemic spurred a flight to haven assets but it's pulled back since with the roll-out of vaccines. To fight the crisis, central banks and governments worldwide have unleashed an unprecedented wave of monetary and fiscal stimulus, boosting balance sheets at the Federal Reserve and elsewhere and straining state finances.

'It is going to be very, very good to have physical gold that you can access immediately without the danger of the government confiscating all the gold,' Mobius, a long-time fan of the metal, said in an interview."

You Take My Breadth Away: Market's Underlying Deterioration -Charles Schwab

"The stock market could use some mouthwash. Breadth in the S&P 500 remains fresher than either the NASDAQ or Russell 2000, but it's also been deteriorating. Generally, market breadth indicators highlight the percentage of stocks in an index trading above moving averages; or the number of stocks rising relative to the number that are falling - often incorporating volume statistics as well.

An analogy often used to explain why breadth matters comes from the battlefield. When the generals are on the front line; but the soldiers are lagging behind, the force is less powerful than when the soldiers are on the front line alongside the generals.

Let's start with a very broad look at breadth. Although the S&P 500 traded at an all-time high as recently as last week, the cumulative advance/decline (A/D) line for the broader NYSE universe peaked on June 11 this year....


In the case of the NASDAQ, as the chart shows, new lows have exceeded new highs recently - even though the index hit an all-time high as recently as August 5 this year. This is strikingly different than the massive breadth thrust for the NASDAQ from last November through this past February....

At the sector level, as shown below, Energy's breadth stinks the most; while given the market's recent bias toward classic defensive areas, Utilities have the freshest breadth (followed by Financials).

The bias recently toward traditional defensives likely reflects growing concerns about COVID's Delta variant's impact on economic growth; but also the peak in the growth rate for both the economy and earnings, as well as fading fiscal and monetary stimulus. ...

As summer winds down, we soon head into September - historically the worst month for stocks in terms of average performance. Aside from seasonality, there are several risks with which the market is confronting "¦ including deteriorating breadth, fading monetary and fiscal stimulus, peak earnings/economic growth rates, and of course the Delta variant...

With regard to rebalancing, it's one of the most beneficial disciplines in that it forces us to do what we know we're supposed to do - add low, trim high. Notice I adjusted that from the classic 'buy low, sell high' adage; which can infer an all-or-nothing strategy."

Newsmax's Steve Cortes Blasts The Fed For Crushing The Middle Class & Protecting Biden -ZeroHedge

"Former Fox Business anchor Trish Regan spoke with former investment manager turned White House advisor turned Newsmax host Steve Cortes on her podcast called 'American Consequences' about the Federal Reserve decimating the American middle class.

Before Regan spoke with Cortes, she provided readers with a backdrop of the word 'transitory' and how The Fed ignores soaring prices of goods and services. Heck, it's a brilliant strategy by the Fed because if six months from now prices are still increasing, Chair Jerome Powell will merely say inflation remains transitory.

Regan asked a very important question during in the intro of the podcast: How long can the middle class handle surging stagflation: soaring gasoline and supermarket prices and barely any real wage growth (on top of new virus restrictions).

She said the 11-14% food price increases at the supermarket are beginning to dent consumer sentiment, adding that middle-class wages adjusted for inflation aren't going as far as they used to. Many folks are living a different life than they were in pre-COVID times, and they're becoming furious that the American dream is collapsing in front of their eyes.

Regan adds a confluence of bad events, such as inflation, souring consumer sentiment, and the Afghanistan withdrawal debacle is damaging people's perception of the Biden administration.

And to circle back to the Fed, she said unless Powell and his gang of monetary wonks begin to taper or at least raise rates in the near-term, the inflationary impact will continue to crush middle America....

With all the wealth and power increasingly being transferred to financial elites under an easy money regime via the Fed, who are enjoying asset price inflation, comes at the expense of an increasingly debt-ridden (just to keep up appearances) collapsing middle class that has been well underway for decades."

House Rents Pop Up as New Investors Pile In -Wall Street Journal

"Would-be home buyers priced out of the sales market are finding little consolation when they turn instead to the single-family rental market.

Prices are soaring there as well. Asking rents for houses rose nearly 13% for the year to date through July, the highest annual increase in the past five years as tracked by real-estate data company Yardi Matrix, which analyzed professionally managed properties.

The sharp rise partly reflects increasing demand from people who can't afford to buy homes as well as city-dwellers who moved to the suburbs to rent during the pandemic. Meanwhile, the supply of new houses also continues to trail historical levels relative to population growth, and builders in some places remain constrained by zoning laws and available land.

Price increases are more moderate for single-family tenants renewing their leases, said Haendel St. Juste, a real-estate securities analyst at Mizuho Securities USA. 'You've got to be careful in this industry. You can't be perceived as gouging.'

Apartment asking rents also have risen, but at a slower pace: 8.3% for the year to date through July, Yardi Matrix said. The difference partly reflects weaker demand in downtowns that lost population after Covid-19 hit, although those markets have rebounded in recent months."

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5.28.21 - Debt Crisis Ahead, Sell Federal Assets Now

Gold last traded at $1,900 an ounce. Silver at $27.83 an ounce.

NEWS SUMMARY: Precious metal prices steadied Friday on safe haven buying amid data showing rising inflation. U.S. stocks headed for a winning week amid optimism over the U.S. economic recovery.

Ultimate gold price target is $5,000-$10,000 -Guggenheim/Kitco News

"As chaotic price swings of the crypto world push investors back into gold and silver, the precious metals will start to build momentum, with the ultimate gold price target set at $5,000-$10,000, according to Guggenheim's CIO Scott Minerd.

'As money leaves crypto and people are still looking for inflation hedges, gold and silver are going to be much better places to go,' Minerd told CNBC in an interview.

It will take some time due to the sheer size of the gold market, but the precious metal will enter an 'exponential phase,' Minerd said.

The ultimate price target for gold is between $5,000 and $10,000 an ounce, he added. 'This is ultimately is in the cards. Silver traditionally lags. It is the poor man's gold, and it's the one that will have the largest move on a percentage basis. It is the high-beta version of gold,' he said."

debt Some Day There May Be a Debt Crisis, So Sell Federal Assets Now -RealClearMarkets

"For years, economists have been debating the best way to reduce the debt-to-GDP ratio. The fear is that we may soon cross over to a point of no return that inevitably leads to some form of debt crisis. However, in recent years, a growing number of economists and commentators have come to believe that the debt doesn't matter. Thanks to permanent low interest rates and low inflationary risks, we can disregard the debt and achieve low unemployment and high output.

There are problems with this position. First, the fact that interest rates have stayed low in recent years does not mean that they will never significantly rise. Second, and maybe more importantly, even if interest rates never increase and inflation never materializes, there is a significant cost to high debt that is best avoided, especially if one values smaller government....

The point is that bond market investors' willingness in the past to lend 100% of GDP to the U.S. government at 1% interest says little about their willingness to do the same when our debt-to- GDP stands at 200 percent (which we are set to reach in 2050 without accounting for the Biden administration's new spending or assuming no future wars, recessions, or emergencies). There is a limit out there somewhere....

Milton Friedman was correct: The true measure of government's size is found in what it spends and not in what it takes in in taxes. Because borrowing allows politicians and citizen-taxpayers to push the bill for today's spending onto future generations, borrowing encourages too much spending today - thus irresponsibly enlarging the size of government.

For those who desire to keep government small, raising debt levels means a larger and larger increase in the size and scope of government. It also suggests a lack of accountability as well as a lack of transparency. For all these reasons we need to reform entitlement spending, put both large chunks of military and domestic spending on the chopping block, and start selling off federal assets. Better to do it now than during a fire sale later."

Why you might feel the urge to overspend as the pandemic winds down -Vox

"After this year of no - no festivals, no plays, no shopping in stores without concern for a deadly virus - 'no you can't' is slowly transforming, with 60 percent of adults in the US now having at least one dose of the vaccine, to 'yes you can.' Many of us, regardless of disposable income levels, will and will and will, budgets be damned, if we don't prepare for the powerful emotions about to swoop through our experience-deprived brains.

Our minds, it turns out, are not spreadsheets. That's the idea behind behavioral economics, the fairly new field that studies how humans operate around this invention we call money. Unlike previous thinking from the field of economics, our decisions don't come from formulas, but a mishmash of the feelings, reactions, and mental shortcuts whittled by evolution to keep us alive in the wild, within small tribes, without consideration for targeted Instagram ads for peep-toe espadrilles.

Behavioral economics has identified more than 100 ways people of all financial backgrounds fail to think straight when it comes to money. And as the pandemic shifts in the US, our thinking is about to get much blurrier....

You might want to watch out for the bandwagon effect, where you jump into the Roaring Reopening spending just because all the cool kids are doing it, in your real friend group and in the groups you just watch on your social media feeds. Worse, there won't be a designated financial driver among us, because though our experiences have varied widely, with many Americans continuing to work in public during lockdown, chances are that nearly everyone you know will have some kind of wild emotions."

Orwell's 1984 could happen in 2024 -Microsoft president/BBC News

"Life as depicted in George Orwell's 1984 'could come to pass in 2024' if lawmakers don't protect the public against artificial intelligence, Microsoft's president has warned.

Speaking to BBC's Panorama, Brad Smith said it will be 'difficult to catch up' with the rapidly advancing technology. The program explores China's increasing use of AI to monitor its citizens. Critics fear the state's dominance in the area could threaten democracy.

'If we don't enact the laws that will protect the public in the future, we are going to find the technology racing ahead, and it's going to be very difficult to catch up,' Mr Smith said.

'I'm constantly reminded of George Orwell's lessons in his book 1984. You know the fundamental story"¦was about a government who could see everything that everyone did and hear everything that everyone said all the time.

'Well, that didn't come to pass in 1984, but if we're not careful that could come to pass in 2024.' In certain parts of the world, reality is increasingly catching up with that view of science fiction, he added.

China's ambition is to become the world leader in AI by 2030, and many consider its capabilities to be far beyond the EU....

Seth Moulton, chair of the US Future of Defense Task Force is urging tech companies to support the Department of Defense.

'Because we're in a race, because we are in this competition, that's really what it comes down to,' he said. 'Are you going to help us win this race or are you going to essentially be against us?'

'China does not have the same system of government as we do. Could the AI arms race lead to conflict with China? Absolutely'"

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5.27.21 - Major Cities Re-Fund Police After Crime Surges

Gold last traded at $1,896 an ounce. Silver at $27.81 an ounce.

NEWS SUMMARY: Precious metal prices steadied Thursday despite mild profit-taking and a weaker dollar. U.S. stocks rose as investors digested stronger-than-expected labor-market data.

Why gold is headed for the largest monthly gain since July -Marketwatch

"Gold futures on Wednesday were on track to tally the largest monthly gain since July - just a day after breaching the key $1,900 mark for the first time in almost five months, with the precious metal finding support on the back of declines in the U.S. dollar and Treasury yields.

'After testing support in first quarter in the mid $1,700s,' gold's move above $1,900 is 'significant,' said Kevin Rich, global gold market adviser for The Perth Mint. It's an 'important technical and psychological level.'....

The latest climb pulled prices higher year to date, above the Dec. 31 most-active contract settlement of $1,895.10, FactSet data show. For the month, prices traded around 7.7% higher, which would mark the biggest monthly percentage rise since July 2020.

'Gold has recently been benefiting from a downward move in real yields, driven primarily from an increase in inflation expectations and related concern over the purchasing power of the dollar,' Peter Grosskopf, chief executive officer of Sprott, told MarketWatch....

Gold's move is significant because investors assumed the economic recovery would support an increase in nominal and real yields, and that the U.S. dollar would rebound, said Grosskopf.

'After a healthy correction due to confidence in the recovery, gold will now anticipate investor concerns over overall debt and deficit levels,' he said.

All in all, 'the fundamentals for gold have never been better - record debt and deficit levels, financial markets that are priced for perfection and the emergence of inflation in response,' said Grosskopf. 'Gold should now move strongly higher.'"

inflation Inflation is back. Biden should be worried -CNN Business

"It's time to sound the inflation alarm inside the White House.

From used cars and gasoline to lumber and food, prices are surging. The return of inflation, after a decades-long absence, is squeezing families and businesses recovering from the pandemic.

In many ways, higher prices can be seen as evidence that President Joe Biden's economic and health policies are working. The successful rollout of vaccines is allowing companies to reopen and Americans to resume traveling, spending and working. Growth is being turbo-charged by rock-bottom interest rates and unprecedented fiscal stimulus.

For many years, the nightmare for the US economy was a Japanese-style spiral of falling prices. Now, the risk for the White House is an economy that overheats, forcing the Federal Reserve to cool it down by raising interest rates so aggressively that it short-circuits the Biden boom, both on Main Street and Wall Street.

The return of inflation also undermines Biden's efforts to ease inequality. That's because higher prices on essentials are most painful for low-income families - the same ones hit hardest by the pandemic.

'The cruel thing about this is, once again, the little guy is being hurt,' Richard Fisher, former president of the Dallas Federal Reserve, told CNN Business....

'If we see gasoline and food prices move sharply higher, that could become a problem for the Democrats in 2022,' said Greg Valliere, chief US policy strategist at AGF Investments. 'The risk is that both monetary and fiscal medicine could be too strong. It could be an overdose.'

One concern is that inflation expectations, by businesses and consumers alike, are rising sharply. People no longer expect prices to remain in check. That's a big deal."

We don't need a woke Fed -Washington Examiner

"Racial equality is an incredibly important cause, but we don't understand what it has to do with the Federal Reserve. We suspect the Fed doesn't have a clue, either.

So it's a good thing Sen. Pat Toomey is asking it.

Congress created the Federal Reserve and has given it a clear but always tricky mandate: to 'promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.' ....

Toomey wants to know why government bankers at the Minneapolis Fed have found it crucial to state they have 'renewed our commitment to dismantling structural racism?' The treasury bonds they are supposed to sell do not really have much to do with 'dismantling structural racism' one way or the other.

Indeed, as with corporate wokeism, Fed wokeism is all about empty gestures. In this case, it's the boilerplate 'racial justice' language in the Minneapolis Fed's annual report, along with working papers....

As Toomey has written, 'this subject matter is fraught with ideological assumptions and interpretations, and the work and analysis of' the regional banks '[seem] heavily laden with political and value judgments.' There's no agreement on what 'systemic racism' is, and some of the Left's definitions of the term simply don't line up with reality. Choosing to focus on 'systemic racism' is inevitably politically charged.

That's why the Fed should stay away. Congress has given the Fed far more leeway than any other part of government. Presidents and Fed board members have lengthy terms, and the elected branches at least try not to meddle with their decision-making. But with great power comes great responsibility to political neutrality. Becoming a woke Fed betrays that responsibility....

The Atlanta Fed or Minneapolis Fed aren't turning out papers on how church closures and the birth dearth interact with the economic woe of the working class. They aren't publishing papers on the sexual revolution's devastating effect on marriage and thus the prospects of poor people born to single mothers.

The banks seem to be choosing social topics that appeal to liberal cultural elites and the current party in power. It's not appropriate, and Toomey is right to call it out."

Re-Funding The Police: Major Cities Backtrack On Police Budget Cuts After Crime Surges -Zero Hedge

"Following calls last summer from groups such as Black Lives Matter to 'defund the police,' a number of city officials are now walking back statements to go through with cutting funding to law enforcement due to surges in crime levels.

The Minneapolis City Council several months ago voted to approve $6.4 million more in funding to the police department, coming after a number of councilmembers last year pledged to completely abolish the department.

Minneapolis Mayor Jacob Frey, a Democrat, announced in May that he's pushing to increase funding to the city's police department - coming about a year after George Floyd's death in police custody, which sparked the Black Lives Matter protests, riots, and arson attacks across Minneapolis.

'The violence needs to stop; it's unacceptable,' he said earlier in May during a news conference, which came amid a massive spike in violence in the city.

'People deserve to feel safe in their neighborhood, they deserve to be able to send their kids out to the sidewalk to play and to recreate without bullets flying by. That's unacceptable. We should be holding these perpetrators accountable.'

Frey blamed activists' calls to defund the police....

New York City Mayor Bill de Blasio, a Democrat, announced this month that his city is building a police precinct in Queens to deal with a spate in rising crime - coming months after he pledged to cut $1 billion from the NYPD's budget. The city has cut far less from the police department than the pledged $1 billion...

This comes in the midst of a historic increase in shootings, murders, and other violent crimes. According to NYPD data, there was a 76 percent increase in shootings in March 2021, as compared to March 2020....

In Baltimore, a city that has historically had a high crime rate, the city's spending board in mid-May approved a budget with a $28 million increase to the police department.

In 2020, the city cut about $22 million from the police department's budget.

The 'defund the police' movement has also seen its support plummet since last summer, according to various polls. A recent survey in March showed that just 18 percent of Americans support the cause."

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5.26.21 - Would You Trust a Fed Crypto Dollar?

Gold last traded at $1,895 an ounce. Silver at $27.69 an ounce.

NEWS SUMMARY: Precious metal prices steadied near recent highs Wednesday despite a firmer dollar. U.S. stocks rose slightly as shares tied to the economic reopening supported the broader market once again.

Gold prices have jumped more than 10% since the start of April amid a weaker dollar and falling bond yields -Business Insider

"Gold prices have jumped more than 10% since the start of April to nearly $1,900 per ounce. Since the start of May alone, gold is up roughly 7%.

According to Sophie Griffiths, a market analyst for the FX solutions provider OANDA, the rise in prices is a result of 'falling Treasury yields and a softer tone surrounding the greenback.'

Griffiths also said that a recent cryptocurrency sell-off could have pushed investors toward gold amid inflation concerns....

Daniel Briesemann, a precious and industrial metals analyst at Commerzbank, said in the new report that 'speculative financial investors are also betting increasingly on rising gold prices.'

Traders have expanded their net long positions in gold for the third week in a row and net longs are now 82% higher than they were at the start of May, according to data from the report.

Briesemann said that he believes there is still 'upside potential' in the gold market due to the Fed's insistence on maintaining 'ultra-expansionary monetary policy.'

Despite the recent rise in gold prices, the precious metal still trades below where it did nearly a decade ago in September of 2012. Since the end of 2018, however, Gold is up roughly 40%."

central bankers Politicians Play With Fire by Risking Inflation -Reason

"Prices are rising, government spending is soaring, and trillions of dollars of new money appears as if by magic. It's all intended, we're told, to sustain the economy through the pandemic and then get individuals and businesses back on their feet as COVID-19 fears retreat. But many observers can't help but wonder if rising prices are a sign not of a country returning to health, but of money losing its value in a world starting to suffer a renewed bout with an old enemy of prosperity: inflation.

'Unfortunately, we've turned our backs to inflation during the past decade, and we're about to relearn a painful lesson about respect,' warns Connel Fullenkamp, a professor of the practice of economics at Duke University. 'The Fed and the Biden administration are dismissing the latest inflation data, claiming that the jump in prices is merely temporary. Besides, they continue, it will be good to let the economy run hot for a while. In other words, don't worry - higher inflation won't be a big deal.'....

Prominent among what 'needs to be done' according to the Biden administration, is lots and lots of federal spending to revive the American economy - with politicians in charge.

'Mr. Biden's plans add up to about $6 trillion and reflect an ambition to restore the federal government to the role it played during the New Deal and Great Society,' Glenn Thrush of The New York Times summarized at the end of April....Worryingly, much of that money was created by the Federal Reserve out of thin air, with M2, a standard measure of money supply, rising from $15.2 trillion in February 2020 to $19.6 trillion a year later.

'While the Fed can create money out of thin air, that does not mean it does so without cost,' cautions William J. Luther, assistant professor of economics at Florida Atlantic University. 'Indeed, there are two potential costs of creating money that one should keep in mind. The first results from inflation, which denotes a general increase in prices and, correspondingly, a fall in the purchasing power of money.'

Even with relatively low inflation, that fall in the purchasing power of money can sneak up on you, eroding the value of any currency you hold. That's why the 2021 dollar will buy only about half of what a dollar would purchase in 1990. A sudden inflationary surge erodes the value of money even more quickly, eating into people's income and savings....

'The Fed-driven economy relies on the creation of trillions of dollars - literally out of thin air - that are used to purchase bonds and push money into a pandemic-ravaged economy that has long been dependent on free cash and is only growing more addicted,' Axios Markets Editor Dion Rabouin warned in December, even before economic activity picked up.

Politicians may like that addiction - addicts are dependent on their sources, after all. But, if they trigger a new round of inflation and devalue money in the process, nobody will be very happy."

Rising Prices Make Food, Housing, and Transportation Less Affordable -Rogue Economics

"What people care about is not their absolute wealth... but how rich they are compared to other groups around them, or to their own brothers-in-law.

It is galling to see others get richer than you are... especially when you think they might be up to something. It is even more annoying to see yourself getting poorer, as prices rise faster than your income.

And it is alarming to see your country driven into the ditch by the doo-dah diddleheads in Washington....

The year-over-year increase is 19.1% in median U.S. house prices for existing homes. That median price is now $341,600, an all-time high...The Bureau of Labor Statistics tells us that wages for private industry workers increased 2.8% in 2020. So housing is going up nearly seven times faster than incomes....

Many of the home buyers are large corporations. They can borrow money at near-negative rates. Then, they can rent the houses out for a huge return on capital. Or they can sell them. If they borrow at 3%"¦ and housing goes up at 19% - they enjoy a 16% win"¦ and an almost infinite gain on real investment....

If the cost of food, shelter, and transportation is going up - in terms of the time it takes to get them - aren't we getting absolutely poorer, not richer? And if that is so, how come?

The U.S. empire is the richest in history. But that doesn't make it immune to the traps and temptations that have bedeviled all previous empires - including the obvious one, fake money."

The Crypto Dollar -New York Post

"The Federal Reserve's chairman, Jerome Powell, is promising to deliver over the summer a discussion paper on cryptocurrencies. He announced that Thursday in a rare video press release. The New York Post takes it as a signal that a 'crackdown' could be coming. Mr. Powell himself said the Fed might even issue a cryptocurrency - or a Central Bank Digital Currency - of its own.

Before the Federal Reserve goes into business hawking its own cryptocurrencies, though, it might want to get on top of the Federal Reserve notes it's already circulating. It has had primary responsibility for the dollar since 1971, when President Nixon closed the gold window and Congress plunged the country into the age of fiat money. Since then, the Fed's irredeemable electronic paper ticket money has lost 98% of its value.

By 'value' we speak of what a dollar it will fetch in classical, constitutional money - gold. Until the 'Nixon Shock,' America was bound to redeem dollars presented by foreign countries at a 35th of an ounce of gold. Today a dollar won't fetch an 1,880th of an ounce. It's shed 86% of its value just since Bill Clinton was president. At one point under Chairman Powell, a greenback couldn't fetch a 2,000th of an ounce....

If the Federal Reserve can't stabilize the currency it's been using for decades, what makes it think it's a logical move for it to go into the business of crypto? Mr. Powell ignores this question. He begins his video press release by noting that today we are in the midst of a technological revolution that is fundamentally changing our world: reshaping how we communicate, access information, and purchase goods and services.

The technological features of the revolution in the midst of which we find ourselves strike us as the least of the issues. The real revolution, if that's the word for it, is fiat money - the idea that the currency has no connection to gold or silver or other specie....

This is a revolution in which the Federal Reserve can print - or create out of pixels - all the money it wants and lend it to the government that owns the Fed. It's a revolution in which the concern over asset inflation is brushed aside - and in which price stability becomes a policy of seeking inflation of 2% (on, it later develops, average). Such debasement would wipe out savings within two generations."

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5.25.21 - The War on Retirement

Gold last traded at $1,897 an ounce. Silver at $27.96 an ounce.

NEWS SUMMARY: Precious metal prices rose near 2021 highs on downbeat consumer confidence and housing data. U.S. stocks rose slightly amid optimism about an economic recovery despite ongoing cryptocurrency volatility.

The math for higher gold prices is more compelling every day -Sprott/Kitco

"In an interview with Kitco News, Peter Grosskopf, CEO of Sprott Inc., said growing government debt and the Federal Reserve expanding balance sheet will continue to push inflation pressure higher and destroy the U.S. dollar's purchasing power, which in turn will push gold prices higher.

'This equation for the global economy and financial markets does not get solved without some sort of financial repression and higher inflation. And in that environment, gold is on solid footing. The math just keeps getting more and more and more clear.' he said. 'A few tax increases aren't going to solve the government's growing debt problem.'

The U.S. Federal Reserve continues to forecast higher inflation this year that will ultimately prove to be transitory in the long term. However, Grosskopf said that he expects inflation to be more permanent than the central bank expects.

He added that investors just need to look at what is happening in the labor market to see the growing inflation threat. Although there is significant slack in the labor market, wages rose sharply in April. Grosskopf explained that workers are in no hurry to get back as they continue to be supported by government stimulus spending. He added that it would take much higher prices to get people back into the workforce.

Grosskopf added that rising commodity prices with the unprecedented move in lumber prices, copper, tin, and aluminum would eventually trickle through to consumers, making products more expensive.

'This whole notion that inflation will stay in check at 2.5% is ludicrous,' he said.

Although inflation is rising, Grosskopf said that the Federal Reserve would be forced to sit on the sidelines and maintain its ultra-loose monetary policy because the fragile economy can't afford the volatility that would come with expected tightening....

'The Fed is in checkmate, and this is why the gold market is still so exciting for me,' he said. 'They will do everything they can to keep interest rates low because they can't afford higher rates. It is only a matter of time before we see new historically low negative yields.'

As to how high gold prices go, Grosskopf said that his investment firm still sees prices pushing north of $2,000 an ounce this year."

bidenomics Three pitfalls of Bidenomics -Washington Examiner

"As we approach the four-month mark of the Biden administration, we are beginning to see the initial results of President Joe Biden's economic agenda. Suffice to say, the results of Bidenomics so far have been lacking....First, reverse the Trump administration's crowning achievement of energy independence.

The Biden team accomplished this by terminating the Keystone XL pipeline, halting oil and gas leasing on federal lands, rejoining the Paris climate accords, demonizing fossil fuels daily, putting a huge emphasis on unreliable and unaffordable renewable energy, and making climate change a central priority throughout the federal government. The results have been disastrous - unless you enjoy gas shortages and skyrocketing energy prices....

Second, Bidenomics is about increasing government dependence. Since taking office and signing the American Rescue Plan into law, Biden has sent a clear message to the public: You don't have to work because Uncle Sam will take care of you.

This element of Bidenomics manifested in a disastrous April jobs report, in which only 266,000 jobs were created when economists forecast at least 1 million jobs would be created....

The third and probably most perilous aspect of Bidenomics is the embrace of Modern Monetary Theory. Boiled down to its most simple terms, Modern Monetary Theory claims the federal government can literally print money to no end. It also claims, wrongly, that inflation can be micromanaged by all-knowing bureaucrats, which it cannot....

So, if you like higher prices and long lines at the pump, more people on the government dole, skyrocketing inflation, and trillions more added to the $28 trillion national debt, you are going to love four years of Bidenomics."

The War on Retirement -AIER

"Of the five most expensive wars the United States has waged, only one - World War II - involved an armed enemy. The other five - poverty, drugs, terror, and Covid, were all wars on nouns. Now the federal government appears to have inadvertently stumbled into another war - the War on Retirement. Unlike the other wars on nouns, this one isn't only undeclared, it wasn't even intended. But the federal government has taken a series of steps that, regardless of intent, have yielded a situation in which retirement may end up a pipe dream for many.

Ironically, this war on retirement began with Social Security in 1935. Rather than establishing a forced savings program wherein people would save money during their working years and have that money returned to them during retirement, the government established a Ponzi scheme wherein later participants paid off earlier participants. As with all Ponzi schemes, the program was sustainable only if there were more people paying into the system than were receiving benefits from it.

By the early 1980s, too few people were paying in, and Congress fired its first salvo at retirees by making previously tax-free retirement benefits taxable. This tweak in the rules breathed new life into the Ponzi scheme, and Social Security reserves once again grew. But the scheme faltered again in 2010 and since then, Social Security has been paying out more than it brings in. Current estimates have the trust fund becoming insolvent by 2035....

The Federal Reserve, predictably, has been an invaluable ally in the government's unwitting war on retirement. Since the late 1980s, the Federal Reserve has been relentless in driving interest rates down. Interest rates on savings accounts, certificates of deposit, and even Treasury bills are now functionally zero....

And now the Biden administration presents the coup de grace. President Biden has proposed doubling capital gains tax rates - you know, the taxes you pay when you make a profit in the stock market!

The White House says that the elevated tax will only apply to those earning over $1 million, but taxes on "the rich" have a solid history of eventually being applied to everyone else. For reference, look at the birth of the federal income tax. Politicians promised the new income tax would only be one percent and would only apply to the rich. Once instituted, it took Congress only five years to raise the income tax rate six-fold and to apply it to everyone, even the poor....

World War I shouldn't have happened. It was an unintended cascade of what should have been isolated events. So too the War on Retirement. The government never intended to wage war on retirees, but it has set in motion policies that, collectively, do just that."

More investors than ever are borrowing to buy stocks -Marketwatch

"Total margin debt has nearly doubled since March 2000. To the bulls, rising margin debt means investor sentiment should be strong enough to propel the market higher. To the bears, in contrast, it is a contrarian indicator, with high levels indicating dangerous levels of speculative excess....

There were 43 months over the decade prior to March 2000 in which margin debt hit a new all-time high. Only in retrospect can we know that the 43rd of those new all-time highs coincided with the top of the market. There would have been no way of knowing, in real time, that those other 42 cases were not signaling a market top.

The bottom line? Margin debt's new-all-time high in the latest reporting month might coincide with the final top of this incredible bull market. Or it might not. Analysts need to look to other indicators beside margin debt for help in determining which it might be."

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5.24.21 - A Global Recovery That Isn't Real

Gold last traded at $1,882 an ounce. Silver at $27.77 an ounce.

NEWS SUMMARY: Precious metal prices rose above 4-month highs Monday amid ongoing dollar and cryptocurrency weakness. U.S. stocks climbed, led by the technology sector and shares benefiting the most from the economic reopening.

Inflation Forces Investors to Scramble for Solutions -Wall Street Journal

"Pickup in consumer-price momentum leaves tough choices in assets like gold...Signs that inflation is picking up momentum are adding a new dimension to the post-lockdown market rally, forcing investors to make difficult decisions about how to protect their portfolios from the emerging threat.

Investors have a variety of options at their disposal but face near-record prices for old standbys like gold, sending some searching for alternatives that may be even more imperfect. Inflation fears have buffeted stocks, pulling major indexes back from records. Some have even talked up bitcoin as an inflation bet, but it fell as much as 30% during a trading session last week.

The challenge facing investors was apparent this month when new data showed a surprisingly large jump in consumer prices....

The stakes are high for investors. Inflation dents the value of traditional government and corporate bonds because it reduces the purchasing power of their fixed interest payments. But it can also hurt stocks, analysts say, by pushing up interest rates and increasing input costs for companies....

As it stands, many investors are optimistic about the long-term outlook of commodities, from corn to copper, arguing that prices have room to rise, even after a significant rally this year. Commodities, they argue, could be supported by continued strong demand from consumers and relatively limited supply, as many natural-resource companies take a conservative approach to production."

Gold in Top Gear -FX Empire

"For on a closing points basis from Gold"˜s low of $1683 this past 30 March, price in settling yesterday (Friday) at $1882 has since driven 199 points (+11.8%) higher across those 37 trading days. Apply that rate from your tachometer to your speedometer's odometer and you'll find it reads Gold $2713 at year-end. ("˜Course hardly is Gold's undulating circuit a straight-line dragstrip).

Still, like point-acceleration paces happened essentially twice in last year's COVID-driven 'fear-and-debasement' volatility, prior to which we must go all the way back to 2012 to find like points changes up through the gear box....

gold chart

So purposeful across the past seven-plus weeks has been Gold's gain that - even more impressively - 'tis been up and largely through the $1800s' structural price resistance to which we've alluded in recent pieces. Were such pace to continue, Gold would reach our forecast high for this year of $2401 come 08 October....

All the foregoing in mind, we remind you as well of last week's missive 'Gold Works Whilst Stagflation Lurks'....So don't end up in the financial Armco with a shunt; stay in top Gear with Gold to be out front!"

We'll Continue Hearing About a Global Recovery That Isn't Real -Snyder/RealClearMarkets

"We live in a non-linear world, and that means, among other things, rate of change governs everything whether we consciously perceive this or not. Sometimes tampering with the slope leads to immediate reaction....

We live in a non-linear world, and that means, among other things, rate of change governs everything whether we consciously perceive this or not. Sometimes tampering with the slope leads to immediate reaction. More often, changes in the rate of change aren't easily appreciated in the here and now, playing out instead over prolonged periods of deep debate and, if left unchecked, division.

The only ironclad rule in political economics, as it used to be known, is that the rate of change in economic growth contributing to the same in living standards is, over time, inversely proportional to the rate of change in that system's political and social makeup.

Essentially high growth equals political stability, the kind which further contributes to high growth. On the flipside, any economy sure can find itself growing but not nearly enough; history providing ample examples. When its rate of change is and remains too low, the torches get lit and pitchforks find their way out of the backcountry barnyard....

With the US CPI and the crypto slump up at the top and populating most US and developed world news sites, the tremor which struck down at the farthest edges of South America over the weekend rated little or no notice....

Many Americans cannot see the forest for all these trees, especially those on the right looking to Wall Street for cues on 'capitalism's' status. The siege is global because the issue behind it is global, and for all these years unrecognizable to the public since no one wants to admit we have a huge problem on our hands. QE's do dazzle the popular imagination, if accomplishing nothing else....

Rate of change. The one in economy goes down and stays down, the one for politics goes up and only becomes more extreme. And this really isn't about just Chile....And yet, for however many more months still, all we'll hear about is global recovery (yet again) when so much - beyond GDP - has already been lost."

Inside the Rise and Fall (and Rise and Fall) of Crap Coins -Vanity Fair

"Welcome to the era of 'pump and dump,' where investors bummed about missing out on getting rich with Bitcoin are being taken for rides by online jokesters pushing tokens with nonsensical names and no clear value.

Over the past few months, discussion of a new crypto coin, called FEG Token, started to slowly sprinkle across the internet. FEG, which has a logo of a gorilla and is an acronym for 'Feed Every Gorilla,' started to appear on message boards online, with a smattering of anonymous investors saying the coin was 'the easiest opportunity for you to get rich,' and that everyone 'should take a look at' this new cryptocurrency. Soon enough, more unnamed investor types with obscure Twitter handles began discussing this new coin on Twitter, touting it as the next big crypto investment. In turn, chats about FEG started popping up on Discord, Reddit forums, and countless accounts on Instagram.

People were enticed to join a Telegram group, which soon grew from a few dozen random crypto insiders to around 40,000 wannabe investors, who seemed to be on the chat on a rolling-around-the-clock basis, constantly sharing gorilla memes and gorilla jokes and gorilla analysis on FEG Token and talking about how many they had all purchased, or planned to, and how the price was going to skyrocket. There were voice chats about FEG. On YouTube, an army of 'crypto experts,' who host daily and weekly crypto shows in every language imaginable, started touting FEG as the opportunity of a lifetime, dissecting the company's white paper, and waxing prophetically about it being the 'coolest, newest crypto' imaginable.

On Saturday, May 8, after a few weeks of tepid movement, FEG took off into the stratosphere as hundreds of thousands of random investors (who had been enticed to do so on all of those platforms) started to buy the coin. Over about a three-day period, the value of the token rose exponentially. Then, on Thursday around 1 p.m., the value fell like a mudslide, and over the next three hours all of those anonymous investors who had touted the value of FEG for the past few weeks off-loaded about $120 million worth of profits.

What happened to FEG was an orchestration called a 'pump and dump,' where a group of random and anonymous crypto traders pump up the value of a new cryptocurrency across the entire internet, so that hundreds of thousands of unsuspecting wannabe investors, hoping this is their opportunity to get rich quick, buy hundreds of millions of dollars of this new coin, only to watch their fortunes vanish when the pumpers collectively 'dump' their share, and make off with the money they have convinced those wannabe traders to invest in.

In the end, the anonymous crypto traders who are constantly pumping up these coins make off with millions of dollars in the process. One crypto trader I spoke to told me they invested 'a couple of grand' that was pumped up, and a week later the investor sold at a $500,000 profit....

If all of this sounds like a joke or scam or something in between, that's because shit coins are half legitimate and half not. For example, Dogecoin, which some people call an 'altcoin' and others simply a shit coin, was famously started as a joke and was lost to near obscurity a few months ago until the internet's number one 'crypto Karen,' also known as Elon Musk, decided to make a big to-do about it. As a result, Doge is now worth around an astounding $50 billion, more than the value of the Ford Motor Company."

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5.21.21 - Cryptos Face SEC, CFTC, IRS Regulatory Scrutiny

Gold last traded at $1,872 an ounce. Silver at $27.30 an ounce.

NEWS SUMMARY: Precious metal prices steadied near 4-month highs Friday despite a firmer dollar. U.S. stocks traded mixed as the tech sector came under pressure again amid another drop in bitcoin price.

Gold is still relatively cheap and could surge back toward its all-time high -Strategist/CNBC

"Gold is still a 'relatively cheap' investment opportunity and could keep rising even if it soon topped $1,900 per troy ounce, one strategist said Thursday.

TD Securities head of global strategy Richard Kelly told CNBC's 'Street Signs Europe' that 'gold had a phenomenal run-up over the course of last year, and when that reversed, I think it scared a few investors off.' The spot gold price hit an all-time high of $2,063 per troy ounce in August last year....

Kelly also noted gold's relation to the U.S. dollar. Since gold is typically priced in dollars, any fall in the greenback could lead to higher gold prices.

Kelly believes that the dollar - and even other major currencies like the euro - were now looking 'rich' on a relative basis, suggesting a possible dip against the price of gold.

'Gold is relatively cheap so when you're trying to think about that positioning, gold is definitely one that still has catch-up potential,' Kelly told CNBC."

Crypto industry faces regulatory scrutiny from SEC, CFTC, IRS, others -Protocol

"The wild swings in crypto prices this year have enthralled and disheartened investors, alarmed Wall Street and focused the attention of regulators and lawmakers who already had cryptocurrency in their sights.

With shares of Coinbase, a prize of Silicon Valley investors who placed early bets on cryptocurrency markets, swinging along with the price of Bitcoin, tech is worried too....

Washington once seemed befuddled by cryptocurrency, handing out confusing rulings. But the SEC is now chaired by Gary Gensler, who taught a course on blockchain at MIT. He made it clear at a recent House committee hearing that the crypto industry could come under greater regulation. 'If one trades bitcoin in America today, there's not an investor protection regime,' he said....

While it's unclear if or when Congress might pass legislation on the crypto industry, these agencies could have a major impact on how the industry operates. Yet key agencies still lack permanent heads, and future appointments could shift regulatory strategies considerably....

Currently, crypto exchanges have no overarching regulation, as equity markets do. Coinbase, for example, is registered in most states with a money transmitter license, but not as an exchange....

The Financial Action Task Force, a group of 200 countries and jurisdictions that sets international standards related to money laundering and terrorist financing released a draft of new guidance on regulating digital assets in March....

Some in the crypto industry aren't happy. Coin Center argued that the guidelines are overly broad in requiring companies that aren't acting as custodians of cryptocurrencies to register and conduct anti-money laundering activities. Currently FinCEN requires only those controlling the assets be regulated as money transmitters. The draft guidelines also seem to suggest prohibiting peer-to-peer cryptocurrencies and privacy coins, Coin Center said....

The IRS has been less vocal on cryptocurrency, though on Thursday, the Treasury said the tax agency would require disclosure of cryptocurrency transfers worth more than $10,000. Beyond beefing up reporting requirements, there are two categories of issues. First, what constitutes income and basis, a matter that gets complicated as the tax authorities have to figure out what to make of technical aspects of cryptocurrencies like hard forks and airdrops."

Cryptocurrency Has Yet to Make the World a Better Place -Wall Street Journal

"A truly consequential innovation is one that makes possible entirely new business models that touch the lives of millions. The car enabled motels and shopping malls, the internet enabled e-commerce, and smartphones and GPS enabled ride-sharing.

What business model that touches the lives of millions have cryptocurrencies such as bitcoin made possible? American motorists now know: ransomware. In such attacks, hackers encrypt and sometimes steal the victim's data, demanding a ransom to decrypt and not release the data. Crypto is how Colonial Pipeline Ltd. paid hackers who earlier this month forced offline a conduit that supplies 45% of the East Coast's fuel.

A few days after the Colonial attack, Tesla Inc. announced it would no longer accept bitcoin as payment for cars because of the carbon emissions generated by the computer processing necessary to mint new coins.

The two events underline how an innovation that was supposed to displace the dollar as a medium of exchange has proved largely useless for buying legal things yet frighteningly effective at facilitating extortion....

True, legitimate business does get transacted with cryptocurrency. But not much; the vast majority of turnover in crypto is trading and speculation. Chainalysis, a crypto security company, estimates merchants received $2.8 billion in crypto payments last year, less than in 2017, though payments this year are ahead of the pace in 2017.

By contrast, it estimates illicit entities received 75% more: $4.9 billion last year, though that's down substantially from 2019. The fastest-growing category is ransomware: Payments quadrupled to $348 million last year from 2019. That's almost certainly an undercount since many ransoms aren't reported....

Cryptocurrencies are supposed to be a hedge against inflation because issuance is usually restricted. But that's only true of an individual currency. As an asset class, cryptocurrency inflation is rampant: There are now more than 5,000 coins. Gold never faced competition from dozens of new precious metals hitting the market each month.

Gold became a store of value because through most of history it was also a medium of exchange: Coins were once minted from it, and paper money was long backed by it. If crypto never finds acceptance as a medium of exchange, its usefulness as a store of value is also in doubt."

Nobel Winner: Artificial Intelligence Will Crush Humans, 'It's Not Even Close' -Futurist

"It's common knowledge, at this point, that artificial intelligence will soon be capable of outworking humans - if not entirely outmoding them - in plenty of areas. How much we'll be outworked and outmoded, and on what scale, is still up for debate. But in a new interview published by The Guardian over the weekend, Nobel Prize winner Daniel Kahneman had a fairly hot take on the matter: In the battle between AI and humans, he said, it's going to be an absolute blowout - and humans are going to get creamed.

'Clearly AI is going to win [against human intelligence]. It's not even close,' Kahneman told the paper. 'How people are going to adjust to this is a fascinating problem.'

Why listen to Daniel Kahneman? His 2011 book, 'Thinking, Fast and Slow' - over two million copies sold - is one of the most influential tomes in the field of behavioral economics, exploring how and why humans think the way they think (the 'fast' thinking of the title being intuitive; the 'slow' thinking being rational), and what leaves us prepared (or unprepared) to make decisions about our future. But moreover, he won his 2002 Nobel Prize for pioneering 'prospect theory,' which explains how people rationalize the difference between gains and losses, and how their thresholds for risk aversion and risk appetite work.

And why, according to Kahneman, are we so unprepared for the forthcoming takeover of artificial intelligence? Speaking to the way the pandemic overtook an unprepared world, Kahneman cited the exponential growth of the virus. Human minds, he explained, are essentially unequipped to handle the basic math underlying how something like a Covid outbreak can spiral out of control on a global scale....

Winding up into the discussion about AI, Kahneman noted the issue with human minds: 'There is going to be massive disruption. Technology is developing very rapidly, possibly exponentially. But people are linear. When linear people are faced with exponential change, they're not going to be able to adapt to that very easily.'

Kahneman cites medicine as one place humans are going to be replaced, 'certainly in terms of diagnosis.' And elsewhere, he issues a stark message to the boardrooms of the world: 'There are rather frightening scenarios when you're talking about leadership. Once it's demonstrably true that you can have an AI that has far better business judgment, say, what will that do to human leadership?'

If nothing else, Kahenman's quotables feel canny - like maybe if the people in the C-suite are scared for their jobs, someone who can do something about any of this might actually listen."

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5.20.21 - Fed Anti-Inflation Argument Is Absurd

Gold last traded at $1,876 an ounce. Silver at $27.76 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on safe-haven buying amid market volatility and a weaker dollar. U.S. stocks attempted a rebound from a brutal tech-led sell-off as upbeat jobs data lifted investor sentiment.

Gold extends winning streak to a 5th session as bitcoin tumbles -Marketwatch

"Gold prices climbed for a fifth straight session on Wednesday, extending their rise to their highest level in four months. Moves for the metal came on the heels of a tumble in bitcoin and as U.S. benchmark stock indexes declined.

Minutes from the Federal Reserve's April meeting, released after gold futures settled for the session, showed that members of the Federal Open Market Committee agreed that any price increases from bottlenecks are likely to only have 'transitory effects' on inflation.

Precious metal investors fear that out-of-control inflation could prompt the Fed to rapidly lift benchmark interest rates - a move that would weigh on bullion...

However, the fact that the minutes showed that officials believe the economy remains far from committee's inflation goal shows the Fed "will not taper or allow rates to rise quickly, and can live with inflation under their belief it is "˜transitory,'" said Jeff Wright, chief investment officer at Wolfpack Capital....

Either way, that's 'good for gold' as the expectation will be the U.S. dollar will have to 'slip in face of inflation and continuing lower rates, without guidance to when Fed is comfortable with normalized interest rates,' he said."

inflation The Feds' Anti-Inflation Argument Is Absurd -Rogue Economics

"Economists are studying the numbers. Is inflation heating up"¦ or cooling off?

Should they be looking at the Consumer Price Index (CPI)? The CPI-U (for urban customers)? With or without food and energy? The Personal Consumption Expenditure price index (PCE)? ShadowStats?

They watch the thermometer and check the skies.

In the following few words, we explain why we think they are wasting their time.

You can tell it's getting warmer by looking at data points. Check the thermometer every day and you may begin to see a trend. But if you are planting a crop or planning a vacation"¦ you might also check the calendar....

Here at the Diary, we are sometimes right, sometimes wrong"¦ and always in doubt.

Will the April numbers mark the decisive turning point - when inflation turns definitively and dramatically upwards? We'll know in a few months. In the meantime, we reach for a deeper insight.

Consumer price inflation comes as a result of monetary inflation; that is all we know for sure. Modern Monetary Theory (MMT) tells us that government is the source of money (which the MMTers believe is the same as wealth).

It's government printing and spending that make the money world turn, they say.

They add that the feds can print and spend as much as they want - 'investing' to create a safer, more prosperous, and more perfect union - until consumer price inflation rises.

When that day comes, they promise, they will 'pivot' to inflation-fighting policies. But lo! That day came last Wednesday.

And what's this? Quelle surprise! Their eyes still on the thermometer"¦ they tell us why the recent readings are not to be trusted....

It's not government printing and spending that create real wealth; instead, as sure as June follows May, they create real inflation. And if you wait for the Bureau of Labor Statistics to confirm the trend, it may be too late to plant your radishes.

'No need to pivot just yet,' they say. We live in a world of perpetual springtime; they're convinced of it. Stocks always push up, like jonquils in April. The warm rain of deficits and money-printing eternally stirs the dull roots of the economy."

Coinbase IPO Turns Out to Have Been Bad Day to Splurge on Crypto -Bloomberg/MSN

"The rise of a slew of coins went on just long enough to pull in a bunch of otherwise sensible money. And then they made them pay. The siren song reached a peak with Coinbase Global Inc.'s market debut on April 14.

The direct listing of the largest U.S. crypto exchange supercharged theories that crypto had made it to the investing mainstream, that Wall Street's embrace lent legitimacy to the asset class and the sky was the limit. Retail investors flooded in.

Veterans of the 2017 Bitcoin bubble no doubt had flashbacks. Back then, when the token dominated holiday conversations as its year-to-date gains approached 1,800%, CME Group Inc. ushered Bitcoin into the mainstream with the introduction of the first contract on a U.S.-regulated exchange.

Their debut, on Dec. 17, sent Bitcoin to a record $19,511 the next day. But pressures from the increased scrutiny from regulators around the world caused the coin to plunge about 40% by Jan. 17.

A similar dynamic is seemingly at play now as Bitcoin falls back to earth, with selloffs spurring more selloffs.

'The expansion of the holder base has been remarkable over the past year, especially thus far in 2021,' said Michael O'Rourke, chief market strategist at JonesTrading. 'New speculators are learning for the first time what happens when a bubble pops.'

The largest cryptocurrency at one point on Wednesday lost 31% to drop close to $30,000, less than half of its record of almost $65,000 in April.

'The crypto bubble has started to unravel and data from different exchanges suggest that retail investors are capitulating,' noted Vanda Research analysts Ben Onatibia and Giacomo Pierantoni in a note Wednesday."

It's Capitalism and Freedom That Deserve Our Thanks for Conquering Covid -NY Post

"'Thanks, science.' The phrase is suddenly ubiquitous on social media posts from individuals grateful that they or their children have just been vaccinated against Covid-19.

I'm grateful for the impulse people have to express gratitude. Surely science, in the sense of the technical knowledge required to develop an effective vaccine and the empirical method used to test it, has indeed played a crucial role in vaccine development.

Thanking 'science' at such a moment, though, betrays a certain tendency to attribute good things to science while ignoring the role that science plays in bad things. Such an approach is inconsistent with the clear thinking that characterizes the best science.

Yes, science has helped create and manufacture the vaccines. So, though, did President Trump and his son-in-law, Jared Kushner, who championed Operation Warp Speed to discover, manufacture, and distribute an immunizing shot. Somehow, needle-in-arm vaccination photos with 'Thanks, Jared Kushner' labels seem to be rare.

In capitalism, the profit motive provides financial rewards for innovative products and services that people voluntarily purchase or consume. This particular case is complicated because government played a significant role as a purchaser of vaccines and funder of research.

Even so, the vaccines were developed and made by for-profit companies, such as Pfizer, Moderna, and Johnson & Johnson. Individuals are choosing to be vaccinated, and for-profit companies like CVS and Walgreens are playing a role in administering the vaccines. Somehow, needle-in-arm vaccination photos with 'Thanks, free-enterprise system' labels are as rare as the 'Thanks, Jared Kushner' ones....

So thank science, sure. If you do, add thanks, too, for capitalism and freedom, for democratic governments, and for inspired individuals who have chosen to use science not to persecute but to heal."

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5.19.21 - Crypto Plunge: Bitcoin Tanks 30% to $30,000

Gold last traded at $1,867 an ounce. Silver at $27.59 an ounce.

NEWS SUMMARY: Precious metal prices rose sharply early Wednesday amid a major stock and cryptocurrency market sell-off. U.S. stocks were hit hard as massive selling returned to the tech sector amid a 30% plunge in Bitcoin prices.

The 2-Year Gold Bull Market Has Started -Seeking Alpha

"The gold price has been consolidating for almost a year now since the peak of last August. I believe that this consolidation has ended and we are now going to start a 2-year bull market in gold....

I believe the rise in bond yields is about to slow down as we see signs of deterioration in the economy. The U.S. unemployment rate inched higher in April of 2021.

Additionally, inflation is also hitting new highs. Producer prices hit a new high of 6.2% year over year in April. As producer prices rise, the costs will be passed on to the consumer and will likely lead to higher consumer prices.

We also took notice that the Federal Reserve is starting a new round of 'Operation Twist 2.0'. Operation Twist aims to manipulate the yield curve by selling lower maturity treasury securities and buying longer- dated ones....Institutions took notice of this change in events in monetary policy and have started buying gold...

We are also seeing a shift in gold demand from China and India. SGE data shows that China's gold demand has doubled year over year and Indian customs data shows that Indian gold imports have done the same.

In conclusion, everything is pointing upwards on gold. So how long will this gold bull market last? Charles Nenner believes this gold bull market has just started and will last for about 2 years based on his model on neural networks. I suggest investors to get in on this trade of a lifetime."

bitcoin Bitcoin's plunge intensifies, tanks 30% to $30,000 in single day amid broad cryptocurrency sell-off -CNBC

"Bitcoin plunged to near $30,000, continuing a major sell-off that began a week ago. The digital currency was down more than 30% on the day to $30,015.02, according to Coin Metrics.

It hit as low as $30,001.51 as the selling intensified Wednesday morning. The cryptocurrency hasn't traded below $30,000 since late January. Wednesday's decline extended bitcoin's loss for the past week to more than 40%....

Big institutional investors are dumping bitcoin and going back into gold, JPMorgan says....

China's hard line on digital currencies is not new. In 2017, authorities shut down local cryptocurrency exchanges and banned so-called initial coin offerings (ICOs), a way for companies in the space to raise money through issuing new digital tokens.

Traders in China once accounted for a huge share of the bitcoin market but after the crackdown, their influence was reduced significantly. Chinese cryptocurrency operations have moved abroad.

'The crypto markets are currently processing a cascade of news that fuel the bear case for price development,' said Ulrik Lykke, executive director at crypto hedge fund ARK36."

How Monetary Expansion Creates Income and Wealth Inequality -Mises

"'Every change in the money relation alters ... the conditions of the individual members of society. Some become richer, some poorer.' - Mises, Human Action, p. 414.

"New money enters the economy at a particular point. It does not enter in the form of a proportional and simultaneous increase in everybody's incomes. This means that there are uneven effects of monetary expansion, including exacerbated income and wealth inequality. When we trace the consequences of monetary expansion, we notice that it creates winners and losers as resources are shifted toward the first receivers and spenders of new money....

In our modern fractional reserve banking system with an active central bank and profligate federal government, monetary inflation is a given. In the US, money originates as bank reserves created by the Federal Reserve to pay for US government debt or other assets from commercial banks. Commercial banks can then use these reserves as a basis for multiplying deposits in the form of extending new loans....

Monetary expansion increases and exacerbates income and wealth inequality in a permanent way, however. We have seen that incomes rise disproportionately, such that some people's incomes increase before others. We have also seen a clear movement of real wealth toward the first spenders since they are able to successfully bid resources to themselves from others. The increase in inequality is not self-reversing....

Future monetary expansion will multiply these effects - inflation favors those who own real assets. The inevitable result is the emergence of economic classes and the political and social conflict that may entail....

State intervention that exacerbates inequality. They also like to use the term 'trickle down' economics as a discrediting label for policies that would get us closer to a healthy and growing market economy. But there is nothing more 'trickle down' than government money printing from on high."

Jobs Without Takers -City Journal

"The complaint has become ubiquitous: businesses are hiring, but no one wants to work. April's employment data revealed that the labor shortage is more severe than economists had expected. In Florida, even with encouraging steps from Governor Ron DeSantis, we're seeing the trend firsthand.

For the past several years, the Florida nonprofit I operate, Better Together, has worked with local churches and volunteers to hold hiring events that have connected 8,000 people across the Sunshine State with job openings. One in four attendees get hired on the spot; 60 percent find work within six weeks. On average, about 400 job seekers attend each event, with people from all walks of life lining up along entire blocks in search of opportunity.

Not this year. At three job fairs held in late April - in Bonita Springs, St. Petersburg, and Lehigh Acres - only 87 people showed up....

Where was everyone? They were getting paid to stay home. In 2020, at the height of the lockdowns, Congress expanded federal unemployment insurance (UI) to $600 a month. The boost has continued at the clip of $300 a month and seems to be discouraging people from working....

Discouraging work has bad social effects. Work is about a lot more than a paycheck. Holding a job confers dignity, builds new skills, and provides structure and accountability.

I've witnessed the transformative power of work in my own life. My father, released from prison when I was a young child, struggled to find a path forward. Finally, he caught a break when a local plumber offered him work. It kept him sober, giving him a new beginning that allowed him to reclaim his identity, model responsibility, and put his family back together. Had he been paid more money to stay home, his story-and our family's-could have ended much differently....

Citing the 'abundance of job openings' at a news conference last week, Governor DeSantis announced that he would reinstate the work-search requirements for unemployment benefits that were waived at the peak of the pandemic - an important step in encouraging Floridians to get back to work. Other states have taken even more aggressive measures. Still, expanded federal UI remains in place in most states. The federal government should allow the enhanced federal unemployment bonus to expire."

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5.18.21 - Gold Glows As Cryptos Collapse

Gold last traded at $1,868 an ounce. Silver at $28.24 an ounce.

NEWS SUMMARY: Precious metal prices took a healthy breather, consolidating recent major gains Tuesday despite a weaker dollar. U.S. stocks fluctuated after data showed housing starts dropped sharply last month.

Gold Glows As Cryptos Collapse After Musknado; Dollar, Bonds, & Stocks Sink -ZeroHedge

"Black Gold and the barabarous relic were both bid today as crypto, stocks, bonds, and the dollar all slipped lower (and Lumber entered a bear market).

Big-Tech's dead-cat-bounce from last week is over as it underperformed again today as Small Caps recovered from an early drubbing at the open to get back into the green...

Oil prices (WTI) jumped back above $66, but is testing a critical resistance...Gold also surged, to its highest since January...

With real yields continue to tumble, supporting gold's renaissance...Gold is back above its 200DMA for the first time since January...

Bitcoin was a bloodbath after Musk's machinations, back at its lowest since early Feb after trying to test $50,000...It was all going so well til Elon opened his mouth."

gold chart Gold, silver ready to explode -Horowitz/Kitco

"Gold and silver have broken out of their consolidation patterns and are running higher. This could be just the birth of the next big move up. The price action has been bullish; Monday's big move up, especially in silver, indicates there is room to run higher.

Both metals are seeing some follow-through this morning, moving higher towards our next target. We are looking for $1,900 June gold and $29.00 July silver. We expect much higher but will only quote one level at a time. There is no point in making a ridiculous call higher because these markets move one level at a time.

If you look at the chart of gold or silver, they are walking up the stairs, which is the most bullish pattern you can ask for. The only question left to answer is how many stories there are in this building? This move could turn into a skyscraper; we never know how far a move will go.

We remain long gold and silver in both our trading and investing accounts adding physical Platinum on the investing side."

Everything is Transitory -Compound Advisors

"At 4.2%, overall inflation is running at its highest level since 2008. The prices of imports and exports are surging...The price of Copper, one of the most important industrial metals, is now at an all-time high...while the Price of Lumber (a major component of new homes) has gone vertical, up more than 4x in the last year.

Meanwhile, gas prices are above $3 a gallon, at their highest levels since 2014.

At their next meeting, the Federal Reserve will, with a single word, dismiss all concerns related to rising prices: 'transitory.'

What do they mean? Simply: the current rate of inflation is not permanent. And of course that is true, as nothing in this world is permanent.

War. Famine. Pestilence. They all have a beginning and an end. But does that make them insignificant? Hardly, just as higher inflation, even if temporary, is not an irrelevant fact.

Take the extreme example: Venezuela. They have a current inflation rate of over 3,000%, the highest in the world. One could say this is 'transitory' as it will not go on forever, but it is still devastating to the 28 million people that live there. And if inflation were to go down to 1% tomorrow it wouldn't erase the damage that was done....

The prevailing view today is that there are absolutely no downsides to endless easing and deficit spending. And if there are no downsides, you only do more of it.

Even if it means higher inflation? Yes, even that. The Fed today is not only unfazed by higher inflation but seems to be welcoming it. We haven't seen that stance in a long, long time as the Fed (starting with Volcker) has always sought to retain its image as the inflation fighter.

It's been so long since Americans have experienced the harmful effects of inflation that they've either forgotten it or weren't alive to experience it. Which means the Fed has a green light to do as they see fit, monetizing the explosion in debt and throwing fuel on the inflationary fire with promises of 0% rates for years to come."

The Colonial Pipeline Attack is a Wakeup Call -Regan/American Consequences

"I've written before about the need to protect our grid. And I'm writing about it again"¦ Because what just happened with Colonial Pipeline is a wakeup call.

Over the weekend, Colonial Pipeline, the company transporting 45% of the fuel consumed by the east coast, was the victim of a ransomware cyberattack. The perpetrator goes by the name 'Darkside,' and while it purports to not have any political interests, Western security experts believe the group is based out of Eastern Europe and may have ties to Russian intelligence....

The effects of the Colonial pipeline closure were felt immediately"¦ Oil and gas prices spiked, and all over the news we saw the long gas lines, reminiscent of the 1970s, as people waited patiently to fill up their tanks. At present, many gas stations along the east coast have run out of fuel and, as I go to publish this story, there is no real indication as to when the 5,500-mile Colonial Pipeline system transporting oil from Texas to New Jersey will be back in business.

We have a real problem"¦ The Colonial pipeline attack demonstrates how critical it is to protect our infrastructure. A cyberattack on a pipeline is one thing"¦ but, who's to say it couldn't be much worse next time around?

This recent cyberattack proves key parts of our infrastructure are exposed and vulnerable. We must put in place measures to safeguard our highly advanced, technology-dependent infrastructure against threats from ransom criminal gangs and terrorists.

If we don't do more to protect ourselves, our country, and our infrastructure soon, we run the risk that there will be nothing left to protect"¦

The government-commissioned EMP Task Force has not once, not twice, but three times reported to Congress that in the event of an Electro Magnetic Pulse attack, 90% of the American population would be dead within a year.

So, as much as the administration wants to make room for affordable housing and elderly care in its infrastructure bill, the reality is this"¦ There will be no need for social programs in the event that our electric grids are attacked."

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5.17.21 - Gold Prices Scale 3-Month Highs

Gold last traded at $1,866 an ounce. Silver at $28.21 an ounce.

NEWS SUMMARY: Precious metal prices shot up to 3-month highs on a variety of bullish factors amid ongoing dollar weakness. U.S. stocks fell, led by tech shares, after last week's hotter-than-expected inflation readings sparked a downturn in equity markets.

Gold scales over 3-month high on virus worries, lower U.S. yields -Reuters

"Gold prices rose on Monday to their highest level in more than three months, as a dip in U.S.Treasury yields and worries over surging COVID-19 cases in some Asian countries boosted demand for the safe-haven metal....

'Treasury yields are falling and on the other hand, there seems to be fears about virus resurgence in Singapore, Taiwan and broader Asian-Pacific markets... driving up demand for safety,' said Margaret Yang, a strategist at DailyFX.

Benchmark U.S. 10-year Treasury yields slipped to their lowest in nearly a week, reducing the opportunity cost of holding non-interest bearing gold.

Singapore will shut most schools from Wednesday after the city-state reported the highest number of local COVID-19 infections in months, while Taiwan imposed new curbs on gatherings and movement.

In India, the world's second-worst pandemic-hit country after the United States, the tally of coronavirus infections reached nearly 24.7 million on Sunday.

Investors now await minutes of the U.S. Federal Reserve's last meeting due on Wednesday for more cues on the central bank's monetary policy and any comments on rising inflation.

'Inflation is going to be a strong driver behind gold in the short- and medium-term. There are always concerns about Fed tapering, but the latest non-farm payroll report is helping to contain that fear,' Yang said.

The Fed has pledged to keep interest rates low until the economy reaches full employment, and inflation hits 2% and is on track to "moderately" exceed that level for some time."

peak Billionaires Are Selling Mega-Sized Stock Blocks After Surge -Bloomberg

"Stock sales are reaping a windfall for the world's richest shareholders.

Corporate insiders including Amazon.com's Jeff Bezos and Google co-founder Sergey Brin have ramped up stock sales recently, cashing in on a 14-month long bull market that's helped boost fortunes to the tune of trillions.

U.S. public company insiders offloaded shares worth $24.4 billion this year through the first week of May, with about half sold through trading plans, according to data compiled by Bloomberg. That's almost as much as the $30 billion total they disposed of in the second half of 2020....

There are multiple reasons an investor of any size might be motivated to sell. After the pandemic-defying rally, valuations are increasingly under pressure from rising inflation. Investors are wary the post-Covid recovery could prompt tightening measures from the Federal Reserve. And President Joe Biden's proposed tax hikes -- including a near doubling of the capital gains rate - have created uncertainty.

Whatever the reason, the sales are flooding the market with yet more liquidity, the consequences of which will ripple through philanthropy, the art market, real estate and other niches.

Bezos has sold $6.7 billion worth of Amazon shares this year. While a relative pittance for the world's richest person, it's more than two-thirds the value of shares he sold in 2020. Larry Ellison unloaded 7 million Oracle shares in the past week for total proceeds of $552.3 million. Charles Schwab has sold $192 million worth of shares of his eponymous brokerage this year."

War Of Words Over Inflation Stirs Questions for the Fed -Sheldon/New York Post

"The war of words unleashed on Wall Street and in Washington by Wednesday's announcement of an unexpectedly high rate of consumer price inflation is escalating by the day.

Legendary hedge fund manager Stanley Druckenmiller had warned on Tuesday in the Wall Street Journal that the Fed was enabling fiscal and market excesses by not standing up to the political whims of Congress; he stated on CNBC that the Fed's overly accommodative monetary policies posed a risk to the status of the United States dollar as a global reserve currency....

What seems to be missing in the debate over whether the inflation number itself is alarming as a bellwether - some were disconcerted when the Fed's vice chairman, Richard Clarida, admitted that it 'surprised' him - is the larger question of government competence in steering the economy.

Does it make sense, for a nation founded on the notion of individual liberty, equality under the law, and personal property rights, to allow a government agency to manipulate the value of the currency used by its citizens? Would it be better to have a stable monetary foundation to facilitate free-market outcomes, rather than empower the Federal Reserve to distort interest rates and dilute dollars in the service of government policy?....

Even as the Fed appears to be signaling its willingness to comply with a progressive agenda that would enlist our nation's central bank in efforts to focus on climate change or systematic racism, there is growing skepticism that the solution to such problems is to be found in Fed purchases of Treasury debt and government-backed mortgage securities.

In short, while economists and policy makers bicker about the implications of an inflation number that raised eyebrows for some, bile for others, and now has become a marker for questioning the infallibility of government management of the economy, most Americans are left wondering what it means for their own financial well-being and prospects.

Some may even start questioning whether Fed officials' insistence that being 'patient' about tolerating higher inflation 'for some time' until there is 'substantial progress toward our goals' provides meaningful forward guidance."

Inequality Would Widen if U.S. Policies Spur Sustained Inflation -Wall Street Journal

"Federal Reserve and Biden administration officials say economic inequality is bad and they aim their policies in part at helping to reduce it. In the short run, at least, those policies might be widening inequality, not shrinking it.

In recent months, inflationary pressures have caused the cost of living to rise faster than paychecks, meaning a paycheck hasn't been going as far as it did before. Consumer price inflation in April rose 4.2% from a year earlier, while hourly pay for production workers rose 1.2%, the Labor Department reported last week....

A fall in inflation-adjusted wages hits low- and moderate-income households especially hard, because they dedicate a larger share of their paychecks to covering daily living costs. The numbers might be temporarily skewed, but if inflation persists and is fueled by the Fed or the Biden administration's policies, it could raise questions about the costs and benefits of those policies for working Americans.

Economists describe inflation as a regressive tax - meaning it hits low-income workers hardest. 'I don't see anything good happening from an economic inequality perspective,' said Karen Petrou, a financial analyst and author of 'Engine of Inequality,' a critique of Fed policy. 'Most American households are living hand to mouth.'

Ms. Petrou said a decade of the Fed's low-interest-rate policies have mostly helped the wealthy by pushing stocks higher. That effect has accelerated recently. While inflation-adjusted wages fell in April from a year earlier, the Dow Jones Industrial Average was up more than 40% over the same period. The wealthiest 10% of U.S. households own 88.5% of stocks, according to Fed data....

In the mind of many Fed policy makers, inflation has been too low for too long - undershooting its 2% goal. Most Fed officials see low interest rates as a path to stronger wage growth: By helping to boost demand and push the unemployment rate down, they argue, they are giving workers bargaining power with employers to demand sustainable pay increases that outstrip inflation. That is what was happening in 2018 and 2019, before the Covid-19 crisis.

Money pouring into the economy isn't just coming from the Fed. A $1.9 trillion coronavirus-aid bill was signed by President Biden in March that sent $1,400 checks to households, extended jobless benefits and expanded child tax credits."

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May 14, 2021

5.14.21 - 'Worst-case scenario' Warning for Retirees

Gold last traded at $1,841 an ounce. Silver at $27.33 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday as retail sales data weighed on the dollar. U.S. stocks rebounded for a second day led by technology shares.

Inflation pressures to drive gold prices to $2,000 as Federal Reserve holds the dovish line -Aberdeen Standard Investments/Kitco

"The gold market's recent break above $1,800 an ounce could be the start of a more significant move through the second half of the year that could push prices back to $2,000, according to one market analyst.

Gold is attracting attention as a hedge against inflation, but Steven Dunn, head of exchange-traded products at Aberdeen Standard Investments, said in an interview with Kitco News that it also remains an important diversifier as volatility heads up in over-priced equity markets.

'Gold has not yet seen its best days in 2021,' he said. 'I have always expected that the second half of the year would be a lot more interesting for gold and maybe we are starting to see that play out a few months early.'

Dunn's bullish outlook for gold comes as investors look for prices to push above its 200-day moving average, which comes in around the $1,850 level. Dunn said that the inflation debate is holding the gold market back a little bit because investors and the Federal Reserve don't have a clear picture of the looming inflation threat....

'The Federal Reserve is going to remain as cautious as possible, for as long as possible. That will be positive for gold,' he said.

The inflation story is just one fundamental pillar of support for gold in the current environment. Dunn said that if hawkish comments from the U.S. central bank start to creep into the marketplace, he would expect to see significant volatility in equity markets. He added that gold would look attractive as an important diversifier."

bitcoin Cryptocurrency Wealth and True Inflation -Bonner/Rogue Economics

"Poor Dogecoin. The crypto pooch is in the doghouse, after self-proclaimed 'Dogefather' Elon Musk called it a 'hustle' on Saturday Night Live. The joke didn't go down well"¦

But not to worry, the joke isn't over. There's another bow-wow coin called Shiba Inu (SHIB), which is taking up the slack. At its high on Monday, the new dog-based meme coin was showing a 1,700% gain - in a week"¦ and is now worth more than $6 billion.

Which just shows what we know. Here at the Diary, we wouldn't have paid 10 cents for it.

The idea behind the world's first crypto, bitcoin, was that the computer algorithm would limit the supply, making the new money a plausible substitute for the dollar"¦ and even for gold.

But Dogecoin - a spoof currency - was never limited"¦ And neither, apparently, is SHIB. There are said to be nearly 400 trillion of these coins already cluttering up the crypto-sphere....

While the 'free market' is destroying real capital by 'investing' time and resources in these pranks, the federales are destroying even more wealth with their jackass programs.

This week, Democrats and Republicans huddled together to see how they could misuse some $4 trillion more. Of course, it was obvious to one and all that the feds don't have that kind of money"¦ and can't raise it by borrowing private savings or increasing taxes.

They will have to print it, which guarantees price increases....So far this year, according to our colleague David Stockman, consumer prices have been rising at a 7% rate, annualized. And if housing were properly included (rather than the statisticians' 'owner-equivalent rent' fantasy), the real rate would probably be over 8%.

And so"¦ the 'Inflate or Die' trap closes in on Treasury Secretary Janet Yellen and Fed chief Jerome Powell"¦ and on the whole company of dreamers and schemers who thought they could print money forever...But now that inflation is back in town, how will the Fed 'address'it?

As recently as last Friday, it thought it could duck the question. The coast was clear; higher unemployment numbers left the Fed free to keep printing money. But now what? Does it inflate more? Or let the boom die?"

'Worst-case scenario' warning for retirees and the 4% rule -Marketwatch

"A new study brings a fresh warning for retirees hoping to rely on the so-called '4% rule' to make their money last until they die.

Those expecting to retire soon may face a 'worst-case scenario' as a result of elevated stock prices and record low bond yields, warn Jack De Jong, finance professor at Nova Southeastern university, and John Robinson, a financial planner in Honolulu (the pair are co-founders of a financial planning business, Nest Egg Guru). Many need to slash their spending as a result.

The so-called 4% rule was coined by financial planner William Bengen in 1994. Using historical data, he estimated that a new retiree should be able to make their money last for their remaining years if they followed a simple two-step process.

First, in the initial year of retirement, spend no more than 4% of your portfolio's value. And second, in all subsequent years, increase that spending only in line with inflation....

What's ominous for today's likely retirees is that current math looks even worse than it did in 1999, at the peak of the last stock market mania.

That's because retirees typically hold a portfolio of stocks and bonds. And while stocks are not quite as expensive today as they were in 1999, bonds are much more so....

DeJong and Robinson write, 'A worst-case scenario would be one in which the lost decade for stocks began and lasted over a period when interest rates were at historic lows and either stayed low or rose in conjunction with high inflation.' And that, they add, may be what retirees face now."

Corporations Are Getting Rich off Government Aid -Stossel/Reason

"Congress passed the $2.2 trillion HEROES Act. House Democrats said it gives money to 'governments who desperately need funds.'

But it also gives lots of money to people who don't need funds.

Maryland, which even The Washington Post admits is 'flush with cash,' got enough extra money to pass a budget that 'hands bonuses to every state worker.'

Even Atherton, California, where the median home price is $6 million, got HEROES Act money. 'There was no means test!' complains Lisa Conyers, author of Welfare for the Rich, in my latest video.

Omni Hotels & Resorts received $68 million in loans. Major airlines got $25 billion in loans from the CARES Act.

'Who wouldn't like to play Santa Claus?' asks Conyers. 'Who wouldn't like to just be able to give everybody some money?'

Welfare for the rich didn't start with coronavirus relief bills. Politicians have done it for years, and a pandemic didn't stop them....

A study by the Federal Reserve Bank of Kansas City found new stadiums bring in about $40 million in jobs and tax benefits, much less than the $188 million that taxpayers pay. Handouts to other corporations fare no better.

Ohio politicians gave General Motors millions in tax credits to keep its Lordstown plant open. GM then closed the plant. Politicians let GM keep a third of the money.

Wisconsin gave nearly $3 billion in tax breaks to Foxconn because it promised to create 13,000 jobs. Now the company promises to create only 1,454. 'If you look at the cost of each job, it was a million dollars,' Conyers points out."

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May 13, 2021

5.13.21 - Fed Endangers Dollar's Global Reserve Status

Gold last traded at $1,825 an ounce. Silver at $27.08 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on rising inflation data and a flat dollar. U.S. stocks rebounded from steep losses in the previous session as investors picked up major technology shares after the pullback.

Gold vs $200 Trillion Counterfeited Money -Gold Switzerland

"All fiat money is fake and produced at will with the press of a button by the culpable bankers. Fiat money is today produced electronically which means at no cost. So it is obviously today not even worth the piece of paper it is written on.

Anything that can be produced in unlimited quantities at no cost can by definition not by worth more than ZERO. Ayn Rand said that 'we can ignore reality but not the consequences of reality'.

And reality is that just in this century over $200 trillion of debt or fake money has been produced in the world. That is 200% more than all the debt monies created ($100T) in history until year 2000. This sum obviously excludes promises and lies in the form of global unfunded liabilities, (medicare, social security, pensions etc) plus up to $2 quadrillion of derivatives which will end up worthless.

But few realize the consequences of the world's insatiable need of fake money. The super bubble will inflate until it one day it totally implodes....

As I mentioned in a Tweet last week, gold has now finished the correction since August 2020 and is on its way to around $3,000 as an initial target....Very few investors are aware that gold has outperformed virtually all asset classes, including stocks, in this century. But gold should not be seen as an investment but as an asset for 'freedom and benefit'.

In an investment world which consists primarily of insanely overvalued paper assets, physical gold represents sanity and eternal wealth. Gold is also the ultimate insurance and wealth preservation asset against a very fragile financial system.

Anyone who fails to protect his family's and future generations' wealth is not only irresponsible but stands to lose virtually everything as the most epic asset bubble in history bursts."

economy Fed endangering dollar's global reserve status -Druckenmiller/CNBC

"Federal Reserve policies aimed at keeping markets and the economy afloat during the pandemic could end up threatening the long-term health of the U.S. dollar, investing magnate Stanley Druckenmiller told CNBC on Tuesday.

The chairman and CEO of Duquesne Family Office said the Fed's insistence on holding interest rates down and buying trillions in bonds even though markets are thriving and the economy is booming is a long-term risk.

'I can't find any period in history where monetary and fiscal policy were this out of step with the economic circumstances, not one,' Druckenmiller said during a 'Squawk Box' interview.

Though he does not take issue with the Fed's initial actions to combat the pandemic-related threats, Druckenmiller said the central bank has kept its foot on the accelerator too long.

He asserted that the Fed has continued its policies to help underwrite the spending binge in Congress, which has allocated more than $5 trillion in stimulus and is contemplating trillions more in infrastructure-related spending.

Over the long haul, he said, the policies and the heavy debts and deficits they support will threaten the dollar's standing as the world's reserve currency. That status means the dollar is accepted for transactions and as a store of wealth anywhere and is widely held by central banks around the world.

'If they want to do all this and risk our reserve currency status, risk an asset bubble blowing up, so be it. But I think we ought to at least have a conversation about it,' Druckenmiller said."

As World Runs Short of Workers, a Boost for Wages - and Inflation -Wall Street Journal

"The inflationary pressures are now roiling the economy and markets...Beneath the surface some of the forces that have long kept inflation in check are starting to turn. Most important: demographics.

The world's two largest economies have just reported that population growth in the past decade was their slowest since World War II, as people aged and birthrates plummeted.

Lower fertility initially boosts the labor supply by enabling more women to enter the workforce. But fertility has been falling for so long in the U.S. and China that those demographic dividends were spent long ago, and now they face the consequences: a diminished supply of workers....

Baby boomer retirements have soared. Reversing this move would require either a dramatic increase in births, which has eluded countries with more-family-friendly policies (and the labor force wouldn't benefit for years), or immigration, which is politically hard....

Workers produce more than they consume while dependents - children and retirees - consume more than they produce, economists Charles Goodhart and Manoj Pradhan argue in their book 'The Great Demographic Reversal: Ageing Societies, Waning Inequality, and an Inflation Revival,' published last year....

After decades of declining power, 'labor has retaliated, not at the wage bargaining table, but in the voting booth,' write Messrs. Goodhart and Pradhan, adding that globalization 'has been checked by populism, just at the time that demographic factors are swinging back to labor's advantage.'"

A list of shortages hitting the reopening economy -Business Insider

"An ongoing computer-chip shortage has affected cars, iPads, and dog-washing technology alike. Chipmakers like Intel had already seen production issues pre-pandemic, but as with many industries, COVID-19 brought a variety of new supply-chain issues. The chip shortage is a problem for consumers wanting basically anything with a computerized component, which is much of the economy.

The semiconductor shortage has hit automakers the hardest...As more cars went into production, chip competition went up. Since then, many carmakers have been forced to shut down plants and prioritize which models they produce, while car prices at dealerships have continued to go up.

The 'perfect storm' hitting rental cars right now, with prices surging and demand increasing. Americans are itching to go on vacation this summer, as more people are vaccinated and some restrictions loosen. That's leading to far more demand - but rental-car companies had sold off parts of their fleets early into the pandemic, leaving fewer cars to go around.

It's not all bad news for used-car lovers, though: As USA Today reports, the trade-in market is hot, too, meaning your old car could be worth more right now....

Gas prices have skyrocketed in recent months, jumping 22.5% in March from the previous year, according to the US Bureau of Labor Statistics' Consumer Price Index. Much of the surge in gas prices started with the extreme Texas freeze, which halted a fifth of the country's oil-refining capacity in its tracks for weeks at a time.

Gas and oil prices soared further in early May, following the country's largest fuel pipeline being shut down by a ransomware attack....

The US was facing a shortage of 3.8 million homes as of April, according to Freddie Mac...In the past year alone, the median cost of a home in the US shot up 15% from $300,000 in 2019 to $340,000 by the end of 2020, according to data from the National Association of Realtors."

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May 12, 2021

5.12.21 - Hacked Pipeline: Gas Stations Running Dry

Gold last traded at $1,821 an ounce. Silver at $27.05 an ounce.

NEWS SUMMARY: Precious metal prices dipped Wednesday on profit-taking and a firmer dollar. U.S. stocks declined sharply - led by a tech sell-off - as key inflation data showed higher-than-expected prices.

Summer of volatility? Gold price to make a run to $1,900 as Fed waits for better data -Kitco

"Summers are usually a quiet time for the markets, especially for gold. But this year could surprise investors with fresh bouts of volatility, said OANDA senior market analyst Edward Moya.

'You're probably going to see more volatility this summer than most people anticipate. You'll have a better idea on the next round of stimulus from the Biden administration as well as get some clarity on taxes,' Moya told Kitco News. 'The other wildcard is China-U.S. relations. And it just seems that things are just brewing, and that could trigger a massive safe-haven move.'

For gold, this volatility could be excellent news as the precious metal gears up to make a run towards $1,900. Slower growth is a key part of that outlook, especially after the disappointing U.S. jobs report last week.

'If we start to see some slower growth, that's going to be very positive for gold. If the economy is starting to lose some of this skyrocketing momentum, that supports the Fed's current stance,' Moya said. 'Gold prices eventually make a run towards $1,900. It will depend on how the recovery unfolds.'

A patient Fed this summer is one of the main reasons why Moya said he is bullish on gold, stating that the Fed is not likely to make any changes to its statement until the end of the summer....

'Gold is slowly becoming more bullish for more people. A month ago, you could have made the argument that the majority of Wall Street was bearish on gold, and now it seems that the tables have turned,' he noted."

pipeline Gas Stations Are Running Dry as Hacked Pipeline Works to Restart -Bloomberg

"North America's biggest petroleum pipeline is in a race against time to overcome a paralyzing cyberattacks as gas station supplies dwindled and North Carolina declared a state of emergency with cars lining up for fuel.

Colonial Pipeline said it's manually operating a segment of the pipeline running from North Carolina to Maryland and expects to substantially restore all service by the weekend. The pledge may not come fast enough to avert immediate shortages in the southeast, where gas station employees are already reporting lines for fuel.

Stations in Asheville, North Carolina, are out of fuel and lines are forming at outlets that still have supplies. David Marcos, an employee at a Royal Dutch Shell Plc-owner station in the city said they ran out of gasoline and diesel earlier on Monday....

The conduit has been shut down since late Friday, prompting frenzied moves by traders and retailers to secure alternative supplies. On Monday, the Federal Bureau of Investigation pointed the finger at a ransomware gang known as DarkSide. The pipeline hasn't suffered any physical damage and no fuel shortages have been detected, a White House official said.

Colonial Chief Executive Officer Joe Blount and a top lieutenant assured Deputy Energy Secretary David Turk and state-level officials on Monday that the company has complete operational control of the pipeline and won't restart shipments until the ransomware has been neutralized....

The pipeline serves 90 U.S. military installations and 26 oil refineries, the person said. Meanwhile, President Joe Biden said Russia has 'some responsibility' to address the attack.

Emergency shipments of gasoline and diesel from Texas already are on the way to Atlanta and other southeast cities via trucks, and at least two Gulf Coast refineries began trimming output amid expectations that supplies will begin backing up in the nation's oil-refining nexus."

Weak Jobs Report Shows Limits of 'Stimulus' -National Review

"The strong economic recovery came to a surprising halt amid the federal government reporting only 266,000 new net jobs created in April. Axios adds that 'forecasters had floated gains close to 1 million, making this the biggest miss, relative to expectations, in decades.' And that is not the only bad news: March's booming 916,000 net jobs gain was also revised down to 770,000....

Notably, that CBO forecast of a strong labor-market recovery was released even before President Biden signed the latest $1.9 trillion 'stimulus' bill into law on March 11. Advocates promised that adding this budget-busting legislation - with its relief checks, state- and local-government bailouts, school-renovation grants, and unemployment-bonus checks - would accelerate the recovery and drive down joblessness even faster than the CBO forecast. While it's still early, the latest jobs figures suggest that the post-stimulus recovery is instead slowing down.

Yet the immediate response from House speaker Nancy Pelosi was that 'the evidence is clear that the economy demands urgent action.' What more 'urgent action' could Congress possibly impose on the economy? In the past year, it has enacted $5.4 trillion in pandemic-relief legislation - totaling roughly one-quarter of the national debt. The Federal Reserve has reduced interest rates to nearly zero and added $3.7 trillion to its balance sheet...Pelosi's comments are reflective of the 'heads I win, tails you lose' arguments often employed by advocates of massive fiscal stimulus. When Congress spends trillions and the economy responds positively, they credit the stimulus spending and claim that we should have done even more. When Congress spends trillions and the economy does not respond, the same advocates assert that the stimulus spending must have been too small....

A similar thing happened during the 2008-2009 'Great Recession.' President Obama's $800 billion stimulus bill did not end the recession - the economy was already out of recession by the summer of 2009, before more than a small fraction of the law had even been implemented....

In short, the last time Washington engaged in trillions of dollars in stimulus spending, the economy missed every White House and CBO benchmark by a wide margin - and performed even worse than the 'zero-stimulus' projection. The $2 trillion in total stimulus - using a commonly asserted multiplier of 1.5 - should have created a $3 trillion burst of economic activity and overheated the economy. Instead, this spending purchased only more debt and the weakest economic recovery since the Great Depression....

Evidently, the failure of stimulus proves only that we need more stimulus. In reality, it is not difficult to see why the economy may not respond strongly to the latest stimulus law. Rebate checks have been largely saved. Schools are not expected to spend their renovation grants until the mid to late 2020s. State and local governments were sent $350 billion in bailout funds despite no longer having large budget deficits to close. Even liberal economists criticized the bill as excessive and ineffective, not that congressional spenders were paying much attention to their critics."

The tinderbox that is Jerusalem has burst into flames -Jerusalem Post

"It could have gone either way. Calm could have returned, or Israel could have found itself at war.

Though the past week has seen hundreds of Palestinians and Israeli police officers and civilians injured, the defense establishment still thought that the situation could have returned to normal.

But that was wishful thinking.

More than 300 Palestinians and several Israelis were injured in clashes with police officers on Monday in violence that the city has not seen in years. While Israel has been condemned for how it is dealing with the crisis in Jerusalem, the situation could have been much worse.

As of this article's writing, while blood has been spilled at the Temple Mount and grenades have been thrown inside al-Aqsa Mosque, no one had lost their life.

Nevertheless, on Monday evening, Hamas and Palestinian Islamic Jihad decided they could no longer be quiet. They fired more than 50 rockets toward Israel, including seven at Jerusalem.

According to Palestinian reports, Israel struck back quickly, including a strike on Beit Hanun in northern Gaza that killed three children, although others said it was a failed launch from Gaza....

Hamas and Palestinian Islamic Jihad (PIJ) have threatened Israel, but before Monday evening, fewer than 10 rockets had been fired over the past week from the blockaded coastal enclave.

Hamas instead resorted to launching hundreds of incendiary balloons that have wreaked havoc on fields and nature reserves. It's a strategy that shows the terrorist group supports Palestinians in Jerusalem but does not want to risk serious retaliation from Israel....

Jerusalem is a tinderbox on slow burn. And because of that, the country looks like it will be dragged into another round of violence with terrorist groups."

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May 11, 2021

5.11.21 - Most Workers Make More On Unemployment

Gold last traded at $1,835 an ounce. Silver at $27.58 an ounce.

NEWS SUMMARY: Precious metal prices traded steady Tuesday on safe-haven buying and a weaker dollar. The U.S. stock sell-off intensified as investors sold higher-priced technology shares which also affected bank stocks, energy stocks and industrials.

Gold, silver see price gains amid greenback erosion -Kitco

"Gold and silver prices are higher in U.S. trading Monday and near their multi-week highs scored late last week. The metals are supported by a slumping U.S. dollar index that hit a 2.5-month low overnight. The near-term technical postures for both metals are also bullish, which continues to invite the shorter-term futures traders on board the long sides of those markets....

The marketplace is still reverberating from the surprising U.S. jobs report for April, released last Friday, that showed a paltry non-farm payrolls rise of 266,000. Forecasts were for a 1 million rise and compares to a rise of 916,000 in March. It was one of the biggest misses from expectations in over 20 years.

The U.S. dollar index is reeling from the report. The jobs report has at least temporarily thrown cold water on notions the Federal Reserve may be forced to raise interest rates much sooner than many expected and that the U.S. economy could be running in high gear by the end of the year.

Traders and investors are watching developments regarding the cyberattack on the U.S. Colonial Pipeline company that has shut the pipeline system down and halted much of the gasoline distribution on the East Coast. The other key outside market today sees Nymex crude oil prices firmer and trading around $65.25 a barrel."

unemployment Shocking Chart Shows Most Workers Now Make More On Unemployment Than From Their Jobs -Zero Hedge

"Almost a decade ago, we explained that America had become a bizarre kind of welfare state where, due to the premeditated vagaries of the tax code, hard work was punished....

Today, thanks to 'Biden's Trillions' (which as we reported a month ago have sparked a historic labor shortage), any - not just hard - work is punished and instead America's great unwashed masses are rewarded to do absolutely nothing.

Of course, the Biden admin will never admit to a full-blown socialist takeover of the labor force by the government's handouts, and instead is blaming the collapse in people looking for jobs on such intangibles as fear of covid, mothers staying at home and who knows what else....

For the real reason answer listen to the Chamber of Commerce, which last week urged an end to Biden's pandemic handouts as 'paying people not to work is dampening what should be a stronger jobs market and is hurting the overall recovery'... Or listen to NFIB chief economist Bill Dunkelberg who said that 'small business owners are competing with the pandemic and increased unemployment benefits that are keeping some workers out of the labor force'....

But what was even more shocking is this chart...showing that as of this moment, tens of millions of US workers, in jobs ranging from dishwasher, to hotel clerk, to preschool teacher, to anyone on minimum wage, can now earn more from unemployment than from their regular job.

Why would any rational person work under such generous welfare conditions? Or as the NOA correctly put it, 'when people can make more staying at home than going to work, they will stay at home. It's that simple. We don't blame them. We fault the system.'....

Which brings us to Rabobank's Michael Every's 100% spot on conclusion: 'What we are seeing in real time is the impact of a high level Universal Basic Income (UBI) - and how is that working out for the economy? About as well as Dogecoin over the weekend...Firms aren't going to raise wages when they know the stimulus checks run out soon (and as labor generally has no bargaining power): but they can't re-open until the workers come back.'

Who could have possibly foreseen that attempts to transform the US into a socialist nation would have an unhappy ending."

Stock market to face a more difficult climb -O'Hare/Briefing

"Since mid-April, the S&P 500 has risen approximately 1.1%...It has been a confounding advance, only because it doesn't seem properly proportional to the amount of tremendously good earnings and economic news....

Some say it is because of 'peak growth' concerns. That is, things are as good, or are about to be as good, as they get from an economic and earnings standpoint. That's a plausible view.

Another uptake, however, is the idea that stocks aren't the only thing going up. Inflation rates, interest rates, and tax rates are also expected to go up, which is something that is likely to make it more challenging for the market to move up easily like it used to....

There is a lot to look forward to in terms of reopening activity. The stock market has priced in a lot of the good news already.

The S&P 500 currently trades at 21.8x forward twelve month earnings. That's a 36% premium to its 10-year historical average, according to FactSet. On a trailing twelve-month basis, it trades at 25.9x earnings, which is a 50% premium to the 20-year average. In other words, it's a high valuation before inflation, interest rates, and tax rates have really moved in a disarming direction.

When you start from a point of high valuation, future returns are apt to be lower than they would be if starting from a point of low valuation, absent price-driven multiple expansion....

The air is turning thinner, because the valuation is high and because a peak at the horizon from these record highs exposes a bank of clouds approaching that includes higher inflation, higher interest rates, and higher taxes. Those clouds could turn into storm clouds, but in any case they will reduce visibility as they get closer and make the stock market's climb more difficult."

Lockdowns Didn't Stop Covid -Editors/Wall Street Journal

"Covid-19 lockdowns shaved 3.5% off U.S. GDP in 2020 even as the federal government spent more than $2.6 trillion in relief measures. Millions of children fell behind in learning and nearly 100,000 businesses closed for good.

Conventional wisdom holds this was worth it because lives were saved by shutting workplaces and schools and telling people to stay home. But a new study by University of Chicago economist Casey Mulligan shows the opposite. After the first month of the pandemic, organizations that adopted prevention protocols became safer places than the wider community....

In 'The Backward Art of Slowing the Spread? Congregation Efficiencies during COVID-19,' Mr. Mulligan uses empirical data to test the presumption that the workplace was less safe than the home. He recognizes that 'absent costly prevention activities, larger groups naturally have more infections per member.'

Yet as he notes, people join firms 'in part because they value the group's management of local externalities and public goods.' That's an economist's way of saying that the human capital of a company is tied to its capacity to protect employees and serve customers.

There is little doubt that infection would spread faster in congregations than in smaller groups if both engaged in similar practices. But since larger groups have an incentive to spend on expensive methods of prevention, larger organizations might be better at prevention than households with fewer people....

According to the study, 'per-capita transmission rates on site fell dramatically, usually to levels below household transmission.' ....

It's not too late to learn from 2020 and 'follow the science,' as President Biden likes to say. One place to start is with Mr. Mulligan's findings summed up in a press release for the study: 'Data show that as a result' of prevention protocols put in place by employers, 'workers have been 4-5 times less safe outside their workplace than inside it. While stay-at-home continues to be pushed as promoting public health, nobody is checking the data which say the opposite.' And that was before vaccines."

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May 10, 2021

5.10.21 - Possible 'Significant Declines' in Stocks -Fed

Gold last traded at $1,837 an ounce. Silver at $27.35 an ounce.

NEWS SUMMARY: Precious metals extended gains Monday on greenback erosion and bullish sentiment. U.S. stocks traded mixed with the Dow rising on energy stocks and the Nasdaq falling on tech pressures.

Listening to Fed Pays Off for Gold Bulls Amid Jobs Market Miss -FX Empire

"Gold futures soared on Friday after a government labor market report came in well-below expectations. This means the Fed is right in saying the economy is still too weak to begin tightening policy. This thought is greenlighting the huge intraday rally in gold.

Treasury yields plunged on the news, pressuring the U.S. Dollar, which drove up foreign demand for dollar-denominated gold.

U.S. employers hired far fewer workers than expected in April, likely frustrated by labor shortages, leaving them scrambling to meet booming demand as the economy reopens amid rapidly improving public health and massive financial help from the government, Reuter wrote.

Nonfarm payrolls increased by only 266,000 jobs last month after rising by 770,000 in March, the Labor Department said in its closely watched employment report on Friday. Economists polled by Reuters had forecast payrolls advancing by 978,000 jobs.

The unemployment rate rose to 6.1% in April from 6.0% in March. The jobless rate has been understated by people misclassifying themselves as being 'employed but absent from work.' Millions of Americans remain out of work and many have permanently lost jobs because of the pandemic....

It looks like the bond traders got this one wrong so congratulations to the gold bulls who stuck with their convictions about the strength of the economy. Today's jobs data miss probably bought them more time to do some serious damage to the upside."

stocks Fed warns of possible 'significant declines' in stocks as valuations rise -CNBC

"Rising asset prices in the stock market and elsewhere are posing increasing threats to the financial system, the Federal Reserve warned in a report Thursday.

In its semiannual Financial Stability Report, the central bank said that while the system overall has remained largely stable even through the Covid-19 pandemic, future dangers are rising, in particular should the aggressive run on stocks tail off.

Investors have snapped up equities, corporate bonds and cryptocurrencies. They've poured billions into blank-check companies called SPACs, and the market has been mostly brisk for traditional initial public offerings....

'High asset prices in part reflect the continued low level of Treasury yields. However, valuations for some assets are elevated relative to historical norms even when using measures that account for Treasury yields,' the report states. 'In this setting, asset prices may be vulnerable to significant declines should risk appetite fall.'

In an accompanying statement, Fed Governor Lael Brainard said the situation bears watching and points out the importance of making sure the system has proper safeguards. She specifically mentioned having banks increase their capital requirements during economic expansions as a buffer against downturns....

The report notes that particular sectors including energy, travel and hospitality have particularly high vulnerabilities because of their sensitivity to the pandemic. The Fed also talks about potential threats from money market and open-end funds."

The Global House Price Boom Could Haunt the Recovery From Covid-19 -Wall Street Journal

"The year of the pandemic saw the largest increase in global house prices since the U.S. housing boom of the mid-2000s. And there is no sign the rally is coming to an end.

That provides immediate economic support for the global recovery from Covid-19. But a prolonged house price upswing would mean big new problems for financial stability. And it could result in economic strife if middle-class citizens accustomed to a one-way housing bet suddenly find the rug pulled out from beneath them down the line.

House prices rose by 4.91% across 16 economies monitored by the Federal Reserve Bank of Dallas last year, the sharpest increase since 2006. The move was large by the standards of a normal year - but explosive in the context of a global economic contraction of around 3.3%.

And the trend shows little sign of abating. The U.S. housing market is millions of homes short of buyer demand....At the same time, banks are far more exposed to housing markets than they once were. Across 18 advanced economies, mortgage lending has grown from around a third of total bank lending in 1960 to very nearly 60%....

Outright taxes on the value of houses, the land beneath them, or both are popular with economists but have yet to find their way into public policy in most parts of the world. Even without such radical steps, fixing other positive biases housing receives in tax systems around the world would be a good start.

Dealing with an asset that is a totemic symbol of middle-class security and the main source of household wealth but is also a major financial stability risk is an unenviable task for policy makers.

But with many parts of the world already in the foothills of a new house price boom, it's an issue that must be considered urgently if they want to avoid the mistakes of the past."

Consumer Credit Explodes Higher As Americans Rediscover Their Love For Credit Cards -Zero Hedge

"Just last Thursday, we showed that only a few quarters after banks effectively shut down, refusing to give out C&I, credit card or auto loans and mortgages to virtually anyone as a result of record Draconian credit standards, credit standards saw a complete U-turn and as of April, lending standards for credit cards and autos were the loosest on record.

This was not lost on US consumers who after suffering through a miserable 12 months in which they dutifully repaid their credit card debt like total idiots who acted responsibly (instead of doing what US corporations are doing and loading up on even more debt to ensure they all get bailed out during the next crisis), in March aggregate consumer credit surged by $25.8BN, smashing expectations for the 2nd month in a row (as a reminder February was the biggest beat on record) and barely slowing down from last month's massive $26.1BN increase.

And while non-revolving credit - i.e., student and auto loans - continued its relentless ramp higher, increasing by $19.4BN in March, the most since June of 2020...

It was the second consecutive surge in credit card debt in March that made all the difference because after 10 of 11 months of paydowns, revolving (i.e. credit card) debt surged by $8BN in February followed by $6.4BN in March. The combined two month total was the highest since October 2018!

This latest shift in spending patterns, means that things are now indeed back to normal, and that with consumers now spending not just using their debit cards (which is where the stimmy checks arrive) but their credit cards, Americans are once again highly confident about the future, and are spending far beyond their means, as they always tend to do."

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May 7, 2021

5.7.21 - Gold Price Races Past $1,800/oz.

Gold last traded at $1,831 an ounce. Silver at $27.45 an ounce.

NEWS SUMMARY: Precious metal prices shot upward Friday after weaker-than-expected job data. U.S. stocks rose as investors believed the Fed's easy monetary policies will stay in place for longer.

Gold races past $1,800/oz as bond yields, dollar retreat -Reuters

"Gold jumped over 1% on Thursday with a weaker dollar and easing Treasury yields propelling it over the key $1,800 psychological level.

'We really have yet to see a strong rebound in Treasury yields,' said Edward Moya, senior market analyst at OANDA.

Despite the economic optimism, Federal Reserve policymakers seem unlikely to budge on their accommodative stance yet and investor inflation fears should boost gold, Moya added.

The Fed plans to keep borrowing costs near 0% and maintain monthly asset purchases worth $120 billion until it sees 'substantial further progress' towards full employment and its 2% flexible inflation target.

The dollar index fell 0.4%, making gold more attractive for those holding other currencies.

At a time of heavy government stimulus, gold is considered a hedge against potential inflation, but elevated Treasury yields have dulled the non-yielding bullion's appeal this year.

'Above $1,800 it gives the bulls fresh technical power, gives them momentum and I think the path of least resistance for prices is now going to be sideways to higher for the near term,' said Kitco Metals senior analyst Jim Wyckoff."

Yellen Yellen tells truth on economy - then quickly reverses herself -Gasparino/New York Post

"On one hand, Janet Yellen is a highly trained economist who understands the Joe Biden spending bonanza could be a recipe for economic disaster.

But as Treasury Secretary, she is also the captain of the Biden economic team, downplaying inflationary fears and cheerleading the big-budget bills. The schizophrenic nature of Yellen's role inside the White House played out earlier this week with a rare public dissention from official administration economic talking points. Wittingly or not, the Treasury Secretary signaled to the American public that Biden's spending blitz of $2 trillion here, and another $5 trillion there, has the potential to backfire and send the economy back into recession.

It began early Tuesday, when Yellen apparently forgot she was no longer President Obama's Fed chair, with a shield of at least quasi independence. At a conference hosted by the Atlantic magazine she conceded something glaring obvious to someone who had just taken Econ 101, much less earning a PhD: 'It may be that interest rates will have to rise somewhat to make sure that our economy doesn't overheat . . .'

Too much money chasing too few goods means we could find ourselves in the same position as the late 1970s, with hyperinflation. As Yellen well knows, inflation is a massive tax increase on working people and it almost always leads to a recession as the Fed cranks up interest rates to slow down the economy.

The Fed, of course, could sit on its hands and do nothing, but bond market won't. Traders will sell bonds because they're a lousy inflation hedge....

Stocks tanked more than 300 points following Yellen's remarks at the morning conference. They would have kept going south if Yellen didn't flip-flop just a bit later, this time at a Wall Street Journal conference, where she adopted the White House line on the spending....

Yellen then said that she doesn't 'think there's going to be an inflationary problem' and that she really wasn't predicting doom and gloom earlier in the day. OK, and I have a bridge in Brooklyn to sell you.

The good news from Yellen's about face is that stocks recovered and extended their rally through Wednesday.

The bad news: The administration continues to hide the obvious potential long-term damage of its spending extravagance that even its own people are seeing as a real possibility."

Three Reasons Why the Biden Tax Increase Makes No Sense -Lacalle/Mises Institute

"Anyone who believes the 'rich' and large corporations will pay for $28 trillion in debt or the $2 trillion in new deficit has a real problem with math. Biden's announcement of a massive tax increase on businesses and wealthier segments of the population simply makes no sense. The tax hikes will have a significant impact on economic growth, investment, and job creation and do not even scratch the surface of the structural deficit....There are three main reasons why the tax increase makes no sense.

First, estimated real revenue impact is negligible. In 2018, the federal capital gains tax revenue was $158.4 billion. A five-percentage point increase in the current regime would provide an additional $18 to $30 billion according to Princeton University estimates in an optimistic scenario where there would be no negative impact of the tax increase...These do not even start to address the rise in mandatory spending that drives the structural deficit above 2.5 percent of GDP.

Second, the impact on the economy will be larger than what the Biden administration estimates. These tax increases do not affect only "the rich." Such high capital gains tax stifles innovation and reduces capital flow into private equity which is essential to boost start-ups and new high-productivity businesses...Even Yellen knows this tax increase is damaging. That is why she wants a global tax. If she saw no negative impact, she would let other countries manage their taxes as they wish.

Third, the problem of mandatory spending is not even addressed. Mandatory spending in the United States has ballooned to $2.9 trillion in 2020 from $1.8 trillion in 2008 and is estimated to rise another trillion in the next ten years. The main cause of the United States deficit comes from the rise in mandatory spending as receipts cannot match the unstoppable increase in spending that no government can touch....

So why does Biden do it? To please the most socialist part of his administration and voter base, who do not worry about the economic implications; they only want to make the rich poorer....Biden's tax increase plan does not make sense from a growth, revenue, or deficit perspective. Furthermore, it does not make sense from a Republican or Democrat perspective. It simply does not add up and does not address the United States problem: ballooning mandatory spending."

After Massive Government Intervention, Here's How It Ends -Bonner/Rogue Economics

"As American economist Herbert Stein remarked, things that can't go on forever must come to an end.

But how? When? Those are our questions for today.

And we won't beat around the bush. The answer is this: Deprived of regular hygiene, public life gets dirtier and dirtier"¦ until finally, we all 'take a bath' on the feds' bad investments....

Borrowing brings its own problems. First, a dollar must be earned before it can be saved. Then, it must be saved before it can be borrowed.

This century, federal deficits have far outstripped GDP growth and savings rates, which is why the feds have had to resort to the printing press...It is only because our fake-money system permits the feds to spend so much, without depleting savings or raising taxes, that they can make so many bad "investments."....

Money will be misspent. Debt will increase. And the grime will grow thicker and greasier than ever. With no routine way of cleaning it off"¦ an extraordinary scrubbing will be needed.

Wars, revolutions, economic collapse - the ways in which elites are finally punished"¦ and their bamboozles eventually corrected"¦ fill the history books....

Here at the Diary, we pretend no precision. Our analysis is broad-brush"¦ like a barn door painted by a blind man.

During our own lifetimes, America's elite has degenerated greatly. Funded with almost unlimited fake money, it has become arrogant, corrupt, and incompetent.

And now"¦ caught in an 'inflate or die' trap"¦ its 'investments' become more desperate and less productive than ever"¦

And since the elite controls both soap and water"¦ the dirt builds up. And then, we all get hosed."

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May 6, 2021

5.6.21 - Sam Zell Buying Gold as Inflation Hedge

Gold last traded at $1,813 an ounce. Silver at $27.32 an ounce.

NEWS SUMMARY: Precious metal prices powered to 10-week highs Thursday on bullish technicals and a weaker dollar. U.S. stocks rose on upbeat jobless claims data ahead of Friday's jobs report.

Sam Zell Buys Gold With Inflation 'Reminiscent of the '70s' -Bloomberg

"Billionaire investor Sam Zell is seeing inflation everywhere, and has bought gold as a hedge - something he says he used to knock others for doing.

'Obviously one of the natural reactions is to buy gold,' he said in a Bloomberg Television interview. 'It feels very funny because I've spent my career talking about why would you want to own gold? It has no income, it costs to store. And yet, when you see the debasement of the currency, you say, what am I going to hold on to?'

Zell, 79, said he's concerned not only about the U.S. dollar but other countries printing money as well, and questioned whether inflation will be transitory, as Federal Reserve Chairman Jerome Powell indicated last week.

'Oh boy, we're seeing it all over the place,' Zell said of inflation. 'You read about lumber prices, but we're seeing it in all of our businesses. The obvious bottlenecks in the supply chain arena are pushing up prices. It's very reminiscent of the "˜70s.'

While gold is an attractive investment, opportunities in fossil fuels are not, said Zell, who in 2019 agreed to set up a joint venture with Tom Barrack Jr.'s Colony Capital Inc. to invest in oil and gas.

'Right now, oil and gas is not priced to reflect the risk of what's going on, whether it be in the EV world, a climate changed world,' he said. 'As recently as a couple of years ago I thought the risk-reward ratio was appropriate. It's clearly become very inappropriate as our political situation has changed.'"

fed policy The Fed Board Agrees Never to Disagree -Shelton/Wall Street Journal

"In the aftermath of an economic and financial challenge that Federal Reserve Chairman Jerome Powell recently likened to Dunkirk - the urgent rescue of British and other Allied troops from France in World War II - there's a remarkable uniformity of opinion on the Federal Reserve Board of Governors. Apparently, they all agree on the appropriateness of the Fed's monetary-policy decisions. That's what worries me.

While it might seem reassuring when members of an institution concur, the Fed's tendency toward groupthink carries the risk of missing other important perspectives. Forging a consensus can mean trimming the edges of troubling concerns over future developments.

For example, even as financial markets signal uneasiness about the effect of inflationary pressures, Mr. Powell has maintained steadfastly that the Fed will be 'patient' in keeping interest rates near zero through 2023....

Echoing this commitment to easy-money policies stretching well ahead, Fed Gov. Lael Brainard's speech in March to the National Association for Business Economics was titled 'Remaining Patient as the Outlook Brightens.'

Is such sanguinity reassuring?....It may surprise people to learn that not a single dissenting vote was cast by any member of the Fed's Board of Governors throughout the eight monetary-policy meetings in 2020 and the three meetings held so far this year. The same is true for 2019, 2018, 2017, 2016, 2015 and 2014, covering Mr. Powell's years as Fed chairman and the entire term of his predecessor, Janet Yellen (2014-18). No Fed governor cast a dissenting vote from the Fed chair at any monetary policy meeting held throughout that time....

A different view might express concern about the loss of price discovery caused by the Fed's massive intrusion into credit markets, its effect on widening wealth inequality, its excessive consumption of government-backed debt, and the potential for global financial instability in the wake of massive liquidity injections by central banks.

Diverse perspectives on the role of the central bank in a free-market economy should be welcome on the Fed board. Consensus is comfortable - but not always correct."

The economy reveals the Biden administration's misdirection -Tatom/The Hill

"The U.S. economy had an explosive first quarter of this year. Largely, this boom reflected a rebound because of the end of lockdowns put in place with surging COVID-19 cases and deaths from mid-November 2020 to mid-January. Those restrictions put a pause in the record pace of rebound in the second half of last year. Now that the pause has ended and the prospects are for continuing declines in new coronavirus cases, hospitalizations and deaths, there has been, and likely will continue to be, a fuller opening of the U.S. economy.

An astonishing expansion is emerging that will shake the core of our economy, raising serious doubts about the stimulus package enacted at the end of December and another in March, new proposals for expanded federal spending for social programs, and the record-setting pace of monetary expansion that is being sustained by the Federal Reserve.

Real GDP was up 1.6 percent in the first quarter from its pre-recession/pre-pandemic position a year ago, indicating that the economy has fully recovered from its brief recession and is growing at a pace not seen in many years. The two-month recession from March to April last year was the shortest and deepest on record, but the recovery was also incredibly fast, despite the winter pause....Personal income also boomed up in March, led by a large increase in transfer payments, mainly stimulus checks....

Since the end of December, two pieces of legislation to stimulate and rescue the economy and cover COVID-19 costs; a proposed, misnamed infrastructure bill estimated to cost $2.3 trillion; and a plan to assist American families, costing about $1.8 trillion, will add over $8 trillion to federal spending in the largest move toward the nanny state and socialism since the New Deal. Ignoring other new federal spending initiatives from last year, federal spending has climbed from about $4.4 trillion in 2019 to perhaps over $11 trillion in 2021, adding another $6 trillion or so to the end of 2020 debt held by the public of $21 trillion.

All of this has happened in a little over 100 days, a dizzying pace of unnecessary transformation of the U.S. economy. President Biden is due for a 'chill pill,' while Americans celebrate the recovery and boom."

The Biggest Problem Facing America: Misinformation-At-Scale -ProMarket

"Technology companies must put community safety and privacy at the core of their business model, ensure that advertising technology is utilized responsibly, and quickly act on groups coordinating disinformation, hate, harassment, and incitement across the media ecosystem.

Before there was 'move fast and break things,' there was another animating ethic of the tech industry: 'Get big fast!' This philosophy has proven to be good for the industry, but bad for the world. Over the last decade, social networking (connecting people to people) morphed into social media (connecting people to people and to content), which resulted in exponential profits and growth.

Most people don't know the difference between social networking and social media, but this transition was the key to products like Facebook, Twitter, and YouTube dominating global markets in mass communication. In short, networks are the wealth of society. Networks are where the rich and powerful derive their importance and high status, hence saying 'he or she is connected' when referencing someone you do not want to mess with. When social media is the vector of attack against our democracy and public health, a small group of highly motivated and connected actors can manipulate public understanding of any issue simply by using these products they are as designed.

How social media companies got big fast was a combination of lax consumer regulation, eschewing risks, buying out the competition where possible, and a focus on scale that made for poor security decisions. Beyond connecting people and content, products like Facebook, YouTube, and Twitter rely on other companies and individuals to provide them with more data, increasing the scale in this massive and sprawling data infrastructure across the web....

By leveraging people's networks and content at the same time, a business model emerged where key performance indicators included: 1. growth of daily and monthly active users, 2. increasing engagement metrics, and 3. advertising revenue. The last decade has been marked by these companies expanding exponentially on all of these indicators....

Back in 2011, mobile was developing quickly and there were many ways in which social media could have been designed to foster community safety and to maximize privacy. Instead, the drive to maximize the number of users, engagement, and revenue led us here.

Most crucially the entire internet infrastructure needs an overhaul, so that companies are not able to siphon data and leverage it to maximize an advantage over consumers. But, users are not necessarily the customers, advertisers are....As journalism wanes, social media serves misinformation-at-scale to hundreds of millions of daily active users instantaneously, especially odious when misinformation is promoted in trends and recommendations....

The biggest problem facing our nation is misinformation-at-scale, where technology companies must put community safety and privacy at the core of their business model, ensure that advertising technology is utilized responsibly, and quickly act on groups coordinating disinformation, hate, harassment, and incitement across the media ecosystem. A problem this big will require Federal oversight.

But I am hopeful that another future is possible, if tech companies, regulators, researchers, and advocacy begin to work together to build a public interest internet modeled on the principles that the public has a right to access accurate information on demand. The cost of doing nothing is democracy's end."

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May 5, 2021

5.5.21 - Yellen Says "Rates Will Have To Rise"

Gold last traded at $1,784 an ounce. Silver at $26.49 an ounce.

NEWS SUMMARY: Precious metals held their recent gains Wednesday on bargain-hunting and a flat dollar. U.S. stocks churned near the flat line after major tech stocks gave back an early attempted rebound.

Gold tailwinds, Fed hot air and silver's inevitable rise -Gold Switzerland

"In a 19-minute MAMChat, Matterhorn Asset Management principals Egon von Greyerz and Matthew Piepenburg address critical data points related to precious metal price conditions. Specifically, they discuss (and make sense of) ongoing shifts in inflation and yield data as well as the omnipresent topic of unsustainable debt levels fictionally managed by central bankers via monetary expansion and yield/rate repression.

As to inflation, dramatic increases in year-on-year money supply combined with record-high commodity prices and ongoing governmental guarantees of commercial bank lending are now undeniable tailwinds for the inflation camp - and hence gold as well.

As Matthew reminds, gold shines brightest when inflation outpaces bond yields in a negative real rate environment. Bond yields, however, have steadily increased in 2021 and thus Egon and Matthew discuss how yields will either be: i) artificially capped (to insure public debt repayment) or ii) rise beyond the control of the all-powerful central banks.

As to the all-powerful Fed, Matt touches upon the requisite double-speak of Jerome Powell's latest promise to handle unsustainable U.S. debt growth in the 'distant future,' a promise which is simply and mathematically false based on current debt levels and currency debasement facts.

Gold and silver, of course, address currency debasement realities head on, and Egon closes the discussion with his thoughts on silver in particular and precious metals as a wealth preservation asset in general."

speculation Have We Reached Peak Speculation? -Calhoun/Alhambra Partners

"Last week I was contacted by two clients seeking information about cryptocurrencies. One was my godson, 12 years old and just getting started in investing...He first mentioned Dogecoin but I sent him a link to an explanation of its joke origins and he laughed and said well maybe not that one. Let that sink in for a second. Dogecoin was too much of a joke for my 12-year old godson to buy. What does that say about the adults buying it?

The second person who called me was an 88-year old lady, a dear friend who has been a client for nearly 30 years. She said one of her girlfriends was trading cryptos and making a lot of money...Her response when I explained bitcoin to her was, that's it? As I said, pretty savvy; you don't get to be a successful 88-year-old investor without a healthy sense of skepticism.

Call me crazy but I think if the cryptocurrency mania has penetrated the 12-year-old and 88-year-old psyches, it may have just about spread as far as it can. I could certainly be wrong. I'll let you know if any 6-year-olds call me.

Speculation is rampant right now across a variety of markets. Forget for a moment why there is a lot of speculation; it doesn't really matter...a joke cryptocurrency is up 5 times in less than a month and commodity charts have almost all gone vertical. Copper is up 12% in the last month and it's lagging the field....

Stocks have been expensive for a very long time and it has been hard to stay invested or to get that way if you've been out. But until recently, stock valuations were high, not crazy, and there wasn't this public fascination with investing and trading. It is the emergence of the speculative factor that has me concerned...the speculative frenzy gives me pause. And I think it should you too.

I do think it makes sense to start looking for the markers that generally signal the end of a bull run. For us, that means keeping a careful eye on credit spreads and other indicators that tend to act as early warning signs."

Stocks Extend Losses After Yellen Says "Rates Will Have To Rise" -Zero Hedge

"Treasury Secretary Janet Yellen is speaking at The Atlantic's 'Future Economy Summit' this morning - a speech she pre-recorded yesterday - and has sparked some chaos with her comments.

The highlight was this... 'It may be that interest rates will have to rise a little bit to make sure our economy doesn't overheat'

And this didn't help...'We've gone for way too long letting long-term problems fester in our economy.'

Is she talking about Fed-sponsored wealth-creation widening the inequality gap?

And the response - stocks puked as one would expect at the first signs of the punchbowl being taken away...

We wonder what Jay Powell will have to say about Janet stepping on his toes? Did she just start the process of thinking about thinking about thinking about normalization?"

Should Young Adults Stretch Financially to Buy a Home? -Wall Street Journal

"Mortgage rates are near-historic lows, which is luring many people - including first-time buyers - into the housing market...But the supply of homes is tight, and new construction can't keep up with demand - which means that buyers often have to fork over a staggering amount to close a deal....

For millennials who are looking for a home, this means a tough calculation. Many of them have limited funds and are carrying a lot of debt. So, is it worth stretching their resources to buy a more expensive house if they can lock in a lower mortgage rate for years to come? Or should they wait until housing prices cool down to more affordable levels - and risk having mortgage rates rise in the meantime?

According to Laurie Goodman, vice president for housing finance policy: 'If a young person interested in homeownership has the opportunity to buy a home in this low-interest-rate environment, they should do so. There is no guarantee that interest rates will stay this low for long, and the earlier homeowners start building equity, the better.'

According to Susan Wachter, a professor of real estate and finance at the University of Pennsylvania's Wharton School: 'In a recession, loss of jobs and housing-price declines can both make it impossible to pay back your mortgage and can wipe out your equity...Ultimately, the notion of stretching one's means to take advantage of low interest rates or other affordable lending products will continue to be a gamble with potentially devastating impacts to the young home buyer and the overall economy.'"

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May 4, 2021

5.4.21 - Gold Price Jumps Over 1% on Weaker Dollar

Gold last traded at $1,779 an ounce. Silver at $26.49 an ounce.

NEWS SUMMARY: Precious metal prices eased Tuesday on profit-taking and a firmer dollar. U.S. stocks fell sharply following Treasury Secretary Yellen's comments that interest rates may have to rise to keep economy from overheating.

Gold jumps over 1% as weaker dollar, U.S. yields enhance allure -CNBC

"Gold prices jumped more than 1% on Monday, pulling along other precious metals with it, supported by a retreat in the dollar and U.S. Treasury yields....

'A combination of bond yields remaining tame, the dollar under pressure, the amount of fiscal and monetary stimulus that we have in this market ... all of those factors continue to drive gold and silver prices higher,' said David Meger, director of metals trading at High Ridge Futures.

'We are in this more inflationary environment and the fact that we've seen as much stimulus ... it's understandable to expect commodity prices in that environment to do quite well.' The dollar index slipped 0.4%, making gold more affordable for holders of other currencies, while benchmark U.S.

10-year Treasury yields also retreated, reducing the opportunity cost of holding non-interest bearing gold. Gold also found support from data showing U.S. manufacturing activity grew at a slower pace in April....

Strong economic data can also push gold higher as it means inflation will go higher, said Michael Matousek, head trader at U.S. Global Investors.

'We need to see gold get above the $1,800 level and sustain it for a little bit, and then it could be off to the races for $2,000.'"

U.S. dollar The Feds' Daring Investments -Bonner/Rogue Economics

"There are times when long-term value mining seems like a waste of time.

Why go to all the trouble of working at the coalface of real investing when Dogecoin (a popular cryptocurrency that has zero value from an investment standpoint) is up more than 7,000% so far this year?

Why bother with all those company reports when you can just listen to Elon Musk"¦ and get rich on Tesla?

And why worry about investing at all? The feds will do it for us.

Also in the news last week was the U.S. government, announcing the jumping-off point for the most daring 'investments' in the history of the world.

Yes, that's what Joe Biden calls the 2020 COVID-19 relief programs and the 2021 follow-on infrastructure, family support, and climate change boondoggles"¦ 'investments.'

It's the biggest, most ambitious, grandest larceny ever attempted. Trillions of dollars will be taxed or inflated away from their rightful owners to be "invested" by the feds.

In fact, since March 2020, the total to be 'invested' by public officials is rising toward $10 trillion. The fib from the White House is that the rich will pay the costs....

Let us assume that the feds could identify 1,000 billionaires and squeeze each one for $10 million. That would only be $10 billion. Peanuts.

Suppose the IRS really cleaned them out, taking a billion from each one. Now, you're beginning to talk real money - $1 trillion. Hmmm"¦ still a $9 trillion hole....

When the government 'invests,' it's a whole different thing.

What is the return on investment from giving more money to school administrators"¦ to meals-at-school programs"¦ to Amtrak"¦ to people who are on leave from their work"¦ to subsidize electric vehicles"¦ to cities and states that have mismanaged their pension programs"¦ to diversity training?

Nobody knows. But few investors - even those now buying NFTs - would want to find out with their own money.

And since you can't calculate the rate of return, government 'investments' develop their own political support and continue misallocating capital resources almost permanently."

Soaring Lumber Prices Add Nearly $36,000 To The Price Of A New Home -NAHB/Zero Hedge

"Skyrocketing lumber prices that have tripled over the past 12 months have driven the price of an average new single-family home to rise by $35,872, according to new analysis by the National Association of Home Builders (NAHB), with the price spike threatening to hobble the momentum of the U.S. housing market, one of the bright stars of the recovery from the pandemic recession.

While homebuilder sentiment remains optimistic, as indicated by the NAHB Housing Market index, headwinds due to rising building costs have pulled the index down from recent highs.

'The supply chain for residential construction is tight, particularly regarding the cost and availability of lumber, appliances, and other building materials,' said NAHB Chairman Chuck Fowke in a statement.

At the onset of the health crisis, 'the mills stopped producing,' said Dustin Jalbert, senior economist and lumber industry specialist at Fastmarkets in Burlington, Massachusetts. 'As soon as they saw 20 million unemployed, they shut down production,' Jalbert added....

Lumber producers have struggled to catch up with the bustling homebuilding activity, with lumber prices jumping more than 300 percent year-on-year to record highs.

'The logging operation, the shipping of the logs to the mill, the shipping of the finished product, getting workers back on the job, it's not like flipping a switch to bring those back online,' Jalbert said....

This lumber price hike has also added nearly $13,000 to the market value of an average new multifamily home, NAHB said in a post. This translates into households paying $119 a month more to rent a new apartment, the association said, adding that its representatives on April 29 held a 'productive' virtual meeting with White House staff from the Domestic Policy Council, National Economic Council, and the Office of the Vice President.

'The discussion covered mill capacity issues, mill worker shortages, and how soaring lumber prices are exacerbating the housing affordability crisis and putting the American dream of homeownership out of reach of millions of households,' NAHB said in a statement."

LA County reports NO new COVID-19 deaths for the first time in 410 days -Daily Mail

"Los Angeles County reported no deaths from COVID-19 Sunday, a stunning turnaround for California's most populous district which has suffered 23,915 fatalities since the pandemic began.

It is the first time in 410 days that the county has not reported at least one COVID fatality.

But health officials warned that the landmark figure may be due to an undercount because of delays in reporting COVID figures on weekends, the The LA Times reports.

Health officials reported 313 new cases and 410 hospitalizations Sunday in the county, which, which comprises a large swathe of Los Angeles city's metropolitan area and has a population of more than 10 million people.

California now has the lowest COVID rate of any state in the country after suffering alternating waves of death and lockdown over the past 12 months.

Less than four months ago, the County experienced its deadliest day when a record 290 died on January 8, according to official figures."

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May 3, 2021

5.3.21 - More Gov Spending Won't Solve Inequality

Gold last traded at $1,793 an ounce. Silver at $26.92 an ounce.

NEWS SUMMARY: Precious metal prices rose sharply Monday on rising inflation and a falling dollar. U.S. stocks traded mostly higher as shares tied to the economic reopening continued to rise.

Bitcoin no match for gold -Barrick Gold CEO/Fox News

"Bitcoin and other cryptocurrencies are nothing more than bubbles and will never replace gold, according to Barrick Gold CEO Mark Bristow.

Digital currencies have experienced massive price gains during the pandemic, leading many investors to speculate they could supplant gold as a hedge against inflation.

'They look like bubbles, they act like bubbles, they smell like bubbles,' Bristow told FOX Business in reference to cryptocurrencies.

Speculators have driven prices to record highs this year and last as Congress has doled out billions of dollars through stimulus checks and as the Federal Reserve cut rates to near zero and pledged to buy an unlimited amount of assets to support the U.S. economy through the COVID-19-induced downturn, the sharpest of the post-World War II era....

The explosion in the price of cryptocurrencies and other assets caused Federal Reserve Chairman Jerome Powell to warn at his press conference on Wednesday that those markets were extended and that monetary policy was partially to blame.

For Bristow, his biggest problem with bitcoin is that the main reason people use the cryptocurrency is to 'circumvent U.S. regulations around dollar transactions.' He noted central banks and global economies have no reason to allow the use of unregulated cryptocurrencies....

Anyone investing in bitcoins 'better own a whole pot of gold to hedge the risk,' Bristow said."

bear market What Happens When Stocks Only Go Up -Wall Street Journal

"Bear markets haven't gone extinct. They've evolved into teddy bears.

That's what some investors seem to believe - and who can blame them? The stock market used to take years, sometimes decades, to recover its prior peak after the start of a bear-market decline. After last year's 34% meltdown, however, stocks regained record highs in only 126 trading days....

Investors elsewhere seem to have concluded from the swiftness of the recovery that stocks aren't risky at all. After last spring's rebound, Dave Portnoy, a social-media celebrity, declared 'Stocks only go up' so often that it began to seem like a magic incantation.

And, for the past year, just about every stock has gone up.

That's largely because the Federal Reserve has backstopped markets by squashing interest rates toward zero and by buying more than $2.5 trillion in Treasury securities since February 2020, along with other massive interventions. Meanwhile, emergency government programs pumped trillions of dollars of stimulus into the economy....

None of that means, however, that grizzlies have forever been transformed into teddy bears.

'Sure, stocks only go up,' says Rob Arnott, founder and chairman of Research Affiliates, a firm in Newport Beach, Calif., whose investment strategies are used to manage about $160 billion world-wide. 'They only go up - until they go down!'

This isn't the first time people have thought that bear markets had been rendered extinct...The best way not to be overwhelmed by fear during a bear market is to retain a trace of it in bull markets, too."

The Price of the Stuff That Makes Everything Is Surging -Bloomberg/Yahoo Finance

"The prices of raw materials used to make almost everything are skyrocketing, and the upward trajectory looks set to continue as the world economy roars back to life.

From steel and copper to corn and lumber, commodities started 2021 with a bang, surging to levels not seen for years. The rally threatens to raise the cost of goods from the lunchtime sandwich to gleaming skyscrapers. It's also lit the fuse on the massive reflation trade that's gripped markets this year and pushed up inflation expectations. With the U.S. economy pumped up on fiscal stimulus, and Europe's economy starting to reopen as its vaccination rollout gets into gear, there's little reason to expect a change in direction.

JPMorgan Chase & Co. said this week it sees a continued rally in commodities and that the 'reflation and reopening trade will continue.' On top of that, the Federal Reserve and other central banks seem calm about inflation, meaning economies could be left to run hot, which will rev up demand even more.

'The most important drivers supporting commodity prices are the global economic recovery and acceleration in the reopening phase,' said Giovanni Staunovo, commodity analyst at UBS Group AG. The bank expects commodities as a whole to rise about 10% in the next year.....

Of course, rising commodities don't immediately show up on grocery shelves and cafe menus. They make up just a part of the costs for retailers, which often absorb the initial increase to keep customers coming back. But there's a limit to that margin hit, and high prices could ultimately feed through to consumers."

What the US Can Learn From Denmark About Inequality and Social Mobility -ProMarket

"Progressive advocates in the US often point to Denmark as a model welfare state with low levels of income inequality and high levels of social mobility in income across generations. Denmark has many generous social policies in place that progressives currently seek to emulate: There are well-funded social security, disability, and unemployment programs, and inequality in disposable income is much lower than in the US.

The Danish policies now advocated for adoption in the US include free college tuition, universal access to high-quality health care, equal per-pupil expenditures across all neighborhoods, universal high-quality pre- K, and generous childcare and maternity leave policy.

Advocates should note, however, that despite generous social policies and equality in access for all citizens, substantial inequality of child outcomes remains across social and economic classes in Denmark. Family influence on many child outcomes in Denmark is comparable in magnitude to those in the US.....

Common forces are at work in both countries that are not easily mitigated by welfare state policies. One overarching conclusion from our study is that formal equality in access does not guarantee equality of opportunity....

Generous provision of social services does not eliminate inequality in many important life outcomes across generations. The origins of inequality and social mobility lie elsewhere.

Families shape child outcomes. And families operate through multiple channels. They do so both through direct parental interactions with children in stimulating child learning, personality, and behaviors through choice of neighborhoods and thereby the quality of institutions and peers; and through guidance on important lifetime decisions.....

One of the most striking policy differences between Denmark and the US is in the educational system, where Denmark has tuition-free education from pre-K to PhD and gives generous education support.

Yet, contrary to conventional wisdom, the differences in the Danish welfare state and that of the US are not reflected in intergenerational educational mobility. Despite the more generous Danish policies, the association between children's and their parents' education is roughly the same in the two countries....

Strengthening families needs to be front and center in policies promoting social mobility across generations. Since equal Danish provision of services does not eliminate inequality in many important life outcomes, an uncritical adoption of Danish policy initiatives is not an effective way to ensure equality of opportunity. Universal programs benefit advantaged families."

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Apr 30, 2021

4.30.21 - Mints Running Out of Physical Gold/Silver

Gold last traded at $1,769 an ounce. Silver at $25.89 an ounce.

NEWS SUMMARY: Precious metal prices steadied Friday as upbeat economic data boosted the dollar. U.S. stocks retreated despite a flurry of upbeat earnings led by tech giant Amazon.

Mints are running out of gold; not enough physical silver to cover paper -former U.S. Mint Director/Kitco

"A global shortage of physical gold and silver products has created a premium on coins and bars, and this premium is causing a disconnect between the spot price and the 'true' price that retail investors need to pay, said Ed Moy, former director of the U.S. Mint.

Moy, who was the director of the U.S. Mint between 2006 and 2011, cites the inability of the mints around the world to keep up with physical coin and bar demand as a reason for this shortage.

'Not only the U.S. Mint, but other Mints around the world, Australia's Perth Mint, the Mexican Mint, have all run out of gold, they can't keep it in spot and there's so many shortages retailers are having problems accessing that gold,' Moy told Michelle Makori, Kitco's editor-in-chief.

Premiums on these physical gold and silver products can run as high as 20% in some places, Moy said....One of the main reasons for why the spot prices have not caught up to gold and silver's premium-adjusted price is that the overall markets are flooded with bullion derivatives, Moy said, but it's only a matter of time before the short contracts keeping the price down expire.

'What's artificially depressing the price of gold now is that there's a lot of institutional investors that don't hold gold. What they hold is they buy gold derivatives, like futures...and a lot of them are betting that the economy's going to recover and that everything's going to be fine and gold's going to go down,' he said. 'As those short contracts come up, what you're seeing is a popping in price.'"

melt up The Stock Market Melt Up Will End in 2021 -Sjuggerud/American Consequences

"The Melt Down is coming, my friend"¦ Unfortunately, it will arrive this year.

Before you get bent out of shape with me for urging caution at the precise moment when things seem like they're getting really good, please keep this in mind"¦ I have been bullish - and right - on the stock market for nearly all of the last 12 years.

I am proud of that. But it's also why it pains me to tell you that the last 12 years of (mostly) good times for investors will likely end this year....

Markets peak when there is nobody left to buy. That is all you need to know.

Unfortunately, we're getting close to that point right now. And that is exactly what makes this year different than previous years.

When music stars like Snoop Dogg and Gene Simmons (of the band KISS) are talking up cryptocurrency Dogecoin on their Twitter accounts, you know speculating is starting to get out of control....

If you are 55 years old and you handle the Melt Down the wrong way, you might lose half of the money you have invested. That might cause you to work an additional 10 years before retirement"¦ all because of a few bad decisions made in 2021. So"¦ don't be that guy.

'As the market goes down, will people rotate out of speculative stocks into less speculative ones?' one of my colleagues asked me recently.

'No, they won't,' I replied. These market newcomers will ultimately give up after big losses. They will throw in the towel. They will pull what little money they have left out of the markets - and vow to never return.

At least, that's the way it went in the 1999 to 2000 Nasdaq Melt Up"¦ which ended in an 80% fall in the Nasdaq between the March 2000 peak and the bottom in 2003.... But you still have to act - and sell - when the time comes.

Your goal from here should be to participate in all of the upside potential that is left in the Melt Up"¦ and then get out with most of your gains when the Melt Down arrives. It's easier said than done."

The Golden Age of Fraud is Upon Us -Carlson/A Wealth of Common Sense

"Thodex is a cryptocurrency trading platform in Turkey. Last week it was reported the 27-year-old founder of the exchange took a flight to Albania. He took with him $2 billion from more than 30k clients.

Last month the company brought in hoards of new clients by offering free dogecoin to anyone that signed up. Whoops....

If Charles Ponzi were alive today, I have no doubt that he would be able to raise capital from investors, probably in the form of a SPAC. Many investors would laud him for being a genius as he bilked investors out of millions of dollars.

When I was researching the history of financial scams for 'Don't Fall For It' the one thing that jumped out above all else is how similar financial frauds are across time and place. They typically involve new technologies, people with extraordinary sales skills and the insatiable human desire for get-rich quick schemes.

Despite the fact that people have been getting duped by hucksters and charlatans for centuries, there was one period that kept coming up over and over again in my research - the 1920s.

It was the golden age of financial fraud. The Roaring 20s had everything a con-artist looking to dupe people out of their money could ask for - innovation, new financial products, a booming economy, rising markets, new and exciting technologies, loose lending standards, new communication tools and people getting rich all over the place....

During bull markets and economic boom times people witness others becoming very wealthy. So they let their guard down, take more risk than they reasonably should and trust people they shouldn't while chasing easy riches.

And the people most susceptible to financial fraud tend to be the more highly educated investors who have already made a ton of money....Be careful out there."

Biden Is Using the Pandemic as an Excuse for Permanent Expansions of Government Power -Suderman/Reason

"President Joe Biden isn't letting a crisis go to waste.

His administration is using the pandemic as an excuse to push a list of preexisting Democratic policy priorities, few of which have much to do with COVID-19, and some of which were initially pitched as temporary measures.

But in last night's address to a joint Congress, Biden made clear that he wants to extend some these policies, turning COVID-era emergency measures into permanent expansions of federal power, using the virus as an excuse. For Biden, the pandemic has become a catchall justification for a wide array of big-government programs that he and the Democratic Party already wanted to pursue.

Take, for example, Biden's push to expand subsidies for health insurance purchased via the Affordable Care Act, the health law commonly known as Obamacare....

Biden's subsidy expansion was structured in a way that would expand subsidy availability to families with quite high incomes. The expanded subsidy is tied to local premiums, and so it varies geographically. In some parts of the country, however, it could make tens of thousands of dollars in annual subsidies available to households earning $350,000 a year....

Biden is using this playbook to extend and expand other programs as well. His $1.9 trillion American Rescue Plan also included a one-year expansion of the child tax credit. Much of it is refundable, and the plan allows for it to be paid monthly, meaning that it is essentially a regular check cut to parents by the government. As a New York Times report put it recently: 'Though framed in technocratic terms as an expansion of an existing tax credit, it is essentially a guaranteed income for families with children.' ....

And somehow it's all justified by the pandemic. His speech last night started with the words, 'Tonight, I come to talk about crisis.' As he took office in January, he said, he had 'inherited a nation in crisis.' The speech, and its laundry list of pricey new programs and policies, was thus framed as an extended response to that crisis.

It's not. In part that's because so many of his proposals are either poorly targeted (large checks for households with stable six-figure incomes) or totally irrelevant to any actual problems stemming from the pandemic (bailouts for union pension funds)....

Biden's presidency is barely three months old, but it's already fallen into a predictable pattern: Point to the pandemic. Declare that it's an emergency, and that something must be done. Then insist on an expensive, expansive policy overhaul that Democrats have pushed for years - first, in some cases, as a temporary measure, and then, inevitably, for much longer. It's deceptive and dangerous. And if he keeps this up, he may leave a new crisis in his wake."

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Apr 29, 2021

4.29.21 - Gold Price Going 'Well North of $2,000 This Year'

Gold last traded at $1,772 an ounce. Silver at $26.09 an ounce.

NEWS SUMMARY: Precious metal prices eased back Thursday on rising interest rates and upbeat GDP data. U.S. stocks rose, led by strong first quarter earnings reports from tech giants Apple and Facebook.

'We are sitting on economic cliff': Gold price will be 'well north of $2,000 this year'-Kitco

"Investors could see a big move higher in gold soon, according to ex-JP Morgan managing director and now CEO of Trovio, Jon Deane, who sees prices trading well north of $2,000 an ounce this year.

Inflation is already here, and the world is sitting on an economic cliff, which makes assets like gold, silver, and bitcoin very popular with investors, Deane told Kitco News.

'We are already seeing inflation. If you look around the world, you see real estate prices, building supplies, and services skyrocket,' he said. 'What we created since the early 1990s is an entire financial infrastructure that is relying on debt, and we have accelerated that dramatically in our response to managing the COVID-19 crisis. In that regard, we will continue to increase the money supply globally, and we will continue to have a quite aggressive fiscal policy. We are sitting on an economic cliff'....

'We'll go well north of $2,000 this year. Realistically, $2,200 is probable. It may have some headwinds as we go through $2,000 again. Gold is in a much better position than where it was a few months ago," Deane said."

jenga Changing America, One Good Intention At a Time -Bonner/Rogue Economics

"The Biden administration's 'net zero' climate change project itself is unlikely to affect the world's climate, Biden's proposals will almost surely take a few weeks off our economy's growing season.

You'll recall that when the money goes funny, everything goes funny. First, things get weird. Then, they get nasty. But that is all still ahead - the consumer price inflation"¦ the financial controls"¦ the depression"¦ the crack-downs"¦ and the crack-ups.

We are still in the delightful, delusional, weird stage. Ordinary people, for example, are beginning to hallucinate that old-fashioned working and saving is a mugs' game. They can make as much money in one hour trading Dogecoin as they can in a whole month stocking shelves"¦ So why not?

Dogecoin rocketed upward after Elon Musk signaled via Twitter that it might be important. Now, the coin - which began as a joke in 2013 - has a market cap of nearly $36 billion....

Some even think the feds should control the world's temperature. Why not? The sky's the limit!

Others want to turn the entire U.S. into a 'safe space,' where people are not allowed to voice any opinion that others might find offensive"¦

Good intentions? Maybe. Power unchecked by real, limited money? Surely....Most people will be pleased to hear about higher taxes on the rich. They think wealthy people are getting away with something.

Perhaps they are. But it has nothing to do with loopholes and not paying their fair share.Instead, they are on the receiving end of a $30 trillion wealth shift - thanks to the Federal Reserve....Where did all that extra wealth come from?

The Fed prints money. It buys Treasury bonds. The rich own bonds. Bond prices go up....Most likely, none of the goals will be reached. Temperatures will go whither they want"¦ productive jobs will be destroyed so that the resources can be redeployed"¦ the new jobs will be time wasters"¦ and the rich will get richer."

"They're Guessing" - Gundlach Rejects The Fed's "Inflation Is Transitory" Narrative -Zero Hedge

Don't believe your lying eyes, will be the message from The Fed's Jay Powell as he hypnotizes investors to believe that 'inflation is transitory' and they have 'the tools' to manage it. 'Bond King' Jeff Gundlach is not buying that line and told BNN Bloomberg in an interview this morning.

'...more importantly, I'm not sure why they think they know it's transitory... how do they know that?'

'...there's plenty of money-printing that's been going on, and we've seen commodity prices going up massively... home prices in the US are inflating very substantially... so there's a lot of inflation that's already baked in to input prices.'...

The Fed is 'trying to paint the picture' of control, but Gundlach tries to make clear: 'they're guessing.'

So, what does that mean for markets?

While some fear 'we ain't seen nothing yet' in terms of yields rising (and multiple contraction), Gundlach notes that 'it really depends on just how much manipulation the authorities are willing to do.'

The billionaire fund manager notes that yields are 'still very low... well below the current inflation rate... so we have negative yields everywhere on the yield curve.'....

His forecast is that 'The Fed will allow the market forces to take yields to higher levels [10Y 2.25%] before stepping in.'

The Bond King also note that the US stock market is very overvalued by virtually every important metric, and especially so versus foreign markets such as Asia and even Europe."

Thanks to the Fed, the High-Risk, Small-Time Borrower Is Becoming a Thing of the Past -Mises Institute

"Banks and accounting trickery go together. Last year, as I remember back to my banking days, financial institutions followed the advice once proffered by one of our board members, 'If we're going to the dump, let's take a full load.'

When the pandemic struck, banks dumped plenty in their loan-loss provisions, $60 billion, expecting the worst. The cavalry arrived led by Jerome Powell's Fed liquidity flood, Steven Mnuchin's Paycheck Protection Program (PPP) loans, Congress's Coronavirus Aid, Relief, and Economic Security (CARES) Act, and moratoriums on foreclosures and evictions. Instead of an Austrian business cycle cleansing, the cracks were papered over, including bailing out money market funds, allowing us to watch the pandemic comfortably on TV.

Here we are a year later and banks are rocking their earnings by adding back the money that had been put away for the predicted rainy covid day. Appearing on Real Vision's Daily Briefing with Jack Farley, bank analyst extraordinaire and Ludwig von Mises fan Chris Whalen said the future of banks could be dim or worse. Mentioning bank darling JPMorgan, Whalen pointed out, '[Y]ou take the reserve release out, their revenues are down year-over-year. Their earnings would have been down year-over-year, and nobody on Wall Street really gets past the first paragraph in the press release, so they don't bother with this stuff.'....

While consumer numbers look good, the lurking problem is commercial real estate. While hiding in plain sight the heavy hand of the government is 'letting the banks let these borrowers go [in] the hope that they come back.' Hope is not a good strategy, but 'the bank doesn't want the building. The bank doesn't want the shopping mall. They're giving these people time. But I think it's a mistake, because especially in big cities, we're going to have to restructure this real estate.'....

In the banking big picture, the Fed's monetary manipulations are sending the business toward oblivion. 'As the banks have grown, their earnings return on earning assets, which is probably the most important thing you look at with any bank that has been falling. It's fallen 20 basis points in the last three years. We're down to about 70 basis points,' Whalen said. 'I keep telling people if the Fed doesn't change their policy, by the end of this year, the banks are going to be in trouble.'

Banks aren't in the risk business anymore. As Whalen told Real Vision, 'banks are running away from consumers, the consumer is toxic. The only time a bank wants to face a consumer is if it's an affluent consumer, a bigger mortgage, high FICO score, low LTV [loan-to-value], cut a loan, no risk.' Other than credit card lending, there is no margin in the lending business anymore....

The Fed and Treasury are scary, banks are slowly failing, and crypto is a fraud. Other than that, it's the end of the world and I feel fine."

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Apr 28, 2021

4.28.21 - Visualizing the Economic Case for Gold

Gold last traded at $1,775 an ounce. Silver at $26.08 an ounce

NEWS SUMMARY: Precious metal prices steadied Wednesday as investors awaited the latest Fedspeak. U.S. stocks fell back as investors digested major technology earnings and geared up for the latest Federal Reserve policy announcement.

World's Most Cashless Place Takes Next Step Toward Digital Money -Bloomberg

"The central bank of Norway, where old-fashioned cash is now used less than anywhere else in the world, says it's time to take the next step in exploring the introduction of a digital currency.

Norges Bank Governor Oystein Olsen, who in the past has seemed less enthusiastic about central bank digital currencies than his peers, says the case for looking into their feasibility now 'has been strengthened.' The bank plans to spend the next two years building its knowledge of the area, and doing 'experimental testing of technical solutions' to make sure it understands the 'purpose and consequences' of introducing a CBDC, he said in a report published on Thursday.

The bank has already spent four years on preliminary research, but has remained on the fence on the subject as others move ahead. Central banks globally are racing to respond to widespread cashlessness by developing their own digital currencies, spurred by the embrace of cryptocurrencies such as Bitcoin, as well as private initiatives including Diem, which is backed by Facebook Inc.

Only 3-4% of transactions in Norway are conducted with bank notes and coins, according to Norges Bank, which estimates that's the lowest level of cash usage in the world. The rate is 9% in neighboring Sweden, which is among the most advanced nations when it comes to developing a CBDC, according to the McKinsey Global Payments Report.

'A possible introduction of digital central bank money will still be some way off,' Olsen said. The timeline published on Thursday 'reflects that Norges Bank has so far not seen an immediate need for the introduction of such money,' he said.

Olsen also said that any decision on introducing a CBDC will require political involvement and potential changes to Norwegian legislation."

A Golden Future: Visualizing the Economic Case for Gold -Visual Capitalist

"Throughout history, people have revered gold as a sign of wealth and a store of value. Today, gold is not only a precious metal but also a precious investment.

In fact, in 2020, 47% of global gold demand - the largest share - came from investors....Gold can protect investors' wealth during tough times while preserving capital for the long run. Investors add gold to their portfolios because it offers many investment benefits....

long term value

Effective diversification - In a typical portfolio of stocks and bonds, gold's historically low correlation with major asset classes and negative correlation with the U.S. dollar can reduce risk through diversification.

Hedge against inflation - Gold is priced in U.S. dollars. Therefore, as the purchasing power of the dollar falls due to inflation, gold becomes more expensive to buy, acting as a hedge against the eroding value of the dollar.

Long-term returns - Gold has always maintained its value in the long run. Between 2001 and 2020, gold's annual return averaged 11.2%, outperforming other key asset classes including U.S. equities, bonds, and treasuries....

With rapidly rising money supply and near-zero interest rates in response to the COVID-19 recession, the world is entering an era of quantitative easing, and possibly, higher inflation....Gold does not rust - it will always hold its value, as a precious metal and a precious investment."

The Fed in the Sand as Inflation Threatens -Wall Street Journal

"Expectations are high that an economic boom is coming. Vaccines are allowing people to get back to normal life. Unprecedented monetary and fiscal policies are designed to stimulate aggregate demand. The Federal Reserve has joined the robust-growth camp, raising its forecast of 2021's real gross domestic product growth to 6.5%....

If everybody agrees the boom is coming, why does the Fed remain so sanguine that inflation will stay close to its 2% longer-run target? The central bank's outlook rests on the experience of the decade following the 2007-09 recession...But things are different today, raising the risks that the Fed may be caught flat-footed by higher inflation.

If the Fed is too slow to reverse its emergency monetary responses to the pandemic, it risks adversely jarring financial markets and the economy....Conditions in the real economy are also vastly different. Housing is booming. The inventory of homes for sale is close to historic lows, and contractors can't build quickly enough. Double-digit home-price increases are lifting expectations and fueling more demand. This is driving consumption of household durables, and spending on all goods are surging....

The Fed's angst about the risks of falling inflationary expectations seems out of place, and its optimistic assessment of inflation is unbalanced. The Fed should be more realistic about current risks and prepare markets for a timely unwinding of its asset purchases and an eventual rise in interest rates."

The Spectrum of Optimism and Pessimism -Collaborative Fund

"At one end you have the pure optimist. He thinks everything is great, will always be great, and sees all negativity as a character flaw. Part is rooted in ego: he's so confident in himself that he can't fathom anything going wrong.

Then there are extremely optimistic people who accept that bad things occasionally happen to other people....Next are the optimists who are capable of being skeptical of other peoples' optimism....

Next are people who are pessimistic with their words but optimistic with their actions. They're attracted to pessimism because it's intellectually seductive and gets people's attention. But their investment portfolios are clearly set up for a world where things get better. Many pundits fall into this category.

In the middle we have what I call reasonable optimists: those who acknowledge that history is a constant chain of problems and disappointments and setbacks, but who remain optimistic because they know setbacks don't prevent eventual progress. They sound like hypocrites and flip-floppers, but often they're just looking further ahead than other people.

Then come the probabilists. They know progress is likely but couch everything as a matter of playing the odds. 'I am not an optimist,' Hans Rosling once said. 'I'm a very serious possibilist.'

Now we get into closet pessimists: Those who view historical progress as a one-off fluke, but think low growth or stagnation is more likely in the future...Further down come the skeptics. They don't disagree that progress is possible, even likely. But they have such a high bar for proving it that only hindsight observations are convincing....

A level down are those who quietly hope for decline, usually to benefit their investments....Soon you get into some real gloom: people who think evidence of past progress is misleading, incomplete, or manipulated to paint a rosy picture.

Then come the cynics, who view anyone promoting progress as being secretly motivated by power and fueled by corruption.

And at last come the pure pessimists. He thinks everything is terrible, will always be terrible, and sees all positivity as a character flaw. Part is rooted in ego: he has so little confidence in himself that he can't fathom anything going right. He's the polar opposite of the pure optimist, and just as detached from reality."

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Apr 27, 2021

4.27.21 - "Buckle Up! Inflation Is Here!" -BofA

Gold last traded at $1,776 an ounce. Silver at $26.29 an ounce.

NEWS SUMMARY: Precious metal prices steadied Tuesday - despite rising consumer confidence - as the Fed policy meeting began. U.S. stocks dipped as investors braced for a big batch of tech earnings.

Gold Is Still the Best Money -Casey/Rogue Economics

"It's an unfortunate historical anomaly that people think about the paper in their wallets as money. The dollar is, technically, a currency. A currency is a government substitute for money. But gold is money. Now, why do I say that?

Historically, many things have been used as money. Cattle have been used as money in many societies, including Roman society. That's where we get the word 'pecuniary' from: the Latin word for cattle is pecus. Salt has been used as money, also in ancient Rome, and that's where the word 'salary' comes from; the Latin for salt is sal (or salis)....

Over thousands of years, precious metals have emerged as the best form of money. Gold and silver both, though primarily gold. There's nothing magical about gold. It's just uniquely well-suited for use as money among the 92 naturally occurring elements available"¦ in the same way aluminum is good for airplanes or uranium is good for nuclear power.

There are very good reasons for this, and they are not new reasons. Aristotle defined five reasons why gold is money in the 4th century BCE (which may only have been the first time it was put down on paper). Those five reasons are as valid today as they were then.... A good money must be all of the following:

1. Durable: A good money shouldn't fall apart in your pocket or evaporate when you aren't looking. It should be indestructible. This is why we don't use fruit for money. It can rot, be eaten by insects, and so on. It doesn't last.

2. Divisible: A good money needs to be convertible into larger and smaller pieces without losing its value, to fit a transaction of any size. This is why we don't use things like porcelain for money - half a Ming vase isn't worth much.

3. Consistent: A good money is something that always looks the same, so that it's easy to recognize, each piece identical to the next. This is why we don't use things like oil paintings for money....

4. Convenient: A good money packs a lot of value into a small package and is highly portable. This is why we don't use water for money, as essential as it is - just imagine how much you'd have to deliver to pay for a new house....

5. Intrinsically valuable: A good money is something many people want or can use. This is critical to money functioning as a means of exchange; I know that someone, somewhere wants gold and will take it in exchange for something else of value....

Actually, there's a sixth reason Aristotle should have mentioned, but it wasn't relevant in his age, because nobody would have thought of it"¦ Gold can't be created out of thin air....

That gold is money is simply the result of the market process, seeking optimum means of storing value and making exchanges."

crypto New federal regulations could spur cryptocurrency crash -Gasparino/New York Post

"Ask Wall Street's C-suite types about cryptocurrencies, and they all admit they're getting into them one way or another. But keep asking questions, and they'll tell you something else, too: The market is ripe for a crash.

The crypto crash, according to top executives I've recently spoken with, could be happening right now with the recent slide in prices. Or it might occur next month or later this year.

Either way, the catalyst will be something the $2 trillion market for digital currency has thus far avoided: serious regulation that will quash exuberance over crypto.....

With some fits and starts along the way, bitcoin, the most popular cryptocurrency, rose to nearly $65,000 early this month, spurred both by speculation and investors looking for an alternative currency because pandemic money printing was debasing the dollar. Nothing, it appeared, could stop it from topping $100,000 before year's end.

Then came rumors that crypto-hating Treasury Secretary Janet Yellen was about to go on a holy war against digital currency, causing a flash crash last weekend. And late this past week, on top of reports that President Biden is looking to hike capital gains taxes for the rich, there were rumors that Yellen wants a jaw-dropping 80 percent tax rate for crypto. That helped send bitcoin tumbling near the $49,000 mark on Friday.

If you believe market history often repeats, and there's lots of evidence it does, consider what came out of the dot-com bubble of the 1990s. When the bubble burst, the losses were staggering....

Signs of a crypto bubble reaching its breaking point are everywhere. Even with a recent sell-off, bitcoin hovers around $49,000 - up 600 percent in just the last year compared to the 'paltry' 51 percent increase in the S&P.

Yet you still can't buy a slice of pizza with crypto, and blockchain technology still isn't replacing traditional banking anytime soon.

The trigger for the crypto crash could be Washington, many investors believe. For most of its existence, the government allowed crypto to grow largely regulation-free, which helped build the euphoria around its pricing. A likely regulatory burden will knock out at least some of the pricing, but also draw skepticism for the staggering run-up in crypto valuations that we've seen this year....

There is also talk about the government banning crypto altogether for fear that it will become a legitimate alternative currency to the dollar."

Myth-Busting: Money Printing Must Create Inflation -Rabener/CFAInstitute

"Central banks are often credited with saving the world with their aggressive monetary stimulus during the crisis in 2008. But the crisis is more than a decade behind us and the same basic policies are still in place. Central bank balance sheets keep on expanding. In countries like Germany, this continuous money printing is viewed with pure horror given its association with the hyperinflation of the Weimar Republic in the 1920s.

With the COVID-19 crisis, the central banks have kicked their money printing into an even higher gear. The US Federal Reserve's balance sheet has breached $7 trillion, which is comparable to the European Central Bank (ECB)'s 7 trillion euro. The central banks seem to have chained themselves to the public markets and feel forced to step in each time stocks drop meaningfully....

Intuitively, inflation should follow the money supply. The more money that circulates in an economy, the more demand for products and services, which should lead to higher prices. However, the economy consists of many interrelated variables and linear models frequently fail to represent reality....

Given their typical mandate to create moderate inflation, the all-powerful central banks seem quite powerless. Or they are simply fighting forces they cannot overcome: namely, the negative demographics and negative productivity growth that contribute to low economic growth.

Should investors worry about the mass money printing by central banks? Certainly. It has distorted financial markets and inflated prices across asset classes."

"Buckle Up! Inflation Is Here!" -BofA Global Research/Zero Hedge

Last Wednesday, we reported that based on recent earnings calls, 'Companies Are Freaking Out About Soaring Costs' and today we got more confirmation of this in a Bank of America report...which warns that Inflation is 'arguably the biggest topic during this earnings season, with a broad array of sectors (Consumer/Industrials/Materials) citing inflation pressures.'

The number of mentions of 'inflation' during earnings calls which exploded, more than tripling YoY per company so far, the and the biggest jump in history since BofA started keeping records in 2004.

Why is this a problem? Because the number of mentions has historically led CPI by a quarter with 52% correlation and points to explosive higher inflation ahead.

BofA has also picked up key inflation commentaries from earnings calls, which noted that raw materials, transportation, labor, etc. were cited as sources of inflation and many plan to (or have already) raise prices to pass through higher costs....

The prices paid indices from regional Fed manufacturing surveys are surging higher. Confirming this point, below are several comments from the recent release of the Kansas City Fed's April Manufacturing Survey which illustrate the breadth of cost increases that companies are currently facing.

'It is very difficult to handle the increased business with supply chain issues across all materials and finding anyone who wants to work. The federal government has incentivized people to stay home and not be productive. Stimulus and increased unemployment money are wrecking the labor pool. Lower level employees are quitting to make just as much not working.'"

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Apr 26, 2021

4.26.21 - Covid Relief Makes Finding Help Impossible

Gold last traded at $1,779 an ounce. Silver at $26.19 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on safe-haven buying and a flat dollar. U.S. stocks inched higher as investors geared up for one of the busiest weeks of the first-quarter earnings season.

Gold gains as rising COVID-19 cases, easing U.S. dollar boost appeal -CNBC

"Gold prices held firm on Monday, supported by a weaker dollar ahead of the U.S. Federal Reserve's meeting this week, while supply worries kept palladium near record highs hit in the previous session.

'We have seen some short-term buying interest come back into the market in line with the weaker dollar and lower bond yields'...said Saxo Bank analyst Ole Hansen.

'The main focus this week will be the FOMC (Federal Open Market Committee) meeting on Wednesday and what kind of signals that will be sent from there.'....

The dollar slumped to an almost eight-week low against other major currencies on Monday. Market participants are awaiting the Fed's two-day policy meeting starting on Tuesday, with the focus on the tapering of bond purchases. Spot gold could retest resistance at $1,792 an ounce, having stabilized around a support at $1,772, said Reuters technical analyst Wang Tao."

king The Toxic Holy Grail of Federal Spending Loonies -Bellinger/Off-Grid Confidential

"We like to watch what Washington's 'money magicians' are up to - and how their behind the scenes actions impact you. The Harris-Biden administration's extremist new scheme to end private U.S. capital markets as we know them is a doozie on steroids....

My current observation is there are 4 big interconnected financial situations that have potential to skyrocket gold to new heights:

1. A radical new U.S. 'Captive Dollar' system to produce unlimited government funding from now on. 2. Why Harris-Bidens' new government funding model must neuter or eliminate private cryptocurrencies. 3. How a government-orchestrated 'bust' in private cryptocurrencies may open the floodgates for gold. 4. How points 1-3 above are set to invigorate a second private economy in America....

The Harris-Biden Administration has implemented a dangerous and completely theoretical scam to establish unlimited federal program funding - achieving what hard core leftists have long sought - a much more closed U.S. financial system 'liberated' from any semblance of restraint on public spending.

Modern Monetary Theory MMT is the dream child of academics and left wing think tanks in Washington - a radical government finance doctrine that's been fully embraced by the Harris-Biden White House.

MMT has been ushered in as a Covid-19 emergency government funding measure without even one congressional hearing - and now MMT is suddenly the central driver of America's fiscal and monetary policy....

Cryptocurrencies and gold are two privately held assets that threaten the MMT government funding system. That's because both are real alternatives to flee into as MMT dollars get softer and softer. To protect new MMT government funding practices, Uncle Sam must take steps to prevent capital flight to assets such as these.

The problem with private controlled crypto currencies insofar as MMT enthusiasts is concerned"¦is that they offer individuals far more economic autonomy and financial privacy than the super soft government money system of MMT generated dollars. Which means that high flying private sector cryptocurrency of any kind is a threat to MMT government funding theory.

Cryptocurrencies are wildly popular with the public and only a handful of Americans choose to own precious metals - so the powers that be rightly see crypto dollars as a bigger threat to their rigged system of federal funny money finance of government operations. Which is why if this statement is vindicated by events, then gold could be king." (Full story)

Covid Unemployment Relief Makes Help Impossible to Find -Wall Street Journal

"Lots of entrepreneurs are overworked these days. The National Federation of Independent Business surveyed more than 500 small businesses and reported last week that 42% of them had job openings they couldn't fill. 'As long as we've been conducting the survey, it's never been that high,' says Holly Wade, executive director of NFIB's research center. Some 7.4 million jobs were open at the end of February, according to an April 6 report by the Bureau of Labor Statistics.

Some workers still fear they'll contract Covid if they return to the workplace, and some parents are unable to take on full-time work because their children's schools remain shut. But there's another reason for the acute labor shortage: It pays to stay on the couch.

As Covid spread and the nation locked down last spring, Congress approved enhanced weekly benefits of $600, in addition to the usual state-administered unemployment payments, through July 2020. A working paper by the National Bureau of Economic Research found that 76% of those eligible for the $600 bonus could be given at least as much for being jobless as they'd earn by working. Lawmakers have since trimmed the enhanced unemployment benefits to $300 a week and extended them through September 2021....

As vaccination rates rise, demand for goods and services is soaring, but there's an enthusiasm gap between consumers and workers. The National Restaurant Association's most recent survey found that 1 in 4 restaurant operators listed recruitment as their top concern, ranking it higher than Covid....

Even businesses that don't shut down will struggle to expand. The longer enhanced unemployment stretches on, the more likely it looks that job growth will trail economic growth, leading to production shortfalls and perhaps higher prices....

Ending lockdowns is the first step toward economic recovery, but ending lavish jobless benefits is the next critical move."

Our conversation about the environment is broken. What is the way forward? -Lassman/Washington Examiner

"In 1970, Sen. Gaylord Nelson of Wisconsin predicted that 'accelerating rates of air pollution could become so serious by the 1980s that many people may be forced on the worst days to wear breathing helmets to survive outdoors.' Buoyed by a United Nations proclamation, Nelson inaugurated Earth Day 51 years ago and called for a national teach-in.

Fortunately, he was wrong about air pollution. A society producing technological advances, paired with an increasingly wealthy population, has the means and the motivation to take good care of the environment.

Unfortunately, that lesson seems to have been lost in the past half-century. Today the battle lines are drawn on climate change. It is commonly held that there is no meaningful debate about the Earth's changing climate or what to do about it. This framing has produced misleading analysis and helped block effective, durable environmental policies....

Forests are being cut down, with devastating effects on local biodiversity and water quality. But overall, the planet is greening, and the tree canopy is expanding, which results in greater carbon capture. Both are true, and neither should be ignored because it is inconvenient to a preferred political narrative.

Strengthening property rights and local rule of law where forests are jeopardized is a market solution that advances green activists' priorities for biodiversity and carbon capture. It is something everyone can agree upon....

We have a half-century of dire environmental predictions that are usually wrong in the same direction. That raises the question of how much science is being undermined by a political agenda. Is the problem models that do not perform or our attachment to the terror of environmental apocalypse?

This fear is the second major problem we must overcome to improve the quality of our policy debate....Renewable energy can be a crucial piece of a greener energy future, but we need to be realistic about its limits....

An effective climate strategy must be itself sustainable. That requires some measure of humility and an honest evaluation of real-world trade-offs, the linkage between energy use and human welfare....The lives and livelihoods of real people are at stake. We have a responsibility to be clear-eyed and humble about real-world consequences. That means admitting when we are wrong and, equally important, when someone with a different view has a valid point."

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Apr 23, 2021

4.23.21 - Gold's Rip Your Face Off Rally is Here

Gold last traded at $1,775 an ounce. Silver at $26.03 an ounce.

NEWS SUMMARY: Precious metal prices were stable Friday with gold on track for a third weekly gain. U.S. stocks dipped early and then rebounded as investors shrugged off tax fears.

Gold unleashed - Rip your face off rally is here -Kingsley/FX Street

"Gold defied the daily selling stretching over to commodities such as oil. Gold and miners defied also the daily weakness in silver which I rightly found little concerning. The decoupling from the Treasury yields pressure goes on, and is further relieved by Treasuries catching a bid again.

The dollar staged a daily reversal, but for how long would that last? The other indicative engine behind the precious metals growth, the USD/JPY pair, is tilting solidly in the direction of the yen carry trade suffering a setback, which means unwinding quite a few 'no brainer' trades, including those short precious metals. Remember, when yen as the safe haven currency strengthens, gold usually likes that.

Such is the amply clear big picture: Now, it's up to gold and silver to catch up on what they missed since the early Aug 2020. Inflation is running hotter, and the Fed is tolerant of it, amply supplying liquidity. The gold bottom is in, and much brighter days ahead.

The stage is set for both gold and silver's rip your face off rally, powered by the miners.

This [gold chart] is as bullish as it gets. Miners are leading, and Treasury yields aren't a headwind any longer for now. Naturally I'm standing by the call of decoupling from nominal yields getting more pronounced, and by increasingly lower dollar values powering precious metals higher, especially in the second half of this year."

DemEagle Tax Hikes Will Stifle the Recovery -Portman/Wall Street Journal

"The Biden administration and congressional Democrats' $2.7 trillion 'infrastructure plan' is deeply concerning. Republicans and Democrats agree on investing in America's infrastructure - the roads, bridges, electrical grids, railroads and broadband networks we all use...The Biden plan broadens the definition of infrastructure to include more than $2 trillion in funding for things like the National Science Foundation, long-term care, corporate child care, and electric-car companies. Some are worthy causes, but they don't belong in an infrastructure bill.

About $600 billion of the plan isn't paid for and will take the nation further into debt. Democrats will pay for the rest of the plan with an enormous tax increase, the burden of which would ultimately be borne by American workers and consumers. It would make the U.S. less competitive in the global economy, reversing progress made in the past few years. The 2017 tax reforms - which the Biden proposal would largely dismantle - unleashed record growth in jobs and wages and produced the lowest poverty rate since the government started tracking it 60 years ago.

In promoting the Biden tax increases, Treasury Secretary Janet Yellen claims the 2017 reforms encouraged U.S. businesses to move jobs out of the country. The opposite is true: The 2017 reforms stopped so-called corporate inversions, which made American companies into foreign companies. The old, uncompetitive U.S. tax laws forced jobs and investment overseas....

Mr. Biden's proposed tax hikes would put all this U.S. investment, job creation and research at risk. Under the Biden plan, the combined federal and state corporate tax rate would go from 25.8% - already above the average rate of 23.4% for other developed countries - to 32.8%, the highest rate in the developed world. The U.S. tax rate would again be higher than China's....

The Biden administration claims that it wants the U.S. to be more competitive, yet its tax increases would do the opposite. In a telling admission, Ms. Yellen asked other countries earlier this month to raise their corporate tax rates to ensure 'a more level playing field.' Those countries understand competition. They're ignoring her advice and lowering rates. Ireland's finance minister has indicated that his country has no interest in raising taxes.

Multiple studies, including from the nonpartisan Congressional Budget Office, show that workers will bear most of the burden of higher rates in the form of lower wages and lost jobs."

Welcome to the YOLO Economy -DNyuz

"Something strange is happening to the exhausted, type-A millennial workers of America. After a year spent hunched over their MacBooks, enduring back-to-back Zooms in between sourdough loaves and Peloton rides, they are flipping the carefully arranged chessboards of their lives and deciding to risk it all.

Some are abandoning cushy and stable jobs to start a new business, turn a side hustle into a full-time gig or finally work on that screenplay. Others are scoffing at their bosses' return-to-office mandates and threatening to quit unless they're allowed to work wherever and whenever they want.

They are emboldened by rising vaccination rates and a recovering job market. Their bank accounts, fattened by a year of stay-at-home savings and soaring asset prices, have increased their risk appetites...If this movement has a rallying cry, it's 'YOLO' - 'you only live once,' an acronym popularized by the rapper Drake a decade ago and deployed by cheerful risk-takers ever since....

To be clear: The pandemic is not over, and millions of Americans are still grieving the loss of jobs and loved ones. Not everyone can afford to throw caution to the wind. But for a growing number of people with financial cushions and in-demand skills, the dread and anxiety of the past year are giving way to a new kind of professional fearlessness....

'Lots of things were on hold during the pandemic,' said Jed Kolko, the chief economist at Indeed.com. 'To some extent, we're seeing a year's worth of big life changes starting to accelerate now.'

In addition to the job-hopping you'd expect during boom times, the pandemic has created many more remote jobs, and expanded the number of companies willing to hire outside of big, coastal cities. That has given workers in remote-friendly industries, such as tech and finance, more leverage to ask for what they want....

Individual YOLO decisions can be chalked up to many factors: cabin fever, low interest rates, the emergence of new get-rich-quick schemes like NFTs and meme stocks. But many seem related to a deeper, generational disillusionment, and a feeling that the economy is changing in ways that reward the crazy and punish the cautious.

Several people in their late 20s and early 30s - mostly those who went to good schools, work in high-prestige industries and would never be classified as 'essential workers' - told me that the pandemic had destroyed their faith in the traditional white-collar career path."

The Velveteen Rabbit: A Modern Elder? -Conley/Wisdom Well

"'Generally, by the time you are Real, most of your hair has been loved off.' - Margery Williams Bianco, The Velveteen Rabbit

As a bald guy in his sixties, I can relate. Of course, with or without hair, it's easy to feel shabby and worn out as you get older, and even more when you're hanging out with thirty-somethings doing their beach workouts (I don't ever remember being that limber or svelte).

Fortunately, with receding hairlines and all the sagging bits and bobs of our aging body comes perspective and the wisdom to know how beautiful life can be when we stop inhabiting the playing field of youth...and our bodies.

How wonderful it is to finally (at long last) venture into the timeless (and perfect) world of the heart and soul. After all, this is the natural progression of aging, which is perfectly captured in the full excerpt from 'The Velveteen Rabbit,' the story of a stuffed rabbit's desire to become real through the love of his owner.

'You become. It takes a long time. That's why it doesn't often happen to people who break easily or have sharp edges, or who have to be carefully kept. Generally, by the time you are Real, most of your hair has been loved off, and your eyes drop out and you get loose in the joints and very shabby. But these things don't matter at all, because once you are Real you can't be ugly, except to people who don't understand.' - Margery Williams Bianco, The Velveteen Rabbit

I say three cheers for the Velveteen Rabbit - our fluffy reminder that it's time to get 'Real' and begin hanging out with people who also 'understand' and want to be Real Together!"

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Apr 22, 2021

4.22.21 - Earth Day: Go Green, Go Nuclear

Gold last traded at $1,780 an ounce. Silver at $26.04 an ounce.

NEWS SUMMARY: Precious metal prices eased back Thursday on upbeat economic data and a firmer dollar. U.S. stocks dipped as investors turned a blind eye to solid earnings and economic data.

Gold prices poised to settle at a 2-month high as COVID's rise rattles market -Marketwatch

"Gold prices headed higher for a second session on Wednesday, on track to mark their highest settlement in about two months.

A rise in cases of COVID-19 from more transmissible variants, especially in Asia and Latin America, threatens the world's economic rebound from the pandemic, boosting the precious metal's appeal as a investment haven....

'Nominal yields have been on a downward trajectory since the beginning of the second quarter, as has the U.S. Dollar Index,' said Ross Norman, chief executive officer at Metals Daily. 'Yields remain the key factor.'

Notably, India recorded over 250,000 new infections and over 1,700 deaths in the past 24 hours, and the U.K. announced a travel ban on most visitors from the country this week, the Associated Press reported....Precious metals are seen as a haven against uncertainty wrought by COVID....

Meanwhile, 'demand from price sensitive Asia remains robust, with gold trading at a $10 premium in Shanghai over [local] London prices,' Ross told MarketWatch.

'Physical demand for coins and bars in Europe remains hot with premiums remaining elevated,' he said. And 'perhaps most encouragingly, the selling by institutions of the gold exchange-traded fund has abated while central bank demand has re-emerged.'

'In short, gold looks set for a successful retest of resistance at $1,800, but it remains to be seen how high it can go before the Asian demand peters out and the market flatlines again,' Ross said."

surveillance state Cryptocurrencies Are the Next Frontier for the Surveillance State -New Republic

"At first, it might have sounded like manna from heaven. Chinese authorities announced they would be distributing more than $1 million to a select number of citizens, as part of a test of its new currency: a digital yuan that could be easily spent almost anywhere. Reports out of China showed happy recipients using'digital wallets' to buy groceries with their free money and marveling at how 'smooth and fast' the system worked.

But there was a hitch or two, pointing to the thorny complexities of this new foray into digital monetary policy. First, recipients of the digital yuan had only a couple of weeks to spend their money; otherwise, it would disappear as mysteriously as it had arrived. And second, the experiment signaled a new advance in digital surveillance, in which the state could potentially track all financial transactions. Recipients got free money, but with a new degree of control attached.

Fifty-six central banks are now researching or developing some form of digital currency, according to the Bank for International Settlements. These new entries in the market pit tech moguls against central bankers against Bitcoin bulls - with consumers sidelined, as usual - and along the way, they've teed up a battle over sovereignty and monetary authority.

The core questions here are about who controls what people get and how they spend it - and about tracking flows of money as never before. With digital currencies, economists and central bankers can coordinate monetary policy and welfare benefits in real time, instantly funneling money into the pockets of those who need it. But these plans also provide a feast of data for technocrats and surveillance-happy police. The risks that come with putting this kind of power in the hands of an authoritarian state bent on social control....

The United States doesn't seem to have progressed beyond reviewing the literature about CBDCs. But in late February, U.S. Treasury Secretary Janet Yellen seemed bullish on the idea. 'We do have a problem with financial inclusion,' she said, using a term that sometimes confuses financial empowerment with getting poor people to establish accounts with big banks. 'Too many Americans really don't have access to easy payment systems and to banking accounts. This is something that a digital dollar, a central bank digital currency, could help with.' But America's digital banking infrastructure is already far too wrapped up in invasive financial surveillance. The solution isn't a new digital currency that generates even more data for the government.

A calibrated rejection of CBDCs shouldn't be considered an endorsement of crypto-currencies that exist in their own wildly volatile market. Monetary policy should instead be made more democratic, so that digital banking technologies are available to those who want them, without the attendant surveillance and social control (or the runaway speculation endemic to cryptocurrency). A new digital currency requires new privacy protections enshrined in law. In China, where citizens have few political rights, that's unlikely to happen. But in the United States, we still have a chance not to screw this up."

An American Epidemic of 'Covid Mania' -Ladapo/Wall Street Journal

"What are the lessons of Covid-19? It depends who you ask. Some believe politicization of the pandemic response cost lives. Others believe a stronger U.S. public-health system would have reduced Covid-19 deaths significantly. Still others say lockdowns should have been longer and more stringent, or that they were ineffective. But one lesson that should transcend ideological differences: Don't put one illness above all other problems in society, a condition known as 'Covid mania.'

The novel coronavirus has caused suffering and heartbreak, particularly for older adults and their loved ones. But it also has a low mortality rate among most people and especially the young-estimated at 0.01% for people under 40-and therefore never posed a serious threat to social and economic institutions. Compassion and realism need not be enemies. But Covid mania crowded out reasoned and wise policy making.

Americans groaned when leaders first called for 'two weeks to slow the spread' in March 2020. Months later, many of these same Americans hardly blinked when leaders declared that lockdowns should continue indefinitely. For months Covid had been elevated above all other problems in society. Over time new rules were written and new norms accepted.

Liberty has played a special role in U.S. history, fueling advances from independence to emancipation to the fight for equal rights for women and racial minorities. Unfortunately, Covid mania led many policy makers to treat liberty as a nuisance rather than a core American principle....

A prime example is mask research. However one feels about wearing masks, look at the evidence from California. Despite a mask mandate imposed last April and steady, high rates of compliance, California experienced a surge in Covid-19 cases over the winter....

The pandemic has been devastating for many Americans, but policies grounded in Covid mania have compounded the harm and delayed a return to normal life. The challenges ahead require rational decision making that considers costs and benefits and keeps sight of the countless things in life that matter."

Go Green, Go Nuclear -Stossel/PJ Media

"This Thursday, Earth Day, politicians and activists will shout more about 'the climate crisis.' I don't think it's a crisis. COVID-19, malaria, exploding debt, millions of poor children dying from diarrhea - those are genuine crises.

But global warming may become a real problem, so it's particularly absurd that Earth Day's activists rarely mention the form of energy that could most quickly reduce greenhouse gases: nuclear power.

When France converted to nuclear, it created the world's fastest reduction in carbon emissions.

But in America, nuclear growth came to a near halt 40 years ago, after an accident at the Three Mile Island plant in Pennsylvania.

The partial meltdown killed no one. It would probably have been forgotten had Hollywood not released a nuclear scare movie, 'The China Syndrome,' days before....

One of the people still freaking out is solar activist Harvey Wasserman. 'I live in terror of the next accident,' he says in my latest video....Actual scientists don't agree. In fact, they find less cancer near Three Mile Island than in other parts of Pennsylvania.

....'But what about the nuclear waste!' shout the activists.

'It's a small problem,' says Joshua Goldstein, author of 'A Bright Future: How Some Countries Have Solved Climate Change (with nuclear power). 'All the nuclear waste from all America's reactors for 60 years would fit into a Walmart.'

While the anti-nuclear movement has stopped nuclear construction in most of the West, 'other places are building them like crazy,' says Goldstein. 'China puts a nuclear reactor on the grid every two to three months.'

America may soon finish... one. It took Georgia Power Company six years just to get permission to build a plant. Regulation is so heavy that, 15 years later, it still isn't operating."

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Apr 21, 2021

4.21.21 - Legal Ponzi schemes: Today's House of Cards

Gold last traded at $1,792 an ounce. Silver at $26.50 an ounce.

NEWS SUMMARY: Precious metal prices lurched higher Wednesday on momentum buying and a weaker dollar. U.S. stocks rose led by a rebound in cyclical stocks as equities tried to recover from two straight days of losses.

Silver: Fiat Currency Chasing Real Money And Short Supplies Leading To Inflation -Seeking Alpha

"In silver, going back to 1992, the peaks occurred about every 9 years. 2008-09 was the end of the previous 9-year cycle. Each year, we are looking at an average increase of a little more than 10%.

Particularly in silver, we are entering a new paradigm. There is a lot of coverage of the shortage of silver supply, which is an increasing problem. Gold also appears to have shortages and the shortages seem to be increasing.

Inflation seems to be kicking in, with prices in grains increasing significantly in the past few months. Those increases will show up in food in the coming months in stores. As inflation increases, the dollar will continue to lose value. Real estate is massively inflated, as is the stock market. Where can people put their money? Gold and silver appear to be a good place for investors.

The fundamentals do not bode well for the economy as a whole or for the US dollar. It does not look good for price inflation. We haven't seen much price inflation. We have seen asset inflation, but not price inflation on Main Street. There will be challenges and one challenge is how much is it going to take in terms of stimulus to get back to some form of normalcy....

It appears that we are going to see more stimulus packages, which means more money printed and the US dollar worth less and less. All paper currencies are heading toward zero because there is nothing backing them but debt. How much money can you print before the currency is worth nothing?....

The key now is to protect your net worth, especially any assets in US dollars. Silver is an excellent opportunity to hedge against the US dollar and to take advantage of what could be one of the most explosive moves in the silver market in history. Silver is real money. It is also an industrial metal, which will be in greater demand as the economy recovers. But, as real money, silver will greatly benefit from the devaluation of the US dollar."

cards Connecting the stock market, Dogecoin, Bitcoin - and Bernie Madoff -MSNBC

"Bernie Madoff, who died last Wednesday, will be justly remembered as one of the biggest scam artists in the history of capitalism. His massive, decades-long Ponzi scheme ended up costing investors tens of billions of dollars and, in the process, wrecked many lives. But these days, Madoff also looks like something else: a man whose moneymaking scheme was an odd forerunner of the hottest, and strangest, investment crazes of the moment.

Madoff was a classic Ponzi artist. He raised money by promising his clients that he had a special proprietary investment strategy, one that allowed him to make money consistently, in any kind of market. But the strategy was an illusion, as were the investment gains. Instead, Madoff paid off his old investors with the money he raised from newer ones (while skimming something off the top for himself). This is a hard thing to keep going for a long period of time. But Madoff was smart - instead of promising his clients massive gains, he promised reasonable but stable returns...It wasn't until the global financial crisis hit, and his clients demanded en masse to pull their money out of his investment funds, that the house of cards Madoff had built collapsed....

The booms in so-called meme stocks, nonfungible tokens, or NFTs, and cryptocurrencies like Dogecoin are, in some sense, legal Ponzi schemes writ large, in which the value of the underlying assets is little more than a wager that new money will keep coming into the market.

Take the cryptocurrency Dogecoin. It was created back in 2013 as, literally, a joke, a satire on cryptocurrencies like Bitcoin. (It got its name from Doge, a popular meme that's the image of a Shiba Inu dog looking sideways at the camera.)...Last week, it rose by more than 400 percent, putting it up by a mere 5,000 percent this year. Friday afternoon, the total value of Dogecoins topped $50 billion.

Why? There is no good answer to that question, other than to say Dogecoins have gotten dramatically more valuable because people have decided to act as if they're more valuable.... this game can continue only as long as people are willing to play. When they aren't willing to do that - because people decide to cash out or panic or just get bored - the game will end, just like Madoff's scheme did.

We may already be seeing that in the market for NFTs - in March, daily sales of art NFTs were down by roughly 85 percent, according to Nonfungible.com. And at that point the people with bad luck or bad timing, inevitably, will lose. It's like Wile E. Coyote running off a cliff. He can keep going until the moment he realizes there's no ground beneath him. When he does, he falls. And it's a long, long way down."

A Real Boom Versus a Fake Boom -Bonner/Rogue Economics

Yes"¦ all that stimmy money"¦ all that fake, new cash and credit"¦ so many boondoggles"¦ so many Madoffs"¦ so little time. So many new 'investments'"¦ and with no sure money, no way to know what they are worth....

Yes, but wait. The trouble with booms is that there is more than one kind. There's the kind of boom that makes people richer. And there's the kind of boom that makes them poorer. A further complication is that, in the early stages, it's hard to tell the two apart.

A real boom - based on working, saving, investing, and innovating - makes you richer and better off.

The other kind"¦ the fake boom"¦ is another thing altogether. You just print up some money and pass it out all over town.

Pretty soon, things start to happen. Even 'better than expected' things. People spend. Cash registers make a joyful sound - ka-ching! - especially the ones in China, Vietnam, and Mexico, where Americans tend to spend most of their stimmy money....

A fake boom doesn't add to prosperity; it reduces it, by squandering real wealth - time and resources - on projects that don't pay off. Giveaways, for example. Political payoffs. And bad investments.

More money for the unemployed. More for Amtrak. More for 'socially disadvantaged farmers.' And more money for cryptos, SPACs, NFTs, and Elon Musk.

But at least a fake boom is more entertaining than a real boom. The latter is all sobriety and hard work, while the former sets in motion a glorious parade of lunacy.

Here at the Diary, we watch them go by - the madmen"¦ the imposters"¦ the shysters"¦ and the world improvers. We gawk. We salute. We toss confetti. We would shake up a bottle of champagne and spray it over them"¦ if we were that sort of fellow.

If only you could get rich by spending money you don't have on things you can't afford and don't really need anyway! But you can't. And over time, every detail of the fake boom is destined to be exposed as counterfeit. Especially the 'low inflation.'"

Ultrawealthy Americans Are Scrambling To Get Ahead Of Biden's Planned Tax Hikes -Huffington Post

"Biden campaigned on slashing the total amount of wealth that rich families can pass on tax-free to their heirs. As part of the 2017 Tax Cuts and Jobs Act - an unprecedented giveaway to the rich - Republicans and President Donald Trump raised the exemption to an all-time high of $11.58 million for individuals or $23.16 million for couples.

Undoing Trump's tax cuts would bring the individual exemption down to $5.49 million; if Biden succeeds in his desire to restore taxation to 2009 levels, wealthy families would be subject to estate taxes after the first $3.5 million.

The result is a mad dash among wealthy families to pass on their millions before they can no longer do so tax-free. Tax attorneys and wealth advisers to the 1% say they're busier than they've ever been, while appointments for appraisers are filling up months in advance.

'What I'm seeing now is a panic,' said Joseph Marion, a Rhode Island tax attorney and expert in wealth transfer, 'relative to people using up their lifetime exemption credits before those credits likely erode under the new Democratic regime.'

It's not just estate tax levels that are under fire. As a means to pay for Biden's ambitious social and infrastructure agenda, Senate Democrats favor jacking up the capital gains taxes that wealthy people owe on some of the stuff they inherit....

You may have heard the same pandemic that cost millions of ordinary people their lives, health, savings, stability, or jobs caused the fortunes of the country's wealthiest families and its largest corporations to grow like gangbusters.

The year 2020 was likewise a pretty good year to make an estate plan. The technical reasons for this are baroque and tedious, as with most things tax-related. The main thing to know is that the economic rescue efforts that were necessary to protect the economy from total collapse - stimulus of atlas proportions, interest rates near zero - made for pretty excellent growing conditions of generational wealth....

Dollars-and-cents appraisers are not the only ones doing a brisk business. Multiple appraisers who specialize in hard assets - real estate, art, and gems and jewelry - tell me this is the busiest they've been in their entire careers."

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Apr 20, 2021

4.20.21 - US Money Supply: More Lies from On High

Gold last traded at $1,778 an ounce. Silver at $25.83 an ounce.

NEWS SUMMARY: Precious metal prices inched higher Tuesday on bargain-hunting and a flat dollar. U.S. stocks fell for a second day as strong corporate earnings failed to boost a market near record highs.

Gold hits 7-week peak on easing dollar, U.S. yields -CNBC

"Gold prices scaled a more than seven-week peak on Monday as a softer dollar and lower U.S. Treasury yields lifted the yellow metal's appeal even as the appetite for riskier assets remained strong. However, later in the day prices eased from those levels.

'The fact that we managed to break above $1,765 and close above on Friday is likely to have attracted some renewed speculative buying from trend and momentum players,' Saxo Bank analyst Ole Hansen said.

'Most of these (players) are price-driven, so when the price tells them that there's a change in the outlook, they have to get involved,' while fundamentally, gold is being driven by the continued drop in bond yields, Hansen added.

Benchmark U.S. 10-year Treasury yields eased, reducing the opportunity cost of holding non-interest bearing gold, while the dollar fell to a more than six-week low against rivals, making gold affordable for other currency holders. Bullion has dropped 6% so far this year, mostly pressured by surging U.S. yields.

Gold's gains accompanied a jump in world shares as markets were generally upbeat about the prospects for a global economic recovery from the COVID-19 pandemic."

government US Money Supply: More Lies from On High -Piepenburg/Gold Switzerland

"As the expressions goes:'A man does not sin by commission only, but often by omission.'

The U.S. Fed, like the vast majority of central bankers, has a long history of messaging fantasy over reality in the name of self-preservation and/or maintaining 'market order' Their most effective lies are typically characterized not just by what they say overtly, but in what they conceal covertly.

Lies of Distortion: The open Charade, for example, of low inflation fictionally published under the U.S. CPI scale is a classic example of omitting certain facts in order to derive at a comforting fiction. We've written at length on this topic dishonest inflation reporting....

Lies of Omission: As for hiding facts, perhaps you've noticed something which the main stream media has largely overlooked, namely that the Fed recently decided to suspend the weekly reporting of the M1 and M2 data which typically came out every Thursday at 4:30 PM. And if you want to know why, the answer is as simple as it is predictable: When policy makers don't like the facts, they just bury them....

Furthermore, the many examples of Fed leaders speaking out of both sides of their mouths (as circumstances demanded) are as disturbing as they are comical. Below are just a few additional highlights:

'You will never see another financial crisis in your lifetime.' -Janet Yellen, spring 2018

'I do worry that we could have another financial crisis.' -Janet Yellen, fall 2018

'There's no reason to think this (bullish) cycle can't continue for quite some time, effectively indefinitely.' -Jerome Powell, 2018

'The US is on an unsustainable fiscal path; there's no hiding from it.' -Jerome Powell, 2019....

Do you still think the Fed has your back as risk assets rise to bubble levels never seen before in the history of capital markets? Do you still think this private bank masquerading as a public office and public servant is indeed serving the ever-debasing dollar in your pocket?

Think again."

Fed's Inflation Problem: Easy Money Creates More Market Than Reported Inflation -Zero Hedge

"The Fed has an inflation problem, but it's not the failure to meet an arbitrary target. The problem is that there is a significant separation between reported and market inflation. The uncoupling is not new and is a statistical issue. But it has become a thorny policy problem as easy money creates more market than reported inflation....

In practice, there should be no difference between reported and market inflation. But in the statistical business of measuring and reporting consumer price inflation (CPI), there is.

Market prices reflect current economic conditions and measure what the consumer would pay, and businesses receive. That is how prices for goods and services are measured and reported in the consumer price index, except for one.

Price estimates for owner-occupied housing (which accounts for roughly one-quarter of the CPI) do not reflect market prices, nor are they based on data for owner-occupied homes.... In the past 12 months, the FHFA house price index is up 12%, and owners rent is up 2%.

Rent inflation should reflect supply and demand factors more than anything else. However, during robust housing markets and a dwindling supply of homes available for rent, the CPI shows a deceleration in owner-occupied housing rent inflation. Why? Because government statisticians use data from the rental market that reflect different supply and demand factors.

The statistical separation between reported and market inflation has become a policy problem."

Bitcoin and crypto markets crash on US crackdown reports -Yahoo Money

"Bitcoin is experiencing a massive sell-off, shedding almost 15% in the last 24 hours - the biggest intraday drop since February.

The drop appears to coincide with reports that the US Treasury is planning to tackle financial institutions for money laundering carried out through digital assets....

On Sunday, the flagship crypto shed nearly $8,000 and was trading 12% lower at $54,900 around 12PM in London, down from a day high of $61,293....

Bitcoin's flash crash saw a new record in liquidations, resulting in more than one million positions being wiped off the books. This meant that $10bn in positions were liquidated, according to Bybt. Other cryptocurrencies have also plummeted....In late February, bitcoin saw a retreat to as low as $43,000 amid uncertainty in the traditional markets over stimulus expectations and their positive effects on US bond yields.

Bitcoin prices have been up and down over the last few months as governments and regulators hone in on the sector amid rising demand."

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Apr 19, 2021

4.19.21 - CEOs Lead A New Great Awakening

Gold last traded at $1,771 an ounce. Silver at $25.81 an ounce.

NEWS SUMMARY: Precious metal prices steadied Monday amid rising inflation and a falling dollar. U.S. stocks slipped from record levels as the weakness in the tech sector weighed on the broader market.

NYC Real Estate Mogul Secures $6 Billion in Gold to Back New Cryptocurrency -Bloomberg

"New York City real estate mogul Kent Swig has secured a minimum of $6 billion in gold reserves to back his new cryptocurrency.

The value of the digital token, DIGau, will be pegged to the market price of the precious metal, guaranteed by liens Swig and partner Stephen Braverman's company, Dignity Gold, secured against mining claims in Nevada and Arizona.

'Gold was one of the original rock-solid backings of all currencies,' Swig, 60, said in an interview. 'We're not reinventing the wheel here. What we're doing is applying the world's stable backing of a lot of things to a very advanced technology.'

A third-generation real estate investor and owner of realty firm Brown Harris Stevens, Swig became interested in cryptocurrencies after learning more about the concept from his teenage son.

So-called stablecoins are cryptocurrencies whose value can be pegged to an external reference, which could be a physical asset like gold or the U.S. dollar. That, in theory, provides more price stability - a buffer against the huge swings seen in digital currencies like Bitcoin.

Coin issuers like Swig and Braverman's Dignity Gold, parent of DIGau's issuer, must hold the value of their reserve currency at all times, to assure investors there's a backstop against the price falling below the fiat currency....

Both gold and cryptocurrencies have attracted renewed interest over the past year from investors seeking a hedge against inflation."

gold backed yuan Is China Preparing A Gold-Backed Yuan: Beijing Greenlights Purchases Of Billions In Bullion -Zero Hedge

"In 2018, the Chinese launched a gold-backed, yuan-denominated oil futures contract. These contracts were priced in yuan, but convertible to gold, raising the prospect that 'the rise of the petroyuan could be the death blow for the dollar.'

Two weeks ago, The IMF reported that the global share of US-dollar-denominated exchange reserves dropped to 59.0% in the fourth quarter, according to the IMF's COFER data released today. This matched the 25-year low of 1995.

And just last week, China became the first major economy to unleash a Central Bank Digital Currency, 'cementing its trailblazer status in virtual currencies far ahead of other countries, after already recently experimenting with large-scale trials of actual payments by consumers, which was met with mixed results.'....

All of which sets the stage for the dramatic headlines that hit this morning, as Reuters reports that China has given domestic and international banks permission to import large amounts of gold into the country,

'The People's Bank of China (PBOC), the nation's central bank, controls how much gold enters China through a system of quotas given to commercial banks....

Is this just the next stage in China seeing the writing on the wall for the USDollar as global reserve currency?...As Alasdair Macleod wrote last year, China can escape the fate of a dollar collapse by tying the yuan to gold. Of all the major economies, China's is best placed to implement a sound money solution.

'With all its gold, by monetizing it China could kill off the dollar tomorrow. Undoubtedly, this financially nuclear option has become a backdrop to her strategy in the ongoing trade and financial war against America. But the idea that by using this undoubted power over the dollar China gains a simple victory if through her actions the dollar is destroyed understates a more complex situation.'....

It is clearly not in China's current geopolitical interest to introduce a gold standard that undermines or destroys the dollar. For this reason, China will only do so once it is clear that the dollar is in the early stages of an unavoidable inflationary collapse, and the risk of the yuan going down with it must be urgently addressed.

Perhaps, as the Biden/MMT agenda becomes clearer, a reappraisal of the dollar's prospects and the debt trap of rising interest rates being sprung on western governments is likely to determine timing. Maybe the digitization of the yuan is the 'control' China needs to enable this transition?"

America needs more starter homes -Kristian/The Week

"After years of delaying or skipping milestones - marriage, children, homeownership - for financial and cultural reasons alike, millennials (who are presently aged 25-40, i.e. not college kids) are finally ready and (maybe) able to buy houses.

The trouble is twofold: There are only so many houses to buy, and four in five of the houses available aren't the right sort of house for most first-time buyers. Home construction has lagged demand for more than a decade; new house inventory is too big and too expensive; and real estate investors, who can often outbid ordinary buyers with cash offers above asking price, are snagging starter homes at record rates.

There's a simple solution to all of these connected woes: We need to make it feasible to build smaller, cheaper houses.

And I do mean houses - single-family homes and townhouses or condos with private outdoor space - not apartments, tiny homes, granny flats, or trailers. Those all serve important needs, and we should make it easier to build them, too.

But when the average American thinks of buying a first home (particularly now, after the COVID-19 pandemic so often confined us to our living spaces), the dream is not an apartment or trailer. It's a detached, semi-detached, or terraced house, purchased at an affordable rate, with at least a small patch of earth to use as you alone please.

That's precisely what American builders aren't much building. The average cost to construct a new single-family home (SHF) in the United States is about $300,000, and that's excluding the cost of the lot, driveway, and landscaping....

Then why aren't builders building smaller, cheaper homes so Americans who need less can buy less? Some of it is rising materials costs. Some of it is about demand: Americans like big houses with lots of bathrooms...but there's another reason, too, and one with a far clearer path to change. That reason is municipal housing policy, particularly zoning rules and building codes. These laws desperately need reform....

Looser zoning rules, a laxer approach to lot and footprint sizes, and a leaner building code bureaucracy would make starter homes viable again. They are the smaller, cheaper houses we need."

CEOs Lead America's New Great Awakening -Sonnenfield/Wall Street Journal

"As they did recently over gun safety, immigration, climate change, social justice and the infamous bathroom bills, major business leaders have protested new voter-restriction efforts in state legislatures. I am proud to have had a role in helping trigger some of this activity...This business awakening shouldn't be ridiculed but celebrated as the rediscovery of a misunderstood pillar of America's industrial greatness....

DuPont CEO and Business Roundtable chairman Irving Shapiro echoed the point in 1983 when he told me: 'Most businessmen are sensible and rational people. They recognize that they've got to meet the needs of our society or they're not going to be successful. Free enterprise is a slogan. It means different things to different people. . . I would make the case that we must get rid of the adversary approach and simply say we have a common objective.'

Ensuring social cohesion in democracy is part of a CEO's job of managing the strategic environment. No CEO wants finger-pointing employees dealing with hostile consumers and communities - even if 'wedge' issues are appealing to politicians with a divide-and-conquer plan for staying in office.

Speaking up is also part of the job. Henry Ford, Thomas Edison and J.P. Morgan all spoke to issues outside the shop. The 2020 Edelman Trust Barometer found that 92% of employees expect their CEO to speak out on issues of the day. Surveys have found CEOs are among the most trusted voices in society today....

Civil-rights legend Andrew Young once told me his successes in voting-rights battles between 1954 and 1963 relied on the voluntary support of Southern business in advance of the 1965 Voting Rights Act. 'Believe it or not,' Mr. Young said, 'I almost have more faith in business than I have in the church, politics or anything else I do. And the reason is there is more freedom and more courage in our free-enterprise system.'

American religious history produced four Great Awakenings - and now American business is sparking a fifth spiritual awakening."

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Apr 16, 2021

4.16.21 - Workers Don't Share Union Nostalgia

Gold last traded at $1,778 an ounce. Silver at $26.01 an ounce.

NEWS SUMMARY: Precious metal prices extended gains Friday on momentum buying and a weaker dollar. U.S. stocks traded mostly higher amid strong earnings from blue-chip companies as well as solid data signaling a snapback in the economy.

Gold rises nearly 2% as dollar, yields retreat -CNBC

"Gold jumped to its highest in over a month on Thursday as the dollar and U.S. Treasury yields retreated despite better-than-expected U.S. economic data, pushing more investors to bullion as a refuge against possible inflation ahead....

'A massive amount of inflation is certainly on the horizon and gold is just the best asset to own as we start to see what I would consider some historic levels of inflation,' said Jeffrey Sica, founder of Circle Squared Alternative Investments.

'It is more of a weak dollar, strong economy, low interest rate dynamic that's moving gold prices up,' Sica added.

Making gold more appealing for holders of other currencies, the dollar slumped to a four-week low, while retreating benchmark 10-year U.S. Treasury yields further boosted bullion's appeal....

More price gains in the near term would better suggest a market bottom is in place for gold, Kitco Metals senior analyst Jim Wyckoff said in a note."

silver Silver Price Forecast - Silver Markets Break 50-Day EMA -FX Empire

"Silver markets have rallied during the trading session on Thursday to break above the 50-day EMA. Ultimately, this is a market that looks as if it has been trying to form some type of base, as we have bounced significantly from the 200-day EMA, and then of course the $25 level.

If we can break above the recent highs from a couple of months ago, then the market is likely to go much higher. At this point on, the market is likely to see pullbacks as buying opportunities and therefore it looks as if silver is ready to turn around and go higher, perhaps reaching towards the $28 level....

The 'reopening trade' suggests that there will be a lot of industrial demand going forward, and that of course is a major driver of where silver goes. All things been equal, this is a market that I think is trying to make a move, but it is obvious that we will continue to see noisy behavior.

Longer-term, I am bullish on silver, but I also recognize that you need to be very cautious about your position size as silver tends to be extraordinarily volatile. With that in mind, scale into a position only when it works out."

Why More U.S. Inflation Is Right Around the Corner -National Review

"The dramatic growth in the U.S. money supply, when broadly measured, that began in March 2020 will do what increases in the money supply always do. Money growth will lead in the first instance (1 - 9 months) to asset-price inflation. Then, a second stage will set in. Over a 6 - 18-month period after a monetary injection occurs, economic activity will pick up.

Ultimately, the prices of goods and services will increase. That usually takes between 12 and 24 months after the original monetary injection. Given this sequence, it's as clear as the nose on your face that we're going to see more - perhaps much more - inflation entering the system in the coming months....

According to my calculations, the average percentage real GDP growth from 2010 to 2020 was 1.8 percent, the average growth in total money supply (M4) was 6.5 percent, and the average change in the velocity of money was -2.5 percent. Using these values and the Fed's inflation target of 2 percent, I calculated the U.S. golden growth rate for total money (M4) to be 6.3 percent....

In response to the COVID-19 pandemic in March 2020, the growth rate in M4 began to skyrocket. By the end of 2020, it was growing at 28.9 percent per year, the highest year-end rate since 1943. That rate dramatically exceeds the golden growth rate of 6.3 percent per year, a growth rate that would be consistent with the Fed's inflation target of 2 percent per year.

Armed with the monetarist model for national income determination and the numbers just presented, it should be obvious, even to the untrained eye, that the recent March year-over-year CPI inflation rate of 2.6 percent is simply a harbinger of what is coming in the future: more inflation."

Workers don't share Democrats' nostalgia for unions -Barone/Washington Examiner

"It wasn't even close. The final count was 1,798 against and 738 for, 71% to 29%.

The election in question was held over whether the employees at an Amazon warehouse in Bessemer, Alabama, wanted to be represented by the Retail, Wholesale and Department Store Union - not, as the Washington Post (owned by Amazon CEO Jeff Bezos) put it, a contest of 'Big Tech vs. its workers.'

The workers weren't one of the adversaries. They were the judges. And the overwhelming majority of them, despite biased media coverage and blatant nudges from President Joe Biden, chose against the union.

That has significance far beyond the individuals involved. Amazon is now America's second largest employer after Walmart, with 950,000 domestic employees. With the increased demand for delivered merchandise during COVID-19 restrictions, Amazon reports that it has hired some 427,300 workers over the past year.

It's no secret that organized labor unions would like to represent employees at big firms such as Walmart and Amazon. That would bring in millions in union dues and, in the opinion of union advocates, better wages, benefits, and working conditions for workers.

It's a bit more of a secret that Democratic politicians want unions to organize these firms...Unionization is, although liberals really don't like to hear this, a form of public financing of campaigns for one political party....

The Biden Democrats' major legislation has been larded up with provisions they hope will promote unionization. They want to dragoon subsidized home-care workers and preschool attendants into unions, as some Democratic states have done, and to classify gig workers (such as Uber drivers) as full-time employees, with minimum hours, weekly schedules, and mandatory union dues, the way California did.

Some of these measures may work, at least temporarily, and channel millions of tax dollars to Democratic election campaigns."

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Apr 15, 2021

4.15.21 - Gold Outlook: Back to the 1970s

Gold last traded at $1,766 an ounce. Silver at $25.91 an ounce.

NEWS SUMMARY: Precious metal prices powered higher Thursday on a technical breakout and a flat dollar. U.S. stocks climbed to record levels after strong earnings reports and fresh economic data pointed to a rebound in consumer spending and the jobs market.

Gold Suddenly Gets Real-ly Interesting -Sprott Money/Zero Hedge

"Since August, we've been waiting for a bottom and end of this current consolidation in COMEX gold prices. With the most recent U.S. inflation data, that day may finally be here....

How important are inflation-adjusted or 'real' interest rates to gold prices?... How are 'real' interest rates calculated? The most popular and widely-followed measure is simply the yield on the U.S. 10-year treasury note minus the current annualized U.S. consumer price index or CPI. If this math nets you a positive result, then you have a positive inflation-adjusted return. However, if the math generates a negative number, then you have a negative return....

August 2020: The yield on the 10-year note was +0.55% while annualized CPI was +1.6%. The resulting inflation-adjusted or real yield on the 10-year note was -1.05%. The gold price? $2100.

March 2021: The yield on the 10-year note had moved up to +1.75% but annualized CPI was still just +1.7%. The resulting real yield on the 10-year note was +0.05%. The gold price? $1700.

And now here's where things might soon get real-ly interesting again....Remember that the key inflation metric is the annualized CPI... Suddenly, the annualized CPI is no longer +1.7% and it's instead +2.7%. With April 2020 soon to be replaced by April 2021, don't expect this trend toward a higher annualized inflation number to end soon....

As you'd expect, COMEX gold and silver prices are up a bit on Tuesday, and the 'market' may be just now beginning to realize that the COMEX gold price is about $300 lower than it was last August when real rates were this sharply negative.

Once gold traders and investors figured all of this out last summer, the COMEX gold price moved from $1673 on June 5 to $2080 on August 5. If bond prices remain firm in the weeks ahead and 10-year yields remain steady in the 1.60-1.75% range, the market will once again rapidly come to its senses and prices will surge....

And it won't take much to get prices moving higher again. There are multiple key levels that traders and technicians will be watching as prices rise. As those levels get broken to the upside, price will generate even more momentum and another virtuous cycle of higher highs will follow."

gold Back to the 1970s -Amos/Daily Reckoning

"I'd like to present a case for sticking with gold. Here it is in a nutshell: As long as politicians spend wildly and the Fed keeps monetary policy loose, the case for gold will remain compelling. And both are likely to continue for a long time.

It also has to do with supply. The amount of gold supply available on the market at any given time represents a tiny fraction of the potential demand for that gold.

If investment demand for gold surges, prices can spike rapidly before additional supply can hit the market.

Unlike dollars, you can't create gold at the stroke of a computer key....As long as the Fed maintains loose policies, the case for gold will get better by the day....

It's reassuring for gold investors that the Fed and Treasury literally cannot afford to let real Treasury yields go substantially positive. If they did, then stock and bond bubbles would deflate in a matter of months, causing catastrophic damage to the economy from an 'inverse' wealth effect.

So, gold investors can be confident that the 'system' has their back. The real 'Fed put' in my mind is for gold, not necessarily for stocks....

Real yields are likely to fall below -1% in the months ahead. That could coincide with gold rising to the $2,300 range by July (a 30% gain from the $1,800 level of July 2020).

This isn't an explicit forecast; it's meant to illustrate what sort of explosive rally in gold is possible in this macro environment of wild deficits and money printing....

The bottom line is, gold could see a big spike this year. You don't want to be late to this party."

Central Bank Will Begin Reducing Bond Purchases 'Well Before' Raising Interest Rates, Powell Says -Wall Street Journal

"Federal Reserve Chairman Jerome Powell said Wednesday that the central bank will begin to reduce the pace of its bond purchases 'well before' raising interest rates.

Since last June, the Fed has been purchasing at least $120 billion a month of Treasury debt and mortgage-backed securities to hold down long-term borrowing costs. Since December, the central bank has said the economy must make 'substantial further progress' toward its goals of maximum employment and 2% inflation before scaling back that policy.

'We will taper asset purchases when we've made substantial further progress toward our goals, from last December when we announced that guidance,' Mr. Powell said in a virtual event held by the Economic Club of Washington, D.C. 'That would in all likelihood be before - well before - the time we consider raising interest rates.'

He reiterated that he thinks it's highly unlikely that the Fed would raise interest rates this year and noted that most central-bank officials see rates remaining near zero through 2023."

Biden and Yellen's nutty corporate tax rate plan -Washington Times

"In 2020, a great global pandemic descended upon the Earth. It not only affected people's bodies, leading to death in many of the elderly, but also caused the global political class to lose a non-negligible number of IQ points.

The open question is: 'Is their new stupidity a permanent or temporary condition?' Silly talk leads to silly policies. Where, at one time, it was known that if the government printed too much money without real backing or productivity growth, the currency would lose its value - that simple fact has been forgotten by those who make such decisions.

There was a time when most educated or naturally astute people knew that if tax rates were disproportionately high in one place, people and their money would flee to lower tax rate environments. That simple fact has eluded the Democrats who control New York, to the great benefit of Florida....

Every competent economist knows that there is some tax rate for each type of tax where the tax becomes counterproductive and causes a loss in revenue and economic well-being. There is considerable honest (and some dishonest) debate of where the revenue and welfare-maximizing point is for each tax.

About four decades ago, the noted economist Art Laffer did a simple drawing of a parabolic curve as way of enabling members of the political class to understand that ever-increasing tax rates do not mean ever-increasing tax revenue. Unfortunately, this age-old concept has escaped the brains of many who comment on or implement taxes....

In order to prove their ignorance, some politicians have demanded that the corporate tax be increased because 'it is not fair' that some companies in some countries pay a lower tax than others. If they were not so dim, they would understand that only people pay taxes and that the corporate tax is a tax on a particular legal form of business - corporations - that is actually paid mainly by the workers.

The corporate tax is a double tax being paid on the profits at the company level, and then the owners being taxed once again on their dividends or capital gains. High corporate tax rates incentivize businesses to move their legal homes to lower-tax jurisdictions or to recast themselves as limited liability companies, partnerships or sole proprietors, where they are taxed only once....

The Biden folks think it is a good idea to not only increase one of the worst forms of taxation, but then try to get the other countries of the world to also adopt the same nutty policy. This, of course, will lead to endless pressures to increase the corporate tax rate, as tax competition is being destroyed, thereby ensuring lower wages, fewer jobs and less economic growth everywhere."

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Apr 14, 2021

4.14.21 - The Real Price of Gold is $2,100, Here's Why

Gold last traded at $1,736 an ounce. Silver at $25.41 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Wednesday on mild profit-taking and a weaker dollar. U.S. stocks rose to record levels as investors digested the first batch of strong corporate earnings.

The real price of gold is at $2,100, here's why - former U.S. Mint director -Kitco

"Even though gold's spot prices are still trading below $1,750 an ounce, the real price of gold is a few hundred dollars higher, according to Ed Moy, former U.S. Mint director and currently chief market strategist at Valaurum.

The true price of gold is what people are willing to pay for the physical metal, including the extraordinary premium investors are currently faced with, Moy told Kitco News when speaking about the unprecedented demand for bullion coins so far this year.

'Part of the confusion in gold is that the spot price of gold remains around $1,735. And it should be higher. But the true price of gold is the spot price plus the premiums that investors are willing to pay for that physical gold. What you do is you add $300 or $350 on top of the spot price. And you ended up with gold currently being around $2,100, which is around the record highs that we saw in August,' said Moy, who served as the U.S. Mint director from 2006 to 2011....

Moy pointed out that investors are turning to gold coins because of the fear of uncontrollable inflation coming in the future. 'You will see inflation come in much higher than what the government's predicting. And if it does run up too quickly, inflation will be beyond the Fed's ability to control.'

And the record amount of stimulus is to blame for investors' fear of runaway inflation. 'With all that extra monetary and fiscal stimulus, investors are saying that as the money flows through the economy, it is going to cause inflation. The bond markets are also agreeing with these investors,' Moy explained....

'The long-term fundamentals that support higher gold prices are all in place now. And so I believe that there is upward pressure building up on gold. But when will that pop? There needs to be a catalyst. And that catalyst will likely be a sudden and dramatic impact in any of the numbers that contribute to inflation, including the CPI,' Moy said. 'A catalyst like that would unleash gold prices.'"

economics A Quasi-Socialist Answer to a Socialist Dilemma -Real Clear Markets

"Imagine an upside-down university that gives its best students Ds and Fs, while the worst get the As. The best students will, of course, quickly notice and will seek to outdo the worst, by getting every question wrong, sitting slack-jawed in class, or skiving completely, in order to displace the worst students and capture the As. Realistically, no one would learn. A system that aggressively rewards the inept, while penalizing the most competent, reaches a sorry endpoint defined by broad indolence.

Our hypothetical upside-down university, courtesy of Art Laffer, comes to mind as we watch the current Congressional spending spree, which follows precisely this model. In the just-passed $1.9 trillion American Rescue Plan, $350 billion of wealth is distributed directly to our cities, states, and the District of Columbia. These funds are ultimately extracted from the private sector, even if the linkage is obscured by newly printed money. Most of that money is distributed in proportion to the states' and cities' recent rates of unemployment. The states that have inflicted the most damage on their citizenry will have proportionally more dollars to 'invest' in whatever programs these hapless governments choose....

The Democratic 'Trifecta' states - states with Democrats controlling the governorship, state Assembly, and state Senate - saw unemployment more than double, from 3.8% to 8.0% on average, in the first 12 months of the pandemic, while the Republican Trifecta states saw unemployment rise from a near-identical 3.6% a year ago to 5.3% recently. For managing the economics of the virus more skillfully, Republican states will pay. Shades of a dystopian university system"¦And it gets worse.

Once we've rewarded cities and states for soaring unemployment, they are forbidden to return the so-called stimulus to their citizenry with tax cuts in any of the coming four years, unless they want to return the stimulus money; this despite the fact that tax cuts are almost uniformly agreed to be among the most powerful forms of stimulus.

In our dystopian present, the productive are punished so that those sidelined either by choice or bad policy can receive more. In other words, bad policy will be rewarded, while its continuance will be subsidized. Who is most hurt by these policies?

Surprise: these policies hurt the working poor more than anyone else. Many of the working poor have already become non-working poor and many are likely to remain so. Long-term unemployment often leads to an erosion in self-respect and sense of accomplishment, while also inflicting the loss of both opportunity to grow as a human being and the hope for a better future....

Any advocate of limited government would likely agree that sending checks to the citizenry is less destructive than feeding Leviathan. State and local stimulus distributions to their residents are perhaps the worst use of the state and local distributions in the COVID stimulus bill "¦ other than all the other possibilities.

Regardless of what states choose to do with their stimulus money, these programs foster a true race to the bottom among states. We are now in Art Laffer's upside-down university. Can we please graduate and return to a more sensible world? "

Market Pulse: Nothing To See Here. No, Really. Nothing. -Calhoun/Alhambra

"The answer to the question, 'What should I do to my portfolio today (this week, this month)'? is almost always nothing. Humans, and especially portfolio managers, have a hard time believing that doing nothing is the right response"¦.to anything"¦or nothing.

We are programmed to believe that success comes from doing things, not not doing things. And so, often we look at markets on a day-to-day or week-to-week basis and think something of significance happened and we ought to respond to it. Most people, according to this recent article in Nature, 'consistently consider changes that add components over those that subtract them - a tendency that has broad implications for everyday decision-making.' That is certainly obvious in most of the investor portfolios I've reviewed over the years which tend to look a lot like a financial episode of Hoarders.

What happened last week? Nothing. Or at least nothing of significance. Yes, there were some economic reports and the Fed released the minutes of its last meeting - as if everyone on the planet doesn't know what Jerome Powell had for breakfast and that he isn't raising rates until some really pricey cows come home. Well, actually, I guess it is IF some really pricey cows come home. The PPI report last week didn't make a ripple in the markets....

We will start to see, over the coming weeks, whether the economy is really going to slingshot out of the COVID hole. Sentiment seems overwhelmingly positive with almost everyone assuming we're about to put up some big growth numbers and of course, we may. But that's already reflected in today's market price...So, be patient and don't just do something, sit there."

The Green New Deal, in Disguise -Editors/Wall Street Journal

"Candidate Joe Biden emphatically denied that he supported the Green New Deal. As with so much else, President Biden is now a convert. His $2.3 trillion infrastructure plan contains enough spending and industrial planning that it amounts to the Green New Deal in disguise.

Listen to Rep. Alexandria Ocasio-Cortez, who two weeks ago claimed maternity for the President's plan. 'As much as I think some parts of the party try to avoid saying 'Green New Deal' and really dance around and try to not use that term, ultimately, the framework I think has been adopted,' the progressive heroine from Queens boasted. The details prove her point....

Start with $213 billion to build and retrofit two million energy-efficient homes and buildings. These putative 'upgrades' would be financed by federal grants, tax credits and the economically inefficient Weatherization Assistance Program (WAP)....

Mr. Biden's biggest climate-works project is to re-engineer the grid to banish fossil fuels. Natural gas and coal currently make up more than half of U.S. electricity generation and a larger share in the South and Midwest. Mr. Biden aims to replace them with carbon-free energy by 2035.

He'd start with an Energy Efficiency and Clean Electricity Standard, which would force states and utilities to phase out fossil fuels. He'd then accelerate their abolition by extending the renewable investment and production tax credits for 10 years. Congress began these credits decades ago to boost the infant wind and solar industries.

But renewable prices have since fallen tremendously - as climateers like to point out - and now the credits let producers turn profits even when wholesale prices go negative....

And herein lies an irony: The green energy tax credits would enrich large corporations and billionaires. Hedge funds and tech companies are some of the biggest green energy investors. These tax credits would become more attractive as tax rates increase. Even big oil companies would benefit from credits for investing in carbon capture and 'sustainable' aviation fuels. This is one reason CEOs like Amazon's Jeff Bezos are endorsing a corporate tax increase. They'll make it up in subsidies....

Mr. Biden says his plan will 'create millions of good jobs,' but his anti-carbon policies will destroy many more in fossil fuels and carbon-intensive industries. That's why he's proposing a $40 billion Dislocated Workers Program and $10 billion Civilian Climate Corps. No wonder Ms. Ocasio-Cortez is elated. Her climate dreams are coming true, and all under the false front of 'infrastructure.'"

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Apr 13, 2021

4.13.21 - Inflation: Deliberate & Disastrous

Gold last traded at $1,745 an ounce. Silver at $25.38 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday as higher retail inflation data boosted safe-haven appeal. U.S. stocks traded mixed as the mandated pause in the J&J vaccine rollout put a damper on investor optimism.

We'll Soon Behold $1,800 Gold -FX Empire

"Any one who understands The Gold Story a wit (and that's you) already knows that price is significantly undervalued (our opening Scoreboard valuation now reading as $3,759, which is more than double the recent $1,744 level).

That $3,759 valuation is being aided and abetted by an unconscionable creation of faux dough having increased the U.S. money supply ('M2') at an annualized rate within the last year of over 25%. Worse, the essentially infinite universe of the 3Ds - Debasement, Debt and Derivatives - is such that if we all simultaneously tried to convert our so-called 'assets' into cash, 99% of us would receive nothing, i.e. zero ('0').

Again, you already know all that. So why isn't Gold already way up there? The market never being wrong, its offers taken and bids hit have rightly put price at $1744. But as is oft our wont to point out, perceived price is not veritable valuation. And to embark on the road up there, Gold really needs a positive catalyst, one that regrettably for many mainstream market analysts shall become the reality. And that is: there shan't be a materially-robust post-COVID economic boom. Sorry, but 'tis better to grasp that eventuality right now rather than later. And as such surprise sinks in, 'twill make Gold 'real popular real fast' as we've seen in the past.

From our purview, this remains seemingly unconsidered across the financial spectrum. But we've herein hinted at it in recent weeks and upon it being realized could help propel Gold to $1,800 "¦ to our forecast high this year of $2,401 "¦ in time to our Scoreboard valuation of $3,759 "¦ and beyond."

inflation Today's Inflation is Deliberate and Disastrous -Bonner/Rogue Economics

"As I've been describing in recent Diaries, the financial markets are beginning to realize that the coming inflation is not 'cyclical'"¦ It is structural. The distinction is important.

Cyclical inflation is more or less benign. It is a feature of the business cycle. As the economy heats up, demand grows for consumer products and the raw materials to make them. This is a healthy trend, but it engenders an immediate feedback loop. That is, the demand for financing increases....

But cometh the Federal Reserve's fake money, and the whole cyclicality of it collapses.

Prices rise, not because a robust economy has increased demand"¦ but because the government has created fake dollars that bid for goods and services just as if they had been gotten honestly.

Then, too, consumers, businesses, and the government itself can borrow as much as they want - because the Federal Reserve, through the banking system, is creating new credit at will.

Interest rates do not necessarily rise"¦ because the feedback loop has been severed. The Fed provides fake savings, indistinguishable from real savings"¦ which keeps lending rates low....

It is fake money, given away on false pretenses. And now, it is fraudulently described as 'savings.'

These ersatz savings help depress interest rates, until people realize how it works. Then, they see that the incipient inflation is not cyclical. It is structural....

'Structural inflation,' in other words, is not a natural feature of the business cycle. It is government policy. Intentional. Deliberate. And disastrous."

Markets Continue On Their Path Of Record Disconnects From Reality -Zero Hedge

"The ghost of 2013 indeed is hanging over this market. Nothing matters and the trend remains fully intact and new record market highs are made every month. November, December, January, February, March, and now April as any smaller pullbacks are continuously bought. Steady and guaranteed gains every month as markets continue to drown in liquidity and recovery optimism.

As such markets continue on their path of record disconnects of asset prices from the economy reaching over 201% vs GDP now.

As with any bubble, valuation metrics are disregarded and new narratives spring up to justify the price action and previous metrics are discarded as irrelevant. This process will work until it doesn't and frankly it has to because equity inflows have taken on epic proportions with people piling into the highest valuations in history.

Overbought, stretched, vertical, with gains based on many unfilled overnight gaps beneath...Back in September 2020 this type of action resulted in a 10.5% correction....

So this steady as she goes non-stop melt up is exhibiting some signs that something is afoot right as markets are reaching a key technical zone. My view remains: This market has an appointment with many open gaps to fill to the downside."

SEC Finds Some Funds That Say They're Green Really Aren't -Bloomberg/Yahoo Finance

"U.S. regulators have some bad news for investors who are trying to do good things with their money: that ESG fund might not really be all that green or socially conscious.

There's a high risk that some money managers are promoting their funds as so-called environmental, social and governance products when the reality is quite different, according to a report released Friday by the Securities and Exchange Commission's examinations unit. Certain mis-characterizations were so bad that the agency signaled firms could be violating securities laws.

Among the worst findings: Some funds had major compliance gaps, and they lacked formal procedures to ensure that investments billed as ESG are meeting standards. The SEC's warning comes as a more and more firms are racing to label their investments as sustainable to attract dollars. The boom is likely to expand with the Biden administration making tackling climate change a top priority.

'Investment advisers and funds have expanded their various approaches to ESG investing and increased the number of product offerings,' the SEC's examinations unit said. 'This rapid growth in demand, increasing number of ESG products and services, and lack of standardized and precise ESG definitions present certain risks.'

Although the SEC report doesn't name any firms, violations discovered by staff during inspections can trigger investigations that lead to sanctions. The agency made clear that it would continue scrutinizing questionable ESG labeling, putting firms on notice."

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Apr 12, 2021

4.12.21 - Did Big Gov't Make Pandemic Economy Worse?

Gold last traded at $1,729 an ounce. Silver at $24.79 an ounce.

NEWS SUMMARY: Precious metal prices eased back Monday on mild profit-taking and a flat dollar. U.S. stocks retreated ahead of the start of first-quarter earnings reports and the release of inflation data.

Government Property Is Sacred. Your Property? Not So Much. -Nino/Mises

"US imperialism came full circle on January 20, 2021, when Washington, DC, was subject to military occupation during Joe Biden's inaugural address in order to secure the Capitol from alleged domestic extremist threats. When the right-wing violence that DC talking heads were squawking about never came to pass, their focus shifted toward trying to deradicalize right-leaning individuals who hold heretical views that collide with the managerial regime's gospel.

Former CIA director John Brennan was among the most vocal of the national security analysts who started listing off all sorts of problematic groups that potentially pose a threat to the dystopian political order crystallizing before our very eyes. The very act of a mob entering the holiest of the holy sites was enough to make the entire American political establishment have a mental breakdown.

The message the ruling class sent to those who protested against it on its own turf was quite clear: tread your muddy boots on our cathedral and you will be met with a firm response from the state.

So far, there have been over 380 people charged for participating in the January 6 incident. Rest assured, the politicians who are still shaken from January 6 are thirsting for more people to persecute. Words like coup, insurrection, riot, sedition, and treason were tossed around liberally to describe the January 6ers' actions. Only a regime insecure of its legitimacy would throw a hysterical fit over the Capitol storming that looked more like a live-action role-play than a rebellion that threatened the sovereignty of the DC occupational regime....

The double standards the legacy media is using to rationalize its ongoing crusade against the specter of extremism are farcical, to say the least. Over the course of a year when small business owners had their livelihoods destroyed by arbitrary lockdowns and widespread rioting, the ruling class tipped their glasses to the rioters and scoffed at those who had to put up with last summer's mayhem....

Even the idea of privatized policing is starting to gain traction in certain parts of America. Occasionally, moments of crisis force people to rethink many political premises they've stubbornly held. There's something to be said about how operating outside of one's comfort zone can compel one to look at things differently....

America is a country with a myriad of problems that have dotted empires in decay throughout world history - a corrupt ruling class, an overstretched military presence, an unstable monetary system, and declining public order."

gold Gold Prices Have Sunk 14%. How the Fed's Policies Could Restore the Metal's Shine. -Forsyth/Barrons

"In the obituaries following the passing of economist Robert Mundell this past week, it was noted he won the Nobel Prize in economics, but omitted that he largely lost the political debate....

Mundell's key insight was that policy makers face a 'trilemma.' They cannot control domestic monetary policy by simultaneously adjusting interest rates, controlling currency exchange rates, and permitting the free flow of capital across borders. Pick any two of the three.

Under the post-World War II Bretton Woods system, exchange rates were fixed versus the U.S. dollar, which was convertible into gold at $35 an ounce. Capital flows also were restricted. But the system broke down in 1971, when President Richard Nixon ended the greenback's convertibility, ultimately leading to the floating exchange rates that prevail today....

Since the pandemic hit a year or so ago, however, America's exploding budget deficit has been covered in large part by the Fed's balance sheet expansion...The Fed's massive securities purchases fueled a $4.2 trillion explosion in the broad M2 money supply in the year through February. That, in turn, helped send the U.S. Dollar Index tumbling 13% from its peak last March to the turn of the year. Since then, it's recovered by about 3%.

That brings the discussion back to gold, which should be viewed as a currency, but one that can't be printed. From its pandemic nadir, the metal rallied 36.6%, to $2,028 an ounce in early August, before slumping 13.6%, to $1,752.90....

To attract the capital needed to fund the twin deficits (budget and current account) requires a cheaper dollar. The best means to hedge the risk of an inflationary dollar decline could be gold."

Did Big Government Make The Pandemic Economy Worse? -The Federalist

"On this episode of The Federalist Radio Hour, John Tamny, author of 'When Politicians Panicked: The New Coronavirus, Expert Opinion, and a Tragic Lapse of Reason' and Vice President at FreedomWorks, joins Culture Editor Emily Jashinsky to discuss how federal government's decisions during the COVID-19 pandemic made the U.S. economy worse.

'Let's not forget that historically, economic growth has always been the biggest enemy of death and disease whereas poverty has easily been the biggest killer mankind has ever known,' Tamny explained. 'Yet, when given a choice in March of 2020, politicians chose contraction as a virus mitigation strategy.'

This 'one-size-fits-all' strategy based on the decisions of a few people, Tamny argued, did nothing but destroy the economy.

'It also blinds us to the information that tells us, why is it spreading more in New York? Why does it seem to hit New York so hard? Why does it seem to hit Florida, with so many old people not as difficult? What are the answers to this? We didn't really get that because they chose one-size-fits-all in so many instances,' Tamny said."

Move over, markets. Big government is back. -CSMonitor

"Ronald Reagan, Bill Clinton, Margaret Thatcher, and Tony Blair make odd bedfellows in many respects. But they all rode, or embraced, the same powerful political wave that has swept major Western democracies for nearly half a century: distaste for the work of national governments.

Has that wave now passed, overtaken by the effects of the pandemic?

Big government is staging a dramatic comeback, and U.S. President Joe Biden's $2.6 trillion infrastructure and investment plan is just the latest sign. After all, his predecessor, Donald Trump, signed off on nearly double that amount in pandemic spending.

Over the past half-century, most Western governments have shrunk their ambitions and handed the economic initiative to private enterprise. But the pandemic has changed all that...And it's hard to overstate the magnitude of the change.

The old orthodoxy took root in the 1980s, when American economist Milton Friedman helped convince President Reagan and Prime Minister Thatcher to challenge the prevailing Keynesian model, which had underpinned massive government intervention in national economies in the wake of World War II.

This approach was not just misguided, ran the new philosophy, but an affront to the way democracies should work: It elevated government's role above the independence and initiative, the lives and interests, of the governed.

'Government is not the solution to our problem. Government is the problem,' Mr. Reagan declared in his first inaugural address, in January 1981. Ms. Thatcher lamented that too many people had been taught to think that when they faced a challenge, 'it is the government's job to cope with it.'....

To judge from polling in America, where there's been public support among both Democratic and Republican voters for the infrastructure plan proposed by Mr. Biden....For the moment, most voters don't seem to have a problem with that. Whether such an attitude holds, however, could be a key signal of whether big government is back to stay."

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Apr 9, 2021

4.9.21 - Inflation Moves Investors Toward Gold

Gold last traded at $1,744 an ounce. Silver at $25.25 an ounce.

NEWS SUMMARY: Precious metal prices eased Friday as a jump in inflation data boosted interest rates and the dollar. U.S. stocks hovered near record highs despite a 1% rise in wholesale prices last month - twice the rate forecast.

As Talk Turns to Inflation, Some Investors Look to Gold -DNyuz

"Inflation is back in the news and so, of course, is interest in gold.

After years of dormancy, inflation is expected to rise a bit this summer. It is even possible that as Americans emerge from Covid-19 induced seclusion, their pent-up demand will overheat the economy and weaken the dollar.

Those concerns have put the spotlight on gold, which has long been viewed as a hedge against inflation, a declining dollar and an unstable stock market....

'For investors who are looking for a hedge in their portfolio, commodities in general and gold specifically can be a good play,' said Katerina Simonetti, senior vice president at Morgan Stanley Private Wealth Management in Philadelphia. 'The goal is to ensure positive long-term performance at a lower level of risk.'....

Keep a small percentage of a portfolio in gold and other precious metals in the hope that this will be a long-term stabilizer.

'In a world where equity prices continue to elevate untethered to any fundamentals, precious metals as a small amount of diversification makes sense,' said David Trainer, chief executive of New Constructs, an investment research firm based in Nashville....

'There is a psychological component in owning gold that goes back for centuries,' Ms. Simonetti said. 'It's an asset that gives peace of mind to investors. It just makes investors feel safe and secure.'"


War on Cash: The Next Phase -Rickards/Daily Reckoning

"With so much news about an economic reopening, a border crisis, massive government spending and exploding deficits, it's easy to overlook the ongoing war on cash.

That's a mistake because it has serious implications not only for your money, but for your privacy and personal freedom, as you'll see today.

Cash prevents central banks from imposing negative interest rates because if they did, people would withdraw their cash from the banking system.

If they stuff their cash in a mattress, they don't earn anything on it; that's true. But at least they're not losing anything on it.

Once all money is digital, you won't have the option of withdrawing your cash and avoiding negative rates. You will be trapped in a digital pen with no way out....

Let's first understand that governments enjoy a monopoly on money creation, and they're not about to surrender that monopoly to digital currencies like Bitcoin....

Anyone who controls the money controls political power, the economy, and people's lives.

Enter the 'central bank digital currency', known as CBDC...Unlike cryptos, CBCDs aren't new currencies. They'll still be dollars, euros, yen or yuan, just as they are today. But these currencies will only be digital; there won't be any paper money or cash allowed. Only the format and payment channels will change....

The roll-out of this new digital dollar may still be a few years away, but the implications are enormous. There's more at stake than just customer convenience....

A reaction to the proposed change has already begun. Major banks fear they will be completely cut out of the payments system. MasterCard and VISA are also concerned that their payment channels will be made redundant....

Governments will know your whereabouts and habits at all times simply by tracking your use of funds through the CBDC payment system....

If cash is gone, there is only one way to escape digital surveillance of wealth - physical gold."

Janet Yellen Is Serious, and That's Really Sad -Tamny/Real Clear Markets

"Without anything remotely resembling a smirk, or a wink, Yellen called for politicians around the world to band together on corporate taxes. She seeks equality when it comes to tax rates. In Yellen's words, 'Together, we can use a global minimum tax to make sure the global economy thrives based on a level playing field in the taxation of multinational corporations.' Yellen was serious.

Where do we begin?

Up front, Yellen's implicit acknowledgement is that members of the American right were correct all along. Businesses are people, and people respond to tax rates. If they become too onerous, people migrate away from them. It turns out people are mobile, which means corporations are.

Yellen wants to ensnare corporations. This explains her call to allegedly avoid a 'race to the bottom' whereby corporations take their wealth and talent to the tax situations that most protect the wealth of their shareholders. In other words, if non-U.S. countries would just stop competing with the U.S. by lowering their corporate tax rates, Yellen et al wouldn't have to fear U.S. companies exiting the U.S. Yes, Yellen aims to trap U.S. businesses.

It speaks to how simplistic and mean-spirited is her seriously expressed view about taxation. Yellen wants the U.S. Treasury to own more of the profits of U.S. companies, but she doesn't want to have to compete....

Yellen wants more of U.S. corporate profits, but doesn't want to work for them. More specifically, Yellen plainly feels individual U.S. tax rates aren't high enough, so she seeks global tax harmonization on the corporate level in order to get another swipe at individuals....

All of which speaks to the abject foolishness behind Yellen's plea to other countries to join the U.S. in overtaxing corporations. She's calling for the confiscation of the very wealth that is relentlessly pushed to higher uses in order to create more and more once-out-of-reach goods for the masses."

I'm a capitalist, President Biden, and you're not -Thomas/Washington Times

"Back in the day when 'Saturday Night Live' was funny, Chevy Chase would open the 'Weekend Update' segment by saying, 'I'm Chevy Chase ... and you're not.'

That line came to mind over President Biden's massive tax-and-spend proposals, which are unlike anything since FDR, after whom Mr. Biden appears to be modeling himself. The president thinks he's a capitalist ... but he's not.

In a very short time, we have regressed from Ronald Reagan's 'government is not the solution to our problem, government IS our problem' and Bill Clinton's declaration that 'the era of big government is over' to Mr. Biden's belief that the era of big government is just beginning.

Let's define two terms. First, capitalism: 'an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, especially as contrasted to cooperatively or state-owned means of wealth.'

Now, socialism: 'a theory or system of social organization that advocates the ownership and control of the means of production and distribution, capital, land, etc., by the community as a whole, usually through a centralized government.'....

The obvious question then becomes, if big government can solve our problems, why hasn't it solved them by now?....

How is returning to the bad old days of higher taxes going to convince those companies that returned home to stay home? No reporter has asked that question and no one in the Biden administration has voluntarily offered an explanation."

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Apr 8, 2021

4.8.21 - Will Gold & Silver Prices Double or Triple?

Gold last traded at $1,755 an ounce. Silver at $25.50 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on technical buying and a weaker dollar. U.S. stocks traded mixed - despite a tech rally - after worse-than-expected jobless claims.

Can Gold and Silver Prices Double or Triple as Rising Inflation Destroys Savers' Wealth? -FX Empire

"Back in 1933 when an ounce of gold was trading at only $20 per ounce, the median income for the average American household was about $1500 a year. So as you can well imagine, $20 back then could go a very long way. You could essentially go to the most expensive store in Beverly Hills and buy the most expensive suit for $20 and upon discovering this careless spending, your family and friends would think you are insane to have spent $20 on a single suit.

Now imagine you had two $20 bills in 1933 and you put one of them under your mattress and turn the other one into an ounce of gold. Fast forward to today, 88 years later. The $20 under your mattress can buy you a couple of burgers, some fries and if you are lucky, you might get some change back. However, the ounce of gold you had purchased, if you sold it at today's spot price of $1730, it would enable you to go back to that same store in Beverly Hills, buy that same suit and never hear the end of it from your family and friends on the insanity of having spent that much money on a single suit.

The purpose of that example was to demonstrate how much the value of your money has dropped over the years and how gold could have prevented that loss in your purchasing power almost a century later....

One of my late father's favorite saying was 'Time is your money's worst enemy!' I didn't quite understand this sentiment till years later when I realized he was talking about my money's 'buying power' eroding with each passing year. Below is an example of the US Dollar's depletion in value over the past 45 years and how time can destroy our hard-earned cash....

This is interesting because in the past 20 years the annual income has gone up by just 47% while the price of gold has moved up over 520%, so back then your money could have purchased nearly 450% more gold than it does today. That's how much your money has lost in value. WOW!

Why am I measuring your dollar's buying power with the price of gold? That's what moves the gold spot price, the value of your dollar. The inverse relationship between gold and the dollar determines the buying power of your money.

Folks, you have a choice to make: Sit on your excess cash and let it collect dust at near-zero interest rate while losing its value year after year, or protect it with gold and silver. Your decision will determine your buying power in the years to come as politicians fight over every pity thing in Washington while our national debt and deficit continue to soar....

You can sit back and do nothing or you can be proactive and protect your hard-earned money with time-tested hard currencies like gold and silver."

big government American Bloat Plan -Hendrix/City Journal

"The release of President Joe Biden's $2.3 trillion infrastructure plan raises the question: is everything infrastructure now? Some $400 billion = a quarter of the entire package - goes toward 'aging care.' That's infrastructure, apparently. Fifty billion dollars in manufacturing subsidies? Infrastructure. Twenty-five billion for child care? Infrastructure. The only part that isn't infrastructure is trillions of dollars in new taxes.

By comparison, just 6 percent of the American Jobs Plan package goes toward roads and bridges, or $115 billion for what old-fashioned people might think of as infrastructure....

Is the Biden plan one of America's most ambitious investments in infrastructure in generations - or is it the Green New Deal disguised as a unionizing jobs program and paid for by a job-killing tax hike?....

Where Biden's infrastructure plan really goes off the rails, though, is the $980 billion allocated for the 'care economy' and the clean economy. From manufacturing subsidies to extending Medicaid, this reads more like a Democratic wish list than an infrastructure bill....

For now, Biden's plan is more aspiration than reality. The devil is in the details - and in Congress. States and localities might also demand more dollars for physical infrastructure and a greater say on where those dollars go, but for the time being, the feds are in the driver's seat. And if there's one thing that remains true in Washington, it's that the bigger the bill, the greater the bloat.

If President Biden wants to claim his American Jobs Plan as a legacy-making, 'once-in-a-generation investment in America,' he should start by making it actually about physical infrastructure - and invest wisely."

Investors Driving Stock Gains With Borrowed Money -Wall Street Journal

"The 'everything rally' that started in stocks last year has been boosted by investors betting money they have borrowed. That includes both small players like the day traders on Robinhood Markets Inc. and heavyweights like Archegos Capital Management, the investing firm that triggered a mini meltdown for several companies' stocks.

As of late February, investors had borrowed a record $814 billion against their portfolios, according to data from the Financial Industry Regulatory Authority, Wall Street's self-regulatory arm. That was up 49% from one year earlier, the fastest annual increase since 2007, during the frothy period before the 2008 financial crisis. Before that, the last time investor borrowings had grown so rapidly was during the dot-com bubble in 1999....

Some analysts say run-ups in margin debt contribute to bubbles, and they fear that today's levels of borrowing will hurt investors if the market has a downturn.

'It fuels bull markets and it exacerbates bear markets and to a certain extent you put it on the list of irrational exuberance,' said Edward Yardeni, president of consulting firm Yardeni Research. 'The further that this stock market goes, the higher that margin debt will go, and when something blows up that will be one of the factors for why stocks are going down.'

Margin trading is a double-edged sword. Borrowing money gives investors more buying power, but it also puts them at greater risk. When stocks fall, lenders can ask investors to put up more collateral or sell the shares, a demand known as a margin call.

Some regulators have voiced concern about investors taking on too much leverage, the broad term for when investors put on big trades with a relatively small amount of money, usually by borrowing....The lack of transparency in this market makes it not possible for the average market participant to know what is going on."

Older Americans can generate a post-COVID "˜vaccine dividend' for the U.S. economy -Freedman/MarketWatch

"Like so many other older people flocking to the Oakland Coliseum FEMA supersite, I was there to get my COVID vaccination...Within a half hour, I was headed home, shocked at moving towards a safety that long seemed out of reach.

I'm still overwhelmed by feelings of liberation and gratitude. Liberation to be able to reconnect soon with family, friends, neighbors, society. Gratitude at having been given priority, by virtue of my age, at a time when so many others are still waiting their turn. And I feel a sense of responsibility, too - determined to make the most of my safer status. I suspect I'm not alone.

More than three-quarters of Americans 65 and over have already received at least one shot. We've been given priority status because of our vulnerability to the virus.

We're an army of older people in a position to use our experience, wisdom, and antibodies to pay back the investment in us. Call it the Vaccine Dividend. It's time to call on older Americans to roll up our sleeves a second time, to give ourselves to a higher cause and join those idealistic young people in getting our nation back on its feet....

I suggest that the president point us to a provision buried in the American Rescue Plan: a $1 billion infusion of new money for national service. What beautiful irony that a powerful path to purpose and connection for America's elders, the generation the Peace Corps was created for in the first place, resides in service.

I'd like to see a call not only to serve, but to serve alongside younger people - like those young people who put the vaccine in my arm. Why not a co-generational call that meets the moment, helping to vaccinate more Americans and rebuild the nation's social fabric? A corps aimed not just at surviving the pandemic, but at thriving beyond it.

Such a mobilization might produce both a talent windfall and a windfall of understanding, especially if it's designed to bring older and younger people together in ways that remind us of our common humanity and help prepare us for the reality of navigating the multigenerational, multiracial society that will be a hallmark of this century."

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Apr 7, 2021

4.7.21 - We Don't Need 21st Century 'New Deal'

Gold last traded at $1,741 an ounce. Silver at $25.25 an ounce.

NEWS SUMMARY: Precious metal prices traded steady Wednesday on a weaker dollar. U.S. stocks were little changed as investors awaited details from the Federal Reserve's last policy meeting.

U.S. Mint sells 412K ounces of gold coins in Q1; best start to the year since 1999 -Kitco

"Investors are taking advantage of lower prices to load up on the physical metal as the U.S. Mint sees its best start to the year and the best quarterly sales in more than 20 years.

Sales data compiled by the U.S. mint shows that 412,000 ounces in various denominations of American Eagle Gold bullion coins were sold in the first quarter of 2021, up more than 88% from the first quarter of 2020.

This is the largest sales pace for the mint since the third quarter of 1999. The strong quarterly numbers were supported by hefty sales in January and February....

'In a world of uncertainty, investors are eager to get their hands on physical gold,' said Ronald-Peter Stoeferle, fund management at Incrementum AG. 'This rise in physical demand will provide important support for gold's long-term bull market.'

'Gold is a lot cheaper compared to other overvalued assets. Physical gold has also proven its validity over the years,' Mr. Stoeferle added.

Silver bullion demand also saw a strong start to the year as the U.S. Mint sold 12.05 million one-ounce American Eagle silver bullion coins. Silver coin demand is up 20% compared to the first quarter of 2020."

lady liberty Who's to Blame for America's Decline? -Bonner/Rogue Economics

"Our view, for the benefit of new readers, is that the U.S. went badly off the rails around 20 years ago.

Since then, by almost every measure, it has been slipping and sliding downward. In everything, from life expectancies to income to GDP growth to freedom"¦ to marriage rates and church attendance"¦ America has lost ground....

Decisions have consequences. You leave a nail sticking up on the job site. Inevitably, someone will step on it.

And there are always cycles - cycles of learning and forgetting"¦ cycles of building up and tearing down"¦ of civilizing and uncivilizing.

Economic cycles are inevitable. But it's still a 'moral' world, in the sense that somebody left the damn nail sticking up!

Who's to blame for America's decline?

American economist Milton Friedman forged one of the nails. That is, he was instrumental in creating the new money system put in place in 1971.

People were already limping in the late 1970s - U.S. inflation was already in the double digits.

But then, Federal Reserve chairman Paul Volcker rescued the money system in 1980.

Then, quietly - and to the delight of millions - the new money did its damage, undermining the nation's economy and its political institutions for the next 40 years.

Today, thanks to all the feds' fake money, U.S. GDP growth rates are barely half of those from the 1970s and 1980s"¦ and the nails are getting tossed out like confetti."

We don't need Biden's 21st century 'New Deal' -Reason

"The U.S. economy added 916,000 jobs in March, the Labor Department said Friday, far exceeding the Dow Jones estimate forecasting that payrolls would increase by 675,000. Unemployment fell to 6 percent.

It's the fastest growth the country has seen since August 2020 and a sign that the U.S. is bouncing back after a year of COVID-19 restrictions that hamstrung the economy...Notably, the uptick materialized without manipulation, casting doubt on the idea that we need President Joe Biden's American Jobs Plan to chart a return to productivity.

The proposal would pour $2 trillion into U.S. infrastructure. True to the plan's name, it's not really about that. It's about creating jobs - specifically union jobs, the likes of which directly contribute to the dizzyingly-high price of American infrastructure....

It's certainly true that U.S. workers experienced quite the shock this past year in the face of government-imposed lockdown orders and individual caution over the COVID-19 pandemic, upending livelihoods across a slew of sectors. Luckily, the country already has a solution: the vaccine, which is the key to rebounding both to normal life and a normal economy. Though Biden has reportedly sought to style himself after former President Franklin Delano Roosevelt, the U.S. does not actually need a 21st century New Deal.

Despite fearmongering to the contrary, the lifesaving vaccines are already helping to curb hospitalizations and deaths related to COVID-19....According to Axios, one estimate predicts the economy will grow by a full 8 percent in 2021 - 'the largest economic expansion for the U.S. in generations.'

'Business activity has returned to close to normal levels in much of the country despite the restrictions, with a tracker by Jefferies indicating that activity is at 93.5% of its pre-pandemic level,' reports CNBC."

MMT Is A Disaster Waiting To Happen -Rickards/Zero Hedge

"Modern Monetary Theory (MMT) is the most potentially-damaging economic doctrine I have ever encountered, with the exception of communism...

Let's begin with the idea that the Fed and Treasury should be merged in practice so that the Fed will monetize any amount of spending or borrowing the Treasury wants.

The reason markets have any confidence at all in the Fed is precisely because they are perceived as independent of congressional spending plans. MMT takes this confidence for granted and assumes the Fed can just crank up the printing press whenever the Treasury likes....

MMT says that a currency issuer such as the U.S. can never go broke because it can simply print money to pay off the debt (provided the borrowings are in the same currency as the printed money). This may be true in some narrow, literal sense, but it does not mean investors have to wait around for the trainwreck.

The evidence is strong that debt-to-GDP ratios above 90% are a major headwind for growth. Today that ratio is 130% and heading higher. More borrowing does not produce growth; it simply makes the debt problem worse....

The MMT claim that U.S. citizens cannot repudiate the dollar because they need it to pay taxes is also nonsense. Nothing is easier than the legal avoidance of taxes....

MMT will fail and cause great economic hardship in its wake. The issue for investors is to discern how and when it will fail....The short-run winners will be cash and Treasury notes. The winners during the inflationary stages will be gold, silver, residential real estate, and commodities....

When inflation kicks in, even high nominal rates will be negative in real terms because of inflation. That's when gold (and gold stocks) will skyrocket. The current price level for gold is an excellent entry point."

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Apr 6, 2021

4.6.21 - Housing: Prepare for 'Tidal Wave' of Distress

Gold last traded at $1,743 an ounce. Silver at $25.18 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on bargain-hunting and a weaker dollar. U.S. stocks traded mixed as investors took a breather on upbeat economic data.

Gold steady as inflation bets counter firm U.S. dollar -Reuters

"Gold prices held steady on Monday, buoyed by concerns over inflation after U.S. President Joe Biden announced a $2 trillion-plus jobs plan last week, while a stronger dollar and elevated U.S. Treasury yields limited bullion's upside....

The U.S. economy created the most jobs in seven months in March as more Americans got vaccinated and the government doled out additional pandemic relief money, marking the start of what could be the strongest economic performance this year in nearly four decades.

Shorter-dated U.S. Treasury yields held near 14-month peak, while the dollar its lost gains against major currencies on Monday after the U.S Labor Department reported stronger-than-forecast jobs growth in March.

Gold is seen as a hedge against rising inflation, but firmer Treasury yields, which translate into a higher opportunity cost for holding bullion, have challenged that status.

Despite the strong numbers the data will not alter the Federal Reserve's stance on monetary policy, Steven Ricchiuto, U.S. chief economist at Mizuho Securities USA in New York said."

fixit The President's Multitrillion-Dollar Gamble -Noonan/Wall Street Journal

"The Covid relief bill President Biden signed March 11 weighed in at almost $2 trillion. Last week's infrastructure bill also comes in at almost $2 trillion, and in a few weeks there will be a companion bill of the same magnitude. It's all big and bold, and you can see it making a million possible messes, from the usual...to the existential...Isn't inflation something to worry about?.

Yes, the White House is in a New Deal state of mind, they're rocking the Casbah, they feel they've got the wind at their back, and at this point they're more or less right. But this is a whole lot of spending and taxing in the first hundred days. It's a big political gamble.

The Infrastructure bill, according to the White House, will include $621 billion for infrastructure, $400 billion to increase care for the aging and disabled, $580 billion to boost manufacturing, and $300 billion for affordable housing. The public won't dislike those goals. There's a lot more shoved in there too. The plan to pay for it is to raise the tax on corporate profits (from 21% to 28%) and corporate foreign earnings....

If there's such a thing as cautious boldness, it would be a good attitude for the administration to adopt as it completes its first hundred days. It's a heady thing to win a White House....

There's an immediate crisis at the border, and I suspect the only way out is something the president won't do: Say he moved too quickly to improve the system, and warn in credible terms that if you come illegally we won't let you in, we have a pandemic and unemployment and we can't do that to our own citizens. So no, if you want to come to America you must do it the legal way.

If he can't say something like that because his progressives will kill him, his progressives have gotten too powerful. It would probably do him some good to beat them back.

Beyond that there's the long-term crisis with China, on which there's no real American governing strategy because we haven't yet defined the full contours of the challenge....'Every crisis is an opportunity!' But some crises are just crises, and the administration already has plenty."

Mortgage Firms Warned to Prepare for a 'Tidal Wave' of Distress -Bloomberg/Yahoo Finance

"Mortgage companies could face penalties if they don't take steps to prevent a deluge of foreclosures that threatens to hit the housing market later this year, a U.S. regulator said Thursday.

The Consumer Financial Protection Bureau warning is tied to forbearance relief that's allowed million of borrowers to delay their mortgage payments due to the pandemic. To avoid what the bureau called "avoidable foreclosures" when the relief lapses, mortgage servicers should start reaching out to affected homeowners now to advise them on ways they can modify their loans.

'There is a tidal wave of distressed homeowners who will need help,' Dave Uejio, the CFPB's acting director, said in a statement. 'Servicers who put struggling families first have nothing to fear from our oversight, but we will hold accountable those who cause harm to homeowners and families.'

In a separate compliance bulletin released Thursday, the CFPB said that companies 'that are unable to adequately manage loss mitigation can expect the bureau to take enforcement or supervisory action.'

More than 2 million borrowers as of January had either postponed their payments or failed to make them for at least three months, the bureau said. Once government-authorized forbearance plans begin to end in September, hundreds of thousands of people may need assistance getting back on track.

What's to come for dying malls -CNBC

"The future of the suburban shopping mall could look something like a mini community, with far fewer places to shop.

The U.S. mall owner Macerich announced Thursday it's sold a majority stake in Paradise Valley Mall in Phoenix, for $100 million, to a joint venture with an affiliate of the Phoenix-based, mixed-use real estate company RED Development. The partners will convert the 92-acre site into a community with homes, offices and a grocery store.

The 1970s-era Paradise Valley Mall has been rezoned to allow the sprawling plot of land to include high-end grocery options, restaurants, 3.25 million square feet of residential space, office buildings and some retail shops.

'As the retail landscape continues to evolve here in Arizona and around the country, our decision to realize the market value of this non-core asset makes sense for Macerich,' Macerich President Ed Coppola said in a statement....

'America's malls have reached the end of their useful life,' said Mark Toro, a managing partner in Atlanta of real estate developer North American Properties. 'Communities across the U.S. have turned their backs on what was once their center.'

'These properties often occupy real estate that would best be repurposed to better serve the community,' he said....Inside a mall in Burlington, Vermont, meantime, kids are now attending high school in what used to be a Macy's department store."

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Apr 5, 2021

4.5.21 - Dollar's Status Drops To 25-Year Low

Gold last traded at $1,726 an ounce. Silver at $24.71 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Monday as upbeat economic data failed to boost the dollar. U.S. stocks climbed to record highs as investors cheered U.S. job growth last month amid the accelerating vaccine rollout.

'Parabolic rise' coming: Gold & silver will take off again -RT Business News

"Max Keiser interviews the author of 'The coming collapse of the dollar', John Rubino, about the relative weakness of gold in a time of endless money printing.

'Sector rotations happen,' says Rubino, adding that right now people aren't rotating back into precious metals but that time will come.

He explains: 'There will come a time when people realize that precious metals are among the only cheap safe haven assets left and they'll pour into it. And gold and silver will take off again, we'll see that parabolic rise. We'll be where the gold bugs have been hoping to be for a long time.'

The former financial analyst says that right now 'gold and silver and mining stocks are where you want to go if you want to beat capital gains.'"

vaccine passports Vaccine Passports Are Just the Beginning -Sexton/American Consequences

"Morning Joe is the premier MSNBC news program for latte liberals who worship snide elitism....He thinks outdoor transmission of COVID is a serious risk (it is not). He also clearly, wrongly believes that his favorite political foe - the 'toothless MAGA hat wearers' - are the only ones who reject vaccine passports"¦ when in reality, vaccine hesitancy, in general, remains high among minority communities.

But Scarborough's scornful mentality toward those with vaccine passports concerns is representative of the Fauciite consensus"¦ Agree to yet another infringement on liberty, or you're a troglodyte who wants to watch old people die"¦ Accept another government mandate, or we will use the authority of the state to force you. There's no room for nuance or good faith discussion"¦ Just shut up and double mask, peasant....

Yes, a vaccine passport is a straightforward idea. You would have a scannable or printed QR code that would signify you've been vaccinated. This would be used for access, we're told, to sporting events and other large venues. New York State is already in the implementation phase, and the Joe Biden administration is considering how to push it at a national level through the private sector without the White House being directly responsible....

The privacy concerns for a vaccine passport are immense"¦ You will be required to carry around proof of vaccination to any number of locations, and every time you're scanned, it will create a digital record of your presence.

The use of such technology also raises innumerable questions"¦ Will there be any other health data loaded onto the system? Who will enforce these rules?....

We are just at the earliest stage of this"¦ The lockdowns and mask mandates have always been, at their core, about government expanding power and giving the most control-obsessed and self-righteous among us the ability to dictate everything to everyone else....

Vaccine passports may sound like a reasonable short-term measure in theory, but then again, so did '15 days to slow the spread.' And that was more than 365 days ago."

US Dollar's Status As Dominant "Global Reserve Currency" Drops To 25-Year Low -Zero Hedge

"Central banks getting nervous about the Fed's drunken Money Printing and the US Government's gigantic debt? But still leery of the Chinese renminbi...

The global share of US-dollar-denominated exchange reserves dropped to 59.0% in the fourth quarter, according to the IMF's COFER data released today. This matched the 25-year low of 1995. These foreign exchange reserves are Treasury securities, US corporate bonds, US mortgage-backed securities, US Commercial Mortgage Backed Securities, etc. held by foreign central banks.

Since 2014, the dollar's share has dropped by 7 full percentage points, from 66% to 59%, on average 1 percentage point per year. At this rate, the dollar's share would fall below 50% over the next decade.

The US dollar's status as the dominant global reserve currency is a crucial enabler for the US government to keep ballooning its public debt, and for Corporate America's relentless efforts to create the vast trade deficits by offshoring production to cheap countries, most prominently China and Mexico. They're all counting on the willingness of other central banks to hold large amounts of dollar-denominated debt.

But it seems, central banks have been getting just a tad nervous and want to diversify their holdings - but ever so slowly, and not all of a sudden, given the magnitude of this thing, which, if mishandled, could blow over everyone's house of cards.

Two decades ago, when the dollar had a share of about 70% of reserve currencies, a presumed competitor became day-to-day reality: The euro, which combined the currencies of the member states into one currency, thereby combining their weight as reserve currency. Since then, the dollar's share has dropped by 11 percentage points."

Impending Doom, Indeed! -Stockman/Lew Rockwell

"We will not mince words. America is indeed suffering from a dangerous plague - a plague of misanthropic fear-mongering from the likes of Dr. Fauci, the Scarf Lady and the Biden's new CDC director, among countless others of the self-designated Virus Patrol.

All three took to the mainstream media in recent days, with new CDC director Rochelle Walensky getting positively teary-eyed as she allegedly veered off-script to sound yet another Covid Alarm:

'I'm going to reflect on the recurring feeling I have of impending doom,' Walensky said, appearing to hold back tears.

'We do not have the luxury of inaction. For the health of our country, we must work together now to prevent a fourth surge.'

What? Where? Wait! .... It seems that the reason for Walensky's alarm is that from the winter-flu season peak on January 13th, when the 7-day moving average reported 251,912 so-called 'new case', the 7-day rate had plummeted by 77.8% to 55,840 on March 15th, but as of March 28 it was down by only, um, 75.3%!....

Medical science and targeted help versus a blunderbuss non-science based political power grab is what the so-called Covid crisis has been about since the very beginning. It was another false crisis defined by the political class and their media subalterns to facilitate a further aggrandizement of the state.

All Causes Mortality Except Covid: # of deaths/rate per 100k, February 2020-March 2021:
0-17 years: 70,731 deaths/96.6 per 100k;
18-29 years: 98,083 deaths/183.1 per 100k;
30-49 years: 239,400 deaths/283.3 per 100k;
50-64 years: 581,170 deaths/923.8 per 100k;
65-74 years: 694,765 deaths/2,206 per 100k;
75-84 years: 840,052 deaths/5,260 per 100k;
85 years & older: 1,045,660 deaths/ 15,819 per 100k;
All age groups: 3,509,979 deaths/ 1,069 per 100k

Nor are these data unique to the U.S. Covid is an elderly-assaulting bully the world over.

But rather than protection of the bottom two classes of the population, the Covid became an excuse for house arrest and economic and social disenfranchisement of the bulk of the population that was never in serious danger, as the chart below makes so stunningly clear.

Yet the apparatchiks who falsely seized power are not about to give it up - vaccinations, herd immunity and plunging cases notwithstanding. That's the real impending doom."

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Mar 31, 2021

3.31.21 - Free States Faring Far Better Than Lockdown States

Gold last traded at $1,708 an ounce. Silver at $24.42 an ounce.

NEWS SUMMARY: Precious metal prices rebounded Wednesday on bargain-hunting and a weaker dollar. U.S. stocks edged higher as investors weighed the potential impact from the President's proposed $2+ trillion infrastructure spending plan.

What Big Infrastructure Push Means For Silver -Seeking Alpha

"The federal government is spending and redistributing newly created cash so rapidly, it's becoming difficult to keep track of which trillions are going where.

This week, President Joe Biden will pitch a $3 trillion 'green' infrastructure package. That's on top of the $1.9 trillion economic 'relief' bill he recently signed into law.

Next month, Biden is expected to roll out plans for additional trillions to be spent on healthcare, education, housing, and more....

Implementing the 'Build Back Better' agenda will require concrete, steel, copper, and other commodities - lots of them. The green energy components in particular could result in a massive demand increase for metals including silver.

The Biden administration is ordering all federal government agencies to transition their vehicle fleets to electric motors. It is also expanding subsidies and incentives for electric vehicles sold to consumers, with the stated goal of ultimately banning the sale of gasoline-powered cars.

Electrification has a silver lining - literally. Silver is a superior conductor of electricity. It is critical in all stages of electrification infrastructure - from solar panels, to charging stations, to battery connections, to just about every electronic system that consumes power.

Silver, gold, and other hard assets also stand to benefit from the broader rise in inflationary pressures likely to accompany Washington's spending spree. It's all being facilitated by debt issuance and the Federal Reserve's printing press, which it uses to buy the government bonds that no one else will.

At the moment, the central bank actually wants to see inflation run hotter. It has virtually abandoned all concern over budget deficits and other aspects of fiscal responsibility on the part of Congress.

But Democrats still want to raise additional revenues the conventional way - through tax increases...A bevy of new taxes could be just the thing to spook Wall Street and bring the bull market in equities to an unceremonious end.

When investors perceiving rising threats to paper wealth, they are more likely to hunker down financially. And among the safe havens they may find attractive for sheltering wealth are physical precious metals."

atm When Society Goes Backward -Bonner/Rogue Economics

"We are wandering in our own woods"¦ and exploring the downswing of civilization.

What causes it to walk backward? How do people forget how to do things"¦ or lose track of what made them prosperous and free? Why does progress go into reverse?

We see, too, how the fake money - like fake road signs - sends people off in the wrong directions.

Investors bet on money-losing companies. The government throws away trillions on delusions, boondoggles, and vote-buying. Households stop saving. Businesses shift from trying to create real wealth on Main Street to chasing after fast profits from SPACs, cryptos, and NFTs.

Everybody wants to get rich. But nobody wants to do the hard work of building real wealth....

Funded by an apparently inexhaustible well of EZ money, Americans wallow in fantasies that must make the gods roar with laughter. They think they can borrow their way out of debt"¦ and print their way to prosperity.

And if they can create fake money, why not fake math?....

What brings down an empire? These trivialities and vanities? Or the big issues - money and war? Probably both. When the money goes, everything goes.

And now"¦ there goes the money!

Marketwatch reports, Even now, the housing market is on fire, with prices surging across the world. 'This is a way of spending that can also drag in some of that surplus labor,' former Morgan Stanley managing director Manoj Pradhan said. But the rise in house prices doesn't show up in official measures of inflation'....

Rising prices...Innumeracy. Illiteracy. Overspending. Dumb wars. Money-printing. Claptrap. An incompetent, greedy elite? What else do you need?"

Free States Faring Far Better Than Lockdown States -FEE

"When COVID-19 first came to our shores, it presented policymakers and elected officials with a crisis like nothing in living memory. In the year since, states have taken markedly different approaches to pandemic policy. Some, like New York, embraced sweeping government lockdowns and top-down mandates while others like Florida and South Dakota took a more humble, hands-off government approach, trusting individuals to make the best decisions for themselves.

The results are in - and they overwhelmingly vindicate the free states over the authoritarian experiments. First, we saw that states with the harshest restrictions didn't necessarily achieve the best COVID-19 death outcomes. Florida has fared far better than New York and New Jersey, for example, and multiple studies have found no correlation between lockdown stringency and death rates.

Yet lockdowns have come at an enormous economic and human cost. We've seen mental health problems and child suicide spikes, an increase in domestic violence, an uptick in drug overdoses, and much, much more. And, of course, the economic toll of shutting down businesses and criminalizing 'non-essential' livelihoods has been devastating....

Hands-off states such as South Dakota, Utah, Nebraska, and New Hampshire top the list with unemployment rates hovering around a stellar 3 percent. States that received enormous flak for eschewing drastic lockdowns like Georgia and Florida both rank in the top 20.

There is a clear trend here. Free states have largely avoided the labor market carnage associated with the COVID pandemic, while lockdown states have wrought higher unemployment levels - without guaranteeing better pandemic health outcomes."

The Equality Act Is at War With Reality -Wall Street Journal

"Every child knows the difference between mom and dad. Congress seeks to outlaw the distinction.

At stake in the so-called Equality Act, currently before the Senate, is neither women's sports nor bathrooms, at least not ultimately. At stake is the freedom of rational human beings to use a common vocabulary when speaking about what all can see. Also at stake are the countless vulnerable souls falling prey to the tyrannizing 'gender identity' ideology and the medical atrocities that go with it. That is why religious freedom is also at stake. Religion is the last bastion of sanity.

Mary Hasson, a legal expert on religious freedom, testified earlier this month before the Senate Judiciary Committee. She explained how much of the bill's enshrinement of sexual orientation and gender identity as protected categories under civil-rights law would curtail the many activities that go on in religious buildings, schools, sports leagues, hospitals, soup kitchens, shelters, adoption agencies and charitable organizations. These arguably fall under the Equality Act's expanded definition of 'public accommodations.' Ms. Hasson also provided the committee a much-needed lesson on the nature of religion: Religion is not something locked up in the heads of believers, but public in character, both in its worship and its works.

Senate Judiciary Chairman Dick Durbin takes a different view. To him, recourse to religion is nothing but a 'shield' behind which to practice bigotry and discrimination 'freely.' His concluding remarks at the committee hearing invoked lynchings, no less: 'People who want to blatantly discriminate and use religion as their weapon have gone too far.'....

The Equality Act doesn't concern such invisible mysteries as the Holy Trinity, for example. That is a matter of belief in the strict sense, though it isn't irrational or private. Rather, the Equality Act concerns things everyone can see and understand. Infants don't need instruction to know that their mothers are the ones who are nursing them, and their fathers are the ones who are not. Sexual difference is obvious to anyone with eyes to see....

The tragic irony is that society is now awash in 'beliefs' based on nothing but 'deep-seated feelings' and fluid 'self-identifications.' Only these 'beliefs' are by no means private. They demand to be publicly confessed by everyone and in every aspect of common life, or else.The tragic irony is that society is now awash in 'beliefs' based on nothing but 'deep-seated feelings' and fluid 'self-identifications.' Only these 'beliefs' are by no means private. They demand to be publicly confessed by everyone and in every aspect of common life, or else."

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Mar 30, 2021

3.30.21 - $2,200 Gold Target in 2021 -Wells Fargo

Gold last traded at $1,682 an ounce. Silver at $23.92 an ounce.

NEWS SUMMARY: Precious metal prices were pressured lower Tuesday as rising interest rates boosted the dollar. U.S. stock fell amid heightened volatility and continued fallout after a hedge fund was forced to liquidate several media stocks.

Gold's 'strongest price rally' is coming: Wells Fargo's 2021 target is $2,200 -Kitco

"Investors could still see some of the strongest price action in gold this year, according to Wells Fargo, which sees signs of a developing rally.

The driver behind this new spark in prices is diminishing supply growth. And it could get gold up to $2,200 an ounce this year, said Wells Fargo's head of real asset strategy John LaForge.

'Gold supplies have flipped from excessive to deficient,' LaForge said in the latest update. 'Such times in the past have sparked some of gold's strongest price rallies'....

However, this picture has shifted in the past three years, with gold supplies moving from 'excessive to deficient.' This is why Wells Fargo has turned positive on gold.

'Such times in the past have sparked some of gold's strongest price rallies "¦ We believe gold could be on the eve of a new commodity bull super-cycle, which would be only the seventh since the year 1800,' LaForge said. 'Gold prices have climbed over 40% since 2018, and we believe that more gains lie ahead.'....

'These trends remain largely intact, and we remain gold bulls with a 2021 target range of $2,100 to $2,200,' LaForge said."

bitcoin Is Bitcoin Good for Business? -Project Syndicate

"Following its rapid rise in value, Bitcoin is now being touted as an investment that legitimate businesses would be remiss to ignore. But business leaders should stay off the bandwagon, because the cryptocurrency revolution has already failed.

In a recent commentary for the Financial Times, economist Dambisa Moyo makes a case for why business leaders should invest in Bitcoin. Her three main arguments are that Bitcoin is a way to mitigate company risk; cryptocurrencies can provide possible solutions for doing business in emerging economies; and digital currencies augur an exciting new future of 'currency platforms.'....

First, it is unclear how buying Bitcoin can mitigate company risk. The only risk Moyo identifies is that of missing out on what could be one of the greatest speculative bubbles of all time....Equally far-fetched is the idea that cryptocurrencies could provide solutions to problems often encountered in emerging economies....

Moyo also suggests that Bitcoin could facilitate remittances to low- and middle-income countries. But this ignores the fact that Bitcoin transactions are notoriously inefficient. Because its block size is capped at one megabyte and the block-discovery process takes approximately ten minutes per block, only seven transactions can be completed per second. By contrast, Visa executes an average of 1,700 transactions per second, and could feasibly handle more than 65,000 transaction messages per second. By design, Bitcoin is simply too inefficient ever to become an effective medium of payment....

Bitcoin and similar cryptocurrencies are extremely unattractive as stores of value. No sensible investor should go near them (unless she has very deep pockets and extremely low risk aversion). Moreover, Bitcoin's extremely high energy demand is another nail in its coffin. Bitcoin transactions are verified through proof-of-work 'mining' operations that require exorbitantly energy-intensive computational efforts. The Cambridge Bitcoin Electricity Consumption Index estimates annualized consumption at 139.15 terawatt-hours - more than that of Argentina....

The bottom line is clear: Bitcoin is an excessively risky and environmentally undesirable investment. It is not a sensible solution to any emerging-market problem, and it cannot possibly serve as a store of value or reliable medium of exchange. The sooner it and other DLT-based cryptocurrencies are relegated to a footnote in economic history, the better."

GDP Hides the Damage from the Covid-19 Lockdowns -Mises

"Do not believe government pronouncements that the economy is rebounding from very minimal damage caused by unprecedented covid-19-inspired closures of businesses. Government will use its favorite statistic of the health of the economy to justify its actions - gross domestic product (GDP).

GDP is supposed to represent the total of spending on final goods and services in the economy. It is a Keynesian term that elevates a concept called 'aggregate demand' as most important. Not production and especially not savings.

In fact Keynesians fear savings most of all. Now, you and I know that we can become wealthier only by saving some of our income and investing it wisely for the future. But Keynesians invented a concept called 'the paradox of thrift,' whereby they claim that the economy enters a death spiral from reductions in spending caused by an increase in savings. Individually, savers may be better off, they say, but collectively the economy suffers....

There are two critical problems with GDP. One, it does not capture a lot of spending on longer-term and intermediate-term production, but rather mostly retail sales...Headlines that retail sales are up are supposed to generate confidence that all is well with the economy. But is it? If you and I spent all our savings and even borrowed more, we would soon find ourselves in the poorhouse. But Keynesians would say that our individual financial difficulties were good for the economy. Anybody buying that? I certainly hope not!

But the biggest problem with GDP is the most obvious one - that GDP measures price increases, not increases in the production of real goods or services. For example, in the past month or so the price of a gallon of regular gasoline in my home state of Pennsylvania has gone up from just under $2.50 to around $3.00. That's a 20 percent increase in price. Since gasoline consumption changes little in the short run, selling the same volume of gasoline at a higher price causes GDP to go up. But our standard of living just went down!....

The best measure of long-term price inflation is not necessarily measuring retail prices in the short run but measuring the increase in the money supply over time....M2 is the broadest measure of the money supply that can be accessed by the public on demand...M2 stood at $7.215 trillion in 2008, then was juiced to $15.419 trillion by January of last year. It now stands at $19.384 trillion. That's a 169 percent increase, and tracks well with inflation in asset prices like stocks and housing.

The lesson is this - don't be fooled by government statistics, especially GDP, that the economy is recovering nicely from the covid-19 lockdowns. The covid-19 lockdowns have caused immense damage to the economy. Government money printing may goose GDP, but It will do nothing to compensate for the deadweight loss that millions have suffered."

White House dramatically increased tax proposal -San Diego Union

"When President Joe Biden's team began putting together his infrastructure and jobs package this February, the White House National Economic Council circulated an internal proposal calling for about $3 trillion in new spending and $1 trillion in new tax hikes, according to three people with knowledge of the matter.

But soon enough, some members of the economic team second-guessed themselves, concerned that the plan could jeopardize the nation's long-term financial stability. The officials worried that the large gap between spending and revenue would widen the deficit by such a large degree that it could risk triggering a spike in interest rates, which could in turn cause federal debt payments to skyrocket, said the people familiar with the matter.

Partially in response, the two-pronged package Biden will begin unveiling this week includes higher amounts of federal spending but also significantly more in new tax revenue - with possibly as much as $4 trillion in new spending and more than $3 trillion in tax increases, said the people, who spoke on the condition of anonymity to describe private dynamics....

Biden's 'Build Back Better' agenda is ambitious in scope, aiming to confront global climate change, rebuild the nation's infrastructure, revive domestic manufacturing, and transform U.S. child care, among other goals. Beyond blunting the deficit impact, raising taxes also would advance liberals' goal of cutting inequality....

Republicans have already begun to attack the White House for embracing large spending and tax plans - which would largely reverse former president Donald Trump's 2017 tax cut - that reflect Democratic priorities with very narrow majorities in Congress....

The tax component is expected to be the heaviest lift politically for the administration. The White House is studying a range of tax hikes on wealthy investors, corporations and rich people to pay for the package. Steve Rosenthal, a tax expert at the nonpartisan Tax Policy Center, said the tax increases would be the largest in decades."

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Mar 29, 2021

3.29.21 - If Deficits Don't Matter, Why Tax?

Gold last traded at $1,710 an ounce. Silver at $24.64 an ounce.

NEWS SUMMARY: Precious metals traded lower Monday on profit-taking and a firmer dollar. U.S. stocks fell amid weakness in bank stocks caught in the downdraft of Friday's margin call.

What's the catalyst to take gold price to $1,900? -Kitco

"Now that gold is sitting comfortably above $1,700 an ounce, is it ready for liftoff towards $1,900? Analysts remain optimistic but say that the precious metal needs a new catalyst to get it there....

'Factors that would normally weigh on gold, such as rising stock markets and the firm U.S. dollar, do not appear to be pressuring its price all that much at present,' said Commerzbank analyst Eugen Weinberg.

This trading pattern could be a sign that it's time to start picking up gold, RJO Futures senior commodities broker Daniel Pavilonis told Kitco News.

'Market sentiment is low compared to where it was back in August. This is a good sign. It is probably the time to start picking up gold. Next week, we could see more of an up week for gold,' Pavilonis said.

Gold is being pulled by two different outlooks - the short-term risk-on view, which is based on vaccinations and the economic recovery, and the long-term risk-off view, which is filled with uncertainty and an accommodative Federal Reserve....

'We happen to think we break out into $1,900 by year-end because we will see inflation and no action from the Federal Reserve,' said TD Securities head of global strategy Bart Melek. 'Also, we'll have more debt and more infrastructure spending.'"

carrot If Deficits Don't Matter, Why Bother with Taxes? -Mises Institute

"On March 18, Joe Wiesenthal of Bloomberg Markets had MMT economist Stephanie Kelton on the show. If you're not familiar with modern monetary theory, they think governments should print more money because deficits aren't a big deal. At one point in the show, Wiesenthal asked, 'If we don't need to worry about deficits, why do we have taxes?' Kelton's response was illuminating....

Kelton's answer? Taxes would still be needed, because they make us poor. And because they can punish people she doesn't like.

Specifically, Kelton likes that taxes 'remove dollars from our hands, so we can't spend them,' leaving more purchasing power for the government. So taxes make the people poor, and that's a selling point to her, presumably because she thinks governments are really good at lifting people out of poverty. Anybody who's spent time in America's inner cities, where government money is pretty much the only money, might disagree.

Ah, but it's not just about spending our money more wisely than we ever could, Kelton adds two secondary reasons she loves taxes: to punish particular people by redistributing their money, and to punish people for doing things she doesn't like. Such as failing to buy energy-efficient appliances (no, really). In other words, social engineering with carrots for your friends, sticks for your not-so-friends.

Aside from the morality of preying on our neighbors, demanding they pay an ever-growing 'fair share' that invariably exceeds what, say, a journalist or professor pays, using taxes for redistribution and punishing - 'nudging,' in the fashionable parlance - carries enormous collateral damage. Because redistribution arranges society into hostile factions either trying to violently dispossess one another or defending against that dispossession....

If, indeed, the only remaining justification for taxes in an inflationary regime is to redistribute and punish - to erode social harmony in a fiscal war of all against all while impoverishing society and enabling a creeping totalitarianism - then it is much closer to the mark that modern taxes have become not the price of civilization, but the predator of civilization."

Hold Big Tech accountable -Washington Examiner

"The current trend to deploy false, distorted, selective, and deliberately misleading information in pursuit of various objectives may be a more troubling contagion than COVID-19. We see it in traditional media with 'journalists' who now view their role as the promotion of narratives rather than the objective account of facts. Big Tech now imposes its ideologies on vast swaths of America while answering only to executives, principal shareholders, and employees.

For example, Google, Twitter, Facebook, Apple, and Amazon inflicted a digital death sentence on the social media application Parler by withholding the infrastructure and linkages on which Parler depended, a practice known as 'deplatforming.' In other cases, malleable terms of service agreements provide an excuse for selective censorship, deplatforming, or manipulation of the search ranking algorithms effectively to bury content....

Ominously, many of the civil rights enumerated in the Constitution and its amendments are effectively being abridged by Big Tech companies, which often hold more power than the government over our day-to-day existence. Few would function 'normally' without Amazon, Google's search engine, app stores, Twitter's forum, and Facebook's 'communities,' but these companies operate with impunity because the public's constitutional protections do not apply to private entities, only to actions of government....

Big Tech companies essentially function as public utilities yet are not regulated as such. Would we accept a phone company scanning our calls and interrupting for voice ads or even cutting off a connection in real time? But we allow Big Tech to do a similar thing to us all. The irony is that, for constitutional reasons, the government cannot directly censor the censors....

Content that offends or misinforms would persist, but that is the price of a society with freedom of expression. Nobody is forced to purchase, read, or 'follow' anything or anyone. The decision-making power would return to the consumer. If consumers want to reside in an echo chamber of their own beliefs, so be it. In other words, put everything that is not poisonous, regardless of how it tastes, on the information buffet table and let the consumer consume.

The current behavior by Big Tech assumes that it can 'properly' arbitrate what is acceptable or accurate, but that vests far too much power in unelected and undeserving parties."

The 'Green Energy' That Might Be Ruining the Planet -Politico

"Here's a multibillion-dollar question that could help determine the fate of the global climate: If a tree falls in a forest - and then it's driven to a mill, where it's chopped and chipped and compressed into wood pellets, which are then driven to a port and shipped across the ocean to be burned for electricity in European power plants - does it warm the planet?

Most scientists and environmentalists say yes: By definition, clear-cutting trees and combusting their carbon emits greenhouse gases that heat up the earth. But policymakers in the U.S. Congress and governments around the world have declared that no, burning wood for power isn't a climate threat - it's actually a green climate solution.

In Europe, 'biomass power,' as it's technically called, is now counted and subsidized as zero-emissions renewable energy. As a result, European utilities now import tons of wood from U.S. forests every year - and Europe's supposedly eco-friendly economy now generates more energy from burning wood than from wind and solar combined.

Biomass power is a fast-growing $50 billion global industry, and it's not clear whether the climate-conscious administration of President Joe Biden will try to accelerate it, discourage it or ignore it. It's usually obvious which energy sources will reduce carbon emissions, even when the politics and economics are tricky; everyone agrees that solar and wind are cleaner than coal.

But when it comes to power from ground-up trees, there's still a raging substantive debate about whether it's a forest-friendly, carbon-neutral alternative to fossil fuels, or an environmental disaster. Even within the Biden administration, senior officials have taken different sides of that debate....

In documentaries, lawsuits and the teenage activist Greta Thunberg's spirited Twitter feed, critics of the industry have suggested an alternative climate strategy: Let trees grow and absorb carbon, then don't burn them. Deforestation is a major driver of climate change, and the United Nations climate panel has warned that the world needs to end it worldwide to meet the ambitious Paris emissions targets for 2050.

In February, more than 500 scientists and economists wrote to President Joe Biden and other leaders to warn that converting wood into power is a carbon disaster, a forest destroyer and an absurdly inefficient way to generate energy."

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Mar 26, 2021

3.26.21 - Stocks Don't "Only Go Up"

Gold last traded at $1,731 an ounce. Silver at $24.97 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on bargain-hunting and a weaker dollar. U.S. stocks rose led by bank shares and economic reopening plays as investors cheered government stats showing 'subdued' inflation.

Finally A Bottom In Gold? -Seeking Alpha

"Gold continues to be in a strong multi-year uptrend, and I anticipate large gains in value in the decade ahead as governments around the world continue to stimulate their respective economies with both fiscal and monetary stimulus....

Finally, it appears that gold could be re