2022 Blog Archives

2022 Blog Archives


6.14.22 - US Inflation to Continue

Gold last traded at $1,811 an ounce. Silver at $21.02 an ounce.

NEWS SUMMARY: Precious metal prices steadied Tuesday on a hot inflation report and a weaker dollar. U.S. stocks traded mixed as the S&P Index fell back into a bear market.

Hedge funds still bullish on gold but market faces challenging environment -Kitco

"Although volatility has picked up in the last few days, market analysts say that, in general, the gold market is waiting for a catalyst to push the precious metal out of its narrow trading range.

The latest trade data from the Commodity Futures Trading Commission shows that hedge funds remain relatively neutral on gold and are not taking any significant bullish or bearish positions. Analysts have said that gold remains caught in a tug of war between rising inflation and aggressive interest rate hikes from the Federal Reserve.

The Federal Reserve is on track to raise interest rates by 50-basis points later this week and make another similar move in July. However, inflation remains a major threat to the economy. The U.S. Consumer Price Index rose 8.6% for the year in May, a new 40-year high.

'The macro picture - with the Fed and BOE set to hike rates and the hawkish spin from the ECB - might be expected to weigh on gold, but the inflation story may keep the gold bears at bay," said Marc Chandler, Managing Director Bannockburn Global Forex, in a recent comment to Kitco News....

Although gold prices could trend lower, many analysts remain optimistic that gold can move higher in the long term. There is growing doubt that the Federal Reserve will be able to get inflation under control.

Ole Hansen, Head of Commodity Strategy at Saxo Bank, said that rising stagflation fears and further weakness in equity markets will continue to support gold prices. 'Gold is relatively unchanged on the year, but it continues to outperform equities, so I am happy with its performance,' he said."

inflation U.S. Inflation Likely to Continue Into 2023 -Reason

"The Consumer Price Index (CPI) went up again in May. Over the last year, prices across the economy increased an average of 8.6 percent, up from 8.5 percent in April's year-over-year reading....

When COVID hit, the Federal Reserve tried to stimulate the economy with a massive bond-buying program. Its balance sheet more than doubled over the next two years, from $4.1 trillion to $8.9 trillion, which increased the M2 money supply measure by a third. The Fed's actions have lag times ranging from six to 18 months, which is why inflation started increasing last year.

Now, a little more than two years later, we are seeing a slight tick down in Core CPI as that torrid monetary growth begins to slow. When the Fed realized it overshot the mark, it eventually stopped the bond-buying program and began increasing the federal funds rate - though this was too little, too late to tame inflation in 2022.

As a result, high inflation should last at least into next year. Republicans are trying to blame President Joe Biden. Democrats are trying to blame everything from Putin to corporate greed. Both are misguided, which is leading them to make misguided policy proposals that threaten to make things worse.

Inflation is not a Red Team vs. Blue Team issue; it is a monetary issue. The Federal Reserve started this fire, and they have barely begun putting it out."

How the Fed and the Biden Administration Got Inflation Wrong -WSJ

"Officials applied an old playbook to a new crisis. "�We fought the last war.'

"�If you look back in hindsight then, yes, it probably would've been better to have raised rates earlier,' Federal Reserve Chairman Jerome Powell said.

In recent weeks, top officials in the Biden administration and Federal Reserve have publicly conceded that they made mistakes in their handling of inflation.

Behind their errors was a misreading of the economy.

Advisers to President Biden and Fed officials worried the Covid-19 pandemic and related restrictions would bring similar consequences to the 2007-09 financial crisis: weak demand, slow growth, long periods of high unemployment and too-low inflation.

So they applied the last playbook to the new crisis. The Fed redeployed low-interest-rate policies that it believed had been effective and generally benign, and promised not to pull back prematurely. Elected officials concluded they had relied too heavily on the Fed previously, and decided to spend more aggressively this time....

Moreover, many Democrats saw their control of the White House and Congress as a rare opportunity to shift Washington's priorities away from tax cuts favored by Republicans and toward expansive new social programs.

But the pandemic economy turned out to be fundamentally different. While the financial crisis primarily dented demand by businesses and consumers, the pandemic undercut supply, resulting in persistent shortages of raw materials, container ships, workers, computer chips and more.

Unemployment fell and inflation rebounded more quickly than policy makers expected-yet they stuck with the old playbook. That exacerbated the supply-and-demand mismatches and helped drive inflation up, reaching 8.6% in May, its highest in 40 years."

The Era of Free-Lunch Economics Is Over -City Journal

"In American foreign policy, the period from 1990 through the summer of 2001 has been called the "holiday from history."� Between the collapse of the Soviet empire and the 9/11 attacks, the United States drastically reduced defense spending and celebrated what was optimistically assumed to be a permanent end to significant security threats. September 11, 2001, shattered that peace and returned America to its familiar posture of vigilance against security threats.

We may soon look back on the 2009-2021 period as the era of 'free-lunch economics,' when hubristic politicians and economists declared that traditional fiscal and monetary trade-offs no longer existed in any meaningful form. Advocates portrayed a new economy liberated from restraints, one in which money-supply expansions and congressional deficit spending could finance benefits that would make even Western Europeans envious, with no economic drawbacks. As in foreign policy, this utopian vision proved to be an illusion. Reality has intruded.

The precipitating event of the free-lunch era was the massive 2009 federal response to the Great Recession. At the time, an $800 billion stimulus bill and $1.3 trillion expansion of the Federal Reserve balance sheet represented a radical (and to many, reckless) divergence from Washington's typical modest recession responses. And yet the warnings of rampant inflation, spiraling interest rates, and a fiscal crisis did not come to pass. In fact, inflation remained low, and interest rates continued to fall for a decade....

Economists like former International Monetary Fund chief economist Olivier Blanchard updated earlier, more cautious, research and now claimed that low interest rates provided substantial fiscal room for spending. Many progressives embraced a fringe concept called Modern Monetary Theory (MMT), which argued that simply printing trillions of dollars could magically finance the progressive wish list without inflation.

Right on cue, progressive analysts developed proposals to borrow tens of trillions of dollars to spend on Universal Basic Income, the Green New Deal, a government-funded job guarantee, single-payer health care, and free public college. All this borrowing would be on top of the combined $112 trillion shortfall for Social Security and Medicare that the Congressional Budget Office projected over the next 30 years....

The 'free-lunch' experiment has collapsed. Inflation has jumped past 8 percent for the first time in 40 years-reaching 8.6 percent in May-interest rates are rising every month, real wages are falling, and economic growth is dipping. Budget deficits are now projected to soar past $2 trillion within a decade, even assuming peace, prosperity, and the scheduled expiration of most of the 2017 tax cuts.

This is not a coincidence. Economists such as Lawrence Summers warned that the ARP would worsen inflation, and research from the San Francisco Fed has confirmed it. America's inflation rate has thus exceeded those of European countries with smaller fiscal responses."

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6.13.22 - How the FBI Uses Foreign Laws to Spy on You

Gold last traded at $1,828 an ounce. Silver at $21.27 an ounce.

NEWS SUMMARY: Precious metal prices retreated Monday on profit-taking as the dollar hit 20-year highs. U.S. stocks fell sharply - back into bear market territory - ahead of an anticipated Fed rate hike later this week.

Inflation threat is far from over, got gold? -Kitco

"After a relatively quiet week, the gold market saw some fireworks on Friday as investors reacted to rising inflation pressures.

Economists expected to see a further decline in consumer prices in May; however, the U.S. Labor Department said its Consumer Price Index rose 8.6% for the year in May, hitting a new 40-year high....

According to many market analysts, the Federal Reserve's credibility is now on the line as investors start to question if the central bank can actually bring down inflation. Although the Federal Reserve is expected to raise interest rates by 50 basis points next week and in July, they remain woefully behind the inflation curve and some significant investors are paying attention.

Thursday, David Einhorn, founder of Greenlight Capital and a long-time gold bull, said that gold will be an essential asset as the Fed is bluffing when it comes to taming inflation.

'The Fed doesn't really have the tools to stop the inflation. When the Fed has to choose between fighting inflation and supporting the Treasury, I think it has to pick the Treasury. At that point, it's best to have some gold,' he said in a presentation during the annual Sohn Investment Conference.

But it's not just investors who see gold as an essential asset in a portfolio. Wednesday, the World Gold Council released its annual central bank gold survey. Fifty-seven banks participated in this year's survey, and 25% said they wanted to increase their gold reserves in the next 12 months."

boiling point The Boiling Over of America -Noonan/WSJ

"San Francisco's progressive District Attorney Chesa Boudin was recalled this week in a 60-40 landslide. Los Angeles saw a surge of support for a moderate mayoral candidate, Rick Caruso, who campaigned on crime, homelessness and social disorder. None of this necessarily marks a sea change; the people of both cities have long been happy to be liberal Democrats. What they won't accept is being ruled by progressives. (San Francisco has made this clear twice; in February, when voters fired as many progressive members of the school board as they could, we called it the beginning of a serious rebuke.)

An aspect that is potentially promising for the Republicans is that the shock and trauma of the past few years of misgovernment, and the recall fights, have, for the first time in at least a generation, reminded Democrats that there are options beyond their party and that on the issues of crime and public disorder, Republicans have demonstrated the greater wisdom. So yes, there could be long-term implications.

Early reports suggest, unsurprisingly, that minority voters backed the recall in greater numbers than college-educated whites. This is because they suffer more and have fewer protections when crime spikes and homeless encampments seize new ground.

This is what the foes of progressives are saying: We won't let our city go down. We won't accept the idea of steady deterioration. We will fight the imposition of abstract laws reflecting the abstract theories of people for whom life has always been abstract and theoretical. We can't afford to be abstract and theoretical, we live real lives. We wish to be allowed to walk the streets unmolested and with confidence. This isn't too much to ask. It is the bare minimum.

Progressive politicians have been around long enough running cities that some distinguishing characteristics can be noted. One is they don't listen to anybody. To stop them you have to fire them. They're not like normal politicians who have some give, who tack this way and that. Progressive politicians have no doubt, no self-correcting mechanism....

The lesson of this political moment: Don't be radical, don't be extreme. Our country is a tea kettle on high flame, at full boil. Wherever possible let the steam out, be part of a steady steam release before the kettle blows."

How the FBI uses laws to spy on foreign terrorists to spy on you -The Hill

"The FBI searches through databases of foreign communications in a program that Congress created specifically to catch foreign terrorists and spies. But the FBI uses this same program to glean private information about American citizens and our communications.

These so-called 'U.S. person queries' are transforming one of the most powerful and invasive surveillance authorities - Section 702 of the Foreign Intelligence Surveillance Act - into a means for FBI agents to spy on Americans without a warrant, gutting the Fourth Amendment of the Constitution.

Section 702 has become increasingly controversial since its passage in 2008. Congress passed it only to authorize the surveillance of non-Americans outside the United States. It was promoted as an authority designed to counter terrorists. Instead, it is being used in Orwellian ways that make America a little more like Russia or China.

Through declassified Foreign Intelligence Surveillance Court (FISC) opinions and other government disclosures, the public has learned that Americans' personal information is also swept up by what intelligence agencies call 'incidental' collection. After our information ends up in government databases, the FBI intentionally searches it to learn more about Americans, our communications, and what we're up to. This means the FBI can warrantlessly obtain, review and use the private communications of Americans who are not suspected of criminal activity or any wrongdoing.

A declassified FISC opinion from 2020 reveals that FBI agents have used 702 information to snoop on individuals who asked to participate in the FBI's 'Citizens Academies' - a program for business, religious, civic and community leaders to better appreciate the role of federal law enforcement in the community. (Yes, that joke writes itself.) Section 702 also was used without warrants to search the personal information of repair workers entering field offices, people providing tips, and victims reporting crimes.

The same FISC opinion describes the FBI's systematic failure to obtain court orders before reviewing the contents of Americans' communications....It is in the enlightened interest of the FBI to cooperate on transparency. Another surveillance authority, Section 215 of the USA Patriot Act - which allowed for the collection of personal information from business transactions - was so routinely abused that Congress allowed it to expire in 2020."

Even Deep-Pocketed Buyers Are Starting to Back Away From the U.S. Housing Market -WSJ

"After an epic two-year run - not just in Austin but in major cities around the country - the luxury real-estate market is finally cooling.

Real-estate agents in places like New York, Los Angeles, and the Hamptons say the frenzied deal making and record-setting prices that characterized the past few years has eased, thanks to a growing disconnect between what sellers want and what buyers will pay. Meanwhile, buyers are grappling with inflation, this year's interest-rate hike and the volatile stock market. Gas prices and the war in Ukraine are adding to feelings of economic uncertainty, effectively throwing cold water on luxury sales.

The number of luxury homes-defined as the top 5% of the market-that sold during a three-month period from Feb. 1 to April 30, 2022, dropped 18% compared with the number of sales during the same period in 2021, according to a new report from the real-estate brokerage Redfin. That is the biggest decline since the pandemic started, when the number of luxury sales plunged 23.6% during the three-month period between April 1 and June 30, 2020, compared with the same period in 2019....

'There's a sense that prices are frothy in many markets across the country,' said Ryan Serhant, CEO of real-estate brokerage Serhant, who says the market is normalizing after a period of rapid appreciation, fueled by heightened demand. 'You're now starting to see buyers become a little hesitant to be caught at the top,' he said."

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4.27.22 - Twitter's reaction to Elon Musk

Gold last traded at $1,889 an ounce. Silver at $23.39 an ounce.

NEWS SUMMARY: Precious metal prices extended losses Wednesday on profit-taking and continued dollar strength. U.S. stock struggled to come back from worst rout since 2020.

Gold edges higher after falling to 2-month low -MarketWatch

"Gold prices edged higher Tuesday, a day after finishing at its lowest since late February as a flight to quality left the yellow metal behind....

Global equities slumped Monday as investors reacted to fears of a potential lockdown of Beijing as Chinese authorities responded to a rise in COVID-19 cases, though U.S. stocks later bounced back to end the day in positive territory. Gold, often viewed as a haven during periods of market volatility, failed to find support as investors piled into Treasurys and other havens.

But Daniel Briesemann, analyst at Commerzbank, argued that the Monday slump was likely the result of forced selling as well as a stronger U.S. dollar.

'During such market phases in the past, gold would often come under pressure because gold would be sold to offset losses elsewhere,' he said, in a note. 'Yesterday, for example, saw considerable pressure on stock markets for some of the time. Gold has at least regained the $1,900 per troy ounce mark this morning.'

Briesemann said gold is likely to be well supported and will reassert its status as a safe haven and an inflation hedge."

i dont know I Don't Know -Compound Advisors

"I Don't Know. Three words that are rarely heard in the investment business and at the same time the most important to long-term success.

Why?

Because the future is unknown and having the humility to admit that is very hard for us to do. We're wired instead with overconfidence - we tend to overestimate our abilities when it comes to sports, driving, investing and many other areas of life (Dunning-Kruger effect).

While a little bit of confidence can be a good thing in many areas of life, overconfidence, particularly in the investment world, can be disastrous. With overconfidence comes the tendency to overtrade and make highly speculative, concentrated bets on the future.

Many studies have shown that these attributes tend to lead to lower overall returns. The more confident you are, the more you trade, and the worse your returns are on average"�.

What's the best way for investors to manage their overconfidence bias?

1) Diversification: not putting all of your eggs in one basket.

2) Resisting the urge to trade (first, do no harm).

3) And sticking with a broad-based asset allocation plan.

By diversifying, you're removing your ego from the equation and accepting the fact that you're not likely to pick the next Apple/Amazon or make the next Big Short.

To the contrary, you are saying three important words when it comes to making precise predictions about the future: I Don't Know.

Let's practice this concept in response to some standard questions you hear on financial TV every day:

-Where will the S&P be at the end of the year? I don't know.

-Where will the 10-year yield be at the end of the year? I don't know.

-Will Crude Oil be higher or lower a year from now? I don't know....

So the next time someone ask you where the markets are headed, don't be afraid to say "I don't know."� In the business of investing, it's the most honest and helpful thing you can say.

'It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.' - Anonymous (often misattributed to Mark Twain)"

Twitter's reaction to Elon Musk only proves change is needed -Fox Business

"Twitter bans hate speech - specifically, speech it hates. If Elon Musk is successful in his mission to acquire Twitter - which he will be - he will pull back the curtain. We will finally be privy to the process the company uses to decide which ideas they deem suitable for us to hear.

Musk's takeover bid is a classic example of the free market at work. He is exercising what essentially amounts to a personal antitrust action, taken in the name of free speech.

The reaction from Twitter proves he's onto something. They are shaken to the core at the idea of having to be more transparent about how they conduct business at what has become the world's virtual public town square.

Musk's takeover is doable. Twitter, in spite of its enormous societal impact, is a relatively small company compared to other tech firms. Apple is estimated to be worth $2.7 trillion. Google parent Alphabet is $1.7 trillion. Musk is the richest man in the world. He has a personal net worth several times greater than the $50 billion or so he would probably have to pay for outright ownership of Twitter. However, that is not the same thing as cash. Nonetheless, he will find a way to put together a take-over syndicate. He will find a way to snare his prey.

Musk is clear about why he wants the company. In a recent TED forum after the announcement of his takeover plan, he said 'My strong, intuitive sense is that having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization.' He is right, and he has laid out some of his plans to change the way Twitter operates.

Musk has made clear he would be reluctant to delete things and more open to 'time-outs' than permanent bans. He acknowledges that there are limitations to free speech and Twitter must obey the law, but if a tweet is in a gray area, he would let it exist. He would also insist that the algorithm Twitter uses to rank content be made public and open to user audits."

Modern Monetary Theory: The End of Policy Norms As We Know Them? -Progressive Policy Institute

"Modern Monetary Theory (MMT) gained popularity at a time when U.S. inflation was benign, income and wealth inequality was on the rise, and progressive politicians saw a political opportunity to pass big-ticket spending programs. To the nagging perennial question, 'How do we pay for it?,' MMT serves up a tasty answer. You don't need to raise taxes or reduce other spending. You don't need to secure low-cost borrowing. A monetarily sovereign nation, like the United States, can create more currency to buy the goods and services that the programs require.

Large new spending programs often invoke in U.S. voters fears of persistent budget deficits and rising inflation. MMT delivers the reassuring message that those fears are grounded in defunct 'orthodox' economic reasoning that limits the federal government's capabilities: we have nothing to lose but our outmoded fiscal bromides and much to gain by replacing historic policy norms with fresh ideas.

MMT explicitly ties itself to populist policies, self-labeling their plans 'the birth of the people's economy' [subtitle of Kelton (2021)]. Any sensible elected leader, whose vision is not impaired by conventional economic thought, would happily gobble up such a fiscal banquet.

MMT is the progressive counterpoint to supply-side economics. It supplants the claim that tax cuts pay for themselves with the claim that '"�[federal] spending is self-financing' [Kelton (2021, p. 87), emphasis in original]. Both claims contain a germ of economic substance. Both claims are carefully crafted to provide elected officials seemingly plausible economic grounds to support their preferred fiscal policies (though at opposite ends of the political spectrum). Both offer policy makers an ideology freed of trade offs.

Because economic policy is too important to be reduced to catchy phrases and clever marketing, this essay analyzes MMT economics dispassionately. It does not assess the worthiness of MMT's goals. Instead, it asks if MMT can achieve its goals without doing grave damage to America's fiscal standing and, quite possibly, its economy. The answer: probably not. MMT suffers from several flaws.": (Full story)

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6.10.22 - Wall Street's Blank-Check Boom Gone Bust

Gold last traded at $1,871 an ounce. Silver at $21.94 an ounce.

NEWS SUMMARY: Precious metal prices shot up Friday on red-hot consumer inflation data, despite a stronger dollar. U.S. stocks fell after a highly anticipated inflation report showed a faster-than-expected rise in prices and consumer sentiment hit a record low.

The U.S. and Europe have enough gold for a gold standard; This is why it can work -Larry White/Kitco

"The United States and Europe have enough gold to return to the classical gold standard, said Lawrence (Larry) White, professor of economics at George Mason University. He further explained that the gold standard can work in today's world.

White is an expert on the gold standard and free banking. He has a new book out next year, Better Money: Gold, Fiat, or Bitcoin? He spoke with David Lin, Anchor and Producer at Kitco News....

'The classical gold standard was a self-regulating system,' said White. 'During [World War I], all the major nations went off the gold standard with the partial exception of the U.S., and didn't' really resume it in the old-fashioned way'....

He added that central banks are not necessary in such a system. '[One] of the great attractions of a gold standard is it can work through market forces. We don't need a central bank. We don't need any kind of central planner in the market for money balances or in financial markets.'....

A classical gold standard requires every dollar in circulation to be backed by gold. Some analysts claim that a return to the gold standard is impossible, since there is not enough gold.

White demurred. 'I think a fractional gold system will work,' he said. 'It worked in the classical gold standard period. Banks did not have 100 percent reserve requirements"� And yet prudence dictated that they hold enough gold to actually meet the redemption demands that are made on them.'

White went on to say that the United States and Europe have enough gold reserves to return to the gold standard. However, he cautioned that while the gold standard is economically feasible, it may not be politically practical."

investing The Big Bull Market in Commodities Has Only Just Begun -The Market

"Commodity prices are on the rise. Leigh Goehring and Adam Rozencwajg say why they expect prices to continue to climb and how investors can best gain exposure to resources such as energy, metals and agricultural commodities in today's inflationary environment.

While inflation and worries about the health of the global economy are unsettling the stock markets, prices of resources such as oil, gas and grain are trending upward. The S&P Global Natural Resource Index, which includes a broad range of companies from the sector, has advanced 15% since the beginning of the year.

'This rally hasn't even started yet,' Mr. Rozencwajg says. 'Huge changes in investment flows are about to take place with large implications. Investors should use any pullback as an opportunity to increase their exposure,' Mr. Goehring adds.

In this in-depth interview, which has been edited and condensed for clarity, the two investment professionals explain why commodities and commodity stocks can play an important role in weatherproofing a portfolio, why they are bullish on the sector from a fundamental perspective, and how investors can best gain exposure....

Mr. Goehring: This will be the decade of shortages. For over thirteen years, huge amounts of the global economy have been starved of capital. Obviously, this trend was showing up first in the global oil and gas industry which is hugely capital intensive. Investments in these areas were cut back drastically, and two forces were responsible for that. One is that oil and gas prices on average declined almost 80% from peak to trough. In the US, oil prices went even severely negative. Prices got so low in many areas of the extractive industries that it made little sense to go forward with investment projects....

Mr. Rozencwajg: Today's inflationary pressures are neither transitory nor moderate. Given the significant amount of money printed and the huge amount of debt accumulated throughout the world, we believe Inflation will intensify as we progress through the decade. The surge in commodity prices is basically causing the first stage in this inflationary cycle. Although inflation-sensitive assets have already begun to radically outperform bonds and the general stock market, investors' interests in these assets remain subdued. Very few investors have taken serious steps to protect themselves from the massive trend change. This means there is still plenty of opportunity to not only protect yourself from the ravages of inflation, but to profit by it as well."

Wall Street's blank-check boom has gone bust -CNN

"The once hot blank-check merger trend is fading fast.

The stock market has been cratering so far this year - leaving special purpose acquisition companies, which buy private firms in order to take them public without the need for a traditional initial public offering, with difficulty finding targets.

SPACs, also known as blank check companies, are facing the same concerns about inflation and a looming recession on the horizon that are plaguing the rest of Wall Street.

So with stocks tumbling, the IPO market drying up and increased regulation around the corner, several high-profile SPACs have recently pulled the plug on their merger plans.

Expect more firms that hoped to go public through this once-trendy fad to put the kibosh on those plans. Several other startups have already scrapped their SPAC plans for this year, including homebuying service Knock, corporate ridesharing firm Gett and investing app Acorns"

Dotcom 2.0 bubble has burst. What is next? -Contrarian Edge

"Over the last few years, I killed a forest of good-looking trees writing about the insanity of what was going on in the stock market. These trees did not die in vain. Rising interest rates and inflation making multi-decade highs served as a bucket of cold water, waking investors up to the fact that a vivid imagination is not the only skill required to be an investor. Until recently, the investors who had the richest imaginations seemed to make the most money - until they lost years of gains in months.

Let's take the ARK Innovation ETF (ARKK) - the poster child of the recent hysteria and until last year one of the best-performing funds in the market. It more than quadrupled from the pandemic lows to its peak in February 2021. Some companies it owned had business plans that looked like they were from sci-fi novels; many were going to revolutionize the world; most came with sci-fi-like (out of this world) valuations.

Cathy Wood, ARK's fund manager, turned into an instant celebrity. The media and Wall Street did what they usually do - they hailed her as the next Warren Buffett....

This movie is ending in a very predictable way. Higher interest rates activated a dormant gravitational field in the market. ARK stocks turned into horror stories, crashing down to mother earth. Investors who bought the fund at the peak are down more than 70%. All investors who bought ARK after mid-April 2020 and held on to the fund are down on their purchase. Since the majority of inflows to the fund occurred near the peak, most ARK investors got annihilated.

There is an interesting parallel between the run-up and crash in 'digital' stocks during the pandemic and the Y2K bubble of 1999.

The market was already frothy in the late 1990s, full of dotcom speculation. In 1999 corporations were concerned that at the turn of the century, computer clocks, instead of taking us forward from 1999 to 2000, would take us back to 1900. Though this was a true risk only for old mainframes, it triggered a tsunami of upgrades for everyone. It seemed like every Fortune 10,000 company upgraded its computers to a new system."

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6.9.22 - What To Do When the Stock Market Crashes?

Gold last traded at $1,848 an ounce. Silver at $21.78 an ounce.

NEWS SUMMARY: Precious metal prices eased back Thursday on a firmer dollar. U.S. stocks extended losses ahead of Friday inflation data.

Gold to trend higher as world faces several years of stagflation -Commerzbank/FX Street

"Gold climbed slightly to a good $1,850 yesterday and is still trading at roughly this level on Wednesday. On Tuesday, the World Bank lowered its 2022 global growth forecast to 2.9% from 4.1% in January. What's more, global inflation will likely remain above target in many economies, lending support to the yellow metal, economists at Commerzbank report....

'Gold was lent support by the World Bank's report on the economic situation and outlook. In it, the World Bank has further lowered its forecast for this year's global economic growth to +2.9%. At the same time, it warned that we could be facing several years of below-average growth and above-average inflation. We believe this will benefit gold in the long term, as it is likely to come into its own as a store of value in such an environment.'

'The World Gold Council (WGC) published figures yesterday for the gold ETFs it tracks. They show outflows of 53 tons in May, bringing a series of four consecutive monthly inflows to an end.'

'The ETF outflows accompanied the downward trend of the gold price that began in April and continued until mid-May. In our view, the price slide was due chiefly to the appreciating US dollar and rising bond yields.'"

stock chart What Should I Do When the Stock Market Crashes? -InvestorPlace

"Stock market crashes are many investors' worst nightmare - or they're a dream come true if you have the right approach. Investors can view a crash as a chance to go bargain hunting, and they should take steps ahead of time to prepare for this eventuality.

When I give you the years 1929, 1987, 2008 and 2020, what's the first thing that pops into your mind? Seasoned investors should immediately think of the collapses that happened in the stock market during those years.

Sudden stock market drawdowns of 20%, 30%, 50% or more can be scary if you're not prepared. Knowing what to expect, and how to capitalize on the opportunities involved, can help investors make the most of a very challenging situation.

With all of that in mind, let's explore the three steps you need to take to protect your investments when the market crashes

1. Stay Calm, but Be Aware of Macro Conditions - Stocks fall for many different reasons, but there's a common theme: a negative surprise....

2. Look for Opportunities - History shows that buying when most investors are complacent, and selling when investors are panicking, is a recipe for disaster....

3. Extend Your Time Frame - What if you already owned stocks and the market collapses? Rather than panic-sell your stocks, you can choose to extend your investment time frame....

For what it's worth, it's practically assured that the stock market will recover at some point. In the meantime, feel free to build your wish list - and, when your favorite companies' stocks get down to an irresistible price point, make a move and turn that crash into cash."

Mortgage demand falls to the lowest level in 22 years -CNBC

"Mortgage rates are back on the upswing, after a brief decline in May, and the housing market is still suffering from a lack of listings. As a result, mortgage demand continues to drop.

Total mortgage application volume fell 6.5% last week compared with the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. Demand hit the lowest level in 22 years.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 5.40% from 5.33%, with points rising to 0.60 from 0.51 (including the origination fee) for loans with a 20% down payment.

Refinance demand, which is most sensitive to weekly rate moves, fell another 6% for the week and was 75% lower than the same week one year ago. The vast majority of mortgage holders now have rates considerably lower than the current one, and even those who would like to pull cash out of their homes are choosing second mortgages, rather than refinancing their first liens....

'There's some chance that the upper boundaries of that range end up being a ceiling for rates, but that will depend on inflation and other incoming economic data,' wrote Matthew Graham, chief operating officer at Mortgage News Daily. 'With a key inflation report set to release on Friday morning, the potential for volatility remains high.'"

Central Bank Digital Money Risks Being an 'Expensive Failure' -BNN Bloomberg

"Central-bank-issued digital currencies run the risk of turning into a costly waste of time, according to the Center for European Reform.

Europe - one of the most advanced economies considering the initiative -- should instead use regulation to make payments cheaper and more competitive, the London-based think-tank said Tuesday in a report. It warned that the cost benefits and privacy incentives of a so-called CBDC are unlikely to be sufficient to entice consumers to use it.

'Without widespread adoption, a CBDC will be an expensive failure, and will do little to advance central banks' goals,' senior research fellow Zach Meyers said. 'The EU shouldn't be distracted by the prospect of a digital euro - which may sound impressive and exciting, but may give Europeans few benefits they can't enjoy already.'

The payment initiative is being explored in about 100 countries across the globe, with backers touting various advantages -- from boosting financial inclusion to lowering the cost of electronic payments.

Pioneers like the Bahamas and Nigeria have already started allowing the public to use CBDCs, and policy makers in Europe say they will ensure that a future digital euro would be attractive enough not to be swept aside by other private means of payment. The European Central Bank says it may roll out its own CBDC in the coming years."

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6.8.22 - 12 Months of No Progress

Gold last traded at $1,854 an ounce. Silver at $22.09 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on bargain-hunting and a flat dollar. U.S. traded mixed as investors weighed rising yields, economic growth concerns.

When Thoughts Turn to Gold -FEE

"Henry Hazlitt was an infinitely better economist and closely associated with FEE for decades. He picked Keynes apart virtually line by line in his definitive 1959 tour de force, The Failure of the New Economics. If you're an economics major and your professors never told you about it, consider demanding a tuition refund.

Keynes and Hazlitt knew each other but agreed on little. In 1931, in fact, Hazlitt invited Keynes to participate in a series of articles around the theme, 'If I Were a Dictator.' You can see the reply from Keynes here.

I knew Hazlitt personally and called him by his nickname, 'Harry,' as did others among his many friends. I cherish the letters from him in my personal files. He was so much more than a fine economist-an exceptional journalist, a scholarly but accessible gentleman, and a brilliant moral philosopher as well.

Hazlitt authored more than two dozen books, most notably the classic Economics in One Lesson, available free from FEE. In his 1978 volume, The Inflation Crisis and How To Resolve It, he noted that far from barbarous, gold served many nations extraordinarily well. It was the world's chosen money for centuries.

The unprecedented explosion of economic growth in the 19th Century was accompanied by sound money tied to gold, punctuated by brief calamities when politicians abandoned it. Governments don't like it because they can't print it, pure and simple. As Hazlitt wrote in The Inflation Crisis,

'It is the outstanding merit of gold as the monetary standard that it makes the supply and the purchasing power of the monetary unit independent of government, of office holders, of political parties, and of pressure groups. The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine, and to process; and that it cannot be created by political fiat or caprice. It is precisely the merit of the gold standard, finally, that it puts a limit on credit expansion.'

In the long run, just as Keynes predicted, Keynes himself was indeed dead. But gold as a reliable medium of change lasted far longer than he ever did. It may re-emerge one day to replace the barbarous paper inflation his legacy helped to create. Wouldn't that be ironic, if not entirely predictable?

Americans are once again feeling the pain of runaway expansion of money and credit that a gold standard would never have allowed...Jerome Powell, chairman of the inflation factory known as the Federal Reserve, took a short break from the printing press to assure us that the Fed 'understands the hardship it is causing' and that his paper money machine is 'moving expeditiously' against it. He's counting on us being sufficiently gullible and miseducated to thank him for his "inflation-fighting" efforts. Count me out, please....

As price inflation eats away at our savings and livelihoods, it's time we re-think money and monetary policy. We should compare the record of the gold standard with that of our present tree standard."

taxes Yellen Tells Lawmakers She Expects Inflation to Remain High -WSJ

"Treasury Secretary Janet Yellen warned that the U.S. is likely facing a prolonged period of elevated inflation, while the World Bank sharply lowered global growth forecasts and flagged a risk of recession in many countries.

The World Bank, in a report, projected several years of high global inflation and tepid growth reminiscent of the stagflation of the 1970s. Ms. Yellen told lawmakers that the White House would likely revise upward its U.S. inflation forecast - which already showed prices rising this year at nearly twice the prepandemic rate.

'I do expect inflation to remain high, although I very much hope that it will be coming down now,' Ms. Yellen said, adding that the Biden administration was updating its forecast from March that inflation would average 4.7% this year. In recent months, consumer inflation has trended above 8%...

'Several years of above-average inflation and below-average growth now seem likely,' David Malpass, president of World Bank Group, told reporters. 'The risk from stagflation is considerable.'

Meanwhile, a Commerce Department report Wednesday showed imports into the U.S. fell in April for the first time since July, suggesting domestic demand eased in the face of higher prices. Falling imports and rising exports caused the trade gap in goods and services to fall 19.1% from the prior month."

12 Months of No Progress -All Star Charts

"With everyone so certain about the upcoming recession, even Cardi B, why don't we take a step back and look at what the actual prices of stocks are doing.

The Dow Jones Industrials and Dow Jones Transports have done absolutely nothing for over a year.

For perspective, stocks first peaked in January of 2018, then went nowhere for 3 years, and finally broke out:

After a historic rally, everything changed in the first half of last year.

You can even argue that stocks peaked 16 months ago in February. In fact, I have been arguing that.

The question is not whether or not we're going into a bear market. What we're really interested in is how much longer we're going to be in one."

Don't grovel abroad, President Biden: Drill at home -NY Post

"President Joe Biden is walking back all his tough talk on the Saudis in hopes the perfidious princes will pump more oil to alleviate the global crunch that has America suffering $5-a-gallon prices. But rather than grovel in Riyadh, he should take his foot off the neck of the US energy sector....

Yet the prez won't drop his war on US energy production, even as surging prices are one reason inflation is at 8.3%.

To please his party's green extremists, Biden on his first day in office canceled the Keystone XL pipeline (which would have transported 800,000 barrels of oil per day from Canada to the Gulf Coast). Then he put a moratorium on leasing federal lands to oil and gas drillers, increased restrictions on fracking and smiled on moves to choke off drillers' access to capital.

America was a net energy exporter under the last president, and should still be. But Biden left us (and our allies) prey to the likes of MBS, Vladimir Putin and the tyrannies in Colombia and Iran - whose industries are all far dirtier than US producers.

Say no to groveling, Joe - and yes to drilling at home."

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6.7.22 - The "Super Bad" Paradox

Gold last traded at $1,854 an ounce. Silver at $22.26 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday as bulls stepped up to buy the dip despite a firmer dollar. U.S. stocks extended their 6-week slide after Target profit warning.

Gold eyes $1,863 and $1,867 on road to recovery -FX Street

"Gold Price is on a recovery mode this Monday, kicking off a new week on the right footing, as bulls reverse Friday's deep losses. The upbeat US labor market report lifted the bids for the dollar alongside the Treasury yielding, weighing heavily on the bright metal.

Bulls are attempting a comeback, as USD bulls take a breather ahead of the all-important US inflation release. The persistent strength in oil prices has helped gold price find a floor, reviving its demand as a hedge against energy costs-driven inflation worries. Let's take a look at how the yellow metal is positioned on the various timeframes, technically....

The next relevant upside target is seen at the Fibonacci 61.8% one-month at $1,863, above which the immediate barrier at $1,865 will be put to test. That level is the confluence of the Fibonacci 61.8% one-day and SMA200 four-hour.

Further up, the pivot point one-day R1 at $1,867 will guard the bearish interests, with the last line of defense for sellers seen at $1,874. That level is the meeting point of the previous week's high and the pivot point one-week R1."

Musk The "Super Bad" Paradox -Bonner Private Research

"We never know what will happen. All we know is what ought to happen.

Elon Musk, bless his heart, has a 'super bad feeling' about the months ahead. So do we. Something bad ought to happen.

But bad things are sometimes good things. Musk explained the paradox two weeks ago. Referring to the unhappy part of the business cycle, he said: 'Yes, but this is actually a good thing. It has been raining money on fools for too long"�.'

'Some bankruptcies need to happen. Also, all the Covid stay-at-home stuff has tricked people into thinking that you don't actually need to work hard...'

Yes, things happen that ought to happen. But not always what you want, or when you expect, or how you think it should go. We've spent years waiting for a major stock market correction, for example. By our reckoning, stock prices ought to get cut in half before we can be confident of a genuine new bull market. And we have our "�I told you so's at-the-ready.

Remember, beneath the chop of up and down stock price movement are deep tides. By our reckoning, stocks go up for decades. Then, the tide turns"� and for decades the "�primary trend' is down. We wait for a low - when you can buy all 30 Dow stocks for the equivalent of 5 ounces of gold or less - then, we will be reasonably sure the tide is ready to flow again.

In the meantime, the years go by"� and imagine our disappointment! It is like being a lifeguard in a wading pool....

Sensible people have had a "�super bad feeling' for years. "�There must be some price to pay for counterfeiting money and rigging the credit markets,' say the sages. "�If not, everyone would do it"� all the time.'

The two obvious consequences: more debt and more inflation. The details are being filled in now.

America's debt burden grew by more than $50 trillion this century"� to a total of more than $88 trillion, including households, businesses and the government. And inflation? Who could have seen that coming?

And now, what ought to happen? Higher prices ought to bring more output. More output ought to lower prices. Inflation ought to go back whence it came. Those bad feelings ought to go away. Will they?"

Fossil-Fuel Shares Lead the Stock Market. How Awkward. -NYT

"It is no secret that the stock market has been rocky since the start of the year. Tech giants like Apple, Microsoft, Google and Amazon have been no help at all. Their shares have all had double-digit percentage declines.

So far in 2022, the S&P 500 is down more than 13 percent, and it briefly dipped more than 20 percent below its peak, putting stocks in bear market territory....

In fact, when I looked at a performance table of the top companies in the S&P 500 for 2022, I found that 19 of the top 20 spots belonged to companies connected, in one way or another, with fossil fuel. The best performer was Occidental Petroleum, with a gain of 142 percent....

This poses a classic dilemma for investors who want to follow the guidance of much academic research and be fully diversified. I try to do this by putting my money into low-cost index funds that track the entire stock and bond markets. These funds are marvelous in many ways. They reduce the risks of specific stock selection - owning the wrong stock at the wrong time - and of emphasizing the wrong sectors at inopportune moments.

There is an important catch, though. Complete diversification means owning all sectors and companies, and, in the current environment, that definitely includes traditional fossil fuel companies."

Why Joe Biden thinks you can fight inflation by reducing the deficit -Vox

"Fuel prices are rising, rent is too damn high, and elections are coming. As inflation and high costs of living spoil the country's economic mood, President Joe Biden has revived a recent talking point to get across how seriously he takes the country's economic situation: 'I reduced the federal deficit.'

Cutting government spending isn't really top of mind for most American voters, and balancing federal budgets is certainly not going to be enough to motivate Democratic voters to turn out in midterm elections. The federal budget deficit hardly registers in Gallup's recent polling on the country's most pressing problem, but inflation is at the top of the list.

With midterms coming up and a new inflation estimate scheduled to be released next week, the White House is now making deficit reduction a core part of its intense efforts this month to convince voters the economy is getting better - and reset public opinion on its biggest political challenge.

It marks a pivot: Biden campaigned on wanting to be a transformative president, pushed for massive spending packages throughout 2021, and played down concerns of inflation to boost those proposals. But the president now sounds more cautious about big government spending....

'I've heard the president and his administration say over and over again, things like "�we have reduced the deficit because of our actions.' That is only true in a very backward sense,' Marc Goldwein, a senior vice president at the Committee for a Responsible Federal Budget, a fiscally conservative group, told Vox. 'The deficit is coming down year over year overall despite their actions.'"

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6.6.22 - Bitcoin Falters, Crypto Miners Brace for Crash

Gold last traded at $1,841 an ounce. Silver at $22.08 an ounce.

NEWS SUMMARY: Precious metal prices remained stable Monday as U.S. dollar, oil prices rise. Stocks pulled back from gains as 10-year Treasury yield breached 3%.

Russia's Gold Standard a "Pipe Dream"; Why a Gold Standard Is Not Happening -Kitco

"According to Jeff Christian and Gary Wagner, Russia did not return to a gold standard after the Ukraine war. And even if they had, a gold standard won't work.

Jeff Christian is the Managing Director of CPM Group, while Gary Wagner is the Editor of TheGoldForecast.com. They spoke with David Lin, Anchor and Producer at Kitco News.

Central banks around the world have been hiking interest rates. The Bank of Canada recently increased its key policy target to 1.5 percent. However, gold's price has remained relatively flat despite such monetary tightening.

Christian is unsurprised that the price has not moved much.

'You still have historically low interest rates,' he said. '"� And you also have negative interest rates on an inflation-adjusted basis"� In addition to that, the increase in interest rates reflects concerns about inflation, which are positive for gold prices.'

He remarked that increasing 'volatility and uncertainty' are bullish for gold. ...

In March of 2022, the head of Russia's parliament Pavel Zavalny said that countries can pay for Russian resources with gold. Yet the claim that this implies a return to a gold standard is a 'Russian pipe dream,' according to Christian. '"� The reality is that nobody is actually paid in gold, or in fact in rubles, for the most part.'

Christian opined that Russia's rhetoric around gold was a 'face-saving' measure, and that the Russian energy company Gazprom was simply accepting payment in Euros and converting them to rubles....

Wagner said that a return to a gold standard would be a 'hard to an impossible task.' He added, 'Can we go back to some kind of modified gold standard? Possibly. But an actual gold standard? I don't believe that any country has the ability to back their currency dollar-for-dollar with gold. That would take way too much gold, when you look at the amount of currency in the system.'"

bitcoin As Bitcoin Falters, Crypto Miners Brace for a Crash -Wired

"Last year, as bitcoin's price rose as high as $68,000, miners were having a blast. Their profits, according to some estimates, were hovering just under 90 percent, and many of them decided to expand their operations at a frantic pace, bracing for an even larger 2022 bonanza.

That windfall has not come to pass. Over the past few months, cryptocurrency markets have slid, with bitcoin's price hovering at $30,630 at the time of writing. At the same time, the price of electricity shot up across the world because of a bounce-back in demand and the war in Ukraine.

That is a problem for bitcoin miners, who use energy-chugging mining computers, called ASICs, to coin cryptocurrency by solving complex mathematical problems. Energy can account for up to 90 to 95 percent of a miner's overhead, according to Bitfury CEO Valery Vavilov in an interview with Reuters in 2016....

'The problem now is the price of energy on a gross basis, but also the volatility in energy price,' says Alex Brammer, vice president for business development at crypto-mining infrastructure company Luxor Mining. 'It's really hard to model forward what energy prices are going to be.'

That problem is compounded by a growing number of miners joining the network since last summer, which in turn has reduced individual miners' outputs. In short, miners are paying more to mint fewer bitcoins, and their coins are less valuable. While miners are still turning a profit, it is shrinking, says Sam Doctor, chief strategy officer at digital asset investment bank BitOoda...

In the wake of the crypto crash, there are signs that miners need cash, and quickly - and given the current market sentiment they cannot just turn to investors for help."

Jamie Dimon: An Economic Storm Is Coming -National Review

"JP Morgan's Jamie Dimon may be one of those who pushed "�stakeholder capitalism' to the forefront of the C-suite agenda (and he still is doing what he can to advance it), but he does have a way of occasionally letting his understanding of finance and economics override his more usual corporatist game.

The world is facing an economic 'hurricane' as the war in Ukraine combines with surging inflation and rising interest rates, top US banker Jamie Dimon has warned.

Oil prices are in danger of rising to $175 per barrel in the years ahead, the chairman and chief executive of JP Morgan predicted, with a potential recession on the way in the US.

He upgraded his warning from previous predictions of a 'storm', saying that unprecedented risks are combining with unpredictable consequences.

Speaking at a conference hosted by Alliance Bernstein, Mr Dimon said: 'I said they're storm clouds, they're big storm clouds here. It's a hurricane. Right now, it's kind of sunny, things are doing fine. Everyone thinks the Fed can handle this'....

I'm not convinced how 'sunny' large numbers of Americans feel when they leave the gas station or grocery store, but I get Dimon's broader point, both on conditions now, and what may lie ahead....

Beyond what JP Morgan (and, I assume, other banks) may be doing (or will be doing) to cut back, is the reality that ultra-low rates have been an invitation to malinvestment, an invitation that has been all too frequently accepted. Not only have people and businesses borrowed more than they should, they have also been bidding up the price of anything remotely investable. That generally doesn't end well."

How The White House Fumbled The Inflation Football And Lost The Game -Issues & Insights

"Wasn't it not even a year ago we were told that inflation would, in fact, be a 'good' thing? That it was 'transitory'? Not a serious threat. Now we're finding that the media, Wall Street economists, Fed officials, but most of all, the Biden administration, were all wrong. Does anyone pay a price for gross incompetence anymore?

Last year, headlines were filled with inflation cheerleaders. We searched the term 'inflation is good' and got back 508 million hits. What's troubling about this expert consensus is that inflation, now at a 40-year-high, isn't good for anyone.

It skews business and personal decisions, wrecks family budgets, makes millions of low-income families even poorer, destroys personal thrift and wealth, undermines faith in the economy, distorts financial markets, and discourages investment and innovation.

And, eventually, it destroys real economic growth, undermining the very underpinnings of our prosperity and standard of living. We're on the way to that now.

Which brings us to our main point: The failure of our 'experts,' 'elites' and elected officials to attack the root causes of inflation, namely runaway government spending and the Fed's relentless money printing, based on bogus Modern Monetary Theory, that makes the spending possible.

No one in the Biden administration wants to step forward and accept responsibility for the inflation mess. That's why it looked almost brave as one person finally stepped forward this week to admit there was a miscalculation.

'I think I was wrong then about the path that inflation would take,' Treasury Secretary Janet Yellen told CNN's Wolf Blitzer this week, after he asked about her calling inflation a 'small risk' just last year."

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6.3.22 - Employers Have Essentially Stopped Firing People

Gold last traded at $1,849 an ounce. Silver at $21.93 an ounce.

News Summary: Precious metal prices eased back Friday as trader digested the latest jobs data. Stocks fell with the technology sector leading the way after a report that Tesla Inc may be considering job cuts.

Is global 'slavery' coming? Gold guards against 'total control' - Bob Moriarty - Kitco

"Gold is a safe bet as food shortages, inflation, and geopolitical turmoil rile the global economy, according to Robert Moriarty, Founder of 321gold.com.

'Gold is an insurance policy against government stupidity,' he said. '"� Gold never changes its value.'

Moriarty spoke with David Lin, Anchor and Producer at Kitco News.

When asked why an investor should consider gold, Moriarty responded, 'Because the alternatives are far worse.' He referenced the selloffs in stocks and cryptocurrencies....

Moriarty is skeptical of cryptocurrencies and has previously compared Bitcoin to 'tulip bulbs' and 'Florida real estate.'

'I happen to be exceptionally negative on cryptocurrencies,' he said. 'There are 10,000 cryptocurrencies. None of them are going to work.'

He also suggested that Central Bank Digital Currencies (CBDCs) would not work out.

'It's a popular theme now to believe that governments are going to Central Bank Digital Currencies, but I don't believe so,' he opined. 'It's a solution for a problem that does not exist. Gold currencies have always worked. They're a solution, they're not a problem.'"

the Fed Fed is in danger of losing control of public expectations of future inflation, Bullard says- Market Watch

"The Federal Reserve is in danger of losing control of how much inflation American households are expecting, said St. Louis Fed President James Bullard on Wednesday.

'I think we're on the precipice of losing control of inflation expectations,' Bullard said, in a speech to the Economic Club of Memphis.

'That's why it is important for the Fed to take action today that's credible, that will keep inflation expectations low and stable,' he said.

The Fed watches inflation expectations closely. Although difficult to measure, a basic tenant of Fed policy is that keeping inflation expectations low and stable will make it easier to bring inflation down....

Inflation has surged over the past year as the U.S. economy has recovered from the pandemic. The Fed's favorite inflation measure, the personal consumption expenditure index, was running at a 6.3% annual rate in April, well above the Fed's 2% target.

In a subsequent interview with reporters, Bullard said that inflation expectation measures over one and two years are a better gauge of inflation expectations and are 'pretty high.'

Longer-run inflation expectations are misleading because they just signal that markets and survey participants have some faith that the Fed will do 'the right thing and get inflation under control.'

'It seems to me we want to move as quickly as we can"�to get downward pressure on inflation and make sure we keep inflation under control so we don't have a decades long problem on our hands,' he said."

It's so hard to find workers that employers have essentially stopped firing people- CNN Business

"The number of workers being fired or laid off has hit the lowest point on record, the Labor Department reported Wednesday. The Job Openings and Labor Turnover Survey showed only 1.25 million people lost their job in April, breaking the previous record low of 1.26 million recorded in December.

With job openings still near record levels and with nearly two openings for every unemployed job seeker, employers are desperate to hang on to the workers they have.

The same report showed that the number of job openings fell slightly to 11.4 million from a revised reading of 11.9 million in March, which was a record high. The number of workers who quit their jobs in April was essentially unchanged from March at 4.4 million and only slightly below the record 4.5 million who quit in November....

Because it has become so difficult to find workers to fill openings, employers have essentially stopped laying off or firing people.

The Labor Department has been tracking job openings and the number of workers quitting or being let go from jobs since the end of 2000. Through the end of 2017, the number of job openings was always lower than the number of unemployed people looking for work. On average there were about two job seekers for every job opening during those 17 years.

But since early 2018 the balance has for the most part switched, with the number of openings most often being greater than the number of unemployed people looking for work.

After the rebound in hiring in mid-2020, the ratio of job openings to job seekers has swung increasingly in favor of job seekers. Wednesday's report showed there are a record 1.92 openings for every unemployed person seeking work."

Some hedge funds face steep losses after betting on hot sectors - Reuters

"Hedge fund investors are bracing for a river of red ink as firms begin reporting returns for May when the stock market hovered near bear territory on disappointing earnings and worries about aggressive rate hikes, investors and fund managers said on Thursday.

Data from Hedge Fund Research shows the HFRX Global Hedge Fund Index slipped 1% in May, leaving it down 3.31% for the first five months of 2022. But preliminary numbers from some firms show far bigger losses, especially at funds that had invested heavily in technology and biotechnology stocks.....

For many fund managers the damage began long before May when former market darlings reported unexpectedly poor returns. Netflix in April said it lost subscribers for the first time in a decade, sending its share price tumbling 35% in one day.

Billionaire investor William Ackman, who banked three years of very strong returns, was caught in the drop and made an abrupt U-turn by liquidating a three month-old $1.1 billion bet on Netflix and locking in a $400 million loss. In May, Ackman's Pershing Square Holdings portfolio lost 9.5%, leaving the fund down 18.2% for the first five months of 2022.

It was also the month where Melvin Capital, once one of the industry's best performers, announced that it was going out of business after being skewered by wrong-footed bets on meme stocks like GameStop in early 2021....

Investors said it might take longer than usual to get numbers for May as firms are pricing illiquid securities. As the market turned against them, equity hedge fund managers cut their use of borrowed money, or leverage, to try to insulate against steep falls, investors said.

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6.2.22 - U.S. Mint sells 147k oz of gold in May

Gold last traded at $1,869 an ounce. Silver at $22.30 an ounce.

News Summary: Precious metal prices jumped Thursday as Treasury yields and the U.S. dollar retreated. Stocks turned higher as investors shook off a weak Microsoft outlook and Fed hike fears.

U.S. Mint sells 147k ounces of gold last month, a sign of growing investor anxiety - Kitco

"While gold prices appear to be trapped in neutral below $1,850 an ounce, physical demand for the precious metal appears to tell a different story, one of growing investor anxiety, according to some market analysts.

In its monthly sales data, the U.S. Mint sold 147,000 ounces of gold in various denominations of its American Eagle Gold bullion coins, the best May performance since 2010. Compared to April, sales are up 67%. For the year, bullion demand is up a massive 617%.

Even taking COVID-19-related production issues out of the equation, U.S. gold bullion sales are up more than 400% from the five-year average between 2015 and 2019....

'Bullion sales better reflects the anxiety investors are feeling right now. When you hear economists talk about a recession, it starts to make sense why bullion sales are so strong,' he said. 'Gold will always be a long-term store of value.'

Daniel Pavilonis, Senior Commodities Broker with RJO Futures, also said bullion sales better capture the current sentiment in the marketplace....

'Gold futures are capped by rising interest rate, but people having been going out to buy the physical metal to have some 'real money stashed away,' he said.

Pavilonis added that he is ultimately bullish on gold as there is solid demand for the precious metal. He said that he sees gold as undervalued given where inflation is and how persistent it will be through 2022."

recession Here's How The Stock Market Performs During Economic Recessions- Forbes

"The stock market has had its worst start to a year in recent history and things could get worse as recession fears loom. Since World War II there have been 13 recessions-defined as two consecutive quarters of GDP decline-and there have been 3 in the 21st century (2001, 2008 and 2020), according to the National Bureau of Economic Research. Some experts say another one could be on the way.

It's no wonder, then, that investors are worried about the Federal Reserve's ability to achieve a 'soft landing'-bringing down inflation without hurting economic growth-as it tightens monetary policy. The S&P 500 briefly plunged into a bear market last month as investors were whipsawed between inflation concerns and rising rates.

'Historically, when inflation is high and the Federal Reserve is working hard to quell it, recessions happen more often than not,' as rate-hiking campaigns often precede economic downturns, says Moody's Analytics chief economist Mark Zandi. He puts the odds of a recession at 50% within the next two years.

So, how do stocks perform when the economy is faced with a recession? The S&P 500 surprisingly rose an average of 1% during all recession periods since 1945. That's because markets usually top out before the start of recessions and bottom out before their conclusion.

In other words, the worst is over for stocks before it's over for the rest of the economy. In almost every case, the S&P 500 has bottomed out roughly four months before the end of a recession. The index typically hits a high seven months before the start of a recession....

Adding to the already considerable amount of uncertainty this year is the midterm election in November. The second year of a presidential cycle often tends to have weaker stock market returns overall, producing the lowest average S&P 500 return of just 4.9%. The second and third quarter of midterm years have the worst returns, declining on average 1.8% and 0.5%, respectively, with more volatility than at any other times during the presidential cycle.

Amid the heightened market volatility facing investors this year, "�with midterm elections looming and inflation at 40-year highs, we believe this trend is likely to continue in 2022,' according to analysts at Baird Private Wealth Management."

Private payrolls increased by just 128,000 in May, the slowest growth of the recovery, ADP says - CNBC

"Job creation at companies decelerated to the slowest pace of the pandemic-era recovery in May, payroll processing firm ADP reported Thursday.

Private sector employment rose by just 128,000 for the month, falling well short of the 299,000 Dow Jones estimate and a decline from the downwardly revised 202,000 in April, initially reported as a gain of 247,000.

The big drop-off marked the worst month since the massive layoffs in April 2020, when companies sent home more than 19 million workers as the Covid outbreak triggered a massive economic shutdown...

May's slowdown in hiring comes amid fears of a broader economic pullback. Inflation running around its highest level in 40 years, the ongoing war in Ukraine and a Covid-induced shutdown in China, which since has been lifted though with conditions, have generated fears that the U.S. could be on the brink of recession.

Small business took the biggest hit during the month, as companies employing fewer than 50 workers reduced payrolls by 91,000. Of that decline, 78,000 layoffs came from businesses with fewer than 20 employees.

'Under a backdrop of a tight labor market and elevated inflation, monthly job gains are closer to pre-pandemic levels,' ADP's chief economist, Nela Richardson, said. 'The job growth rate of hiring has tempered across all industries, while small businesses remain a source of concern as they struggle to keep up with larger firms that have been booming as of late.'...

The biggest change in the ADP count came in leisure and hospitality, the sector most hit most by restrictions and which has been a leader throughout the recovery. May saw new hires of just 17,000, even as the summer tourism season gets set to hit full swing."

OPEC agrees to pump more oil as Russian output drops - CNN Business

"OPEC has agreed to pump more crude oil over the next two months as Russian production begins to drop because of Western sanctions.

The oil exporters' cartel said it would increase supply by 648,000 barrels per day in July and August, 200,000 barrels per day more than scheduled under a supply agreement with other producers, including Russia, known as OPEC+.

The Biden administration welcomed the 'important decision from OPEC+,' and highlighted Saudi Arabia's role as the group's largest producer in achieving consensus.

'This announcement accelerates the end of the current quota arrangement that has been in place since July of last year and brings forward the monthly production increase that was previously planned to take place in September,' White House Press Secretary Karine Jean-Pierre said in a statement.

The Wall Street Journal reported Tuesday that some members of OPEC were exploring the idea of suspending the OPEC+ supply agreement to allow countries such as Saudi Arabia and the United Arab Emirates to step in and ease a supply crunch that pushed global oil prices above $120 a barrel this week. The Financial Times and Reuters carried similar reports.

Saudia Arabia has previously dismissed US requests to increase production beyond the long standing quota agreed with Russia and other non-OPEC producers. But concerns that sky-high prices could tip the world into recession appear to have prompted a rethink. Reuters, citing two OPEC+ sources, reported earlier that Russia's output had fallen by around 1 million barrels per day in recent months because of the sanctions imposed over its invasion of Ukraine."

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6.1.22 - Treasury secretary concedes she was wrong

Gold last traded at $1,848 an ounce. Silver at $21.88 an ounce.

News Summary: Precious metal prices remained stable Wednesday on bargain hunting and rising U.S. Treasury yields. Stocks started June in a slump as worries mount over economic growth.

Central Banks Buying Gold Could Be Catalyst for $3,000 Gold Price- Lombardi Letter

"If you're trying to figure out where gold prices are headed next, you can't ignore central banks. They could be one of the biggest catalysts to take gold prices to $3,000 per ounce much sooner than expected.

Central banks have been buying gold for years, and it doesn't look like they'll stop anytime soon. Here's the kicker: it's not the major central banks that have been buying the yellow precious metal lately; it's the smaller ones. The major central banks already own a lot of gold.

Central banks don't make an announcement before buying gold for their reserves. They buy it first and announce it later.

Central banks' actions have been speaking louder than words, saying they want more gold. They've been net buyers of the yellow metal since 2010. In the first quarter of 2022, they bought gold again, 84 tonnes of it. That's a slightly lower amount than during the same period a year ago, but they remain buyers....

Dear reader, what central banks are doing these days when it comes to purchasing gold is grossly underreported in the mainstream media. It doesn't get reported much because the gold market is considered boring, not like hot technology stocks or cryptocurrencies.

Central banks need gold as the world becomes more polarized and currencies get questioned. The yellow precious metal has a history of preserving wealth in times of currency devaluation and crisis. Central banks know this well. They hold a lot of currency in their reserves and will need a lot of gold to hedge against volatility. This will help gold prices get to $3,000 per ounce.

Given what central banks did in the first quarter of 2022, my stance on gold is as bullish as ever. Over the past few months, gold prices have held at the level between $1,800 and $1,900. There could be a solid base building, and I wouldn't be surprised if, in a few years, we look back at these prices and say, 'Wow, gold was cheap.'"�

Yellen Treasury secretary concedes she was wrong on 'path that inflation would take'- CNN

"US Treasury Secretary Janet Yellen admitted Tuesday that she had failed to anticipate how long high inflation would continue to plague American consumers as the Biden administration works to contain a mounting political liability.

'I think I was wrong then about the path that inflation would take,' Yellen told CNN's Wolf Blitzer on 'The Situation Room' when asked about her comments from 2021 that inflation posed only a 'small risk.'

The admission was the latest indication that the administration's expectations of a normalizing economy were thrown into disarray by the continuing pandemic and the war in Europe.

'As I mentioned, there have been unanticipated and large shocks to the economy that have boosted energy and food prices and supply bottlenecks that have affected our economy badly that I didn't -- at the time -- didn't fully understand, but we recognize that now,' she said.

Yellen and other White House officials once framed inflation as a temporary side effect of the economy returning to normal following the pandemic, pointing to snags in supply chains and demand outstripping supply.

Yet months later, inflation is running at a near-four-decade high....

The Powell-led Fed has been criticized as slow to address high inflation by ending emergency support for the economy and beginning interest rate hikes. However, the Fed has vowed to swiftly raise interest rates and earlier this month increased rates by half a percentage point for the first time since 2000. The US central bank has signaled further aggressive rate hikes in the months to come."

Jamie Dimon says "�brace yourself' for an economic hurricane caused by the Fed and Ukraine war - CNBC

"JPMorgan Chase CEO Jamie Dimon says he is preparing the biggest U.S. bank for an economic hurricane on the horizon and advised investors to do the same.

'You know, I said there's storm clouds but I'm going to change it"� it's a hurricane,' Dimon said Wednesday at a financial conference in New York. While conditions seem 'fine' at the moment, nobody knows if the hurricane is 'a minor one or Superstorm Sandy,' he added.

'You better brace yourself,' Dimon told the roomful of analysts and investors. 'JPMorgan is bracing ourselves and we're going to be very conservative with our balance sheet.'

Beginning late last year with high-flying tech names, stocks have been hammered as investors prepare for the end of the Federal Reserve's cheap money era. Inflation at multi-decade highs, exacerbated by supply-chain disruptions and the coronavirus pandemic, has sown fear that the Fed will inadvertently tip the economy into recession as it combats price increases.

While stocks bounced from a precipitous decline in recent weeks on optimism that inflation may be easing, Dimon seemed to dash hopes that the bottom is in.

'Right now, it's kind of sunny, things are doing fine, everyone thinks the Fed can handle this,' Dimon said. 'That hurricane is right out there, down the road, coming our way.'

There are two main factors that has Dimon worried: First, the Federal Reserve has signaled it will reverse its emergency bond buying programs and shrink its balance sheet. The so-called quantitative tightening, or QT, is scheduled to begin this month and will ramp up to $95 billion a month in reduced bond holdings....

The other large factor worrying Dimon is the Ukraine war and its impact on commodities, including food and fuel. Oil 'almost has to go up in price' because of disruptions caused by the worst European conflict since World War II, potentially hitting $150 or $175 a barrel, Dimon said."

Inflation will force 25% of Americans to delay retirement: survey- New York Post

"Rampant inflation will result in a delayed retirement for a large swathe of Americans who are concerned about dwindling savings accounts and tight budgets, according to the results of a new survey published this week.

With the costs of daily necessities such as food and fuel hitting record highs, 25% of Americans will need to delay their retirement to account for the reduced savings, according to the quarterly BMO Real Financial Progress Index.

'Prices across the board - from cars and gasoline to groceries and other everyday essentials - are rising at the fastest pace since the 1980s,' said Paul Dilda, the head of consumer strategy for BMO Harris Bank. 'Consumers must think differently about their finances in this inflationary environment.'

The impact to retirement plans is just one of several signs of the way inflation has affected American households. Nearly 60% of respondents said inflation was having a negative impact on their personal finances, while 21% said economic conditions had cut into their retirement savings.

More than 60% of Americans aged between 18-34 said they were saving less money while paying more for staple items....

Food and fuel prices are two of the largest factors in inflation that hit 8.3% in April. The cost of food rose 9.4% in April compared to the same month one year earlier, while energy costs rose a whopping 30.3%.

Gas surged to all-time highs in May as the Russia-Ukraine war further disrupted shipments - a sign that the upcoming Consumer Price Index could show even higher energy prices when it is released next week."

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5.31.22 - The stock market "�casino' is closed

Gold last traded at $1,837 an ounce. Silver at $21.55 an ounce.

News Summary: Precious metal prices saw a slight pullback Tuesday as bond yields rose. Stocks seesawed as investors closed out a rocky month of trading.

Tennessee removes sales tax on gold and silver, only eight states to go- Kitco

"Gold and silver made another important step to becoming legal tender in the United States. Ahead of the Memorial Day long weekend, Tennessee Governor William Lee signed into law House Bill 1874, removing sales taxes on gold, silver and platinum bullion coins.

Tennessee becomes the 42nd to pass laws that will make gold and silver hard currencies.

'The victory puts a capstone on long-running efforts by the Sound Money Defense League, Money Metals Exchange, Campaign for Liberty, and grassroots activists and coin dealers in Tennessee. Tennessee investors, savers, and small businesses can now acquire gold, silver, platinum, and palladium bullion and coins without being slapped with taxes as high as 10%, depending on the purchaser's specific location,' the Sound Money Defense League, a national organization dedicated to making precious metals recognized money in the U.S.

According to reports, the legislation passed the state's house and senate with ease, but has been a long-time in the making....

There are still eight states that still tax precious metals bullion as investment assets. However, in a comment to Kitco News, Jp Cortez, Policy Director for the Sound Money Defense League, said that they are helping to develop proposed bills to be introduced in the remaining states....

Cortez added that rising inflation pressures make gold and silver more attractive for consumers looking to preserve their wealth. Friday, the U.S. Department of Commerce said its core Personal Consumption Expenditures Index saw an annual rise of 4.9% last month, down from February's peak of 5.3%.

Although inflation appears to have peaked, it remains elevated at unprecedented levels. Last week, the Federal Reserve also said inflation threatens to erode consumer wealth.

'At a time of record-high inflation, Tennessee shouldn't be punishing citizens with sales taxes for choosing to protect the purchasing power of their savings with sound money,' Cortez."

inflation Inflation has been pummeling the middle class for decades, but the out-of-touch CPI masks this reality - Market Watch

"For several years now, many of us have focused on the scourge of 'fake news.' But much as we may blame avaricious social platforms and conniving public figures for driving widespread cynicism, we need to consider the role played by another more innocuous reality: misleading statistics.

Flagging confidence in both government and the mainstream media tracks decades in which official economic indicators-most notably those that purport to gauge the cost of living-have fundamentally failed to mirror middle-class reality.

Perhaps 'fake' is too strong a term to describe the data-driven consumer price index (CPI), which serves as the U.S. government's proxy for inflation. But the narrative the CPI has long burnished-namely that, since 2000, ordinary expenses have been fairly manageable amid rising wages-is entirely debunked by new research.

Over the 20 years that preceded the present crisis, prices for things middle- and low-income Americans must purchase rose 40% beyond what CPI would indicate, more than wiping out a median earner's income gains. In short, the CPI-driven narrative is something akin to 'fake news.'

The implications are dire. Not so long ago, a family of four earning the median income in the United States could make ends meet with a little left over....

That's not to insinuate that the government is purposely misleading the public. Rather, it suggests that the prevailing statistical methodology produces tragically misleading information for one clear reason: Prices for yachts, luxury hotel rooms, and other high-end items have risen much more modestly than the everyday items-food, housing, medical bills-that middle-class families are compelled to cover.

So the CPI's heavy weighting of those luxury goods divorces it from the inflationary reality it purports to track."

In big bid to punish Moscow, EU bans most Russia oil imports- AP News

"In the most significant effort yet to punish Russia for its war in Ukraine, the European Union agreed to ban the overwhelming majority of Russian oil imports after tense negotiations that tested how far the bloc is willing to go to ostracize Moscow.

From the moment Russia invaded on Feb. 24, the West has sought to make Moscow pay economically for its war. But targeting its lucrative energy sector was seen as a last resort in Europe and has proved hardest, since the bloc relies on Russia for 25% of its oil and 40% of its natural gas. European countries that are even more heavily dependent on Russia have been especially reluctant to act.

In a move unthinkable just months ago, EU leaders agreed late Monday to cut around 90% of all Russian oil imports over the next six months.

Belgian Prime Minister Alexander De Croo called the embargo a 'big step forward,' and Irish Prime Minister Micheal Martin hailed it as 'a watershed moment'

"The sanctions have one clear aim: to prompt Russia to end this war and withdraw its troops and to agree with Ukraine on a sensible and fair peace,"� German Chancellor Olaf Scholz said.

Ukraine estimated the ban could cost Russia tens of billions of dollars.....

The EU estimated around 90% of Russian oil will be banned by the end of the year. That figure includes a ban on all Russian oil delivered by sea - which accounts for two-thirds of the EU's imports from Russia - plus a decision by Germany and Poland to stop using oil from the northern branch of the Druzhba pipeline."

The stock market "�casino' is closed - CNN Business

"Investors have learned a bunch of hard lessons so far in 2022. The stock market doesn't always go up. And factors such as the economy, earnings and valuations, which might sound like quaint relics of a bygone era, still matter even in a world seemingly dominated by memes and Reddit boards.

Picking winning stocks isn't easy, especially at a time when the Federal Reserve is raising interest rates and inflation is staring to hurt consumers and the broader economy. Shares of many speculative tech companies are now tumbling due to worries about weakening fundamentals and unsustainable stock prices...

'The casino is closed,' said Peter Mallouk, president and CEO of Creative Planning, a wealth management firm.

'The days of stimulus are over. This is now more of a thinking person's market. Total speculation is dead,' Mallouk said, adding that traders can no longer pass around blank check SPAC stocks, cryptocurrencies, unprofitable tech firms and other risky investments like hot potatoes and hope someone else will want to catch them.

Stock picking seemed a lot easier when the Fed was doing everything in its power to try to stimulate the economy. Many investors do not have experience navigating the market when the central bank is jacking up rates in a bid to cool things down.

'The world is waking up to the fact that zero percent interest rates are done,' said Max Wasserman, co-founder of Miramar Capital. 'Rates were real low and people took on excess risk because anytime the stock market pulled back, the Fed cut rates. The message was to buy the dips because the Fed has your back. But the party's over.'

Some investors who were flush with Covid stimulus cash last year and chased meme stocks like GameStop and AMC may now be less bullish on individual stocks....

Wasserman said that stock picking isn't dead per se. It's just that now is a time for investors to look for quality companies that can perform well even as interest rates go up and the economy potentially slows as a result."

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5.27.22 -Gold Could Reach $5,000 by 2030

Gold last traded at $1,853 an ounce. Silver at $22.10 an ounce.

News Summary: Gold and silver rose Friday on a weakening dollar. Stocks attempted recovery as inflation reportedly cools.

Gold Could Reach $5,000 by 2030-ETF Database
"The gold market remains on track to end the year above $2,000 per ounce and rise to nearly $5,000 per ounce by the end of the decade, according to the latest In Gold We Trust Report from the European investment firm Incrementum AG.

Per the report, Incrementum's analysts are bullish on gold as rising inflation threatens to edge the global economy into a recession. The company warned that normalizing global monetary policies has revealed serious problems in the global economy that were papered over by loose monetary policies and huge amounts of liquidity.

'Just as in 2018, when we warned of the inevitable consequences of the attempted turning of the monetary tides, we are now issuing another explicit warning,' the report stated. 'In addition to wolfish inflation, a bearish recession now looms.'...

With inflation expected to hold above 5% through 2022, Incrementum said that equity markets could see further losses this year, adding that holding precious metals has proven to provide a cushion for those losses.

The S&P 500 has declined 18% so far this year, approaching bear territory. Meanwhile, gold prices are up 1% on the year as prices push back above critical resistance at $1,850 an ounce.

'The historical performance of gold, silver, and commodities in past periods of stagflation argue for a correspondingly higher weighting of these assets than under normal circumstances,' said analysts. 'But also, the relative valuation of technology companies to commodity producers is an argument for a countercyclical investment in the latter.'"

Davos Top financiers and millionaires just met up in the Swiss Alps. And the mood was terrible. - CNBC
"The world's financial elite gathered in Davos, Switzerland, at the World Economic Forum this week, and a darkening global economic outlook was the number one talking point.

While some foresaw regional pockets of recession in countries or continents particularly exposed to the Russia-Ukraine war and global supply chain problems - with Europe a particular concern - others painted a far bleaker global picture.

Inflation has soared worldwide, with food and energy costs skyrocketing as the war and supply chain bottlenecks bite, along with the residual effects of the Covid-19 pandemic. This has forced central banks to start tightening monetary policy against a backdrop of slowing economic activity.

Recent data indicates that price increases have begun to spill into the underlying economy, posing further risks to global growth and causing headaches for central bank policymakers, who face the unenviable task of tightening monetary policy to rein in inflation without pushing economies into recession....

The surge in food prices was also raised as a central threat by International Monetary Fund Managing Director Kristalina Georgieva, who said during a panel on Monday that the economic horizon has 'darkened' due to the combination of the Russia-Ukraine war, tightening financial conditions, dollar appreciation and the slowdown in China.

'We have a commodity price shock in many countries, and the particular shock I want to bring your attention to is food price shock. Over the last week, because of that sense that maybe the economy is getting into tougher waters, the oil price went down but food price continues to go up, up, up, up,' Georgieva said.

'Why? We can shrink the use of petrol when growth slows down but we have to eat every day, and the anxiety about access to food at a reasonable price globally is hitting the roof.'"

Interest on the debt is a huge threat- The Hill
"The justifiable and unavoidable focus on the highest inflation in 40 years should look beyond its visible impact on the economy and the cost of goods and services. While the most noticeable sign of increased prices appears at gas stations, where they are reaching record highs every day, there are less noticeable but more destructive long-term consequences of higher costs that should be made clearer to the American people.

Over the past two years, $4.6 trillion has been provided by Congress in response to the COVID-19 pandemic. The impact on inflation.... is subject to some debate, but what cannot be denied is the impact this spending has had on the interest paid on the national debt. Between 2011-2018, interest on debt held by the public averaged $272 billion annually. Between 2019-2021, annual interest on the debt averaged $389 billion, an increase of $117 billion, or 43 percent. The president's fiscal 2022 budget, which is the first to project deficits of more than $1 trillion for 10 consecutive years, estimates that FY 2022 interest on debt of $26.3 trillion will be $305 billion and reach $941 billion in FY 2031, or more than triple the amount for the current fiscal year. By that time, interest payments will account for 59 percent of the projected $1.6 trillion deficit.

The projected interest payments in the budget were made with the assumption that 10-year Treasury interest rates would be 1.4 percent in FY 2022, then average 2.2 percent for the next four years and average 2.8 percent for the following five years. But the 10-year Treasury interest rate is already 2.8 percent and likely to go higher given the Federal Reserve Bank's plan to continue raising interest rates....

Overcoming Congress's lack of fiscal responsibility and preventing interest on the debt from becoming not only the largest federal expenditure, but also using up all tax revenue, will be difficult. Far too many members of Congress believe the answer to every problem is to create a program, and if that program does not work, they create another program rather than fixing what went wrong....

President Biden and Congress need to stop spending and start cutting before it becomes too late to stop interest on the debt from growing to become the government's largest expenditure, crowding out all other federal programs, and using up all tax revenue."

Great Resignation regret is sweeping the nation as workers who quit for more money quit again - Business Insider
"The Great Resignation hasn't been so great for everyone.

Even though a record-high 4.5 million Americans quit their jobs in March, fewer appear to be choosing to remain in their new positions, according to a LinkedIn study of 500,000 job changes in 2021 and first reported by Bloomberg.

LinkedIn found that among workers who started new jobs last year, the number who had been in their previous position for less than a year rose by 6.5% compared with the year before. That's the highest percentage of job migration the platform has recorded since it started tracking data in 2016....

LinkedIn's study backs up data from the Bureau of Labor Statistics indicating that a growing number of people who left their jobs to pursue better pay and opportunities are continuing to leave. Even among those who stay put in their new role, one in five polled in a March Harris Poll survey by USA Today said they regretted quitting in the first place.

Though the US economy has recovered about 93% of all the jobs it lost during the coronavirus pandemic, those employed workers are moving around a lot. March was the 10th consecutive month in which more than 4 million Americans resigned. A desire for higher pay, more benefits, and remote flexibility are among the reasons people have been quitting, especially Gen Zers and millennials. But if the LinkedIn study is any indicator, those perks don't necessarily mean they will love their new workplace.

'At the end of the day, you spend most of your life working,' Laurel Camirand, who quit her job for a better one only to leave the new position, told Bloomberg. 'It sucks to be miserable.'"

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5.26.22 - Gold price still on pace to push above $2,000

Gold last traded at $1,850 an ounce. Silver at $21.95 an ounce.

News Summary: Precious metal prices remained stable Thursday as investors weighed the latest U.S. economic reports and upbeat earnings. Stocks higher as Wall Street tried to rebound from a long string of declines.

Gold price still on pace to push above $2,000 as stagflation, recession risks rise - In Gold We Trust- Kitco

"While the gold market remains off its highs from the first quarter, it is still on track to end the year above $2,000 an ounce and push close to $5,000 an ounce by the end of the decade, according to the latest In Gold We Trust Report.

In its annual gold outlook, analysts at Incrementum AG remain bullish on gold as rising inflation threatens to push the global economy into a recession and create a stagflationary environment. The European investment firm issued a warning, saying that normalizing monetary policies worldwide is started to expose major issues in the global economy that were papered over by loose monetary policies and massive amounts of liquidity.

'Just as in 2018, when we warned of the inevitable consequences of the attempted turning of the monetary tides, we are now issuing another explicit warning. In addition to wolfish inflation, a bearish recession now looms,' the analysts said in the report...

With the threat of stagflation looming large, the analysts noted that most investors are inadequately positioned to protect their capital as the traditional 60/40 portfolio structure is expected to see negative returns for only the fifth time in 90 years.

With inflation expected to hold above 5% through 2022, Incrementum said that equity markets could see further losses this year. The analysts said that holding precious metals has proven to provide a cushion for those losses. So far this year, the S&P 500 has lost 18%, dropping below 4,000 points; however, gold prices are up 1% on the year as prices push back above critical resistance at $1,850 an ounce.

'The historical performance of gold, silver and commodities in past periods of stagflation argue for a correspondingly higher weighting of these assets than under normal circumstances,' the analysts said. 'But also, the relative valuation of technology companies to commodity producers is an argument for a countercyclical investment in the latter.'"

inflation Recession, inflation fears creating 'complicated' market for investors to navigate: Citi exec - Fox Business

"Co-Head of Citi's Banking, Capital Markets and Advisory division Tyler Dickson stressed that U.S. investors are dealing with a 'complicated market to navigate' as stocks have experienced weeks of turbulence.

'We have to deal with three Rs on the risk side,' Dickson told 'Mornings with Maria' on Wednesday, noting that the U.S. is dealing with the risk of rates, Russia and recession 'that are weighing heavy on the markets.'...

'Certainly higher rates are creating complexities across various asset classes and from our perspective we do see pressure on housing just like we see pressure on energy and food,' Dickson told host Maria Bartiromo....

'We're in an inflationary environment,' Dickson stressed. 'We have energy prices high. We have labor prices high. We certainly are seeing challenges with the supply chain.'

He then noted that he believes inflation 'is expected to continue' and that the situation is a 'challenge for the Fed.'

Stocks have had some rough weeks in anticipation of and following the half-point interest rate hike by the Federal Reserve. It was the second of several anticipated increases this year as the central bank seeks to combat soaring inflation, which is at a high not seen in four decades."

Fed minutes point to more rate hikes that go further than the market anticipates- CNBC

"Federal Reserve officials earlier this month stressed the need to raise interest rates quickly and possibly more than markets anticipate to tackle a burgeoning inflation problem, minutes from their meeting released Wednesday showed.

Not only did policymakers see the need to increase benchmark borrowing rates by 50 points, but they also said similar hikes likely would be necessary at the next several meetings

They further noted that policy may have to move past a 'neutral' stance in which it is neither supportive nor restrictive of growth, an important consideration for central bankers that could echo through the economy....

The May 3-4 session saw the rate-setting FOMC approve a half percentage point hike and lay out a plan, starting in June, to reduce the central bank's $9 trillion balance sheet consisting mostly of Treasurys and mortgage-backed securities.

That was the biggest rate increase in 22 years and came as the Fed is trying to pull down inflation running at a 40-year high...

The minutes mentioned inflation 60 times, with members expressing concern about rising prices even amid confidence that Fed policy and the easing of several contributing factors, such as supply chain problems, combined with tighter monetary policy would help the situation. On the other hand, officials noted that the war in Ukraine and the Covid-associated lockdowns in China would exacerbate inflation...

Along with their resolve to bring down inflation came concerns about financial stability.

Officials expressed concern that tighter policy could cause instability in both the Treasury and commodities market. Specifically, the minutes cautioned about 'the trading and risk-management practices of some key participants in commodities markets [that] were not fully visible to regulatory authorities.'"

A Comfortable Retirement Appears Out of Reach for Most Americans- Bloomberg

"American workers say it will take $1.1 million on average to retire comfortably - but less than one in four figure they'll be able to save that much.

Just 22% of people approaching retirement age said they'll have enough money to maintain a comfortable standard of living, according to the 2022 Schroders US Retirement Survey, down from 26% a year ago. The survey of 1,000 workers was conducted in mid-February, when the S&P 500 Index was higher than it is now.

Many Americans expect a significant shortfall in their retirement savings. Fifty-six percent said they expect to have less than $500,000 saved by the time they retire, including 36% who anticipate having less than $250,000.

The leading concern among American workers about retirement was, not surprisingly, that inflation would shrink the value of their assets. The second most-feared event has likely become a reality, at least right now - 53% worried about 'a major market downturn significantly reducing assets.'....

For those already in retirement, a good chunk of people said they are comfortable, or described their situation as 'not great, not bad.' But 18% said they are struggling, and 5% said retirement is a nightmare."

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5.25.22 - Food Crisis Fuels Fears of Protectionism

Gold last traded at $1,852 an ounce. Silver at $21.95 an ounce.

News Summary: Precious metal prices pulled back Wednesday after a four-day streak of gains, as traders braced for the release of Fed minutes. U.S. stocks climbed despite the fact that Treasury yields were on the downswing.

The S&P 500 is headed lower, which is good for gold - Kitco

"After a one-day reprieve, the S&P 500 is once again seeing some intense selling pressure, and the gold market continues to benefit from the market volatility as prices hold above another critical resistance level at $1,850 an ounce.

As the broad-equity market index continues to struggle and flirt with bear-market territory, the chorus of negative sentiment among economists and market analysts grows. Many analysts are looking for significantly lower price prices through the end of the year....

In the current environment, some market analysts continue to see gold as an important market diversifier and risk hedge against falling equity markets. Gold prices are significantly outperforming the S&P 500.

The broad market index is down 18% this year; meanwhile, gold, trading above $1,850 an ounce, is up more than 1%.

In a recent interview with Kitco News, Axel Merk, President and Chief Investment Officer of Merk Investments, said that although gold faces some challenging headwinds as real interest rates turn positive, it continues to do its job.

He added that rising inflation and market instability will continue to support gold prices.

'The Federal Reserve has one tool and that is not good for risk assets,' he said."

returns

"�Real wealth destruction': This Deutsche Bank chart shows what could happen to assets in a repeat of the stagflationary 1970s.- Market Watch

"While the decade is still young, if inflation sticks around for the next few years, things could get pretty ugly for investors.

That's according to this chart from Deutsche Bank, which shows how a range of assets performed during the disco and stagflation days of the 1970s.

While history never exactly repeats, Deutsche Bank strategists were aiming to offer a framework to clients on how to think about the next few years if inflation stays high even after a Fed-induced recession.

'The short answer is that for traditional financial assets like bonds and equities you would expect real wealth destruction rather than the massive real wealth creation seen over the last four decades,' the bank's strategists Jim Reid and Henry Allen, told clients in a note on Tuesday.

Commodities would likely be a better bet, although given the run up already seen so far this decade, the easy gains have perhaps been made, they noted.

'However, gold and silver haven't made much progress over the last two years so if the playbook follows the 1970s they are the standout cheap asset from this starting point,' said the strategists"

Food crisis fuels fears of protectionism compounding shortages- Reuters

"A growing world food crisis is precipitating protectionist moves by countries which are likely to compound the problem and could lead to a wider trade war, business leaders and policymakers at the World Economic Forum said.

In a sign of the escalating squeeze on food supplies and rising prices, a government source told Reuters that India could restrict sugar exports for the first time in six years to prevent a surge in domestic prices.

Meanwhile Indonesia, the world's biggest palm oil exporter, will remove a subsidy on bulk cooking oil and replace it with a price cap on the raw materials for local refiners.

'It is a major issue, and frankly I think the problem is even bigger ahead of us than it is behind us,' Gita Gopinath, first deputy managing director of the International Monetary Fund, told Reuters of rising food security concerns.

Protectionism is looming large at Davos, prompting calls for urgent negotiations to avoid a full-blown trade war.

'It's very important for the leaders of the world to sit at the table with calm and talk about how we will manage trade and food and investment,' Jay Collins, vice chairman of banking, capital markets and advisory at Citigroup told the Reuters Global Markets Forum in Davos....

Russia's invasion of Ukraine, which Moscow describes as a 'special military operation', has led to a sudden crunch in a crisis that was already in the offing.

'We were facing an extraordinary food crisis before Ukraine, food costs, commodity prices, shipping costs were already doubling, tripling, quadrupling,' David Beasley, Executive Director for the United Nations World Food Programme, said."

New home sales plunge nearly 17% in April - Fox Business

"Sales of new single-family houses in the U.S. dropped significantly more than expected last month to the lowest level in two years as rising construction costs, home prices, interest rates and supply chain woes continue to batter the industry.

The U.S. Census Bureau's latest data shows the pace of new home sales fell by 16.6% in April from the month before at a seasonally adjusted rate of 591,000. Analysts surveyed by Refinitiv anticipated a dip of 1.7%.

The drop is 26.9% lower than a year ago, and the lowest since April 2020. This is the fourth straight month new home sales have declined.

'April's dismal new home sales data shows an industry besieged by higher construction costs, supply chain disruptions and by higher mortgage rates that are giving many potential buyers cold feet,' said Robert Frick, corporate economist at Navy Federal Credit Union.

'Given the pipeline for bringing new homes to market is stretched so thin, we shouldn't expect home building to add much to housing stock for the foreseeable future,' he added."

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5.24.22 - 1 in 5 Will Change Jobs in the Next Year

Gold last traded at $1,865 an ounce. Silver at $22.08 an ounce.

NEWS SUMMARY: Precious metal prices continued their climb Tuesday - aiming for a fourth straight gain - as the U.S. dollar falls. U.S. stocks resume sell-off on fears of a recession following a brief sell-off reprieve.

Gold ticks higher, aiming for 4-day winning streak as dollar pulls back- Market Watch

"Gold futures ticked higher early Tuesday, aiming for a fourth straight gain, as the U.S. dollar continued to edge back from recent highs....

Gold, which bounced after hitting a three-month low in early May, has benefited as the 10-year Treasury yield pulled back from 3 1/2-year high above 3.2% in recent weeks as a selloff in equities spurred demand for safe-haven assets.

The dollar, as measured by the ICE U.S. Dollar Index, meanwhile, has retreated from a roughly 20-year high.

Gold 'is benefiting from the drop in Treasury yields together with some dollar weakness -- with which it has an inverted price correlation. The stabilization of Treasury yields and the dollar, which have retreated from peaks reached in mid-May, occurs as the markets appear to have priced-in the Fed's hawkish tilt, and the appearance of some rays of hope for a brighter global economic outlook,' said Ricardo Evangelista, senior analyst at ActivTrades, in a note.

The expected easing of Covid lockdowns across China and a surprising statement from President Biden, hinting at a potential reduction of tariffs applied to Chinese imports on Monday, lifted the mood in the markets and created scope for further gold gains, as dollar demand decreases, he said."

earnings Social Media Stocks Sink to Erase $180 Billion on Snap Warning -Yahoo! Finance/Bloomberg

"Social media stocks lost more than $180 billion in market value Tuesday after Snap Inc.'s profit warning, adding to woes for a sector that is already reeling from stalling user growth and rate-hike fears.

Shares in digital ad-dependent Snap tumbled as much as 41%, their biggest intraday decline ever to trade below its 2017 initial public offering price of $17. The selloff erased about $15 billion in market value. Added to the value of declines for peers including Facebook-owner Meta Platforms Inc., Google-owner Alphabet Inc., Twitter Inc. and Pinterest Inc., the group has seen $181.1 billion billion wiped out....

'At this point, our sense is this is more macro and industry-driven versus Snap specific,' Piper Sandler analyst Tom Champion wrote in a note.

Others on Wall Street agreed, with Citi analyst Ronald Josey saying 'a slowing macro is likely impacting advertising results across the broader Internet sector, although we believe platforms more exposed to brand advertising-like Twitter, Google's YouTube, and Pinterest-are likely experiencing a greater impact overall.'

The owner of the Snapchat app, which sends disappearing messages and adds special effects to videos, reported quarterly user growth in April that topped estimates. But with the company saying just a month later that it won't meet prior forecasts for revenue and profit, analysts noted a rapid deterioration of the economic environment."

Why Is It Normal For You To Worry About Retirement Before You Retire?- Forbes

"The clock is ticking towards your final day on the job. On the other side sits the promise of a proverbial pot of gold at the end of the rainbow.

Or so you have always been told. And you've always believed retirement would be just that.

If that's all true, why are you so anxious?

'Change is inevitably hard for everyone, and the shift from working to not working is huge!' says Wes Moss, Managing Partner and Chief Investment Strategist at Capital Investment Advisors in Atlanta. 'For many people, they've been working since they were in their teens, and they know how to manage a steady incoming stream of income. We're talking about decades of consistent habits and lifestyle. From a human and psychological level, the transition will nearly always create anxiety. Will I run out of money once there are no more paychecks? What will my purpose be once my career and steady work income stop? So, it's completely understandable that the transition will create worry.'

Worry comes in many flavors. It exists for many reasons. As you might imagine, money stands as the taproot of this fear. The funny thing, though, is that money may merely be a symptom, or at the very least a metaphor for the real problem....

'Often, people don't think they have "�enough' money,' says Christopher J, Mackin, Partner and Wealth Advisor at Bleakley Financial Group in Boca Raton, Florida. 'It comes from a common scarcity of money mindset where people focus on what is lacking versus how to grow. Shifting this mindset begins with having a plan for your money.'...

'Initially people seem most worried about whether or not they will have enough saved to have a comfortable retirement, where they can take care of themselves and not place any financial burden on their children,' says Matthew Grishman, Principal at the Gebhardt Group, Inc. in Roseville, California. 'Quite often, even when people know they have enough, they still worry about retirement...'"

The Great Resignation looks set to continue - 1 in 5 say they'll change jobs in the next year- CNBC

"The Great Resignation is set to continue, according to a new global survey by PwC, with one in five saying they are likely to switch jobs in the next 12 months....

The consulting firm said in a press release that higher pay, more job fulfillment and wanting to be 'truly themselves' at work are the factors pushing workers to change jobs.

Some 35% of respondents are planning to ask their employers for more money in the next 12 months.

'The findings are very clear ... you see a significant number of employees concerned about their future employment and their job security,' Bob Moritz, global chairman of PwC, said at the forum.

However, 'the power is now, we would argue - in the hands of individuals that are employed.'

The pressure for more compensation is highest in the tech sector, where 44% of respondents who work in the industry said they plan to ask for a raise, according to PwC. Conversely, only 25% in the public sector said they plan to do the same....

More money is the biggest motivator for a job change, yet finding fulfillment at work is 'just as important,' according to PwC.

Some 71% of survey respondents said a pay increase would prompt them to change jobs, yet 69% said they would change employers for better job fulfillment too."

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5.23.22 - Small Business Owners Fear Economy Will Worsen

Gold last traded at $1,853 an ounce. Silver at $21.78 an ounce.

NEWS SUMMARY: Precious metals rose Monday as the U.S. dollar hit a four-week low. U.S. stocks higher as markets attempt rebound after eight-week losing streak.

Gold climbs over 1% on dollar sell-off- Kitco/Reuters

"Gold prices rose over 1% on Monday, boosted by a slide in U.S. dollar to its lowest in a month, while growth concerns in the economy kept bullion's safe-haven demand intact....

A weaker dollar makes gold cheaper for overseas buyers.

'Gold bugs are drawing strength from a weaker dollar, concerns over accelerating inflation, and global growth fears... In the near term, a weaker dollar could provide the precious metal a tailwind, lifting prices further away from the 200-day simple moving average,' FXTM analyst Lukman Otunuga said....

ANZ Research in a note said the rising risk of underperformance in equity markets has also enhanced gold's risk-diversifier appeal. Stocks hovered just above bear market territory as economic fallout from the war in Ukraine and persistently high inflation capped gains in equity benchmarks."

inflation Inflation Will Lead Inexorably To Recession - Forbes

"Recession is in the cards and not because of the recent report of declining real GDP in the first quarter..... A real recession looms nonetheless some months out because of the tremendous inflationary pressure confronting this economy. Only in the extremely unlikely event that price pressures lift mysteriously of their own accord can the nation avoid this unwelcome prospect. And since inflation's roots run deep in the economy's fundamentals, such luck is far from likely.

The recession will have one of two causes. If the Federal Reserve (Fed) decides to exercise sufficient monetary restraint - restrict credit flows and raise interest rates considerably and rapidly - it would likely shock markets and precipitate recessionary conditions, perhaps brief and mild, but a recession, nonetheless. The Fed could, of course, avoid taking aggressive action. That might delay recessionary pressure, but eventually an unchecked inflation itself would produce sufficient economic distortions to bring on a recession anyway, probably more severe and longer lasting than one induced by anti-inflation policies. One way or another, recession looms....

Eventually unchecked inflation itself will make business planning so fraught with uncertainty that businesses will forgo investment projects that would otherwise enhance the economy's productive potential and encourage job growth.... By eroding the value of dollar-denominated assets, like stocks and bonds, inflation will also cause a retreat in financial markets and in so doing further discourage investments in real productive capacities. At the same time the inflation would redirect what investment monies are available into inflation hedges, such as art and land purchases, instead more productive activities."

The bull market minted millions of day traders. They're in for a rough ride- CNN Business

"In early 2021, in the midst of speculative stock market euphoria, a pair of day traders went viral on TikTok with a video explaining their winning strategy.

'I see a stock going up and I buy it. And I just watch it until it stops going up, and I sell it,' says the user known as Chad. 'I do it over and over and it pays for our whole lifestyle.'

Yes, Chad had discovered momentum trading. And it seemed to work out well for him. Like the millions of people who took up day trading during the pandemic, Chad was riding a thrilling bull market that was bingeing on ultra cheap money from the Federal Reserve.

For newbies, it was hard to go wrong. Pick a stock, any stock, and watch it go up. Now, of course, the joyride is coming to an end almost as rapidly as it began....

'Turns out investing is kinda difficult when the free money faucet is turned off,' wrote one user on the WallStreetBets Reddit page last week, alongside an apparent screengrab of a stock market data page showing a sea of red.

For traders who've only known the thrill of the bull market, 2022 has been a harsh pivot. On the WallStreetBets page - the epicenter of the 2021 meme stock mania - the mood is decidedly less party-like. The rally cries of 'diamond hands' and 'HODL' have been replaced by jokey memes about bottomless losses"

Most small business owners fear US economy will worsen over next year- Fox Business

"Small businesses are growing concerned about the fate of the U.S. economy as the nation deals with high inflation, supply-chain and labor shortages, and rising interest rates.

According to a poll conducted this month by business-coaching and peer-advisory firm Vistage Worldwide Inc., 57% of small business owners predict that the U.S. economy will only become worse in the next year, matching the April 2020 mark for lowest level of confidence. Last month, 42% of small business owners had the same grim outlook on the economy.....

Data showing that small business owners have a pessimistic view of the economy relies on responses from a variety of sectors, including manufacturing and consumer products and services.

Even large corporations are feeling the impact of supply-chain holdups, rising prices and worker shortages....

Small businesses, however, do not have the financial flexibility that larger businesses do, so they often struggle to manage economic woes. Many small business owners have said their companies have been hurt by the COVID-19 pandemic and by a number of economic challenges. Government aid programs that helped alleviate the economic burden for businesses have largely run out of funds."

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5.20.22 - Firm pays staff in gold to avoid impact of inflation

Gold last traded at $1,845 an ounce. Silver at $21.68 an ounce.

News Summary: Gold price were stable Friday, on track for a weekly gain. Stocks officially entered bear territory with the S&P 500 off 20% from its high.

Firm pays staff in gold to avoid impact of inflation- FT Adviser

"Staff at a financial services firm have been offered the chance to get paid in gold rather than pounds and pence to help them stay ahead of inflation.

TallyMoney, which is an app linking currency tied to physical gold ownership, is understood to be the first employer in the country to trial a gold payroll, though others have offered to pay staff in crypto.

Chief executive officer Cameron Parry, said: 'With the cost of living crisis going from bad to worse, it didn't make sense to continue offering pay hikes in pounds when its value is being eroded further with every passing day. It was like putting a bandaid over an open wound.'

'We're seeing the spending power of the pound continue to decline at an alarming pace whereas gold has been steadily rising in value throughout 2022.'"

recession U.S. may be barreling toward recession in next year, more experts say - MSN

"The U.S. economy could be heading for a recession in the next year, according to growing warnings from banks and economists, as a sudden bout of economic pessimism hammers financial markets that had been counting on sustained economic momentum.

Although major swaths of the economy - including the job market and consumer spending - remain robust, there are mounting worries that rising borrowing costs for consumers and businesses, after years of near-zero interest rates, could cause a sudden retrenchment. The Federal Reserve has raised interest rates by 0.75 percentage points so far this year, while officials are signaling more aggressive hikes could be necessary to cool the economy. Continued uncertainty from the coronavirus pandemic and Russia's invasion of Ukraine are adding to the uneasiness.

'Recession risks are high - uncomfortably high - and rising,' said Mark Zandi, chief economist at Moody's Analytics. 'For the economy to navigate through without suffering a downturn, we need some very deft policymaking from the Fed and a bit of luck.'...

Those concerns come amid new smatterings of data that point to economic cooling, particularly in interest rate sensitive sectors that are already feeling the brunt of the Fed's promise to keep tightening monetary conditions."

Next big shoe to drop in financial markets: Inflation that fails to respond to Fed rate hikes - Market Watch

"Traders, investors and strategists are adding one more factor to the list of reasons why financial markets may be in for more volatility through at least the next three to four months: the likelihood that Fed rate hikes won't put a dent in inflation by then....

Equities had already been roiled in the past two weeks since the Fed's May 4 decision to deliver a 50 basis point hike, its biggest rate increase in 22 years. A day after the Fed's move, Dow industrials dropped almost 1,100 points and, along with the Nasdaq Composite Index scored its worst daily percentage drop since 2020 on signs of panic selling on Wall Street. This year's selloff in stocks has left all three major indexes nursing double-digit losses.

What has yet to be fully considered in financial markets is the notion that U.S. inflation, at 8.3% as of April but still near a four-decade high, may fail to respond to the Fed's rate hikes through this summer, according to traders, strategists and investors. Typically, it takes anywhere from six to nine months, and even up to two years, for rate hikes to work their way through the economy. But that policy lag may be lost on markets accustomed to years of easy money and growing more uneasy by the day. Though the Fed's effort to shrink its almost $9 trillion balance sheet adds an additional layer of tightening to financial conditions, it doesn't start until June 1."

The true depths of our debt crisis - The Hill

"For over 50 years, both political parties have run up the national debt while ignoring warnings about the long-term unsustainability of federal budgets. Now, the Federal Reserve has quietly turned to inflation to lighten the nation's debt burden through a policy of negative real interest rates.

Unfortunately, this policy path is reducing the value of Americans' paychecks and savings accounts as devaluation is used to effectively default on obligations incurred over decades. While it is clear how decades of deficit spending, rising entitlement costs, off-the-books war spending, and massive stimulus packages got America into this situation, a new data project from Reason Foundation reveals the true depths of this debt crisis....

The Federal Reserve holds down federal borrowing costs by purchasing more federal debt securities, typically with newly created reserves. By competing with other buyers of U.S. Treasury securities, it can push down interest rates. The Federal Reserve typically remits most of the interest income it receives on its bonds back to the U.S. Treasury, further lowering the government's effective borrowing costs. There's a possibility that the Fed may need to step in more and more in the future if foreign demand for U.S. debt securities decreases....

The massive federal debt accumulation is going to force extremely tough political and policy choices in the coming decades, but political leaders should stop the bleeding and start to contain the damage by adopting a more prudent approach to federal spending."

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5.19.22 - Does inflation have you worried about retirement?

Gold last traded at $1,840 an ounce. Silver at $21.95 an ounce.

NEWS SUMMARY: Precious metals jumped Thursday amid a weaker U.S. dollar and bargain hunting. U.S. stocks extended their slump as traders continue to react to a severe drop in profits by America's major retailers.

Gold, silver look cheap as Fed rate hikes create threat of a recession - Degussa/Kitco

"The gold market continues to struggle to make material gains above $1,800 an ounce. Still, the precious metal remains cheap as investors continue to miss-price risk in the marketplace, according to one market analyst.

In his latest market commentary, Thorsten Polleit, chief economist of Degussa, said that both gold and silver are relatively cheap as investors ignore the growing risk that the Federal Reserve will push the U.S. economy into a recession as it raises interest rates....

However, he added that the U.S. central bank is walking a very narrow path, which has been made difficult because of massive government debt worldwide. Polleit noted that global debt levels represented 351% of global GDP.

'The risk that something could go wrong is enormous, especially given record levels of global debt,' he said.

Even if the Federal Reserve can avoid pushing the economy into a recession, Polleit said there is still potential for gold and silver once investors realize that inflation will remain elevated longer than expected."

stocks fall Target posts a stunning drop in profit. Stock plunges - CNN Business

"Target's earnings didn't hit the mark. Far from it.

The retail giant reported a stunning 52% drop in profit for the first quarter, badly missing Wall Street's forecasts. The company blamed higher expenses due to continued supply chain disruptions. Consumers also are holding back on nonessential purchases because of rampant inflation...

'We faced unexpectedly high costs, driven by a number of factors, resulting in profitability that came in well below our expectations, and well below where we expect to operate over time,' said Target CEO Brian Cornell in the earnings press release Wednesday...

As prices soar, consumers aren't splurging on bigger-ticket items, such as televisions and exercise equipment. The company noted that there were 'lower-than-expected sales in discretionary categories,' and Target was forced to write down the value of excess inventory that's stuck in warehouses....

The continued problems in the supply chain are hurting retail profits. Target, like many other retailers, has needed to boost hourly pay to attract workers. The company said higher compensation costs for employees in its stores and distribution centers put a dent into earnings.

Big retail chains are also grappling with the fact that last year's earnings were boosted by federal stimulus checks from the government, a phenomenon that has largely disappeared in 2022."

Does inflation have you worried about retirement? Here's what experts say to do - CNBC

"Inflation may have you worried about your retirement.

Prices have been rising on everything from food to housing. In April, the consumer price index, which measures the prices of goods and services, notched an 8.3% increase from the year-earlier period....

Meanwhile, some older adults are choosing to put off retiring: Thirteen percent of Gen Xers and baby boomers said they've postponed or considered delaying plans to leave the workforce because of rising costs, a survey from the Nationwide Retirement Institute found.

Add a volatile stock market to the mix and those saving for retirement may start rethinking their investment plans....

Your portfolio should be a mix of different assets, like stocks and bonds, and the allocation should be determined by your risk tolerance, time horizon, cash-flow needs and taxes...

Then there are assets that are traditionally considered inflation hedges, like gold and other commodities, as well as real estate investment trusts. The decision to add them to your portfolio, and how much, again depends on your time horizon..."

This Could Be a Lost Decade for Stocks - Wall Street Journal

"U.S. stocks could well bounce back from their awful start to the year. How they do in the longer run is another matter.

Heading into 2022, expectations were great. A Natixis survey of individual investors in 24 countries in 2021 showed U.S. investors had the highest projections of the group at 17.5% annual returns going forward. The difference between that and historical experience is stark: Compared with long-term annual U.S. stock returns of around 9.8%, a $10,000 investment would grow to about $50,000 in 10 years instead of $25,000. But even stocks' more restrained long-run returns seem aspirational now....

Guessing what prices investors will pay in the future, and when or whether they will revert to the mean, is notoriously hard. The recent selloff could be the early stages of that adjustment, though, according to Christopher Bloomstran, a value-investing veteran who is president of Semper Augustus. He wrote in an email interview that tightening monetary policy is likely to be the catalyst.

'The Fed has a perfect record popping bubbles. They aren't likely to fail this time,' Mr. Bloomstran wrote.

Another prominent value investor, Jeremy Grantham, co-founder of the asset manager GMO, wrote in January that U.S. stocks had entered their fourth 'superbubble' of the past 100 years and that he expected them to drop by half. In addition to quantitative reasons such as statistical deviation from long-term trends, he cited a more subjective historical cue akin to ringing a bell near the top-'crazy' speculation, this time in meme stocks, EV makers, cryptocurrencies and NFTs."

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5.18.22 - The 5 stages of bear-market grief

Gold last traded at $1,818 an ounce. Silver at $21.45 an ounce.

NEWS SUMMARY: Precious metal prices eased back Wednesday as bond yields rose. U.S. stocks saw sharp losses as another major retailer warned of rising cost pressures.

New gold bull market to begin soon - Kitco

"Precious Metals have been hit hard in recent weeks but what is happening in the global macro world is necessary for a real bull market to begin in Gold, gold stocks, and Silver.

Recently and historically, every big move in precious metals has transpired around either a significant correction or bear market in stocks.

Think of the major lows in precious metals in recent years: March 2020, August 2018, December 2015, and October 2008. Economic and market turmoil is always a catalyst for precious metals.

This time will be no different.

The biggest and best cyclical bull markets in precious metals occurred amid or after a bear market, within the context of a secular bear market in stocks. Think of the early to mid-1930s, the 1970s, and 2000 to 2011.....

However, Gold is poised to begin a new secular bull market soon as the stock market has likely started a new secular bear market"

bear market Stock investors are now starting to feel the 5 stages of bear-market grief- Market Watch

"The bear market for stocks isn't over. In fact, it may have aways to go. That's because - even with the S&P 500 below its all-time high, and both the Nasdaq Composite and the Russell 2000 Index into bear-market territory - many investors are more focused on when and where to invest in stocks than worried about the possibility of further, steep declines.

A review of past bear markets suggests that, when the current bear market does hit bottom, few investors will even be contemplating that possibility. We either won't even be paying attention, having grown so dejected as to have thrown in the towel, or will consider any sign of market strength as a bear market trap.

That's not Wall Street's current mood. Bear-market psychology follows a progression that is similar to what psychologists call the five stages of grief - denial, anger, bargaining, depression and acceptance. Here's how they manifest in the stock market:

  • Denial - In this initial stage, the prevailing view is that stock-market weakness is nothing more than a buying opportunity. Far from getting angry (see next stage), investors remain quite sanguine, since the market's pullback offers an opportunity to buy stocks more cheaply than would have been the case had the bull market kept going.
  • Anger - Denial becomes increasingly difficult to sustain as the market's pullback becomes too severe. Investors' mood eventually morphs into anger, as they rail against the unfairness of the pullback. A hallmark of this stage is where investors see the pullback as a personal affront - as if the market cares whether you or I lose money.
  • Bargaining - In this stage, investors' redirect their energies to figuring out if they can maintain their lifestyles despite the hit to their portfolio; retirees rejigger their financial plans. Investors promise to give up that fancy new car or the European vacation - the fat from their budgets - so long as they don't have to cut bone.
  • Depression - As the market continues to slide, the realization sets in that cutting the fat isn't going to be enough. Major changes in lifestyle will be required. Near-retirees work for longer than originally planned; retirees go back to work.
  • Acceptance - In this final stage, investors throw in the towel. They surrender to the bear market and stop even fantasizing about when it might end. They treat any sign of market strength as a suckers' rally, luring the gullible into losing more money on the next leg down.

My impression is that we're no further through this five-stage cycle than the second one. There are individual exceptions, of course, since not all investors progress at the same pace. But the preponderance of the attitudes I encounter are either that the pullback is a buying opportunity (stage one) or that the market's weakness is profoundly unfair (stage two)."

Crypto crash stokes some financial crisis fears- NBC News

"The cryptocurrency market's near-$2 trillion loss in value forces a difficult question: Could crypto trigger a broader economic slowdown?

It's a concern that highlights the uncertainty inherent in a market that by many measures is still in its infancy but is now mainstream enough to inspire multiple Super Bowl ads and attention from mainstream financial institutions. Last month, Fidelity Investments, the nation's largest retirement plan provider, said it would allow people to put bitcoin in their 401(k) accounts, beginning this year.

The question also nods to the financial crisis that started in 2007, when a drop in the housing market sent the U.S. into a deep recession and briefly threatened the global financial system.....

At its peak in November, the entire crypto market was valued at $3.1 trillion, according to data from CoinGecko, a company that aggregates crypto data. On Monday, it was down to $1.3 trillion. The price of bitcoin has fallen by more than half from its high. The digital currency luna is now nearly worthless, and a related coin, TerraUSD, is on shaky ground. And tether, a token that's become increasingly important to how cryptocurrencies trade because of its stable price, needed an urgent rescue last week to avoid the online equivalent of a bank run."

The Fed's $2.7 trillion mortgage problem - Axios

"If you took out a mortgage over the last couple of years, there's a good chance the holder of that loan is America's central bank - a consequence of its monetary stimulus efforts throughout the pandemic.

Why it matters: The Fed will face a series of political and economic headaches as it attempts to move away from subsidizing home lending by shrinking its portfolio of mortgage-backed securities.

The problem: Extracting itself from this market risks crashing the housing industry and creating intense political blowback for incurring financial losses....

The bottom line: The Fed's pandemic actions fueled a housing boom. As it tries to withdraw that support, it could be bad news for housing - and the Fed's standing on Capitol Hill."

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5.17.22 - Stock Market is Bloody, Cryptos Massacred

Gold last traded at $1,819 an ounce. Silver at $21.70 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday amid sharp losses in the U.S. dollar index. U.S. stocks higher as traders react to latest U.S. economic reports.

Gold price remains stuck at $1,800 -Kitco

"The gold market remains under pressure but is holding support above $1,800 an ounce as it sees little bullish momentum following weaker than expected regional manufacturing data from the New York Region.

Monday, the New York Federal Reserve said that its Empire State manufacturing survey's general business conditions index dropped to a reading of -11.6 in May, down from April's reading of 24.6. The data significantly missed expectations as consensus forecasts were looking for a reading of around 15.3.

The gold market is not seeing any major reaction to the latest disappointing economic data....Economists have noted that the U.S. manufacturing sector continues to struggle as issues remain in the global supply chain. Problems have been exacerbated by Russia's ongoing invasion of Ukraine.

Although inflation pressures dropped slightly this month, the report noted that prices are still elated. The Prices paid index dropped to 73.7, down from April's reading of 86.4.

The report also noted that future expectations have diminished compared to strong optimism at the start of the year."

markets Why the stock market is bloody, crypto's getting massacred, and traders are screaming -Slate

"After a bubbly two-year run that gave us meme stonks, Matt Damon shilling crypto, $2 million monkey JPEGs, woozy tech valuations, and so much more as retail investing once again became a national pastime, stock prices finally seem to have popped while Bitcoin and other digital currencies are now in a total freefall. We've entered the era of crash memes.

There are interesting, sometimes complicated stories about why individual stocks and various blockchain schemes have gone sideways. But the main explanation for why your 401(k) has started to look like the aftermath of a Brian De Palma film is pretty straightforward: The Federal Reserve did it.

The U.S.'s central bank is raising interest rates in order to fight inflation and has in the process sent tremors all throughout the markets. That's partly because rising rates have a direct impact on how stocks and other assets are valued, but also because many investors are worried the Fed might tighten credit so much that it triggers a recession. In other words, stocks are falling thanks to both math and fear....

We're in the midst a serious fall: Investors traditionally say it's a 'bear market' once stocks tumble 20 percent from their last peak. The S&P 500 is getting close to there, and the Nasdaq is well past it.

Then there's crypto. Bitcoin's price has fallen by more than half since last fall, from about $67,000 in November to $47,000 in March to around $30,000 as when this story was published. The total value of all digital currencies has similarly plummeted. The cryptoland rollercoaster hath crashed....

And this is all the Fed's fault? Fault is a slightly loaded word. But yes, the Federal Reserve is the key factor here-which I guess in my overextended movie metaphor would make Chair Jerome Powell a teenager with supernatural powers burning down the party.

The Fed is aggressively raising interest rates to curb inflation, which is running at 40-year highs. This month, it hiked by half a percentage point, its biggest single increase in 22 years. At the same time, the central bank is allowing its giant stash of government bonds to shrink (you might have heard this described as "running down its balance sheet"�), a move that should also push up long-term interest rates and tighten credit.

All of this is quite bad for stocks and other assets that involve some risk (like Bitcoin). If you look at corporate earnings reports and forecasts, big companies are actually doing pretty well. There have been some high-profile disappointments such as Netflix. But overall, more companies are exceeding their estimates than last year. They're getting pummeled for things beyond their control....

The important thing to remember is that when interest rates go up, so do the returns on safe assets like government debt. As a result, discount rates go up too, and stocks start look like a worse deal in the eyes of equities analysts and investors yielding excel spreadsheets. Ergo, their prices drop....

Aside from all that, everybody's worried that the Fed is going raise rates so high that it will start a recession, which would be bad for stocks....The bottom line is that, at least since the 1950s, the Federal Reserve has never managed to bring down inflation as high as it is today without plunging the economy into a downturn."

4 reasons the economy looks like it's crumbling - and what to do about it -CNN

"The American economy is super weird right now. Pretty much anyone who wants a job can have one. The economy is so hot that prices are surging faster than at any point since the 1980s. The housing market is on fire. Consumers are spending like crazy.

Yet we keep hearing the word 'recession' like it's 2007 all over again. What gives? The truth is that we're probably not in recession now (although it's possible), but there are plenty of signs that one is around the corner.

Sign 1. The Fed is hiking rates - Inflation has been rampant, and the Federal Reserve's tool to fight surging prices lies in its ability to set interest rates higher....

Sign 2. The stock market is in sell-everything mode - Extreme fear is the predominant sentiment on Wall Street this year. CNN Business' Fear & Greed Index is at a measly six out of 100....

Sign 3. The bond market - When investors aren't so hot on stocks, they'll often switch to bonds. Not this time....

Sign 4. Chaos around the globe - None of this is happening in a vacuum. Russia continues its deadly invasion of Ukraine, which has choked off supply chains and sent energy prices through the roof....

Here are a few ways financial advisers say you can insulate your finances from a downturn.

Lock in a new job now: With ultra-low unemployment and plenty of openings, it's a job seeker's market. That could change quickly in a recession.

Cash in on the housing boom: If you've been on the fence about selling your home, now may be the time to list...

Set some cash aside: It's always a good idea to have liquid assets - cash, money market funds, etc - to cover urgent needs or unexpected emergencies."

The Rich Are Not Who We Think They Are. And Happiness Is Not What We Think It Is, Either. -NYT

"We now know who is rich in America. And it's not who you might have guessed.

A groundbreaking 2019 study by four economists, 'Capitalists in the Twenty-First Century,' analyzed de-identified data of the complete universe of American taxpayers to determine who dominated the top 0.1 percent of earners.

The study didn't tell us about the small number of well-known tech and shopping billionaires but instead about the more than 140,000 Americans who earn more than $1.58 million per year. The researchers found that the typical rich American is, in their words, the owner of a 'regional business,' such as an 'auto dealer' or a 'beverage distributor.'

This shocked me. Over the past four years, in the course of doing research for a book about how insights buried in big data sets can help people make decisions, I read thousands of academic studies....What are the lessons from the data on rich earners?

First, rich people own. Among members of the top 0.1 percent, the researchers found, about three times as many make the majority of their income from owning a business as from being paid a wage....

Second, rich people tend to own unsexy businesses....There are, however, plenty of unsexy businesses from which a few people are getting rich. These include auto repair shops, gas stations and business equipment contractors....

The third important factor in gaining wealth is some way to avoid ruthless price competition, to build a local monopoly....

If pop culture is right, getting rich is a path to happiness. Is that true? Does money actually make people happy?....

Money is not a reliable path to happiness. Matthew Killingsworth of the University of Pennsylvania has studied data from more than 30,000 adults, far larger than previous studies of money and happiness. He debunked a popular myth that there is no effect of money on happiness beyond $75,000 per year, but he did confirm a law of diminishing returns to money. ...

Many of us while away hours on social media - also not a path to happiness. The Mappiness project found that, of 27 leisure activities, social media ranks dead last in how much happiness it brings."

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5.16.22 - Worries and Rates Rise as Markets Drop

Gold last traded at $1,823 an ounce. Silver at $21.60 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on bargain-hunting and a flat dollar. U.S. stocks attempted to rebound from a relentless six week sell-off that's punished tech stocks and pushed the S&P 500 to the brink of a bear market.

Gold price sees worst week in 11 months, but is the market oversold? -Kitco

"The gold market is looking to close the week down around 4%, its worst weekly close since mid-June 2021....

Gold was hurt by technical selling pressure after dropping below the $1,830 an ounce Thursday, which served as support. The precious metals also suffered from higher U.S. dollar and expectations of an aggressive Federal Reserve following hotter-than-expected inflation data.

June Comex gold futures were last at $1,809.90 an ounce, down more than $70 on the week.

'We've seen the CPI come in stronger than expected this week. The 8.3% pace in April is problematic, especially after markets were expecting 8.1%. That automatically told us that the Federal Reserve would not soften its hawkish stance,' TD Securities head of global strategy Bart Melek told Kitco News. 'It's unlikely that inflation will come off sharply any time soon.'

This outlook has weighed on gold and the precious metal moved significantly lower. 'The $1,830 was good support, but we breached it. Now, $1,790 is the next support level as gold consolidates,' Melek said.

Gold was also used this week for liquidity purposes amid a massive selloff in U.S. equities, with the S&P 500 falling 18% since the end of December.

'Gold's decline is investors covering losses elsewhere. Liquidation for traders and investors to make up for major losses seen in equity markets. Gold is one of the easiest things to convert into cash when times are tough,' Gainesville Coins precious metals expert Everett Millman said Friday....

'Even with elevated downside risk, we still can get back above $1,900 in a matter of weeks. Traders need to widen gold's range due to the side effect of heightened volatility.'"

Home prices could fall in some cities following sharp increases. -NPR

"Chelsea Fitzgerald-Dole really likes living in Nashville, Tennessee. 'I fell in love with the city,' she says. 'I've met so many incredible people.'

'The food scene is awesome,' her husband, Kevin Dole, chimes in. 'The music scene is unparalleled. It's a really fun city to be in.'

The couple desperately wants more space. So the two are planning to move away from this city they love because they can't afford a bigger house there. Prices have just risen too much. 'Everything around us has just exploded,' Kevin says.

home prices

Prices all over the U.S. have been rising astronomically. Boise, Phoenix, Austin and Miami have been particularly hot. But prices are up sharply pretty much everywhere. Moody's home price index shows a 32% rise in prices nationally over the past two years. The National Association of Realtors reports an even bigger increase of 39%.

In the run-up to the housing bubble that occurred 15 years ago, prices rose faster than normal too, before the bottom fell out, causing the worst housing crash and overall recession in generations. So, what's going to happen this time around?

'I believe that it is a bubble,' says Kevin. 'I just don't know when it's going to burst.' Chelsea says the increase in prices doesn't feel normal.

'This can't last forever, whatever it is that's happening,' she says. 'All of the locals being pushed out of Nashville and people not being able to afford homes - it just can't keep happening.' Chelsea and Kevin don't pull in big salaries, and they have a lot of student loan debt. She works for a company that sells internet service to schools. He's in sales.

Just about all economists agree that prices can't keep rising as they have been. They at least have to level off and rise more slowly. Too many people just can't afford to buy now, especially with rising interest rates.

And some economists, including Mark Zandi, think prices could fall - at least in dozens of the most juiced-up markets.

'I expect prices to come down,' Zandi tells NPR. 'If you told me two years from now, prices are 5, 10, 15% below where they are today where they're peaking, I'd say that sounds about right to me.'....

For their part, Chelsea and Kevin are planning to leave Nashville, work remotely and move four hours away to Covington, Ky., near Cincinnati. Kevin has family there. And they say they can buy a three-bedroom home for about $250,000 - half the price it would cost in Nashville."

Worries Rise as Markets Drop -Commonwealth

"Yesterday was another bad down day in the markets. Not only that, but other assets are getting hit as well, with bitcoin getting hit even more than the general financial markets. As worries rise, when will the bleeding stop?

As I have written before, it all comes down to valuations, which means it all comes down to interest rates. The higher interest rates go, the lower stock valuations will go. When we look forward, interest rates are what we need to watch....

First, with valuations now in the 16-18 range after the recent market drop, we are likely getting close to done with this pullback. It may have a bit further to go, but again we are now in a reasonable range, and that will provide some cushion to the market.

Second, with the economy still growing, we have a fundamental cushion as well. Even if valuations decline a bit further, growing earnings will offset that and limit the damage. There is good reason to believe we may be close to the end of this.

Even if so, though, this has been an unusually scary decline - but why? Two reasons. First, the speed. Rates have spiked - and markets tanked - faster than we have seen in recent years. Second, and this is the major point, markets were overvalued to start, and a bigger adjustment was necessary to get back to something like normal.

That takes us back to interest rates. If they keep rising, the damage can and will continue. But if they stabilize, we are now close to the end."

Your chief problem and worst enemy as an investor -TEBI

"One of my favorite investment authors is Benjamin Graham. Widely credited as the father of value investing, Graham was Warren Buffett's mentor and wrote the classic book, The Intelligent Investor.

One of the central themes of that book is the investor's capacity for self-harm. 'The investor's chief problem,' Graham wrote, 'and even his worst enemy, is likely to be himself.'....

'Your basic advantage as an investor is that you don't have to trade because everybody else is. When everybody is selling, that's their problem; it doesn't have to be yours.'

When the market's behavior doesn't make sense to you, you don't have to join in. You can marvel at what is going on, but you don't have to follow the flock"�

'If you sell just because other people are selling, you make yourself hostage to the whims of tens of millions of strangers who often go collectively crazy. That's no way to live, and it's no way to invest.'

Of course, keeping your head when all around you seem to be losing theirs isn't easy. It requires patience, discipline and emotional resilience.

But most of all...it requires self-knowledge. So, invest time in getting to know yourself better. Work out the ways in which your own beliefs and personality could actually get in your way, and learn to spot the warning signs. Most importantly, make sure there's someone you can turn to when you really need them."

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5.13.22 - The Cure for the Great Resignation

Gold last traded at $1,807 an ounce. Silver at $20.98 an ounce.

NEWS SUMMARY: Precious metal prices steadied Friday on safe-haven buying despite a firmer dollar. U.S. stocks traded mixed as they headed toward bear market territory.

Gold price on 'cusp' of $2k rally, here's how not to miss it -Bloomberg/Kitco

"Gold could be on a cusp of a major breakout above $2,000 an ounce, according to Bloomberg Intelligence.

After falling 6.5% in the last month, gold is now near a bottom, with the $1,800 an ounce serving as a floor for prices, Bloomberg Intelligence senior commodity strategist Mike McGlone told Kitco News.

Investors have been reevaluating their risk-on positions as the Federal Reserve looks to tighten by 50-basis-points in June and June as it fights inflation.

'Gold is near a bottom and on the cusp of a pretty significant breakout - when it gets above $2,000 an ounce and never looks back,' McGlone said. 'One day, we're going to wake up, and gold is going to pop above $2,000 an ounce, which is resistance that will be converted into support, and never look back.'

The $2,000 an ounce level has been a critical psychological resistance point for gold, which the precious metal failed to sustainably breach this year despite coming close in March.

'The dollar strength is putting pressure on the price of gold in terms of the U.S dollar. In terms of the yen, gold is up 20%. In terms of the euro, gold is up 15%. In terms of the U.S. dollar, it's flat. So people holding gold in Europe and Japan are performing much better.'

'It's been a good hedge against their currency declining. It's just a matter of time before but catches up in the U.S. dollar,' McGlone explained. 'But once you reduce that headwind, which I think we're on the cusp of, gold should take off, and that's just based on past performance.'

One of the drivers to trigger the next rally will be markets shifting gears to price the end of the Federal Reserve's tightening cycle. And that is already starting to happen, McGlone pointed out."

inflation Two-thirds of Americans live paycheck to paycheck as inflation climbs -CNBC

"Inflation is showing no signs of slowing down, making it harder for workers to make ends meet.

The Consumer Price Index increased 8.3% from a year ago, higher than the 8.1% estimate, according to the U.S. Bureau of Statistics.

Although it was down slightly from the March peak, inflation is still growing at the fastest annual pace in about four decades.

'Rising prices are putting household budgets in a vise,' said Greg McBride, chief financial analyst at Bankrate.com. 'Price increases are widespread, but look at food and shelter - which together account for 40% of the weighting in the CPI and more than that for many households.'

Food prices are up at the fastest pace in more than 41 years and the shelter index, which makes up about one-third of the CPI weighting, was up 5.1% on a yearly basis, its fastest gain since March 1991.

While wage growth is high by historical standards, it isn't keeping up with the increased cost of living.

When wages rise at a slower pace than inflation, those paychecks won't go as far at the grocery store and at the gas pump - two areas of the budget that have been particularly squeezed.

As of March, close to two-thirds, or 64%, of the U.S. population was living paycheck to paycheck, just shy of the high of 65% in 2020, according to a LendingClub report."

Is a recession coming in the next 12 to 18 months? -The Hill

"Economist Ezra Solomon once observed that the 'only function of economic forecasting is to make astrology look respectable.' Historically, economists have had a terrible track record when it comes to making growth forecasts.

The Federal Reserve (Fed) during the 2007-2016 period had a tendency to persistently overestimate future GDP growth. After correcting for this tendency in the recent past, Fed officials found themselves making a new set of costly forecasting errors during the past year. They persistently underestimated inflation....

A 2018 International Monetary Fund study looked at 153 recessions in 63 countries between 1992 and 2014 and found that the vast majority were missed by economists. In fact, the study found that forecasters predicted only five out of 153 recessions in the year prior to the actual downturn....

Looking ahead, there are multiple harbingers that suggest a reasonably high likelihood of a U.S. recession occurring in the next 12 to 18 months. First, the extent of monetary tightening needed to bring inflation under control implies that financial conditions will tighten significantly enough over the coming year to sharply raise the cost of credit to households and businesses. Given the starting point of this particular tightening cycle, the odds of a hard landing are rather high.

Second, high oil prices have presaged most U.S. recessions since 1970. If the G-7 goes through with a ban on Russian oil imports, then global oil prices are likely to remain elevated for the foreseeable future....

Third, the yield curve is expected to invert as short-term rates catch up to longer-term yields in the coming months. This is quite likely as the Fed now plans to hike its policy rate at a more aggressive pace. Inverted yield curves have a reasonably good track record of forecasting recessions.

Fourth, consumer surveys indicate potential headwinds. The growing gap between the Conference Board's consumer confidence index (which is dominated by lagging indicators) and the University of Michigan's consumer sentiments index (which emphasizes inflationary concerns) often portends a recession.

Finally, a sharp slowdown in the global economy is likely given the ongoing geopolitical turmoil in Europe, the stalling of the Chinese economy and the threat of a currency/debt crisis in some emerging markets. Economic woes abroad may have a blowback effect on a U.S. economy that is already facing record-high trade deficits.

All in all, the odds of a recession over the next 12 to 18 months are quite high. Hopefully, it will be a brief and shallow recession."

The Cure for the Great Resignation: Hire Older Workers -Kiplingers

"A Yale psychology professor smashes myths on aging and the worth of older workers in her fascinating and uplifting new book, 'Breaking the Age Code.'

A truly fascinating, just released book by psychology professor Becca Levy of Yale University shatters many of the basic - and completely wrong - assumptions that we have been told were gospel about aging as far back as most of us can recall.

'Breaking the Age Code: How Your Beliefs About Aging Determine How Long and Well You Live,' provides answers to challenging questions facing both employers and America's aging population itself.

For, as her book makes clear, 'Thinking ourselves old is a self-fulfilling, dangerous prophecy.'

She is on a mission to convince an aging population to believe in themselves and realize that candles on a cake have no connection to reality, for the person blowing them out or their employer.

I asked her to list several of the more common myths about aging and their consequences for our society, the world of business, and each of us when we wake up one day with a wrinkle that wasn't there before.

Myth No. 1: Your older workers are not as effective in the workplace. Reduce their job responsibilities.

Research shows: Both anecdotally and decades of research has shown that older workers take fewer days off for sickness and reflect a strong work ethic that rubs off on younger colleagues....

Myth No. 2: Older workers lack the ability to be creative.

Research shows: Creativity often increases in later life. Many artists, including Matisse, are credited with producing their most innovative work at an older age. Many writers will admit to finding their skills and their craft improving with age. The average age of 60 Minutes journalists was 71 in Mike Wallace and Andy Rooney's day....

Myth No. 3: Older people in general don't contribute to society and are selfish. On the job, they don't help co-workers and only think of themselves.

Research shows: Older workers seek close, positive and productive relationships with co-workers. From a lifetime in a particular field, they are more able to see the potholes an employer needs to avoid."

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5.12.22 - Gold: A 'Good Hiding Place' for Investors

Gold last traded at $1,822 an ounce. Silver at $20.70 an ounce.

NEWS SUMMARY: Precious metal prices eased back Thursday as the dollar extended gains. U.S. stocks fell as a sell-off on Wall Street continued to push the S&P 500 to its lowest level in more than a year; and to the brink of bear market territory.

Gold is a 'good hiding place' for investors as S&P 500 falls nearly 16% this year -Kitco

"In a telephone interview with Kitco News, Steve Land, vice president and portfolio manager of Franklin Templeton's Franklin Gold and Precious Metals Fund, said that although gold has struggled to attract any consistent bullish momentum, it continues to outperform equity markets.

Since the start of the year, the S&P 500 has fallen 16% as the index drops to 4,000 points Tuesday. Meanwhile, even with Tuesday's selling pressure, gold prices are roughly neutral for the year....

'The big headwind had been the strong U.S. dollar. When you consider that, I think gold has actually been performing reasonably well,' he said. 'Gold's role in times of crisis and uncertainty is to maintain and preserve value, which it is doing.'

Land said that although gold's performance has been disappointing in recent weeks, he sees the price action as a consolidation phase following a strong first-quarter performance. He added that investors will continue to see gold as a vital diversification tool and inflation hedge.

'There's no question that there are a lot more moving pieces in the global economy than there have been in a long time. Gold's, low correlation to markets, means it's someplace investors can hideout to a degree,' he said."

rate hikes A Harder Landing -Bonner Private Research

"The stock market had another anxious day. Stocks started falling in Tokyo, headed down in Europe"� and continued the pattern around the globe, ending in the US with a 653 point loss for the Dow Jones....

It's gratifying to us when things that should happen actually do happen. It stiffens our belief in an ordered universe, where bubbles pop"� what goes up also goes down"� and you don't get what you want or expect, but what you deserve.

But wait"� what 'should' happen?

The Fed printed $8 trillion new dollars since 1999. The Trump and Biden administrations passed it around. Consumer prices should go up. And they are going up; the last official reading showed inflation at nearly 9%.

Big, overpriced companies should lose value, too. The bigger they are, the harder they fall. Meta has lost nearly half its value from the peak. Google, about a quarter. And Amazon, almost 40% down.

As for the flakier tech companies, 'it's clear that the market is experiencing a seismic shift,' says Uber CEO Dara Khosrowshabi. Uber plans to meet the challenge by actually making a profit. Until now, Uber was happy to lose money, chasing market share rather than earnings. Those days are over, says Khosrowshabi.

While zombie companies should go down, interest rates - artificially pushed down for the last 13 years - should go up. And they are going up; the US 10-year yield rose above 3% last week"� for the first time since 2018.

All around us, the brave new world promised by tech breakthroughs and the enlightened guidance of our elites is falling to pieces. Part of that promise was that with the geniuses of the Fed at the controls, we would have no more fear of 'market panics' or 'hard landings.' They would prevent things from getting out of whack in the first place. Then, if something went wrong, they would make sure that the damage was limited.

But real life has its bills that must be paid"� its scores that must be settled"� and its reckonings. Not every fall is graceful. And every one of us has his own flight to make - his takeoff"� his climbing"� his descent"� and his landing. And the last landing is always a hard one; none of us walks away from it....

And now, the gaudy, disfigured US economy - its wings bent by ultra-low interest rates"� over-freighted with debt and running out of fuel - is coming in for a landing; Fed governors are nervously looking for the runway lights. Stocks are falling. Interest rates are rising. Inflation, like a drunken passenger, threatens to get out of control.

But which kind of landing is this? Carefully controlled"� gentle"� harmless? Or a flaming crash? Anything is possible, but lately, and not for the first time, we have been staggered by the incompetence of the captain and his crew."

Inflation soars 8.3% in April, hovering near 40-year high -Fox Business

"Inflation cooled on an annual basis for the first time in months in April, but rose more than expected as supply chain constraints, the Russian war in Ukraine and strong consumer demand continued to keep consumer prices running near a 40-year-high.

The Labor Department said Wednesday that the consumer price index, a broad measure of the price for everyday goods including gasoline, groceries and rents, rose 8.3% in April from a year ago, below the 8.5% year-over-year surge recorded in March. Prices jumped 0.3% in the one-month period from March.

So-called core prices, which exclude more volatile measurements of food and energy, climbed 6.2% in April from the previous year, also more than Refinitiv expected. Core prices also rose 0.6% on a monthly basis - double the 0.3% increase notched in March, suggesting that underlying inflationary pressures remain strong.

'This is another upward inflation surprise and suggests that the deceleration is going to be painstakingly slow,' said Seema Shah, chief strategist at Principal Global Investors. 'The focus will soon start shifting from where inflation peaked to where it plateaus, and we fear that it will plateau at an uncomfortably high level for the Fed.'....

Rising inflation is eating away at strong wage gains that American workers have seen in recent months: Real average hourly earnings decreased 0.1% in March from the previous month, as the inflation increase eroded the 0.3% total wage gain, according to the Labor Department. On an annual basis, real earnings actually dropped 2.6% in April.

The inflation spike has been bad news for Biden, who has seen his approval rating plunge as consumer prices rose. Biden on Tuesday again blamed the price spike on supply chain bottlenecks and other pandemic-induced disruptions in the economy, as well as the Russian war in Ukraine."

Americans don't get how inflation works. That's a problem for Biden. -MSNBC

"In a Monday poll from CNN and SSRS...'A majority of US adults say Biden's policies have hurt the economy, and 8 in 10 say the government isn't doing enough to combat inflation.' Moreover, only 34 percent of respondents approve of his handling of the economy, while 66 percent disapprove. (Apparently nobody CNN asked was undecided this time around.)....

Respondents were asked: 'Do you think the U.S. government is doing (too much), (too little), or the right amount to try to reduce inflation?' Eighty-one percent said 'too little,' while 15 percent answered it's doing just enough. (Another 4 percent responded 'too much,' and I have follow-up questions for them.)

What most Americans don't seem to get is what it means for the federal government to 'fight inflation.' For that, we turn to another recent poll, this one released on April 30 by Axios and Ipsos. It found that 34 percent of respondents knew the Federal Reserve plays a role in fighting inflation. Encouragingly, 51 percent had heard the Fed had increased interest rates in March as part of its efforts to rein in price increases.

But here's the bad news for Biden: The vast majority of Americans don't know the Fed is independent of the White House. Respondents were asked to identify whether the statement 'the President can order the Federal Reserve to address inflation' was true or false. Fifty-two percent didn't know. Another 23 percent incorrectly said it was true.

It's also not clear that Americans get what the Fed's interest rate increases entail and what it hopes to achieve. Rate increases are meant to make it harder to borrow money, which in turn prompts saving by individuals and businesses instead of spending, cooling off an economy. What a cooler economy most likely means, though, is a rise in unemployment and a freeze in wage increases.

The Fed triggered a recession in the early 1980s to help finally get the inflation of the 1970s under control, kicking off the worst economic downturn since the Great Depression at the time. Most respondents in a CNBC survey of economists, fund managers and strategists believe the Fed's upcoming moves will trigger a recession. It's hard to imagine that's what most of the 81 percent of Americans CNN surveyed have in mind as their preferred solution."

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5.11.22 - Crypto is Dying a Slow Death

Gold last traded at $1,852 an ounce. Silver at $21.58 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on safe-haven buying and a weaker dollar. U.S. stocks traded mixed as investors tried to look past the latest data showing U.S. inflation hovering near 40-year highs.

Gold to extend its rebound towards $1,880 -FX Street

"Gold price rebounds from near $1,850. As FXStreet's Dhwanie Mehta notes, gold could run into offers near $1,880 on road to recovery.

It remains to be seen if the recovery in Gold Price has legs, as the dollar could regain its safe-haven status if risk-aversion returns on the disappointing German ZEW survey. A sharp dip in the ZEW gauge could likely hint at an incoming recession in the old continent.

A slew of speeches from the Fed policymakers and US President Joe Biden will be closely followed for fresh USD valuations, eventually impacting Gold Price. US Treasury Secretary is also due to testify on the FSR later this week.

Gold has yielded an upside break from the falling trendline resistance at $1,861 on a four-hourly candlestick closing basis. This suggests that the renewed upside could have legs, with the next bullish target seen at around $1,872.

A firm break above the latter will call for a test of the downward-pointing 21-Simple Mo"ving Average (SMA) at $1,876. The 50-SMA at $1,880 will be the level to beat for gold bulls should the recovery momentum continue."�

stagflation Stagflation - Another Blast from the Past -American Thinker

"'History doesn't repeat itself but it often rhymes' is a quote attributed to Mark Twain. In the political and economic world, this maxim is proving true, as we are witnessing today.

The misery index is one such bit of history, dating back not that far, to the Jimmy Carter presidency of the late 1970s. Calculated by adding the unemployment and inflation rates together, the misery index "measures the degree of economic distress felt by everyday people."�

It is currently just over 12 percent, and that's being generous given how the government calculates inflation. More on that later. The misery index reached 15 percent just after COVID hit and the country locked down, closing businesses left and right. During the Carter era, it topped 20 percent.

Former House Speaker Newt Gingrich was recently interviewed on Fox News and brought up the misery index along with another golden oldie, stagflation. This is a term first used in the 1960s in the United Kingdom, describing a period of a stagnating economy along with rampant inflation, hence the coined term....

Stagflation may be the anchor hanging on Democrat necks ahead of the November midterm elections. Real GDP contracted in the first quarter of this year by 1.4 percent, negative growth. The last such contraction was during the first half of 2020 when COVID shut down businesses, travel, restaurants, and life in general.

Now America is post-COVID and the economy should be booming. One more quarter of negative GDP puts us officially into a recession, something the Democrats will be delighted to showcase as they ask American voters to leave them in charge of the nation's affairs....

While the official government figure for inflation is at 8.5 percent, compared to only 4.2 percent a year ago, the true inflation figure is north of 15 percent. Why does the government downplay inflation? Two reasons.

One is politics. President Biden already has 'I did that' stickers peppering gas pumps around the country. High inflation numbers don't help the political party currently in charge and are largely responsible for the rampant inflation....

Second is government itself. Benefit programs, from welfare to Medicare, are linked to the CPI. As the CPI rises, so should these benefits, but that will cost the government more money, dollars they prefer to spend on tampon dispensers in boys' rooms in schools or to send to Ukraine to secure their border while leaving ours wide open.

It's not clear whether the Republican Party offers a good alternative to Democrat policy nonsense but expect the term 'stagflation' to become a campaign issue as it should be for any candidate fed up with the current trajectory of the economy and America."

Crypto is dead -The Spectator

"The warning sign for cryptocurrencies is not so much that they have crashed - Bitcoin is down 50 per cent from its peak last November - but that they have become boring.

Bitcoin has suffered many a crash before, yet bottom-feeders quickly rushed into the market and sent the price rebounding. This time around there is little sign of any enthusiastic speculation. On the contrary, a brief rally in March fizzled out as quickly as it had begun. Bitcoin now looks set to plunge below its previous peak of 31,776 reached last July.

Many thought that Bitcoin and other cryptocurrencies could turn out to be a hedge against inflation. Those hopes have been dashed. While most currencies have been devaluing against real-world assets, cryptocurrencies have been falling in value faster.

As for the other long-term incentive to hold Bitcoin - that it might provide a stable wealth store from the prying eyes of government - that started to decay a while ago as governments got better at tracking down cryptocurrencies.

So cryptocurrencies are no longer making anyone rapid fortunes, are no longer protecting against inflation, and governments are working out how to find them. What exactly is the attraction?

They are clearly little more than a pyramid scheme: machines for redistributing wealth from players who are late into the gold rush to those who were early. And like all other pyramid schemes, they have a brief and finite life. Many of these new get-rich-quick schemes - like NFTs - have already come and gone.

Cryptocurrencies face not so much a rapid crash as a slide into nothingness."

Gas prices hit new all-time high -Fox Business

"Gas prices hit a new all-time high on May 10, 2022, amid rising inflation and President Biden's restrictions on oil and gas production.

According to AAA's average gas price calculator, the national average cost of a regular gallon of gasoline hit $4.374 on Tuesday, the highest ever according to AAA.

The prices come as the European Union edges toward oil sanctions on Russia amid the Kremlin's invasion of Ukraine. It also comes amid record-high inflation, with the consumer price index reaching 8.5% in March."

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5.10.22 - What's Happening to Those Falling for Crypto, NFTs

Gold last traded at $1,844 an ounce. Silver at $21.54 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on bargain-hunting and a weaker dollar. U.S. stocks attempted to rebound after the S&P 500 fell to its lowest level in more than a year.

Blockchain-powered platform to monetize in-ground gold -Morningstar

"Nature's Vault, a GreenTech platform designed to accelerate the funding of impact investments combating climate change and ecosystem damage, today announced its seed funding round, Board and Advisors, and an expected first tokenization project to monetize the preservation of in-ground gold deposits avoiding the environmental impact of physical mining.

'Building a first-of-its kind platform that allows anyone to fund impact investing projects around the world is a legacy everyone at Nature's Vault is proud to be part of,' said Founder and CEO Phil Rickard.

'We are bringing our breakthrough approach to tokenizing ESG projects and Natural Capital assets to help mitigate climate change in a transparent manner via distributed ledger technology and a platform that can be replicated and scaled up for future growth.'....

Its 'Legacy Token', expected to launch in the first half of 2022, will unlock the value of gold assets, without the negative environmental impact associated with mining in some of the world's most pristine locations. The Legacy Token is designed to achieve a net-zero future and to ensure that fractional asset ownership is transparent and irrefutable by recording all transactions on a secure blockchain....

Launched in 2022, Nature's Vault expects to be the one of the first to create a blockchain powered platform to tokenize projects focused on preserving natural capital - the planet's natural resources. The Company's first project involves avoiding the environmental impact and carbon emissions related to gold mining while utilizing tokenization to preserve the value of in-ground gold deposits."

social Security Social Security, Medicare, and the Twilight of "Social Insurance" -City Journal

"With looming depletion of Social Security and Medicare trust funds, Congress may finally be forced to dispense with costly illusions about their fiscal structure.

Last year, program trustees projected that, beginning in 2033, Social Security's trust fund will be depleted and insufficient to pay retirement benefits. Medicare faces an even more immediate crisis, with its trust fund projected to run out in 2026.

Americans have long supported government aid for those who can't provide for themselves, but the structure of Social Security and Medicare partly reflects an alternative vision, known as 'social insurance.' According to this ideal, all workers are required to enroll in self-financing programs, with benefits reflecting how much they have contributed rather than the extent of their need.

This approach was initially unpopular with Americans, who preferred to control their own money and to make their own contingency plans. But after rapid wartime inflation led to the restructuring of Social Security, so that early beneficiaries received much more than they had contributed, the program's popularity soared.

Policymakers then employed similarly creative accounting to generate the appearance of funding to allow the creation of additional benefits. As subsequent generations have been required to pay not only for themselves but also for their predecessors, costs have increasingly exceeded benefits, exposing the arrangement's fundamentally unsound structure....

During the Great Depression, Congress was champing at the bit to establish federal aid to support similar pensions for the elderly poor, but Franklin Roosevelt's administration obstructed its enactment until legislators attached an 'Old Age Insurance' benefit for the middle class. This also proved unpopular in the early going, as it imposed taxes on those with modest incomes and didn't pay out benefits for many years, while wartime inflation rapidly whittled away the value of contributions.

Attempting to bolster the scheme's appeal, legislative amendments to the Social Security Act transformed the program into a pay-as-you-go arrangement, providing benefits out of proportion to individuals' contributions. As a result, the generation of beneficiaries reaching retirement age in the 1960s received payments averaging 8.8 times the value of their contributions - after accounting for interest rates.

This Ponzi-style arrangement proved far more popular, at least in the short run. Legislators waved aside cost concerns by enacting payroll-tax increases that would only fully phase in 20 years later....

The appeal of social insurance has declined as the bills for earlier generations have come due and the ratio of working contributors to retired beneficiaries has halved. In stark contrast to their 1960s forebears, Americans retiring after the year 2000 will receive much less from Social Security than they paid in payroll taxes. There is no funding to maintain historical rates of benefit growth into the future."

Contra Simpleton Pundits, 'the Fed' Didn't Cause the Stock-Market Correction -Forbes

"Every stock-market rally is top heavy. In other words, every stock-market rally is led upwards by the very few. The 80/20 Pareto Principle that defines so much of life is 95/5 when it comes to equities, and realistically 98/2.

Looking back to the rally of the late 1990s/early 2000s, companies like Cisco, Intel, Microsoft, GE, Dell, and AOL were the heavyweights of the bull of that era. As for the one of recent years, it's a waste of words to say that Facebook, Amazon, Apple, Microsoft (again), Google, and Tesla were the tugboats....

In thinking about it, consider why so many of the companies mentioned enjoyed historic rallies of the kind that so thoroughly enriched the lucky-few early shareholders. The stock surges proved enriching precisely because so few saw their immense potential from the beginning. All of which explains why the funding was of the equity variety, instead of debt. These companies weren't expected to make it.

This is a long or short way of saying that the Federal Reserve and its vain attempts to set the cost of short-term borrowing had nothing to do with the early, pre-public funding of the companies that drove the last two stock-market rallies. How could it have? In just about every instance these businesses didn't come anywhere close to rating anything resembling bank finance.

Figure that bank loans must perform, which explains why banks pay so little interest on deposits now, and why they paid so little in 1999. They weren't taking big risks then, nor are they now.

All of this is requires mention given stock-market commentary that never changes. A Federal Reserve that projects its well-overstated influence through the most risk-averse financial institutions on earth is the all-weather explanation for everything stock-market related. Never explained is how. The stock market is risky, banks studiously avoid risk, but minor Fed fiddling with the short rate for credit supposedly tells the market story. What's sad is the narrative rarely even rates the most basic of interrogation.

More important, "�the Fed' as far as the eye can see view is all over the place. Supposedly stocks rallied on Wednesday based on 'relief' that the Fed only hiked 50 basis points. Investors apparently feared 75. Ok, but the following day stocks cratered. And they declined even more on Friday. Did Chairman Powell backtrack?

Readers know the answer, or they should. The rate hikes announced this week had been priced weeks ago, yet we're supposed to believe the big equity declines of the last few days were Fed related? That's what the pundits want us to believe. They embarrass themselves. They don't even try to be serious anymore, or investigatory. Their routine answer whether markets go up or down is that 'the Fed did it.'"

What Is Happening to the People Falling for Crypto and NFTs -NYT

"To understand the latest incarnation of the colossal crypto grifts that continue to engulf the internet, I suppose we should start with all those bored apes, because how could we not?

I don't mean real apes - little of what's in this column is about stuff you could call in any tangible sense real. Instead I'm talking about the collection of digital art known as the Bored Ape Yacht Club.

Created about a year ago by a quartet of mysterious, pseudonymous cryptocurrency enthusiasts, Bored Ape is a collection of thousands of programmatically generated hypercolor drawings of coolly disheveled primates, the kind you don't bring home to mama.

For reasons that don't seem much deeper than weird things happen online, bored apes have become a hot commodity in the market for nonfungible tokens, or NFTs. As of Thursday morning, the cheapest available Bored Ape NFT - a kind of digital certificate that grants its holder nebulous ownership of the ape illustration - was selling for the equivalent of about $340,000; last year, an NFT of a very rare Bored Ape, one of a small number with gold fur, sold at Sotheby's for $3.4 million.

Are you with me so far? People online are going ape for what are essentially primate Pokemons. You may be wondering what the apes do and why people are paying so much for legally uncertain claims to them, and how you ever got so old and out of touch. All good questions - but we're well past those now.

In the past year Yuga Labs, the well-funded start-up that makes Bored Ape, has embarked on a parade of new and even farther-out digital spinoffs of its simians. Its latest ventures have highlighted the head-scratching, money-burning, broken-casino vibe of what's being called the internet's next big thing.

Cryptocurrencies, blockchains, NFTs and the constellation of hyped-up technologies known as web3 have been celebrated as a way to liberate the internet from the tech giants who control it now. Instead what's happening with Bored Ape suggests they're doing the opposite: polluting the digital world in a thick haze of errors, swindles and expensive, largely unregulated financial speculation that ruins whatever scrap of trust still remains online.

The latest ape sale took place last weekend, and it was a disaster from top to bottom. Huge demand overloaded Ethereum, the open-source blockchain that hosts the Ether cryptocurrency and had been developed to be a more capable crypto system than Bitcoin. The technology's shortcomings led to thousands of people paying about $180 million collectively in transaction fees. Some appeared to pay more in fees than what they paid for the NFT. They were the lucky ones; some paid steep transaction fees only to see their ape purchases fail for unknown reasons. (Yuga said it has refunded money spent on failed transactions.)

Still others suffered various hacking and phishing scams. Meanwhile Yuga, whose backers include some of Silicon Valley's biggest venture capital firms, generated at least $320 million in sales. Sales of what? Oh, plots of 'land' in Otherside, a virtual world that might come out soon.

Of course, buyers participated in the sale willingly. You might find it hard to muster much sympathy for folks who paid huge sums to speculate on digital goods in an unbuilt corner of the metaverse. Play stupid games, win stupid prizes....

Honestly, I have long tried to keep an open mind to these claims, because I have been incredibly dismayed by the way a handful of firms have taken over an internet that I once thought of as a font of innovation. If there really is a new web that's going to solve all the problems of the old web, sign me up.

But the continual blowups should crater those expectations. At the same time that the Ethereum blockchain was getting crushed by last weekend's Bored Ape sale, another supposedly smart crypto network, Solana, was taken offline by bots - one of several full or partial outages it has experienced this year.

Two other crypto ventures, Rari Capital and Saddle, were hit with attacks that led to a loss of a combined $90 million in Ether. Early last week, Deus Finance lost $13.4 million in the second attack in two months. I could go on - and on, and on."

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5.6.22 - Gold Gains, Dollar Dips After Fedspeak

Gold last traded at $1,882 an ounce. Silver at $22.32 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on safe-haven buying and a weaker dollar. U.S. stocks extended losses, continuing their slide, after the Dow index posted its worst day since 2020.

Gold gains as dollar dips after Powell flags inflation risks -CNBC

"Gold prices bounced higher as the dollar and U.S. Treasury yields slipped after Federal Reserve Chair Jerome Powell, following an expected interest rate hike, flagged risks to the economy from soaring inflation.

The dollar index fell to a session low as Powell said inflation was too high, making bullion more appealing for other currency holders. Benchmark 10-year Treasury yields also edged lower. 'The market expected the May FOMC meeting to have a hawkish tilt but the gold market viewed the widely anticipated 50bps hike as dovish relative to hawkish fears,' said Suki Cooper, an analyst at Standard Chartered.

'We maintain the view that gold will revert to taking its cue from real yields as the year unfolds pressuring prices lower in H2, but concerns around inflation, geopolitical risks and slower growth leave gold prices prone to upside risk in the near term.'

The Fed in their policy decision released before Powell's speech, raised benchmark overnight interest rate by half a percentage point, the biggest jump in 22 years, and said it would begin trimming its bond holdings next month as a further step in the battle to lower inflation. While gold is considered an inflation hedge, lower U.S.

Kitco reports... 'There were a couple of very subtle changes in Chairman Powell's words. One of the major changes was that he spoke about the Federal Reserve's ability to raise interest rates and have the economy experience a soft landing. Today he replaced the word soft landing with 'softish landing' acknowledging the potential economic fallout because of the number of rate hikes needed to have an impact on inflation.'

During the press conference Chairman Powell addressed the possibility of larger rate hikes than a 50-basis point hike, saying that a rate hike of '75 basis points is off the table'. That statement created bullish market sentiment for both gold and U.S. equities."

money Why a Wealth Tax Is a Bad Idea -Reason

"Billionaires are better at figuring out what to do with their money than the government will ever be.

President Joe Biden has long been, in the immortal words of Editor at Large Matt Welch, a rusty weather vane, creaking reluctantly in the direction that the winds of his party blow. With his new budget proposal, the breezes have finally brought us to the shores of a serious wealth tax debate.

Biden isn't calling his proposal a wealth tax, of course. It's the 'Billionaire Minimum Income Tax,' and it imposes a minimum 20 percent tax on the income of households with more than - oddly - $100 million in wealth. Biden's proposal is smaller and more pragmatic than the earlier variants from Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.) - par for the course with Biden.

Most notable is that even with implausibly optimistic estimates of the federal government's ability to collect, the whole mess is supposed to raise an average of a mere $36 billion per year over the next 10 years....

Anyone who has been paying the slightest bit of attention to federal spending over the last several years knows that figures that begin with b instead of t are now considered rounding errors. The point of this wealth tax is not to raise revenue. It has two rather different aims.

The first is pure political calculus. A floundering, unpopular president seeks to demonstrate a willingness to punish a small, unpopular class of people. A Reuters/Ipsos poll last year found that nearly two-thirds of respondents agree that the very rich should pay more taxes: 64 percent either strongly or somewhat agreed....

The second aim, which has more far-reaching consequences, is to establish the principle that the U.S. government can tax based on wealth at all. If such a tax were to be put into law-and found constitutional by the Supreme Court, which would be no mean feat - it would be the thin end of a very large wedge. Biden's proposal will spin up the huge bureaucratic, legal, and accounting support systems, public and private, necessary to support the formal tracking of wealth alongside income.

As a moral matter, if not a legal one, we might ask what the very rich do with their money as a way of evaluating whether they should keep it. As famously rich person Elon Musk recently tweeted: 'Working hard to make useful products & services for your fellow humans is deeply morally good.'

Many who support wealth taxes seem to hold the belief that the government would use the resources that the very wealthy command toward more valuable ends. Of course, most of the fortunes of billionaires such as the Waltons, or Musk, or Bezos are tied up in the large and extremely productive firms that made them rich in the first place....

Every country on the planet with high real median personal income also has billionaires. It is at least plausible that there is a connection between institutions that make billionaires possible and the same ones that create general prosperity. In fact, Sweden has more billionaires per capita than the United States. Perhaps not coincidentally, Sweden is just one of dozens of countries that have tried wealth taxes and abandoned them."

Everything's a WeWork Now -Wired

Years after the coworking giant's highly publicized decline, its principles have permeated traditional offices and unlikely work spaces alike.

The SaksWorks coworking space in Greenwich, Connecticut, tucked inside what was once a Saks Fifth Avenue department store, feels like a well-appointed library where no one reads: fireplace, overstuffed couches, and large potted plants. When I visited on a Monday in March, the books lining each wall - grouped by color, not theme - made an appealing backdrop for my afternoon Zoom meeting.

SaksWorks was something of a marriage of convenience for the retailer, which is looking to repurpose some of its real estate as in-person shopping dwindles, and WeWork, the fallen coworking giant that, until recently, managed the space. (Saks parent company Hudson's Bay Co. has since invested heavily in Convene, a WeWork competitor that will take over.)

The unlikely transformation also speaks to a peculiar consequence of the Covid-19 pandemic: These days, anywhere can be an office. And every office feels increasingly like a WeWork. It's a surprising turn. WeWork's collapse is the stuff of legend - or at least of podcasts, books, a Hulu documentary, and an Apple TV+ series....

The coworking pioneer had soared to a valuation of $47 billion by 2019 on the back of stylish, amenity-rich office spaces and overeager venture capital. But as the company prepared to go public that year, questions swirled about its viability. Within weeks, Adam Neumann, the charismatic cofounder responsible for much of WeWork's mythmaking, was out as CEO, the company's valuation dropped to $10 billion, and the IPO was put on ice.

But while WeWork has become a cautionary tale, office life in the US has quietly embraced several of its core tenets. Many workers who spent the last two years at home-a small portion of the overall labor force - are being called back to offices that look different from the ones they vacated in 2020, with fewer desks and more open spaces designed to foster collaboration.

A survey by CBRE, a commercial real estate company, found that 51 percent of respondents expect flex space to make up a significant portion of their offices in the next two years. Even the US government is working on its own pilot coworking space, called FlexHub, for federal workers and contractors. Commercial landlords have been adding coworking spaces to their buildings as well....

'The office is undergoing a major evolution,' says Paul Fiorilla, research director for Yardi Matrix, which analyzes commercial real estate. Employers, he says, now need to justify to workers why they should show up in person."

American Consumers Are Shopping, Traveling and Working Out Like It's 2019 -WSJ

"In early 2020, many companies said the pandemic would change everything for consumers. And it did - for a while.

Now many Americans are resuming their prepandemic habits: rocking out at crowded concerts, doing deadlifts next to strangers at the gym and stocking a standard supply of toilet paper. Airlines, restaurants and child-care centers, which relied on government loans to stay afloat during Covid-19's peak, can now hardly keep up with demand.

Live Nation, which owns Ticketmaster, said concert ticket sales were up 45% as of February 2022 compared with the same period in 2019, the last full prepandemic year. As of February, the company had 30% more concerts planned for 2022 than 2019.

Membership levels at gym chain Planet Fitness in January surpassed prepandemic levels following a stretch in which some 25% of the nation's gyms closed, according to industry data.

Over two million people traveled by plane each day on average between April 17 and 23, according to the Transportation Security Administration. That figure averaged about 2.4 million in 2019.

At the same time, some pandemic stars like Peloton Interactive Inc., Netflix Inc. and Instacart Inc. have taken hits. From hoping that consumers had permanently shifted their behavior, the companies are now considering previously unthinkable changes.

Netflix, hit with its first membership decline in a decade, is considering offering a lower-priced ad-supported version. Peloton, losing money and saddled with excess equipment, is lowering the price of its stationary bikes. Instacart slashed its valuation.

The resiliency of the American consumer has been a hallmark of modern history. After events such as Hurricane Katrina in New Orleans or the attacks of 9/11, people have shown they will snap back to doing many of their favorite things, given time.

Rarely has it happened so broadly and rapidly as now, two years after a devastating global pandemic began. In the past few months, American consumer tastes have changed rapidly, again, and companies are scrambling to catch up."

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5.4.22 - 50% of the Stock Market in a Bubble -CNBC

Gold last traded at $1,874 an ounce. Silver at $22.52 an ounce.

NEWS SUMMARY: Precious metal prices steadied Wednesday ahead of the Fed's expected .50% interest rate hike. U.S. stocks traded flat as investors braced for the Federal Reserve's interest rate decision.

The Dollar Is 'Mighty' In the Way That Kim Jong Un Is 'Tall' -RealClearMarkets

"Were he around, Adam Smith would marvel. All this talk of a 'strong,' 'weak,' or as is often said lately, a 'mighty' dollar. Wait, what? Money just is, yet pundits of the moment quite literally act as though money grows on trees such that it grows "stronger"� today, but perhaps not tomorrow. No, the money discussion isn't serious. Again, Smith would be aghast....

Since money flows logically signaled the exchange of products and services for products and services, stability of the unit mattered. A vintner providing his wine for 'dollars' logically wanted the money taken in for the wine to command equal value in the marketplace....

All of which explains the eventual migration to gold. The appeal of the yellow metal wasn't its shininess, or religious factors, or something else unrelated to exchange. Gold came to define money because the producers who comprise the market realized that it was the commodity least affected by everything else. Put another way, gold was remarkably stable. Which meant it was and is the ultimate money. Producers want equal value for their production, period.

That gold still is the ultimate definer of money will logically trigger some in our midst, and without regard to political persuasion. Supposedly gold is 'yesterday,' supposedly it's the stuff of monetary cranks, or conspiracy theorists...The simple and modern truth is that gold remains the ultimate money precisely because it remains the commodity least affected by everything else.

Evidence supporting the above claim is $7 trillion in daily currency trading. Before President Nixon severed the dollar's link to gold in 1971 (and by extension, the world's currency link to gold), currency markets were largely non-existent. With good reason. With the dollar defined as 1/35th of a gold ounce, and the world's currencies either explicitly or implicitly defined in terms of the dollar, currencies were very stable...

When money had a commodity definition, it just was. Like a foot, inch, or minute, money was the quiet aspect of commerce that facilitated actual commerce. Again, pre-1971 'currency trader' wasn't a profession. Money was as Smith defined it in The Wealth of Nations.

Which is why he would once again marvel at the discussion of money today? The dollar is 'strong'? How? Why would money be anything but a constant measure of value? Exactly.

Still, the dollar is said to be strong today. It's well up against the yen, the euro, the pound, etc. Okay, but what does that mean? There has to be context. Think about it. North Korean leader for life is Kim Jong Un is said to be 5'7"�, or 5'4"� without lifts in his shoes. In that case, Kim would be tall around 5-year old kids, but rather short around 35-year olds."

waterfall The River of No Returns -Bonner Private Research

"Is Amazon leading the rest of the market... right over the falls? The great 'River of No Returns' - Amazon.com - went over a waterfall on Friday. Forbes:

'Shares of Amazon collapsed Friday after the e-commerce monolith reported worse-than-expected earnings spurred by high inflation and lingering supply chain constraints, pushing the stock down more than 30% below its record high and extending a slate of massive losses among formerly high-flying technology firms. Amazon stock tumbled 14% Friday to $2,485, logging its worst day since 2014 and wiping out about $210 billion in market value.'

But what did you expect? Nature imposes symmetry. And in a market economy that means this: Those stocks that go up the most in a boom are the ones that go down the most in a bust.

The First Shall be Last. There are always market leaders. Some companies stand out. Either because they have snazzy new technologies or better business models. And they seem unstoppable... indestructible...IBM, Minnesota Mining and Manufacturing, Kodak, Sears, Coca Cola and Xerox. These companies were members of a group of sizzling stocks from the 1960s - the Nifty Fifty.

They were 'nifty' because they grew faster, and made more money for investors, than other stocks. And they had brands that looked unbeatable.

Who could resist 'Avon calling?' Who didn't know that 'things go better with Coke?' Who didn't shop at Sears? What office didn't have a Xerox machine?

But just as day begets night, so does success beget failure. When the big breakthrough in photo technology - digital imagery - came along, for example, did Kodak lead the way? Nope. And when women wanted perfumes and make-up with a little more chic - was Avon on the case? Nope"� it was French brands - Givenchy and Dior - that gave them what they wanted. And who led the world into the laptop computer/tablet/I-phone age"� IBM? Nope again; it was MicroSoft and Apple.

Similar retrospectives could be written about any of the Nifty Fifty companies. The common feature was the symmetry. They went up"� then they went down.

As a group, the Nifty Fifty outperformed on the way up. Then, when the "�60s boom turned into the "�70s bust, they outperformed again"� on the way down."

50% of market is in a bubble, Dan Suzuki warns -CNBC

"The market may be in the early innings of a dramatic decline...Money manager Dan Suzuki of Richard Bernstein Advisors warns the group is in a 'bubble.'

'Go back and look at the history of bubbles. They don't softly correct and then are off to the races six months later. You typically see a major correction, you know, 50% or more. And, typically it comes with an overshoot,' the firm's deputy chief investment officer told CNBC's 'Fast Money.'

Suzuki suggests the stakes are high this week with the Federal Reserve set for a two-day policy meeting. Wall Street consensus expects a half-point hike on Wednesday. The biggest wildcard, according to Suzuki, will be guidance.

'There's probably a lot more downside to go,' said Suzuki, who's also a former Bank of America-Merrill Lynch market strategist. 'Information technology, communication services and consumer discretionary... alone make up about half of the market cap of the S&P 500.'

Suzuki and his firm made the tech bubble call late last June. The forecast is built on the notion a rising interest environment will hurt growth stocks, particularly technology.

Meanwhile, the Nasdaq is coming off its worst month since 2008. The tech-heavy index is off almost 23% from its all-time high, hit on Nov. 22, 2021....

To weather a potential crash, Suzuki is taking a barbell approach. On one end, he likes stocks which typically benefit in an inflationary environment, particularly energy, materials and financials. He lists defensive stocks, which include consumer staples, on the other side."

Delusion Reigns at the Eccles Building -Mises

"Never in the history of the world has the financial well-being of so many been tied to the economic competence of so few. Yet what emerged from the latest Federal Open Market Committee (FOMC) meeting (March 15-16) indicates a complete lack of the macroeconomic fundamentals.

Given how wrong the US Fed has been in its forecasts of transitory inflation, one would hope that Fed officials would have questioned some of their basic assumptions, which led to such dramatically erroneous conclusions. Yet, they continue down the path of mistaking bubbles for growth, extremely frothy market valuations for solid fundamentals and the cheery market consensus for a stable equilibrium.

Make no mistake - we are in extreme bubble territories for the asset classes of equities, bonds (despite the recent routing, valuations are still very frothy - more on that later), and real estate. US GDP (gross domestic product) numbers these days are pretty much largely dependent on the reserve currency status and is just a pin prick away from a cascading collapse on multiple fronts. What lies ahead is sheer mayhem in the equities, bonds, and real estate markets, and consequently on the economy and currency markets as well.

A legitimate question at this point would be what has changed in the immediate past to convert what was an inevitable event to an imminent one? First, the fundamentals of the US Economy have been deteriorating for at least two decades, and it was the apparent low consumer price inflation despite all of the monetary inflation that masked the disease.

Economists, investors, and the general public have been mistaking the equity, real estate, and bond bubbles (which are a direct consequence of the monetary inflation) as indicative of a sustainable economy....

The Fed is forecasting stable unemployment and a cooling Consumer Price Index (CPI), and they will be wrong on both counts. Both the CPI and unemployment, even using the heavily manipulated US government data, are likely to be in double-digits over the next few years, and if measured accurately, the first digit is unlikely to be 1 on both counts....

The US Fed will probably start the Quantitative Tightening (QT)2 process in May, which will lead to a near breakdown of the financial system within a few weeks or months. QT1 in 2018 lasted for nearly a year, but the leverage and the imbalances within the system are far greater today than it was in 2018. QT2 will then be replaced with QE (to infinity) in short order 'to save the economy.'....

How long will the bear markets continue? My guess is that the Fed will continue to lag behind the inflationary curve for at least the next two to three years. Over the medium term of the next three to five years, whether this economic crisis ends in a hyperinflationary depression, with the US dollar losing all of its value, or in a deflationary bust where stocks and real estate lose most of their value, with the dollar retaining a reasonable portion of its value, is something that only time will tell. But I would be inclined to speculate that the former is the far more likely outcome, by a wide margin."

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5.3.22 - Buffett Rips Wall Street 'Gambling Parlor'

Gold last traded at $1,868 an ounce. Silver at $22.58 an ounce.

NEWS SUMMARY: Precious metal prices stabilized Tuesday on bargain-hunting and a weaker dollar. U.S. stocks opened modestly higher after the major averages staged a roller coaster start to the month.

Gold is still putting up a fight as the Fed looks stuck -Kitco

"Gold prices dropped below $1,900 an ounce, falling roughly 5% after it was unable to break above $2,000 an ounce. However, there is still some fight left in the gold bulls as the market looks to end the week back above $1,900.

Gold was hit with some significant selling pressure as the U.S. dollar index has pushed to nearly a 20-year high. The green back has seen some serious bullish momentum as traders and investors prepare for the Federal Reserve's monetary policy meeting this week.

The U.S. central bank is setting itself up to aggressively raise interest rates with markets looking for three 50-basis point moves at the next three meetings.

At the same time markets are expecting interest rates to end the year above 3%. However, it looks like some investors are realizing that maybe market expectations have gotten a little ahead of themselves.

Yes, the Federal Reserve has to deal with the growing inflation threat as consumer prices rise to their highest level in more than 40 years; however, it is looking less likely that the U.S. central bank can engineer a soft land as recession and stagflation fears start to grow.

A major shock this week came last Thursday with U.S. first-quarter GDP showed that the economy contracted by 1.4%; economists note that a lot of the decline in economic activity was due to trade imbalances. Although the consumer remains well supported, cracks are starting to show in the foundation.

The question is how long can the consumer last as inflation continues to rise....Unfortunately, higher interest rates will not impact food and energy costs, these sectors continue to be impacted by Russia's ongoing war with Ukraine. So there is not much the Fed can do to address supply-side issues."

personal income Real Personal Income Down 20% from One Year Ago -Brownstone Institute

"Well, here's another shocker. This Commerce Department report showed that real disposable personal income in March came in at -19.9% versus March 2021.

That staggering shrinkage, of course, is still another testimony to the old saw about 'what goes around, comes around.' That is, last March real disposable incomes soared by nearly 29% owing to the massive Biden stimulus payments. But since then inflation has blasted skyward, even as Washington has run out of nerve on the fiscal stimulus front.

What this reminds, of course, is that we are not in an ordinary business cycle. Washington simply went berserk on the fiscal and monetary front in response to the economic dislocations caused by...Covid lockdowns. These massive stimmy eruptions, in turn, have created unprecedented turmoil and fluctuations in the quarterly flows of income and spending....

Alas, even Washington's outbreaks of fiscal madness eventually come to an end. Consequently, the run rate of transfer payments reported this morning for March 2022 was just $3.86 trillion, a figure -$4.19 trillion and 52% below that of March 2021.

Needless to say, neither the American economy nor economists' models are built to handle fluctuations of such gigantic magnitudes. Accordingly, the American economy is now flying blind into a direction which includes soaring inflation and an abrupt reversal of the massive monetary and fiscal stimulus that drastically distorted economic activity during the past two years....

Thus, the question remains. Under an impending scenario in which the PCE deflator is rising toward 10% is it conceivable that the Fed can ease up on monetary restraint - especially during an election season in which the GOP will be in full-throated anti-inflation war cries?

We think the answer to the above question is negative, and that means the impending hit to the insanely over-valued stock market will be biblical. That's because interest rates are going to rise far above current expectations before the Fed finally succeeds in staunching the inflationary tide and sending the economy into the drink."

Fed Prepares Double-Barreled Tightening With Bond Runoff -WSJ

"To support financial markets and the economy during the pandemic, the Federal Reserve more than doubled its asset portfolio of mostly Treasury and mortgage securities to a mammoth $9 trillion.

This Wednesday, officials are to announce plans on how they will shrink those holdings. Expect the process to be faster and potentially more disruptive to financial markets than last time.

The Fed first undertook large-scale bond buying, dubbed 'quantitative easing,' during and after the 2007-09 financial crisis...It stopped expanding its portfolio in 2014, reinvesting the proceeds of maturing securities into new ones, dollar for dollar....

Officials have recently indicated that in this go-round, they would allow $95 billion in securities to mature every month - $60 billion in Treasurys and $35 billion in mortgage-backed securities - nearly double the caps from last time. Runoff is likely to start in June and reach the new caps in just a couple months instead of a year....

This time, the Fed is in a hurry to remove stimulus because inflation was 6.6% in March using the Fed's preferred index, near a four-decade high.

'I don't think this is going to be 'watching paint dry,' said Diane Swonk, chief economist at Grant Thornton. 'The Fed is doing this at the same time they are raising rates aggressively and inflation is high. They want to tighten financial conditions.'....

The reality is no one is quite sure of the impact on growth and markets of throwing quantitative easing into reverse. That ambiguity complicates the Fed's calculations of how high to raise interest rates to slow the economy and bring down inflation."

Warren Buffett rips Wall Street for turning the stock market into "�a gambling parlor' -CNBC

"Berkshire Hathaway CEO Warren Buffett lambasted Wall Street for encouraging speculative behavior in the stock market, effectively turning it into a 'gambling parlor.'

Buffett, 91, spoke at length during his annual shareholder meeting Saturday about one of his favorite targets for criticism: investment banks and brokerages.

'Wall Street makes money, one way or another, catching the crumbs that fall off the table of capitalism,' Buffett said. 'They don't make money unless people do things, and they get a piece of them. They make a lot more money when people are gambling than when they are investing.'

Buffett bemoaned that large American companies have 'became poker chips' for market speculation. He cited soaring use of call options, saying that brokers make more money from these bets than simple investing....

'It's almost a mania of speculation,' Charlie Munger, 98, Buffett's long-time partner and Berkshire Hathaway vice chairman, chimed in.

'We have people who know nothing about stocks being advised by stock brokers who know even less,' Munger said. 'It's an incredible, crazy situation. I don't think any wise country would want this outcome. Why would you want your country's stock to trade on a casino?'"

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5.2.22 - The Fed's Favorite Inflation Gauge Up 5.2%

Gold last traded at $1,862 an ounce. Silver at $22.49 an ounce.

NEWS SUMMARY: Precious metal prices traded sharply lower Monday as the dollar hit 20-year highs. U.S. stocks opened lower after the Nasdaq Index posted its worst month since 2008; pressured by rising rates, rampant inflation and underwhelming earnings.

The Fed's favorite inflation gauge rose 5.2% -Fox Business

"A key measure of annual inflation that is closely watched by the Federal Reserve is running close to the hottest pace in nearly four decades as the Russian war in Ukraine, widespread supply disruptions, extraordinarily high consumer demand and worker shortages fuel rapidly rising prices.

Core prices, which exclude the more volatile measurements of food and energy, soared by 5.2% in the year through March, according to the personal consumption expenditures price index data released Friday morning. That measurement is the Fed's preferred gauge to track inflation; it marks the 12th consecutive month the measure has been above the central bank's target range of 2%.

Including food and energy, the inflation gauge jumped 6.6% in March from the previous year, beating out last month's measurement of 6.3% to become the fastest pace since 1981.

In the one-month period between February and March, core prices soared 0.3%, while the headline gain shot up by 0.9%."

gold demand Soaring inflation drives up gold demand by 34% as investors scramble for a safe haven -Fortune

"Investors looked to gold to protect their hard-earned savings in the first quarter of 2022 as record inflation pummeled other investment vehicles.

Physical demand for the safe-haven asset jumped 34% year over year to 1,234 tonnes in the first three months of 2022, according to a report from the World Gold Council released Thursday. That's the highest quarterly demand increase the gold market has seen since 2018.

'There will be more demand for gold as a safe haven as long as the world is in disarray and as long as the war is raging in Ukraine,' Kevin Rich, a global gold market adviser to the Perth Mint, the official bullion mint of the government of Western Australia, told Fortune. 'Until the Fed can really get their arms around inflation, gold demand as a hedge should be there.'

The rise was largely driven by the strongest quarterly inflows to gold ETFs since 2020, the gold council said. Gold ETF holdings jumped by 269 tonnes in the first three months of the year, more than making up for the 174-tonne annual outflow seen in 2021.

Central banks also added 84 tonnes to their global gold reserves in the quarter, with net buying more than doubling from the fourth quarter of 2021....

A number of top investment banks and Wall Street titans have been sounding the alarm over the potential for a U.S. recession over the past few months as well. Deutsche Bank economists, led by head of research David Folkerts-Landau, even predicted this week a 'major recession' could be in the cards for the U.S. economy, arguing the Fed is 'well behind the curve' when it comes to fighting inflation.

'On balance, the strong start to the year for investment and the negative economic ramifications of persistently high inflation and war in Ukraine make us confident that investment [in gold] will be higher this year than last,' the World Gold Council explained in its report."

Rumors of Stagflation in First Quarter GDP -WSJ

"Americans have good reason to be anxious amid rapid inflation, and on Thursday they received another one. The U.S. economy shrank in the first quarter of 2022 by 1.4%, the first decline since the pandemic lockdown recession in the first half of 2020. The question is whether this is, well, transitory, or the sign of stagflation or a recession to come.

The case for optimism is that the contraction was largely attributable to shifting inventories and especially falling exports as the world economy struggles. Consumer spending and business investment both grew in the quarter but were exceeded by the export plunge.

The contraction caught nearly every Wall Street economist by surprise. The consensus was for growth of 1% or so. The decline also occurred despite historically easy monetary policy, as the Federal Reserve has only begun to tighten. Consumer spending on goods was flat, and the pace of gross private investment declined.

The GDP decline also coincided with an accelerating rise in prices. The GDP price index rose at an 8% annual rate on top of 7.1% in the previous quarter. The Fed's preferred inflation measure, personal consumption expenditures, rose 7%, when its target is 2%.

A combination of slow growth and rising prices is known as stagflation - that 1970s affliction that younger Americans haven't experienced. One quarter does not stagflation make, but the trend isn't encouraging.

Also bad news is a year-long decline in real disposable income...A burst of federal welfare payments produced a disposable income surge in early 2021. But those payments plus increases in nominal wages have since been overwhelmed by inflation. This is the reason most Americans say they're unhappy with the economy despite strong employment growth....

One obvious message for the White House and Congress is to avoid any anti-growth policy shocks. Even most Keynesians know that a slowing economy is a bad time for a tax increase. Democrats who want to avoid a recession on their watch would be wise to end the talk of reviving Build Back Better and forswear new taxes. President Biden can also help by calling for a moratorium on new regulation."

Stagflation is staring Biden in the face - but he refuses to change course -New York Post

"First we were told inflation was imaginary. Then we were told it was 'transitory,' the result of COVID-inflicted supply-chain problems. Then we were told it was Russian President Vladimir Putin's fault.

Now people are starting to admit the massive runaway spending of the Biden era has something to do with it. But we're also facing stagflation, a mixture of inflation and slow growth, and the government also plays a role in turning inflation into stagflation....

We're seeing it everywhere, from soaring food and gasoline costs to a housing 'bubble' that looks more like inflationary pricing to increases in rents and automobile prices and just about everything else. The latest figures, meanwhile, show that the economy shrank 1.4% last quarter, making it the worst since the pandemic's start; economists had expected 1.1% growth.

There are two ways to address inflation: Remove some of the money from the system, which the Federal Reserve did in the past via higher interest rates, and increase the supply of goods. At this point in 1980, when inflation soared, the federal funds rate was nearly 20%. Presently, it's 0.33%....

Team Biden hasn't just been spending us blind. It's also been regulating like crazy in ways that tend to reduce the supply of key goods. The administration has thrown stumbling blocks in the path of developing domestic oil and natural gas, blocked pipelines to bring in Canadian oil, increased taxes, added environmental rules and generally functioned in ways that tend to make it harder, not easier, to respond to the flood of money by adding production.

It's no surprise that we find ourselves looking at stagflation again when we're re-enacting the approach that led to it the first time.

If the Biden administration wanted to fight stagflation, it would be cutting red tape, encouraging business activity and investment and slashing federal spending. But it's not doing that. Why not?"

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4.29.22 - Inconvenient Truth About ESG Investing

Gold last traded at $1,909 an ounce. Silver at $23.03 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on safe-haven buying and a weaker dollar. U.S. stocks traded lower - led by Amazon - as the Nasdaq heads for worst month since March 2020.

Inflation will keep gold prices above $1,900 even as the Fed raises rates -Scotiabank/Kitco

"The gold market continues to struggle as prices trade below $1,900 an ounce, and the Federal Reserve's monetary policy decision next week will continue to weigh on the precious metal; however, one market strategist still sees solid support for the precious metal through the rest of the year.

In a report published Monday, Marc Desormeaux, senior economist at Scotiabank, said that despite gold's recent more than 5% drop from $2,000, he is increasing his forecast for the precious metal.

The Canadian bank now sees gold prices averaging the year around $1,900, up from the previous forecast of $1,800.

Although Desormeaux is relatively bullish on gold, he added that the precious metal could struggle in the near term ahead of the Federal Reserve's monetary policy decision.

Markets are expecting the U.S. central bank to raise interest rates by 50 basis points. At the same time, the central bank is also looking to start reducing its balance sheet by $95 billion."

yellen See If You Can Follow Yellen's Bouncing Inflation Ball -Issues & Insights

"Treasury Secretary Janet Yellen said over the weekend that we're going to have to 'put up with inflation for a while longer,' which means that she has now held just about every possible - and almost always wrong - position on an issue about which she is supposedly an expert. Is it any wonder nobody trusts elites anymore?

Yellen was on CNBC over the weekend and, when asked whether inflation had peaked, said:

'Well, it may have peaked, but "� I think the shocks emanating from this unjustified attack on Ukraine will prolong inflationary pressures. So, the outlook is uncertain. As you know, the Fed is taking steps to bring inflation down, but I think we will have to put up with high inflation for a while longer.'....

The Putin-is-to-blame for skyrocketing prices is one of team Biden's big lies meant to deflect blame. But the press never calls them on it.

No, what's really troubling is the fact that Biden's Treasury secretary has been so utterly clueless about inflation since joining his cabinet....

So how in the world can her pronouncements about inflation under President Joe Biden be as reliable as the weather forecast? Is her understanding of economics tainted by liberal ideology? Is she just doing the bidding of an incompetent and desperate Biden administration?

Does it matter? Yellen is a shining example of why so many in this country feel betrayed by the people who claim lordship over them."

An Inconvenient Truth About ESG Investing -Harvard Business Review

"Investing in sustainable funds that prioritize ESG goals is supposed to help improve the environmental and social sustainability of business practices. Unfortunately, close analysis suggests that it's not only not making much difference to companies' actual ESG performance, it may actually be directing capital into poor business performers.

As of December 2021, assets under management at global exchange-traded "sustainable"� funds that publicy set environmental, social, and governance (ESG) investment objectives amounted to more than $2.7 trillion; 81% were in European based funds, and 13% in U.S. based funds. In the fourth quarter of 2021 alone, $143 billion in new capital flowed into these ESG funds.

How have investors fared? Not that well, it seems.

To begin with, ESG funds certainly perform poorly in financial terms. In a recent Journal of Finance paper, University of Chicago researchers analyzed the Morningstar sustainability ratings of more than 20,000 mutual funds representing over $8 trillion of investor savings. Although the highest rated funds in terms of sustainability certainly attracted more capital than the lowest rated funds, none of the high sustainability funds outperformed any of the lowest rated funds.

That result might be expected, and it is possible that investors would be happy to sacrifice financial returns in exchange for better ESG performance. Unfortunately ESG funds don't seem to deliver better ESG performance either.

Researchers at Columbia University and London School of Economics compared the ESG record of U.S. companies in 147 ESG fund portfolios and that of U.S. companies in 2,428 non-ESG portfolios. They found that the companies in the ESG portfolios had worse compliance record for both labor and environmental rules. They also found that companies added to ESG portfolios did not subsequently improve compliance with labor or environmental regulations....

Why are ESG funds doing so badly? Part of the explanation may simply be that an express focus on ESG is redundant: in competitive labor markets and product markets, corporate managers trying to maximize long-term shareholder value should of their own accord pay attention to employee, customer, community, and environmental interests. On this basis, setting ESG targets may actually distort decision making....

The conclusion to be drawn from this evidence seems pretty clear: funds investing in companies that publicly embrace ESG sacrifice financial returns without gaining much, if anything, in terms of actually furthering ESG interests."

The prodigal priest, Fr. Stu - Mark Wahlberg's best -Planned Man

"Fighter, drunk, rebel without a clue or cause - a guy with an animus for God, blaming Him for his younger brother's death and the ensuing dissolution of his family - becomes a Catholic priest, and lives the life of the cross as beautifully and painfully as a man imbued with grace can.

'Father Stu,' with Mark Wahlberg in the title role, is the best performance in the storied career of the artist once known as Marky Mark. Yes, even better than his performance in 'The Departed.' The Oscar race for Best Actor should be over already.

Planned Man gives the film and the star's performer a Three Thumbs Up! However, if you look at the cognitive dissonance between the critics (44%) and audience (95%) on Rotten Tomatoes, we see the problem: Elites are secular. We have taken the separation of the Church and state too far. Keeping religion out of politics is a good thing. Keeping it out of our shared public life and culture is quite another.

Mel Gibson, who plays Stu's estranged, drunk and damaged father, captures the spirit of our age, saying in response to Stu's promise to keep dad in his prayers, 'Don't you dare pray for me"�you're violating my civil rights!' Now there's a thought for our era. (As a side note, it has been too long in the making, but 'Father Stu' redeems Mel Gibson's legacy as a serious actor.) ....

Father Stu]s gift is that he is human, all too human. His anger for God, the way his soul chafed at the idea of asking God for forgiveness, the earthiness of his language and his behavior, make him a perfect stand-in for the rest of us, for all those flailing in life and struggling to grasp the idea of loving God in a fallen world.

Father Stu is not for those who are without sin, which makes it a movie for all of us. The moral, earthy clarity Stu embodies and shares - and Mark Wahlberg captures - shows the rehabilitative power of a man imbued with genuine grace. Such souls are what builds and renews a faith and a culture."

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4.28.22 - Wall St: A Casino for Lunatics

Gold last traded at $1,890 an ounce. Silver at $23.13 an ounce.

NEWS SUMMARY: Precious metal prices steadied Thursday on falling GDP data. U.S. stocks tried to recover ground lost during this month's sell-off as investors reacted positively to tech earnings from Meta Platforms.

Gold bulls attempt to move in, stabilizing near USD sunken lows -FX Street

"The Gold Price is higher by some 0.18% and has moved back to challenge the $1,900 round number in recent trade. The US dollar is bid and capping the yellow metal despite the risk-off sentiment in markets. The greenback as measured by the DXY was up for a fourth straight day on Tuesday, smashing through to the highest level since March 2020, and is now up nearly 7% on the year.

A combination of risk-off themes are roiling markets this week, stemming from the Chinese lockdowns and negative implications for world trade at a time when NATO is on the brink of war with Russia. It is a 'sell-everything' day on Wall Street, with stocks in a sea of red.

Meanwhile, data showed US Consumer Confidence edged lower in April. Additionally, the Atlanta Fed Gross Domestic Product nowcast estimate for the first quarter growth was revised sharply lower to 0.4% from 1.3% on April 19. The next update is on Wednesday, the final estimate before the Bureau of Economic Analysis releases its advance reading of Q1 GDP on Thursday.

Worries around China's coronavirus outbreak maintain investors' unease. Lockdowns in Shanghai and news of the spread to some districts of Beijing threaten to spur another raft of inflation courtesy of supply-side disruptions. Meanwhile, the People's Bank of China (PBoC) continues to implement stimuli to the Chinese economy in its attempt to contain an economic slowdown.

In the meantime, the Russo-Ukraine tussles have taken a backseat of late. However, expressions by the Russian Foreign Ministry Lavrov saying that the risks of a nuclear war are 'serious,' summed up the already dampened market mood. Gold Price bias is still tilted to the upside."

casino A Casino for Lunatics -Bonner Private Research

"The Dow sold off nearly 1,000 points and this morning's futures point to more losses. The proximate cause, according to the press: the Fed's long-lost, but now found, desire for more normal interest rates.

But the Fed is 'hoist on its own petarde,' so to speak. It pushed interest rates down to ultra-low levels"� kept them there for way too long"� funded the governments jackass gimmie/stimmie programs"� and now finds - what a surprise! - prices are rising.

Jerome Powell, Fed jefe, tried to ignore it, tried to dismiss it, and tried to excuse it; but there was no doubt where inflation came from.

The artificially low interest rates twisted and disfigured the entire economy. Investors became credit-crazed gamblers. Businessmen became short-sighted profiteers. Households rushed to refinance their homes"� again and again, trading up each time.

And the feds used the cheap money to support the fantasies, caprices, and skullduggeries of the whole elite class. Sex change operations for active-duty soldiers"� a $1,000 a month of guaranteed income to young, unmarried mothers in Baltimore"� $30+ trillion in capital gains to the rich - what else could you want!

Wall Street was turned into a casino for lunatics, where people borrowed at below zero real interest rates, to bid up prices on loss-making companies, using money that didn't exist.

We remind readers that when a company loses money, it makes the whole world poorer. And America's Silicon Valley losers destroyed more real wealth than any group of companies in history. Zillow, Uber, Airbnb, WeWork, Snap, Pinterest, Peloton, Dropbox, Amazon - the losses were staggering.

Even the companies that were profitable were absorbing and destroying capital far beyond what they were actually worth. Capital was so cheap that billions of dollars were invested in companies that - though "�profitable' - could never actually repay the money needed to get there.

It was like borrowing a million dollars - without paying any real interest - and using the money to set up a high-tech lemonade stand. Your customers can sit in special booths and play video games"� they can use ultra-high speed broadband to check their email. They can use your 15 unisex bathrooms and showers to clean themselves up"� and use your state of the art conference room for business.

You pay an interest rate on the million dollars (in real terms) of MINUS 5%. Then, you sell one glass of lemonade and announce that you are profitable. But the 'profits' bear no relationship to the money that has gone into the enterprise. You are "�profitable' but you are still destroying wealth, not creating more of it.

But now, inflation is making life difficult for the Fed. Energy, resources, labor - everything is getting more expensive. And from the looks of producer prices (which will be passed on to consumers) "�double-digit' inflation will be here soon.

So, it's "�inflate or die' time. Either the Fed continues to let the cheap money pervert the economy"� or its monstrosity must die."

The Fed may lack the tools to tame food prices -The Hill

"Federal Reserve Board Chairman Jerome Powell hopes to tame the inflation monster in the style of former Chairman Paul Volcker in the early 1980s, by raising interest rates aggressively in the coming months. But he may face an obstacle that Volcker did not: rising food prices that are beyond the Fed's control.

As Powell and other top Fed officials have clearly telegraphed, the Fed will raise interest rates by a half-point at its May meeting. The rate increase will mark the first time since 2006 that the central bank has raised the rate at back-to-back meetings, and a half-point increase would mark the first such move in 22 years....

Can Powell's Fed tame inflation without triggering a deep, Volcker-style recession? Here's where food comes in.

Economists measure whether a product is 'elastic' or 'inelastic.' If elastic, demand falls as the price rises. Staple food products are inelastic; as prices rise, the demand does not decline proportionately.

That's because we all need to eat. We can replace expensive food items with cheaper ones, and we can eat less but, overall, the demand for food is largely unaffected by prices. We can complain about prices at the grocery store, but we still buy milk, bread, butter and vegetables to feed our family.

Food inflation has now soared to 8.8 percent - and the problem is that it's driven in large part by factors beyond the Fed's control.

One factor is the pandemic-induced food supply chain disruptions of the last two years. Another is changing U.S. and South American weather patterns during the growing seasons beginning in 2020 that limit critical grain production. Still, another is Russia's war with Ukraine - the world's third-largest wheat grower, fourth largest corn producer, and largest sunflower grower.

As Credit Suisse's economist Zoltan Pozsar aptly observed recently: The Fed can 'print money, but not oil to heat or wheat to eat.'"

Tesla Stock Plunge Wipes Out $114 Billion In Value As Twitter Deal Sparks Fears -Forbes

"Tesla shares collapsed Tuesday as investors continued to digest the implications of Twitter's acceptance of CEO Elon Musk's $44 billion bid for the social media giant, tacking onto already-staggering losses spurred by the Federal Reserve's looming interest rate hikes.

Tesla shares fell as much as 11% Tuesday to $890, pushing the stock down more than 28% from its all-time high in November and wiping nearly $25 billion from Musk's fortune and $114 billion from Tesla's market capitalization, which now stands at $920 billion.

'Tesla shareholders can't be happy that Musk will have to divert even more attention away from winning the electric-vehicle race,' Oanda analyst Edward Moya wrote in emailed comments, echoing concerns from Vital Knowledge Media's Adam Crisafulli, who also attributed the plunge to investor concerns about how Musk will finance his Twitter bid.

In a filing last week, Musk disclosed he's secured $46.5 billion in financing for the Twitter deal, including more than $20 billion in loans from Morgan Stanley and another $21 billion in equity financing, making it very likely he'll need to sell Tesla shares and pledge some as collateral to make the deal work.

As the stock plunged Thursday when Twitter confirmed receipt of the unsolicited takeover proposal, Wells Fargo analyst Colin Langan cautioned Tesla shareholders that the risk of Musk selling even more shares could put pressure on the stock, as it did when the 50-year-old teased sales (that did ultimately happen) late last year.

Langan also said Musk's involvement with Twitter could be a distraction for a CEO who already has a full plate, pointing to two recently opened factories in Berlin and Austin, Texas, that are designed to double the company's global manufacturing capacity.

Though it's still unclear what role Musk will take with Twitter, he pledged Monday in a statement to work with the company and 'make Twitter better than ever' through a slew of initiatives including new product features, making its algorithms open source, curbing span and authenticating all humans.

Despite Tesla's stock plunge on Tuesday, Musk remains the world's richest person-by far. Amazon Founder and Chair Jeff Bezos comes closest, with a net worth of $166 billion"

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4.26.22 - American Voters Haven't Been This Afraid in a Long Time

Gold last traded at $1,898 an ounce. Silver at $23.46 an ounce.

NEWS SUMMARY: Precious metal prices rebounded Tuesday on bargain-hunting despite a firmer dollar. U.S. stocks fell as the April sell-off continued after a one-day bounce.

Gold falls to 4-week low amid rate hike jitters, robust dollar -CNBC

"Gold prices slipped to their lowest in four weeks on Monday as prospects of aggressive policy tightening by the U.S. Federal Reserve and a stronger dollar dented the precious metal's appeal. ...

'It seems that the fears about rate hikes have gotten the upper hand as of late,' said Julius Baer analyst Carsten Menke.

With expectations for a half-percentage point interest rate hike at the Fed's May meeting now locked in, traders on Friday piled into bets that the U.S. central bank will go even bigger in subsequent months in order to tame soaring inflation.

Gold is highly sensitive to rising U.S. interest rates and higher yields, which increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced. It is, however, seen as a safe store of value during economic and political crises....

Rival safe haven, the dollar climbed to a level last seen in March 2020, making the greenback-priced gold costlier for other currency holders. Silver fell 2% to $23.65 per ounce after hitting an over two-month trough."

soft landing Do Serious People Still Take Seriously the Fed and "�Soft Landings'? -Forbes

"When it comes to economics and the high IQ types who populate the profession, what's ridiculous is the faux science's daily bread. After all, the consensus inside the profession remains that the maiming, killing and wealth destruction that was World War II is what lifted the U.S. economy out of the Great Depression. It would be hard to find a more absurd - and horrifying - thought than the previous one, but economists certainly try to.

One notion that's fully captured economists in modern times is the patently absurd view that the U.S. economy can become 'too hot,' and since it can, it's up to the PhDs at the Federal Reserve to bring what's too hot in for a 'soft landing.' .....

Which brings us to a front page Wall Street Journal story from last week authored by Jon Hilsenrath and Nick Timiraos. The duo devoted copious amounts of ink to whether or not Fed Chairman Jerome Powell and the central bank he oversees will be able to centrally plan a 'soft landing' for the U.S. economy.

They wrote with straight faces. Somewhere they quoted Treasury Secretary Janet Yellen essentially wishing Powell well, but expressing skepticism that he'd be able to plan a positive economic outcome....

Again, so ridiculous is the 'serious' (to economists, and their enablers in the media) notion of 'soft landing' that it's hard to even describe without feeling foolish for describing it. Of course, Hilsenrath and Timiraos might say that a 'hot economy' would cause inflation because demand would outstrip supply, and they would be wrong. All demand is a consequence of supply.

Furthermore, the instigator of economic growth is investment; the latter what enables greater production at falling prices. Economic growth is a consequence of productivity, or better yet growth is productivity. Which means economic growth is by its very name a sign of falling prices. And no, the latter is not deflation. Economic activity that brings down prices by its very name introduces new wants for market goods formerly out of reach.

Inflation is currency devaluation. Which means it's a policy choice. But in a sense that's a digression given the total redefinition of inflation that Hilsenrath and Timiraos are attempting.

In which case let's pretend that their definition is correct. As opposed to inflation being a devaluation of the currency (what it's always been), let's assume for a second that it's caused by us succeeding too much. When we're too productive, when we're doing too well, when we're hitting too many 3-pointers of the business variety, the Fed must step in to stop us from getting better. So that we don't suck forgetting too good, or something like that, the Fed must 'put on the brakes.'"

American Voters Haven't Been Afraid Like This in a Long Time -DNyuz

"In a rare convergence, America's voters are not merely unhappy with their political leadership, but awash in fears about economic security, border security, international security and even physical security. Without a U-turn by the Biden administration, this fear will generate a wave election like those in 1994 and 2010, setting off a chain reaction that could flip the House and the Senate to Republican control in November, and ultimately the presidency in 2024.

Take the economy, so often the harbinger of election results. From late 2017 until the pandemic, a majority of Americans believed that the economy was strong, and from 2014 until the pandemic at least a plurality believed their personal economic situation was improving. Covid-19 cut sharply into that feeling of well-being; this was initially seen as temporary, though, and trillions of dollars flowed into keeping people afloat. But then near-double-digit inflation hit consumers for the first time in 40 years.

Sixty percent of voters now see the economy as weak and 48 percent say their financial situation is worsening, according to a Harris Poll conducted April 20-21. Many Americans under 60 have relatively little experience with anything but comparatively low fuel costs, negligible interest rates and stable prices. Virtually overnight these assumptions have been shaken. Only 35 percent approve of President Biden's handling of inflation.

Continuing to let gas prices surge will hurt Democrats on the ballot in the fall; the party needs a new, tempered energy policy that includes a more gradual transition to alternative fuels and an appreciation of energy independence. In the presidential debates, Mr. Biden promised a 'transition' to 'renewable energy over time,' though noting he would not attempt to ban fracking.

But in his first flurry of executive orders, Biden gave the public the impression he was far more aggressive in favoring climate change policies, though he has since angered activists by reversing a promise to prevent new drilling on public lands. He will need to shift to an "all of the above"� energy approach and green-light the Keystone pipeline, which is currently favored by nearly 80 percent of the electorate, according to the Harris Poll....

People are afraid of being walloped financially, being injured or menaced by criminals, being in a country without strong borders or Covid protections for immigrants, and being under threat of nuclear weapons.

If Mr. Biden and Democratic leaders cannot effectively address these fears, the wave election will hit them in November, and the president will then face a sobering choice of either passing the baton to another candidate in 2024 or finding the bold leadership necessary to reconcile his drive for more progressive policies with the realities of economics, politics and a more dangerous world."

Joe Biden Has a Presentation Problem -WSJ

"I want to talk about Joe Biden and his unique problems presenting his presidency. You're aware of his political position and the polls. The latest from CNN has him at 39% approval. Public admiration began to plummet during the Afghanistan withdrawal. That disaster came as it was becoming clear the president was handing his party's progressive caucus functional control of his domestic agenda, which fell apart and never recovered.

James Carville the other night on MSNBC amusingly and almost persuasively said Democrats in the 2022 congressional elections should hit Republicans hard on their weirdo content - candidates who are both extreme and inane, conspiracists in the base. But the Democrats too have their weirdo quotient - extreme culture warriors, members of the Squad - and last summer the president appeared to have thrown in with them. That and Afghanistan were fateful for his position, and then came inflation....

All politics grows from policies, and policies are announced and argued for through presentation, including, crucially, speeches. Joe Biden has a presentation problem. This is worthy of note because his entire career has been about presentation, specifically representing a mood. In 50 years he has cycled through Dashing Youth, the Next JFK, Middle-Class Joe and Late-Life Finder of His Inner Progressive.

But the mood he represents now isn't a good one. It's there in the New Hampshire poll. Asked if they thought Biden was 'physically and mentally up to the job' if there's a crisis, 'not very/not at all' got 54% and 'very/somewhat' 42%. Here we all use euphemisms: 'slowing down,' 'not at the top of his game.' If Mr. Biden's policies were popular, nobody would mind that he seems to be slowing. But they aren't.

So to the presentation problem. Here are some difficulties when he speaks.

When he stands at a podium and reads from a teleprompter, his mind seems to wander quickly from the meaning of what he's saying to the impression he's making. You can sort of see this, that he's always wondering how he's coming across. When he catches himself he tends to compensate by enacting emotion....

Mr. Biden tends to be extremely self referential: 'I'll give it to you straight, as I promised that I always would.' Because I'm such a straight shooter. It's better to shoot straight and not always be bragging. He should lose 'Lemme say that again.'

When you speak to America you don't have to repeat yourself for the slow. I don't think he's aware he often seems to be talking down. People will tolerate this from a politician when they think he's their moral or intellectual superior, but they push back when they don't, as in the polls.

Mr. Biden has an opportunity to do something new, reinvent his rhetorical approach. Why not, nothing else has worked. He should commit, when speaking, to Be Here Now. He should be straightforward and modest."

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4.25.22 - Inflation: Retirement Plans Not Keeping Up

Gold last traded at $1,902 an ounce. Silver at $23.73 an ounce.

NEWS SUMMARY: Precious metal prices fell sharply Monday amid China fears and a firmer dollar. U.S. stocks continued an April market sell-off that has pushed the major indexes lower for four straight weeks amid growing fears of a global economic slowdown.

Gold Is Heading Higher as Inflation Rages. Why the Next Stop Could Be $3,000 an Ounce. -Barrons

"Gold bugs have been a lonely bunch, but that may be starting to change.

In the past week, gold made another run at $2,000 a troy ounce, a level above which it has closed only once, back in August 2020. The price then retreated - bullion was trading around $1,935 an ounce on Friday - making the run-up easy to dismiss as just another head fake for a metal that has trudged along as its commodity cousins have exploded upward in price.

Consider the CRB Index, comprising about two dozen commodities, which has more than doubled since the U.S. emerged from pandemic lockdowns. Gold has gained only about 15% in that stretch. But macroeconomic and geopolitical developments suggest the possibility of a new heyday for gold enthusiasts....

Jim Reid, head of credit strategy and thematic research at Deutsche Bank, says he's not convinced that the bond market's prediction of future inflation is so useful. Instead, he calculates real rates based on the consumer price index, which recently registered a year-over-year increase of 8.5%, a 40-year high. By that measure, real interest rates are still deeply negative; Reid expects they will remain negative for the rest of his career.

The kind of skepticism that Reid expresses about a sufficient slowdown in inflation is energizing longtime gold bugs and creating new ones. Lawrence Lepard, managing partner of Equity Management Associates, is betting that gold hits $3,000 within the next two years. He is skeptical of the consensus view that inflation has peaked, and doubtful that the Fed will bring inflation back down near its annual 2% target.

'I believe they have an empty hand,' Lepard says, predicting the Fed will tighten for the next year before a downturn in the economy and the markets forces a more dovish pivot. While central bankers say they will soon start unwinding some of the bond purchases made over the past two years, Lepard sees rate cuts and more quantitative easing within the next year. His bet? More money supply, more inflation, and more demand for gold as investors seek what he calls 'sound money.'....

There is a second piece to many gold bulls' long-gold view. Equity Management Associates' Lepard says the seizure by the U.S. of Russia's foreign-exchange reserves will fuel more demand for gold, which countries can't seize. Some on Wall Street are starting to see it that way, too. Analysts at Goldman Sachs predict record-high gold demand from central banks this year as geopolitics prompt shifts to gold....

Retail investors are also exhibiting more interest in the yellow metal. Gold coin sales rose about 48% in 2021 from a year earlier, data from the United States Mint show, while purchases of gold exchange-traded products hit a record last month."

Yen is the first big domino to fall -Bonner Private Research

"The biggest story in finance (that no one is really covering) is the ongoing meltdown in the Japanese yen. The Japanese yen hit a fresh 20-year low yesterday against the US dollar. It fell for the 13th straight day....

What is it doing against real money? Against gold? Gold is breaking out big time against the yen...if I'm reading the situation correctly, the yen is showing us what's about to happen to every other major currency, including the dollar, versus gold. Long time readers will have seen me write about the 'synchronized global currency devaluation.'....

The yen is just the first pin to fall. Soon, I think the other big currencies -- the dollar, the pound, the euro, the yuan, the Hong Kong dollar, the Canadian dollar, the Aussie dollar etc., are going to devalue too, one by one. While they may change value relative to one another, they will all devalue against gold. The Euro will probably be the next one in line to devalue. It's already happening.

Here's the thing, interest rates around the world have been falling for 40 years, and in 2020 hit the lowest levels in 700 years of modern interest rate records.

The secular decline in interest rates inflated almost every financial measurement or statistic you can think of, from the total value of the world's equities, to the amount of debt governments owe, to house prices around the world, to GDP, to the quantity of energy the world consumes. Low interest rates have even inflated the greatest speculative bubble of all time in financial assets.

But last year, something many thought would never happen, happened. Interest rates hit rock bottom and started rising. When interest rates rise, bond values fall. Not only bonds. The values of all financial assets fall.

The trigger? The first inflationary spike in 40 years caused by the helicopter money central banks and governments dropped during the pandemic. Lenders are now demanding to be compensated for inflation by asking for higher interest rates....

Sooner or later, all the big economies will follow Japan and turn to yield curve control to protect their governments' financial position. It will cause the "�synchronized global currency devaluation' I mentioned above. So what?

You'll know it's happening because central banks will be expanding their balance sheets again, and all currencies will be collapsing against gold.

gold chart

This is not a good environment for owning financial assets, and especially bonds and equities. This 20-year chart shows the Dow/Gold ratio, my favorite way to watch the performance of the major stock market averages. My target for this chart is 5.

If our thesis is right about this, the advice is simple - avoid all bonds and investments with long term paybacks, especially growth stocks and zombie companies (that depend on low interest rates to stay alive.)

We use a diversification approach to investing. Our suggested allocations are 40% cash (although we'll be looking to reduce this allocation before the Fed begins YCC), 35% gold, silver and other hard assets (including real estate), and 25% stocks."

Inflation is sky-high - retirement plans aren't keeping up -The Hill

"Before you head off to join the Great Resignation you may want to think twice before telling your boss to take the job and shove it, as inflation can be real a dream-killer.

In fact, at the wholesale, producer and consumer levels, inflation has broken records - with some measures, once annualized, exceeding 18 percent. At this rate prices will double every four years.

If one does not account adequately for inflation, visions of retirement with Mai Tai cocktails on the beach will encounter a sad reality of saltine crackers and endless Netflix reruns. In these record-setting times it's more important than ever to actively utilize updated estimates for inflation - typically implemented by having one's nominal income stream adjusted for inflation.

Over the last 75 years, inflation has averaged 3 to 4 percent when annualized. Is 5 percent, 6 percent or more the new norm? What if your financial advisor under compensates, or even fails to compensate for future inflation at all?....

Keeping it simple, consider this scenario: You're 65 years old and plan to live to 100. You've already saved $1.2 million for retirement, which begins later today when you'll make the first of 35 annual withdrawals to support you during retirement. You - and your financial advisor - believe you can earn 7 percent per year on average over the next 35 years.

Sounds good? Not so fast - to combat the adverse impact of inflation, at what rate do you want your annual income to grow? Four percent per year? Six percent per year? More? Less? Zero? What to do? Perhaps those saltine crackers will be on sale....

Unfortunately, if you apply any modern handheld financial calculator to our prior example, it'll suggest an annual income of $86,618 per year, with no indexing for inflation. It's the same income each year. However, if inflation averages 6 percent per year, then in 34 years that $86,618 income level will only provide an equivalent income value of $11,946 today. Yikes, it's prosperity to poverty, by failing to index for inflation."

Democrats Urge Final Push on Stalled Agenda to Limit Possible Midterm Losses -WSJ

"Rank-and-file Democrats are pressing President Biden and congressional leaders to take quick action when lawmakers return to work next week, as they hope even modest policy moves can help temper expected Republican gains in the midterm elections.

Lawmakers are pushing leaders on issues ranging from student-loan forgiveness to lowering the cost of prescription drugs, steps they argue can shore up households shaken by rising inflation and economic uncertainty that Republicans have blamed on Mr. Biden. Some proposals have broad support within the party, but others have divided progressives and moderates, with each wing making different arguments about what will energize or repel voters in November.

As the party debates where to place its bets, the White House has taken a series of executive actions-some incremental and some more substantial - on issues including energy.

With polls pointing to possible deep losses in November, many Democrats said they were eager to show voters they can get more things done, after Mr. Biden's $2 trillion healthcare, education and climate-change agenda stalled in the 50-50 Senate late last year.

'Pick a couple of them and just deliver them,' said progressive Rep. Ro Khanna (D., Calif.), who sees young activists being discouraged by the lack of progress on liberal priorities. 'That means getting done the student-debt relief - that is so obvious, that is such a no-brainer.'

Mr. Biden has backed legislation to cancel $10,000 of student debt for all borrowers, but he has expressed skepticism about taking unilateral action without Congress.

White House officials said the president is now weighing whether to take executive action to cancel some student debt on a large scale, amid pressure from prominent Democrats, including Senate Majority Leader Chuck Schumer (D., N.Y.) and Sen. Elizabeth Warren (D., Mass.). Mr. Biden's advisers are divided over the issue, according to people familiar with the matter, and the president hasn't yet made a decision on how to proceed.

Such a measure would provide relief to many households, but critics say it could be unfair to borrowers who have paid off their loans, and relief could be skewed toward middle- and upper-income households."

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4.22.22 - The IRS is in No Position to Do Your Taxes

Gold last traded at $1,933 an ounce. Silver at $24.25 an ounce.

NEWS SUMMARY: Precious metal prices dipped Friday following hawkish Fedspeak and a firmer dollar. U.S. stocks traded lower, heading toward another losing week amid busy earnings and rising bond yields.

Why the price of gold is heading for a 'modest new all-time high' -Morning Brief

"Last week, I got the call. A dear relative living on a pension who's facing soaring prices for food, gas, and medicine - along with everything else - asked me how to buy gold. Whether one considers gold a hedge against inflation or Armageddon itself - and there are arguments both ways - simple market technicals are forecasting gold prices will surge again to record highs, according to one Wall Street bank.

Monday, gold futures briefly topped $2,000 per ounce - less than $100 from its 2020 all-time high. BofA Securities' Paul Ciana on Monday said that 'a dip from $2,000 looks like a buying opportunity.' Gold subsequently dipped below $1,950 before settling at $1,955.60 per ounce Wednesday.

Ciana has been bullish on gold since early February - just before gold broke to the upside after months of consolidation. He's reiterating his bullish gold trend view with a 2022 price target of $2,175, which is 'modestly' higher than the current record high of $2,089.

He also has a bullish conviction on silver and believes that both gold and silver could outperform copper, bonds and 'maybe oil too.' But that could take a few months to play out and be confirmed, he said....

Ciana's $2,175 price target uses a so-called measured move, which is calculated by adding the price range of the consolidation to the breakout apex....That $2,175 price target is only about 11% from the current price, but it's also only a technical target in play this year."

dollar chart Bonds and the Fed are still way behind the curve -Calafia Beach Pundit

"For more than a year I've been arguing that monetary policy was way too easy and thus the risk of higher and persistent inflation was very high. (Check out my posts over the past year in the Blog Archive to the left.) With consumer price inflation now approaching double-digit territory, the bond market is beginning to catch on...unfortunately, it still has a lot of adjusting left.

Although the recent rise in yields has been rather sharp, yields are still an order of magnitude below where they should be if inflation is indeed persistent....

Never have real yields on 10-yr Treasuries been so low. What that means is that bond investors are beginning to learn that owning bonds is a great way to lose substantial purchasing power. How much longer will it take for bonds to at least compensate investors for inflation?...

Chart #4 compares the strength of the dollar vs. other major currencies (blue line, inverted) with the prices of non-energy commodities. This chart is actually quite interesting, because the typical correlation of the dollar and commodity prices has completely broken down: it used to be that a weaker dollar correlated with higher commodity prices; now it seems that the stronger the dollar, the higher commodity prices go.

This can only mean that artificially low interest rates are stimulating demand for hard assets, but they are not weakening the dollar - perhaps because most major currencies have exceptionally easy monetary conditions. The dollar is benefiting mainly from its safe-haven appeal....

The market is only expecting inflation to average a bit less than 3.5%, which is way less than the 11% annualized rate that we saw in the first three months of this year. In other words, the bond market is expecting inflation to fall significantly in coming years. But since the Fed has not even begun to tighten, this is a rather brave assumption."

The IRS is in no position to do your taxes -The Hill

"Every year, Americans struggle to comply with the complex and confusing tax code. Americans collectively spent an estimated 1.9 billion hours filing their individual tax returns in 2020. Taxpayers also incur out-of-pocket costs of about $36 billion, or $230 per average taxpayer.

Progressives routinely say that there is a simple solution to this tax complexity - have the government create a tax preparation 'return-free file' system.

While it may sound like a reasonable solution to tax complexity - there are numerous problems with creating and implementing this system. It would be near impossible for the government to administer this system with the plethora of tax credits and deductions that exist, and it would require Americans to disclose more private information to the government creating the potential for privacy violations.

It would also create opportunities for the IRS to further abuse its power.

Our current tax system is known as a voluntary system of compliance as Americans are responsible for filling out their own tax returns. However, progressives like Sen. Bernie Sanders (I-Vt.), Sen. Elizabeth Warren (D-Mass.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) want to replace this with a system where the government both assesses and files taxes for Americans.

There are many reasons to be concerned with this proposal.

For one, a government tax preparation system is a conflict of interest. Under a system of government-run tax preparation, the IRS would tell you how much you owe and give you the opportunity to contest. This would give the government an incentive to overcharge or withhold information from taxpayers....

As noted by a recent study by the Progressive Policy Institute, the IRS does not have the information it needs to prepare tax returns for American families. This could deprive low-income Americans of tax credits like the child tax credit and earned income tax credit (EITC).

The IRS already struggles to complete its most basic tasks like reviewing tax returns on time, safeguarding taxpayer information and modernizing its technology.

In the past year, the IRS has failed to keep up with processing returns. As of March 25, the agency had 7.2 million unprocessed individual returns, including 4.9 million with errors or needing special handling."

THE MULLIGAN: "Will the Prodigal Father Return?" -Movieguide

"THE MULLIGAN tells an entertaining, inspiring story with a very strong Christian, moral, pro-family worldview and pro-capitalist elements, but there is some light violence, one obscenity and implied drunkenness in one scene.

Paul McCallister is a big-shot businessman who's estranged from his wife and son so he can pursue business opportunities and golf. At his company, McCallister International, e-commerce is the name of the game, and they look to expand their efforts to Asia. Meanwhile, Paul's young adult son, Jake, thrives in the motocross racing world.

Paul's wife, Rebecca, continues to host a women's Bible study at their home while Paul lives alone in a studio apartment. However, all three of the McCallisters feel a void when it comes to their family. Meanwhile, the mother holds out for some Christian forgiveness and reconciliation.

At a charity golf tournament for work, Paul loses his temper on the course. An organizer of the tournament introduces him to Will Dun, nicknamed the 'Old Pro.' Will takes Paul under his wing and mentors him on golf but more importantly on life.

Will explains what a Mulligan is to Paul. It's a do-over, and the term was first coined in the 1930s and applied to golf. Will gives Paul a notebook to journal about his mulligans, not only in golf but also in life.

Surprisingly, Paul journals that his wife, Rebecca, and his son, Jake, need a do-over. During their time on the course, Will and Paul open up to one another as friends. Even now, Paul's heart begins to change, but will the change be a lasting one?

The casting is well done, with Pat Boone playing a terrific Christian wise man. THE MULLIGAN has fine production values with good montage sequences for an independent movie, but sometimes the acting is a little melodramatic.

For viewers who want an uplifting entertaining story, however, none of the movie's low budget aspects will deter them from being inspired by the movie's spiritually uplifting, emotional messages."

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4.21.22 - The Fed's Poison Pill Will Kill The Dollar

Gold last traded at $1,946 an ounce. Silver at $24.54 an ounce.

NEWS SUMMARY: Precious metal prices eased Thursday on upbeat economic data despite a weaker dollar. U.S. stocks rose as investors digested more quarterly results - including strong earnings from Tesla - and awaited a policy speech from Fed Chairman Jerome Powell.

Gold rebounds to $1950s as US dollar/yields reverse lower -FX Street

"Spot gold prices are staging a modest rebound on Wednesday after finding support at the 21-Day Moving Average in the mid-$1940s as the US dollar weakens and US yields pull back from recent highs. XAU/USD currently trades with on-the-day gains of about 0.2% in the mid-$1950....

Profit-taking has seen the US Dollar Index pull back by about 0.6% to the low 100.00s after it hit its highest levels since March 2020 above 101.00 on Tuesday. This is helping to make USD-denominated gold a little cheaper for purchase by the holders of foreign currency.

Meanwhile, after coming within a whisker of hitting 3.0% earlier in the day, US 10-year yields have reversed back under 2.90% and are about 7 bps lower, marking a slight reduction in the 'opportunity cost' of holding non-yielding assets like gold.

With Fed Chair Jerome Powell expected to solidify expectations for 50 bps rate moves at the next few Fed meetings, the recent trend of a stronger US dollar and higher US yields may yet have further legs to run. That suggests gold may continue to struggle to get back above $2000.

However, amid the recent run of negative news flow on the Russo-Ukraine war front (peace talks appear dead as Russia ramps up its assault in the east of Ukraine and the US/NATO up their arms deliveries), further gold pullbacks into the lower $1900s will likely to continue to attract buyers.

After all, as the stagflationary impulse of the war becomes more apparent, with the IMF and World Bank recently revising lower global growth expectations and warning of elevated inflation for longer, demand for assets that provide a safe haven/inflation-protection remains strong."

poison pill The Fed's Poison Pill -Bonner Private Research

"Dominating the headlines is crime"� war"� and inflation. And Elon Musk. Newspapers have their 'foreign affairs' sections. Finance. Local news. Classified. And Musk....

The SEC must have a Musk department too. Even on an Easter weekend, it was investigating Elon. There are so many laws on the books, even an average person is said to break 6 of them before breakfast. A man as active as Elon must break dozens of them.

Here's BizPacReview: 'After Thursday's surprise announcement by Elon Musk that he was offering to buy Twitter lock, stock, and barrel for a cool $43 billion, now there's news that the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) are opening an investigation into both Tesla and Elon Musk, including how he acquired his controlling stake in Twitter....

Yes, dear reader, inflation dogs us everywhere. We inflate our laws"� reducing the value of each one, while making everything potentially illegal. We inflate our money - 'printing' more and more of it, as each dollar loses value. We inflate our knowledge, too; the more we think we know, the less we actually do know.

And to protect itself from Musk, the Twitter board threatened to inflate its own shares. It's called a "�poison pill' provision. Seems a little underhanded to us, but corporate boards can decide to give out extra shares to existing shareholders. In theory, no matter how many shares Elon is able to buy, the existing shareholders will always have more....

The "�poison pill' gambit is essentially an "�inflation' of the shares, rendering each one worth less than it used to be. In effect, it's what the Fed has done to America's money.

Joe Biden attempts to shift the blame: 'What people don't know is that 70 percent of the increase in inflation was the consequence of Putin's price hike because of the impact on oil prices. Seventy percent.'

But The Washington Post calls him out....'Gasoline prices rose 48 percent, while overall energy prices rose 32 percent. Energy makes up only 7.547 percent of the basket of goods in the CPI, so even with that big jump, how does Biden get to 70 percent?'

Even The Post - an apologist for Washington - has a hard time swallowing the 'Putin done it' excuse. It wasn't Putin who slipped the poison pill into America's morning coffee. It was the Fed. And our guess is that it has a lot more where that one came from."

How Will Steady High Inflation Change Our Economic Lives? -Bloomberg

"Americans are entering a period when consumer prices will continue to rise steadily, which will bring a whole different set of costs and benefits to a new generation.

If you are under 45 and live in America or Europe, the odds are this past year has been your first real experience with inflation. Other than a blip in 2008, inflation has barely topped 3% in the last 30 years.

But now inflation is back; up more than 8% last month, and it may get worse before it gets better. Some of the drivers of price increases today, supply chain disruptions and war in Ukraine, will eventually abate. But there are reasons to believe we aren't going back to 2% inflation anymore. The economy is different and the new baseline for inflation will be 4% or 5%....

Much has changed since the late 1980s when inflation hovered around 4%. That rate is almost twice what people now are used to, and all segments of the economy will have to adapt. Getting a pay raise was less critical when inflation was 1% or 2%. Employers got used to giving smaller increases. The last time inflation was high, unions negotiated annual cost-of-living raises built into the pay of many workers.

Now most will need to demand it for themselves. For workers who don't - or can't - negotiate raises that keep pace with inflation, their real compensation will shrink each year as their pay is worth less. Even if you do get a decent raise, those increases generally come just once a year, while inflation happens continuously, eating away at your buying power....

Inflation will be a bigger problem for small business than it was in the 1980s because big firms dominate the market now - odds are your local mom-and-pop hardware store is already barely hanging on against Home Depot. The online marketplace that brought prices down by increasing transparency will continue to make it harder to raise prices above competitors, which will be another strike against small companies....

Saving and investing will also be more challenging. Right now, banks are paying basically about zero interest on your savings. If inflation increases, they will pay a little more interest, but don't expect the 8% rates paid on certificates of deposit in the 1980s."

The Unmasking of America -Brownstone Institute

"The polls on coercive Covid responses were never entirely trustworthy, not even from the beginnings of lockdowns. This happens when everyone knows what they are supposed to believe and say. The polled don't really trust the voice on the other end.

After weeks of disease panic and media figures screaming that everyone should stay home, mask up, fire up their laptops, order Amazon, and fork over for a Netflix subscription - because this is the only way to deal with a pandemic - people knew exactly what to say when asked.

Surely more people went along with the lockdowns, masks, closures, and mandates than would have been predicted in the land of the free and the home of the brave....

In the last several weeks, the scenes in airports have been rather bizarre. Even as the rest of society in most places had the feel of total normalcy, in the airport the plague seemed everywhere. The masks, the loud announcements, the preposterous signs to socially distance even as everyone stood shoulder-to-shoulder, and the way we were required to ritualistically eat crackers in order to earn the right to breathe - it was all too much.

Covid protocols were doing nothing to stop the pandemic but plenty to make it a massive presence in our lives even if none of it was real anymore. At some point, it felt like any run-of-the-mill dystopian movie: the goal of the despotic government is to manufacture a crisis so that people live in fear and obey....

The Biden administration had already made a massive miscalculation in January 2021 by announcing 100 days of masking in order to stop the virus, and of course (and who didn't know this would happen?) the 100 days came and went and the spread was worse than ever and the mask mandate persisted. Even a few days before the Florida judge issued a sweeping judgment for the Health Freedom Defense Fund and against the Biden administration and the CDC, Biden had extended the mandate until May, just to make sure.

Here is what I found to be startling. I was genuinely surprised at the way the entire machinery of compulsion and control unraveled, not in months, not in days, but in hours and minutes. One airline after another announced that they would no longer enforce it. Amtrak joined. Even the D.C. metro said no more....

In my lifetime, I'm not sure I can remember a single other time when a federal government rule imposed upon an entire country, one that affected so many people on a daily basis, was suddenly declared to be completely illegal - not just newly illegal in light of new data but illegal all along. It means that the government, not the people, had been in violation of the law. That is nothing short of astonishing. Surely the implications of this will resonate for many years to come....

I happened upon a movie on Netflix, and it is a great movie, but I would never recommend it to anyone because it is too psychologically terrifying. It is called 'After Masks' and over 100 minutes it tells the tragic stories of many individuals living in isolation. Imagine a movie about solitary confinement in prison except that the prisoners have smartphones. It was deeply painful, almost as much as life has been for so many for these two years.

What lockdowns and mandates have done to society is a painful truth, and one that we will be dealing with for many years. As much as we all just want it to go away, and as much as we all have great cause to celebrate this day, as much as the repeal of the mask mandate represents a symbolic end, no one should lose sight of the deeper problem: all of this happened to us, and not only to us but to billions of people the world over."

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4.20.22 - Gold Glimmers Amid Global Gloom

Gold last traded at $1,951 an ounce. Silver at $25.11 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on bargain-hunting and a weaker dollar. U.S. stocks traded mixed as traders pored through the latest quarterly reports and weighed recent moves in interest rates.

Russia's Link of the Ruble to Gold Is a Practical Admission of What Money Is -RealClearMarkets

"On March 23rd it was announced that buyers from "unfriendly countries"� would provide rubles in return for Russian gas, instead of the traditional U.S. dollar. Eventually the announcement was extended to oil and other commodities...Credible money is what matters to producers of goods and services, period. At the same time, Russia's move to a gold-defined ruble in concert with its decree was logical, and by extension, predictable.

Russia's gold link is a statement of the obvious given the basic truth that goods and services for goods and services underlie all transactions that are on the face of it refereed by 'money.' I'll take your dollars for my computer is the computer seller's way of saying I'll take goods and services of equal market value to my computer.

While the dollar has been far from perfect in modern times, it's generally trusted by producers the world over. Producers of goods and services will accept dollars for their production because they feel they'll have a reasonable chance of going into the market with dollars received and attaining goods of equal value.

With Russia, it wouldn't just start demanding rubles for commodities. To do so would be economically suicidal given the decline of the ruble that we've witnessed since the country's Ukraine invasion, but also at other times since economic liberalization began in the 1990s. Again, no one accepts 'money' for goods and services. They always and everywhere accept roughly equal value for what they're bringing to the market....

Russia's link of the ruble to gold is the country's way of avoiding exporting more in return for the import of less. In short, Russia's announced gold/ruble link is an acknowledgement of what money is, and always has been: a facilitator of the exchange of actual goods and services for goods for goods and services of equal value.

Poorly defined, frequently debased money is rarely used in transactions precisely because it creates winners and losers in trade, when trade by its very name is mutual enhancement. In other words, Russia has long had a currency that didn't rate broad circulation simply because it wasn't money. Gravitation toward gold is an admission from Russian monetary authorities of what money actually is."

cryptoverse Cryptoverse: Gold coins glimmer amid the global gloom -Reuters

"A fledgling class of crypto that feasts on risk is outshining a wider market paralyzed by war and inflation.

Coins backed by gold are newer variants of 'stablecoins', which are typically pegged to the dollar to tame volatility. The largest, Pax Gold or PAXG , has jumped 7.4% in 2022, while main rival Tether Gold has leapt 8.5%. By contrast, bitcoin has lost over 13% and ether is down 20%.

The reach for gold, a traditional hedge against geopolitical upheaval and inflation, is unsurprising. The demand for gold-backed cryptocurrencies, though, is new.

Stablecoins, a fast-growing breed of crypto, have emerged as a common medium of exchange, often used by traders seeking to move funds around....

Tether Gold has been buoyed by bigger investors, including 'whales' with $1 million or more of cryptocurrency, using the token to change a portion of their holdings into gold, according to Paolo Ardoino, Tether's chief technology officer.

'Many of our investors were already involved in crypto, but were interested in not having their entire wealth in cryptos or in dollars, and were seeking more inflation-resistant assets like gold,' he said.

Yet gold-backed coins are still a niche novelty in the crypto market at present - PAXG and Tether Gold are barely over two years old - with thin liquidity and little certainty about their long-term fortunes.

PAXG has seen its market value almost double to $627 million this year, while Tether Gold has risen 9% to above $209 million. By comparison the latter's eight-year-old sibling, dollar-pegged Tether - the world's largest stablecoin - has a market cap of over $83 billion....

Sceptics argue that PAXG, developed by the company Paxos, and Tether Gold have merely risen on the coat-tails of a broad rush for gold; indeed they have tracked the price of physical gold , which is up about 8.5% this year."

Is There a Case for the Pre-1914 Gold Standard? Yes, If You Believe Inflation Is a Bad Thing -Mises

"The Russian central bank recently announced that it will stop buying gold at a fixed rate and will instead buy it at the negotiated rate from banks. Following the numerous sanctions imposed on Russia, the ruble had fallen tremendously against the US dollar, to get out of such a situation it had announced that it would buy gold at a fixed price of five thousand rubles a gram until June 30. Since that announcement, the ruble has strengthened sharply against the dollar for over one month. Five thousand rubles was worth around $52 on March 25 and around $63 on Thursday.

The mechanism which led to the increase was to allow the markets to play themselves out, in order to combat sanctions, they asked the nations to transact in their currency which, due to the extensive and growing array of sanctions by the western front, was becoming devalued by each day. It was here, by demanding payment in rubles, are attempting to increase demand for their currency which led to its increase where being pegged to hard currency allowed the confidence of the markets to increase so ruble wasn't dumped extensively

But because once you allow for sound money such as gold pegged to your currency which is dictated by the effective allocating mechanism of the market you cannot ignore the market valuation any longer, therefore the bounce back and effective strengthening of the ruble which took place more and earlier than expected has now forced them to abandon the fixed-rate currency and move towards a more flexible exchange rate mechanism which would allow them to set the rates effectively in line with the motivation of sellers while discounting for factors such as immediacy, global credit standing and the turns of the global economy.

A classical gold standard requires the central bank to exchange by the process of both purchasing and selling gold and the national currency for each other and to do so according to a fixed weight or quantity of gold per unit of currency. Thus, while neither the pegged currency nor the negotiated rates of exchange comprise the classical gold standard, they nonetheless serve as a great case study into the commendatory effects of having hard money serving as the medium of change in the economy....

The era of the classical gold standard which lasted from 1880 to 1914, Inflation over this time period, while it fluctuated on a year-to-year basis, was virtually zero, and as a result, prices whose proper role lies in giving signals about market scarcity ensured proper allocation of resources due to which real income per capita in the United States increased by over 60 percent in a generation and a half. This low inflation is not a coincidence but a direct effect that is to be expected when the money supply is bound to the supply of gold....

The classical gold standard is superior on every front and a return to the gold standard will cure several economic ills of inflation, improper allocation of resources, and a continuous cycle of booms and busts. This now calls into question a reevaluation of the entire foundation of the fiat money system along with the Keynesian worldview."

BA.2 Proves the Pandemic Isn't Over, but People Are Over It -WSJ

"BA.2 is spreading in the U.S., although few want to talk about it.

The Omicron subvariant is contributing to school and work absences, yet two years of dealing with Covid-19 have made people tired of taking precautions, getting tested and asking about other people's status, say physicians, psychologists and behavioral scientists.

If this is a pandemic wave, then many have decided the best response is a weary shrug.

Part of that reaction comes from the fact that while cases are ticking up in some areas, hospitalizations remain low. Research has so far shown most people who are up-to-date with Covid-19 vaccines face little risk of landing in the hospital with BA.2, and prior infection with another variant also bolsters the body's defenses.

In addition, people in many places got on with their lives long ago and are unwilling to return to a pandemic crouch.

Psychologists say it can be difficult to discern how seriously to take BA.2, given shifting guidance and sometimes difficult-to-parse public-health messaging. That anxiety and uncertainty can result in avoidance, says Dr. Bethany Teachman, a psychologist and director of clinical training at the University of Virginia. Avoidance takes various forms, she says, including refraining from asking friends about Covid exposures to avoid answers people may not want to hear.

Some people say they won't worry about BA.2 unless it is absolutely clear they need to. Nearly three-quarters of Americans polled by Monmouth University in mid-March agreed that Covid is here to stay, and people should get on with their lives.

Kristin Green, 55 years old, a high-school English teacher in Orange County, N.Y., says when she heard about the BA.2 variant, it felt like the wind was sucked out of her.

'It was like, oh, not again. Come on. We're finally out together, seeing each other, and I don't want to have to go back to that,' says Ms. Green. She hopes not to have to don her mask during the school day again.

'If they require it at work, obviously, I will,' she says. 'Otherwise, no.'"

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4.19.22 - Why Peak Inflation is More Bad News

Gold last traded at $1,951 an ounce. Silver at $25.16 an ounce.

NEWS SUMMARY: Precious metal prices fell Tuesday on profit-taking and a firmer dollar. U.S. stocks rose as traders navigated one of the busiest weeks of corporate earnings season.

Gold price up, bulls knocking on $2,000 door -Kitco

"Gold and silver prices are solidly higher and hit five-week highs in early U.S. trading Monday. Save-haven demand and chart-based buying are featured.

Global stocks markets were mixed overnight. The U.S. stock indexes are pointed toward weaker openings when the New York day session begins. Markets in Hong Kong, Australia and much of Europe were closed for the Easter holiday Monday.

Risk aversion remains elevated amid the Russia-Ukraine war that shows no signs of ending any time soon and the Covid surge in China that has locked down major cities in the world's second-largest economy. Stock traders are also focused on corporate earnings reports.

A feature in the marketplace to start the trading week is rising U.S. Treasury yields. The yield on the benchmark 10-year U.S. Treasury note is presently fetching 2.884%. which is a more-than-three-year high. A Dow Jones Newswires headline today reads, "Sell off in Treasuries, worst in decades, rattles investors."

Inflation worries and an aggressively hawkish Federal Reserve have pushed bond yields up (prices down). However, the closely watched yield curve does not see the 2-year and 10-year yields inverted as the 10-year yield remains above the 2-year.

Nymex crude oil futures prices are near steady today and trading around $107.00 a barrel. The U.S. dollar index is higher early today and near last week's two-year high.U.S. economic data due for release Monday is light and includes the NAHB housing market index."

inflation chart The Big Picture: Peak inflation is more bad news than good news -Briefing

"The peak inflation narrative is in full swing following the release of the March Consumer Price Index (CPI) and Producer Price Index (PPI) reports. Each was awful from an inflation reading standpoint, which is part and parcel why there is such an earnest desire to believe that they are as bad as it is going to get.

Briefly, CPI was up 8.5% year-over-year and core CPI was up 6.5% year-over-year. PPI was up 11.2% year-over-year and core PPI was up 9.2% year-over-year.

We can't say for certain that we are at peak inflation, not with Russia continuing to wage its war in Ukraine and China continuing to wage its war on COVID with a zero-tolerance approach. What we can say, however, is that the market should be careful about cheering peak inflation, because cheering peak inflation is also unwittingly cheering a peak in the recovery.

Supply constraints have played a huge role in driving the outsized inflation prints, yet there are other factors on the demand side that have contributed to the worst inflation readings in 40 years.

That would be roughly $10 trillion combined of fiscal and monetary stimulus that led to huge increases in the money supply, huge upticks in personal savings, and huge increases in asset prices that were catalyzed by the artificial suppression of interest rates driven by quantitative easing.

So, here we are. The stimulus pivot is on. Fiscal support, outside of the infrastructure bill, is fading fast. Monetary support is being pulled, but arguably not nearly fast enough....

The Fed has been running behind inflation for too long. It will now be playing catch up with aggressive policy normalization efforts. As it does, the inflation rate is apt to take a step down but so will the economy.

That is the knock-on effect of rising interest rates, which are necessary to get inflation under control.

Cheering peak inflation, then, is tantamount to cheering the arrival of slower economic growth and slower earnings growth that should translate into lower earnings multiples.

To that end, peak inflation is more bad news than good news right now."

The biggest risk to the global economy no one is talking about -CNN Business

"Nearly 400 million people across 45 cities in China are under full or partial lockdown as part of China's strict zero-Covid policy. Together they represent 40%, or $7.2 trillion, of annual gross domestic product for the world's second-largest economy, according to data from Nomura Holdings.

Analysts are ringing warning bells, but say investors aren't properly assessing how serious the global economic fallout might be from these prolonged isolation orders.

'Global markets may still underestimate the impact, because much attention remains focused on the Russian-Ukraine conflict and US Federal Reserve rate hikes,' Lu Ting, Nomura's chief China economist and colleagues wrote in a note last week.

Most alarming is the indefinite lockdown in Shanghai, a city of 25 million and one of China's premiere manufacturing and export hubs.

The quarantines there have led to food shortages, inability to access medical care, and even reported pet killings. They've also left the largest port in the world understaffed.

The Port of Shanghai, which handled over 20% of Chinese freight traffic in 2021, is essentially at a standstill. Food supplies stuck in shipping containers without access to refrigeration are rotting....

Shanghai produces 6% of China's exports, according to the government's statistical yearbook for 2021, and factory closures in and around the city are further rattling supply chains.

Sony and Apple supplier plants in and around Shanghai are idle. Quanta, the world's biggest contract notebook manufacturer and a MacBook maker, has stopped production entirely....

China's recent pandemic response is likely to cost at least $46 billion in lost economic output per month, or 3.1% of GDP, according to research from the Chinese University of Hong Kong.

Analysts no longer believe that China's 2022 target of 5.5% economic growth, the country's least ambitious goal in three decades, is realistic."

Sky-High Pandemic Housing Market Finds Gravity Does Exist -DNyuz

"Luis Solis, a real estate agent in Portland, Ore., marked a milestone weekend late last month. It was the first time in two years that one of his listings made it to Monday without any offers.

This particular house was listed at $500,000, and after a Saturday open house there were promises of at least three bids, including one for $40,000 over the asking price. Then Monday came, and there were none. Then Tuesday, and Wednesday. An offer finally came in, but instead of being 10 to 15 percent higher than the listing - something that became almost standard at the height of the coronavirus pandemic's housing market - it was right at $500,000. And it was the only one. And the buyer took it.

Taking some air out of the crazed market - and the hot economy in general - is precisely what the Federal Reserve wanted to do when it raised its key interest rate in March and signaled more increases to come. Mortgage rates have surged in response, jumping to 5 percent from slightly more than 3 percent since the start of the year.

That rise means the monthly payment on a $500,000 house like the one Mr. Solis just sold would be about $500 more a month than it was at the end of last year, assuming a fixed-rate mortgage and 20 percent down payment. And the higher cost comes on top of a more than 30 percent rise in home prices over the past two years, according to Zillow.

Now early data and interviews across the industry suggest that many buyers have finally been exhausted by declining affordability and cutthroat competition, causing the gravity-defying pandemic housing market to start easing up.

Open houses have thinned. Online searches for homes have dropped. Homebuilders, many of whom have accrued backlogs of eager buyers, say rising mortgage rates have forced them to go deeper into those waiting lists to sell each house....

'We're seeing some early indications that a growing share of home buyers, especially in expensive coastal markets, are getting priced out,' said Daryl Fairweather, chief economist at Redfin....

'What I'm expecting is for homes just to start getting fewer offers, and sellers will have to give up some of their power,' said Ms. Fairweather, from Redfin. 'It will eventually filter down to prices.'"

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4.18.22 -Gold vs. a Failing World

Gold last traded at $1,977 an ounce. Silver at $25.85 an ounce.

NEWS SUMMARY: Precious metal prices rose to 4-week highs Monday on safe-haven buying despite a firmer dollar. U.S. stocks traded flat as a big week of earnings kicked off, while traders kept an eye on rising interest rates.

Gold vs. An Openly Failing/Changing World -GoldSwitzerland

"As central bankers play checkers on a global debt chessboard, we see below how policy hypocrisy, worsening monetary options, failed diplomacy, tanking bonds, rising rates, debt addiction, mismanaged sanctions, de-dollarization and a shift toward a disorderly re-set all spell immense pain for Main Street as well as Wall Street.

In short, the world is in flux, the mess is everywhere and gold is already flexing.

Fed Vice Chair Lael Brainard, a former money-printing dove who helped pour trillions of liquidity into the biggest risk asset bubble and wealth transfer in US history, is suddenly realizing that perhaps she and the FOMC may have gone too far as their open stock market inflation now morphs into just plain everywhere-inflation (and an 8+% CPI).

She is now puffing a Hawkish chest and citing the good ol' days of Paul Volcker rate-hiking as the kind of tough restraint needed in 2022. But such a pivot is the equivalent of the Titanic's captain ordering more lifeboats after the ship has already sunk....

And as for money printing, more is on the way because central banks in general, and the Fed in particular, have no choice but to eventually create more diluted dollars.

Long-term gold investors have always known this.

And the market now knows what double-speakers like Yellen, Powell, Brainard and others won't confess, namely: That as soon as the economy and markets begin to tank in this raising yield/rate environment, the Fed (and other central banks) will be forced to print (i.e., debase) more inflationary money and impose Yield Curve Controls (YCC) to stem the financial bleeding that always follows a rate hike.

In short, and as forewarned long ago, get ready for far more, rather than less, centralized controls over your money, economy, market and lives. Such inevitable bond market disasters, yield spikes and subsequent money printing and YCC is why gold is rising and gold miners like Newmont are seeing all-time highs despite a rising USD."

biden chart The Biggest Loser -Bonner Private Research

"America's last successful government program was WWII. Since then, they've all been flops and failures. And together, they've brought US debt from $259 billion in 1945 to nearly $30 trillion today.

Had the extra $29.741 trillion been invested in productive enterprises, instead of being frittered away on dead end wars and 70 years of gimmie/stimmie programs, it might now pay a dividend of a trillion dollars a year - $10,000 per family every year! - rather than doom the nation to bankruptcy.

It's not "�just money,' in other words. Each dollar represents time, resources, and output - houses, dishwashers, vacations - that otherwise would have helped people get more of what they really wanted.

Yesterday came news that the Covid shutdowns were a waste too. With the death tolls all over the place, there didn't seem to be any connection between how many people the Covid-19 killed and what the feds did to stop it. But now, two years later, a detailed study by the National Bureau of Economic Research gives us a fuller picture.

NBER rated each of the states on how well it managed the crisis - not just on how many people died, but on other factors, such as how many hours did children spend in school, how many people were unemployed, etc.

MishTalk summarizes: 'The outcomes in NJ, NY, and CA were among the worst in all three categories: mortality, economy, and schooling.'

UT, NE, and VT were leaders in all three categories. Among the winners, in #6 position was Florida, a state whose citizens, according to the elite press, were being wantonly massacred by an irresponsible, Covid-denying governor. It didn't turn out that way.

And the lineup of the worst? Again, as you'd expect - Illinois, California, New Mexico, New York, Maryland and the District of Columbia. Those who embraced the shutdown policies most enthusiastically"� that is, those who 'followed the science' - generally, suffered most.

What we take from this experience is that the "�science' was bogus. Real scientists were always skeptical that we could "�win the war' on the Covid. At best, we could help protect vulnerable people from dying. As Shanghai is discovering now, trying to stop the bug in its tracks is probably not worth the cost.

The deeper lesson is this: America's elite is incompetent....

Inflation was created by US policymakers - by printing up $8 trillion in new money since 1999"� by shutting down important parts of the economy to try to fight the Covid"� by holding interest rates far too low for far too long...and now, by stifling the flow of goods, services, and money"� in a "�sanctions war' against Russia.

Leading economists are now guessing that inflation may have "�peaked' out"� that these are the highest numbers we will see. We doubt it."

Biden's insulting response to our inflation crisis -Reason

"President Joe Biden just set another record: The worst inflation since 1981, as consumer prices climbed a staggering 8.5% over the 12 months ending in March.

That's our sixth straight month of inflation above 6%, and our 11th straight month above 5%.

The White House response? A waiver to allow usually banned sales of high-ethanol gasoline over the summer, which impacts only the gas sold at 2,300 gas stations nationwide, out of around 150,000 total.

Pathetic. The inflation picture gets even uglier when you drill down (though, of course, Team Biden opposes new drilling). Fuel oil is up an eye-popping 70%; gasoline, 48%. Not a single category of food saw sub-7% inflation.

This inflation is costing the typical family (median household income of $67,500) at least $5,000 a year.

'Extraordinarily elevated' numbers, Biden's departing flack Jen Psaki called them, before again repeating the bogus claim that it's all 'Putin's price hike.'

Hardest hit are those Democrats claim to care about most: Some 35% of non-white voters report major financial strain along with almost 50% of voters with incomes below $60,000.

But the president refuses to adjust course. His budget calls for more taxes, more borrowing, more spending. He's made no move to end his war on domestic energy. And he definitely won't admit that his disastrous American Rescue Plan was, as a Fed study has shown, the spark that touched off this conflagration by dumping almost $2 trillion into an already overheating economy.

Nope, all Americans get from Joe & Co. is trivial gestures and lame blame-shifting. All of which basically guarantees that inflation, along with all the other disasters wrought by Democratic control of Washington, will only keep getting worse."

We Still Haven't Reached the Inflation Finale -Mises

"Inflations have an inbuilt mechanism which works to burn them out.

Government (including the central bank) can thwart the mechanism if they resort to further monetary injections of sufficient power.

Hence inflations can run for a long time and in virulent form. This occurs where the money issuers see net benefit from making new monetary injections even though likely to be less than for the initial one which took so many people by surprise.

Ultimately at some point the cost-benefit calculus shifts in favor of government not blocking the operation of the burn-out mechanism....

Chief Powell is now telling us that he has no intention of accommodating inflation. For this top monetary bureaucrat and his colleagues this means projecting a series of rises for the fed funds rate which seems to be impressive both whether measured by frequency or cumulative size.

No one, of course, has a clue about how interest rates would be moving in the counterfactual case of just allowing the burnout to take place and no new monetary injections.

So, it is far too early for any sober-rational commentator to announce that the burn-out mechanism is now healthily at work and will accomplish its purpose.

And yes, it is possible that the Fed will at some point constrain (by mistake amidst the general fog) the money supply such that this lags behind demand for money, meaning a period of monetary deflation.

It is hard to form a diagnosis of the monetary inflation gap based just on contemporaneous readings of CPI inflation or taking the speculative temperature in asset markets.

Notably the distortions of price signals in asset market as caused by monetary inflation can persist well beyond the closing of the inflation gap - as was the case with both the crash of 1929 and of 2008.

The central scenario of this writer is that the pandemic monetary inflation theater still has several acts before its finale.

One of these would feature the apparent onset of recession and asset deflation to which the Fed responds ultimately by further inflationary injections of money."

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4.14.22 - Adjusting Your Brain for 8.5% Inflation

Gold last traded at $1,972 an ounce. Silver at $25.58 an ounce.

NEWS SUMMARY: Precious metal prices consolidated recent gains Thursday as upbeat economic data boosted the dollar. U.S. stocks traded mixed as investors digested mixed earnings results from major banks.

Gold gains as Ukraine crisis, soaring inflation lift appeal -CNBC

"Gold firmed near a one-month peak on Wednesday, as the Russia-Ukraine conflict boosted bullion's safe-haven demand while investors also bought it as a cushion against soaring inflation....

Safe-haven bids due to the Ukraine crisis and inflation concerns are supporting gold and could continue to do so, said Michael Hewson, chief market analyst at CMC Markets UK, adding prices could revisit $2,000 an ounce in the next few days.

Russian President Vladimir Putin on Tuesday said Russia would 'rhythmically and calmly' continue its operation in Ukraine, and that on-off peace negotiations 'have again returned to a dead-end situation for us.'

Meanwhile, data showed on Tuesday U.S. monthly consumer prices surged in March, cementing the case for a 50 basis point interest rate hike from the Federal Reserve next month as it seeks to tighten pandemic-era monetary policy....

'The markets have been pricing in the Fed's new hawkish stance and the prospect of inflation stabilization will reduce the scope for further dollar gains,' which will be positive for greenback-priced gold, Ricardo Evangelista, a senior analyst at ActivTrades, said in a note."

inflation How to Adjust Your Brain for 8.5% Inflation -WSJ

"Inflation turns money into a foreign language.

The rising cost of gas, food and hundreds of other things is pushing Americans to rethink how they read every price tag. Whether in the produce aisle or the used-car lot, our definition of cheap or expensive has changed, researchers on consumer psychology say.

Americans trimmed spending and adjusted their monthly budgets as the annual inflation rate rose to a four-decade high of 8.5% in March, the Bureau of Labor Statistics said Tuesday. Financial advisers say this recalibration can't be a one-time effort. Knowing exactly what you are willing to pay for something and examining what is a necessity should be a constant effort.

'There's no going back to the way things were,' said Scott Rick, associate professor of marketing at the University of Michigan, who studies financial decision making. 'You have to update and roll with it.'

The sudden inability to know how to read price tags is especially disorienting to those under age 40, who have never experienced anything like today's inflation rate. Understanding how we think about prices can help us adapt to inflation, Mr. Rick said.

Inflation moves faster than our mind is sometimes willing to adapt. Our understanding of price tags is disproportionately shaped by the items that make up our daily budget....

Our once-stable vocabulary of 'cheap' and 'expensive' has probably changed for good, and we need to learn to speak this new language, Mr. Rick said."

The global monetary disaster -Washington Times

"We are in the early stages of a global money meltdown. The money meltdown, mainly stemming from governments spending and borrowing irresponsibly, has been underway for some time. The pandemic and the sanctions on Russia have greatly accelerated the meltdown process, evidenced by the massive rise in inflation and the shortage of goods.

The interrelationships between national currencies, trade and production are very complex. Many books have been written on the subject. Therefore, the following is merely an outline of the situation and issues to be dealt with.

When the world was on the gold standard and free trade was the norm in the century before 1914 (the beginning of WWI), governments were limited by the system as to the amount of debt they could incur. With the movement away from gold to a U.S. dollar reserve standard, which took place from 1914 to 1971, when the last tie with gold was broken, the government debt discipline also was broken.

Assuming an average economic growth rate of 2% to 3%, the U.S. could have run modest fiscal deficits (under 3% of GDP) and modest trade deficits forever. This characterized most of the period from the first Reagan administration until the pandemic when all fiscal discipline was thrown away and has yet to be reinstated.

The lack of fiscal discipline has caused a sharp rise in the ratio of government debt to GDP to more than 100%. Unless government spending and monetary growth are drastically reduced, the cost of servicing the debt will rise far faster than government revenue, resulting in accelerating inflation and eventually an economic collapse....

As the global economic situation worsens, private individuals and institutions will create workarounds. Tax evasion will rise as governments fail to adjust tax rates fully for the rise in inflation. Various types of nongovernment money-like products, including crypto and commodity-backed currencies, will be created, some for a single temporary purpose to get around government taxes and regulations.

Very sophisticated barter arrangements will emerge as a way of providing necessities and avoiding the foot of the government. The world will more and more resemble some American inner cities."

Book Review: In Heaven As On Earth -Medium

INTRODUCTION - What becomes of us after death? Resurrection, reincarnation, nothingness?

Seventeen years ago, bestselling author, lecturer, philosopher and psychiatrist Dr. M. Scott Peck (1936-2005) entered the afterlife, but first he left readers a personal, providential and visionary roadmap of what we might expect - which he'd thoughtfully written a decade earlier.

In Heaven As on Earth whimsically looks past the boundaries of life on earth to help readers imagine what the main character, Daniel (who serves as Peck's stand-in on this mystical journey) encounters - starting at the moment of his death and taking us to the threshold of his heavenly "apprenticeship."�

Dr. Peck's 1987 groundbreaking bestseller, The Road Less Traveled: A New Psychology of Love, Traditional Values and Spiritual Growth, described the importance of personal discipline, "true"� selfless love, and grace which originates outside human consciousness.

The Road Less Traveled was quickly embraced by readers of virtually every wisdom tradition as a self-help classic, bridging the gap between modern science and ancient religion. Dr. Peck pointed readers toward a life characterized by; learning to delay gratification, accept responsibility for oneself, and a healthy dedication to seeking truth and balance in life.

Whether you're a fan of Dr. Peck's previous ten books, or like me, this is your first exposure to Dr. Peck's wisdom, you will discover frequent quotes from the Bible, which indicates Peck's deep respect for the Christian worldview, without sounding the least bit preachy. Dr. Peck acknowledges his special gratitude to C.S. Lewis' classic The Great Divorce and to the Catholic church "for keeping the vision of purgatory alive."�

The subject of the afterlife is impossible to verify, but curious souls willing to explore the unknown with Dr. Peck may find this book an inspiration to continue learning and growing - both in this life"� and in the next. I did. (Full book review)

*Swiss America will be closed Friday, April 15th in observance of Good Friday.*

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4.13.22 - Gold Rises on Hot Inflation Data

Gold last traded at $1,975 an ounce. Silver at $25.71 an ounce.

NEWS SUMMARY: Precious metal prices extended gains Wednesday as wholesale inflation soared 11% in March. U.S. stocks rose as traders shook off more surging inflation and lackluster results from JPMorgan Chase to kick off the first quarter earnings reporting season.

Gold price up as U.S. consumer inflation runs hot -Kitco

"Gold and silver prices are posting good gains in early U.S. action Tuesday, in the wake of another U.S. inflation report that ran hot and is being deemed problematic. June gold futures were last up $24.50 at $1,972.60 and May Comex silver was last up $0.513 at $25.495 an ounce.

The just-released U.S. data point of the week saw the consumer price index for March come in at up 8.5%, year-on-year, which is a 40-year high. March CPI was expected to come in at up 8.4%, annually. On Wednesday comes the U.S. producer price index report for March.

The Covid pandemic continues to surge in China, the world's second-largest economy. Broker SP Angel said today in an email dispatch: 'Strict Shanghai lockdown has put other Chinese cities on edge. All residents in Shanghai have been in a strict lockdown since last Tuesday as Covid cases surge and the government doubles down on its 'zero covid' strategy.'

Global stocks markets were mixed overnight. The U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. On the Russia invasion of Ukraine front, the U.S. has now warned the war will take a more protracted and bloodier turn. Reports said European countries are now focusing more on arming the Ukrainians and less on adding economic sanctions on Russia....

Nymex crude oil futures prices are solidly higher today and trading around $98.00 a barrel. The U.S. dollar index is firmer early today and hit another two-year high overnight. The yield on the 10-year U.S. Treasury note is presently fetching 2.792% and at a more-than-three-year high."

bull market Guns, Gains And God: Four Days In Miami With Crypto's Most Faithful Fans -Forbes

"It's Saturday afternoon in Miami Beach near the end of Bitcoin 2022, a 92-hour, bacchanal-style conference. The summit has drawn over 25,000 people to discuss and glorify cryptocurrencies, and it'll close with a concert-the so-called Sound Money Fest - featuring two Grammy-nominated headliners, Logic and Steve Aoki.

But a smaller gathering is happening across town at a Hilton a few miles from the airport, a couple dozen men and four women in a windowless room at the back of the hotel. They're here for Bear Arms "�N Bitcoin, a two-day conclave on untraceable 3-D printed guns. (Crypto is used to fuel this shadow industry.) ....

Such was Bitcoin 2022, which began last Wednesday and finished early Sunday morning, and all surrounding it. In four years, the conference has become one of the largest conferences of any kind in the world, bigger than Collision and South by Southwest and increasingly close to the size of Las Vegas' Consumer Electronics Show.

Its organizer is BTC Media, publisher of trade-focused Bitcoin magazine, and the young event does a remarkable job of drawing in average investors, politicians and billionaires alike. It presents a moment for the crypto faithful to bask in the booming attention around what was once seen as an obtuse, worthless technology....

Much of Bitcoin 2022 focused on familiar topics: how to value the cryptocurrency, buy it, store it, sell it, market it and spend it. The opening speaker, investor Mike Novogratz, suggested bitcoin could reach $500,000 a coin, what would be a meteoric rise from today's $42,000 or so....

Despite the week's apparent expansiveness, Bitcoin 2022 left several important realities unresolved. It paid scant attention to reckoning with the problems within the crypto industry, which remains an unregulated financial frontier populated by companies loath to self-police. Another matter: Bitcoin may be the original cryptocurrency with a $1 trillion market value today, but it is far from the only crypto any longer-and far from the only successful example of a blockchain-based project.

For all its success, the conference could risk becoming outdated almost as quickly as it became a must-attend thing if it doesn't recognize attendees likely won't mind hearing about more than bitcoin from the stage."

Top Economist: "We're About to Abandon Traditional System of Money & Replace It With Digital Blockchain"� -Infowars

"Discussing a new digital age where every single financial transaction will be documented on the blockchain, economist Pippa Malmgren told attendees of the World Government Summit 2022 that the age of the Central Bank Digital Coin, or CBDC, is upon us.

'What underpins the world order is always the financial system,' Malmgren said, explaining she grew up with a fundamental understanding of the role monetary systems in our everyday lives.

'I was very privileged. My father was the adviser to Nixon when we came off the gold standard in '71, and so I was brought up with a kind of inside view of how very important the financial structure is to absolutely everything else,' Malmgren said.

'And what we're seeing in the world today is I think we are on the brink of a dramatic change where we are about to - and I'll say this boldly - we're about to abandon the traditional system of money and accounting and introduce a new one, and the new one - the new accounting - is what we call blockchain.'

'It means digital,' she continued. 'It means having an almost perfect record of every single transaction that happens in the economy, which will give us far greater clarity over what's going on.'

Of course, governments having the power to observe a person's transactions could also enable the government to control what, or whether, a person can, or can't buy.

Malmgren warned a digital economy threatens to disrupt the balance of power for fellow globalists and the plebs they lord over, but professed to desire a Digital Constitution of Human Rights in order to protect the rights of citizens.

The revealing comments were just one of many alarming statements made by top globalists at the conference held in Dubai over the past two days, which was commenced by CNN's Becky Anderson who kicked off the summit by asking, 'Are we ready for a New World Order?'"

Why You Need a 'Plan Z' -American Consequences

"Do Americans - with the luxuries of their reserve currency, a stable banking system, the world's biggest military, and a powerful passport - need to even think about Plan Z?

In a word, yes....I'll explain what investors can do to prepare in case Plans A, B, and C fall through"� whether you're living in a country under attack or an American suburb.

Plan Z is like getting a tetanus shot: You may never step on a rusty nail, but if you do, you'll be glad you got the shot....

1. Keep different forms of cash on hand. - Imagine your debit or credit cards (or Apple Pay) no longer work"� The ATMs are empty and your bank account is frozen. To guard against this scenario, keep enough cash in a home safe to get by for a few weeks - or several months preferably....

If push comes to shove...a gold coin could get you out of many jams. Gold is not as easy to use as greenbacks, but the world's oldest currency is a good desperate-situation backup.

2. Get another passport. - During the COVID-19 pandemic, many governments closed their borders to outsiders.

If you had family, property, or assets abroad, but didn't have a passport, you were out of luck. A second citizenship is the best insurance policy against this scenario....

3. Diversify your banking. - How much do you really trust the financial system? Probably more than you should"�

Banking-sector crises - bank runs, collapsing currencies, and cashless ATMs - happen all the time, even in developed countries. Within the past two decades, Greece, Ireland, Belgium, the United Kingdom, and Spain all experienced banking crises....

4. Download today what you might need tomorrow. - In a world where cyberattacks are commonplace, your data is more vulnerable than ever"�

You shouldn't assume that your personal data and online bank or brokerage statements, for example, will be available when you need them most. Periodically download that information and store it in a safe place"� You can generate printouts or save files on your hard drive....

You hope the worst-case scenario won't happen"� but you want to be prepared if it does. That's what Plan Z is all about."

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4.12.22 - Rising Costs Disrupting Retirement for Many

Gold last traded at $1,967 an ounce. Silver at $25.37 an ounce.

NEWS SUMMARY: Precious metal prices rose on safe-haven buying as consumer inflation topped 8.5%. U.S. stocks rose on investor hopes that inflation may be peaking.

A Note on the New Russian "Gold Standard" -AIER

"After ten days of offering to purchase gold for a fixed number of rubles, the Russian central bank has announced that going forward it will pay negotiated rates in future purchases of gold in rubles....

On March 28, the Russian government further announced that international commodity purchases may no longer be made in dollars or euros, but rather that everything from oil and natural gas to grains and industrial metals must be transacted in rubles....

The Kremlin's goals are obvious: They seek to force nations to transact in their currency which, owing to a comprehensive and growing array of Western sanctions, had been steeply devalued. They also, by demanding payment in rubles, are attempting to increase demand for their currency while spurning trade in the familiar medium of US dollars....

The Bank of Russia's decision to hike interest rates to over 20 percent, stemming the flow of savings out of Russian banks, has additionally stabilized the financial system.

But neither today's shift nor the original "�5,000 ruble per gram' purchase measure constitutes a gold standard despite the enthusiasm of certain media pundits. A bona fide gold standard would require the Russian central bank to both purchase and sell (which is to say, exchange) gold and rubles; and to do so according to a fixed weight or quantity of gold per unit currency....

Despite the clamor of incorrect headlines regarding Russia's embrace of gold, it remains a positive step. Gold is tangentially being utilized to make an existing money more sound. It is most unfortunate that these measures are tied to an event as awful as the Russia-Ukraine War, but it may give other nations in less dire circumstances the motivation, and indeed the courage, to shore up their battered currencies."

gas prices Is It Time To Revisit The Keystone XL Pipeline? -OilPrice.com

"With countries around the world experiencing increasing energy insecurity following the Russian invasion of Ukraine, many are looking for ways to increase their oil and gas supply. Rising prices and severe shortages have demonstrated how reliant the world is on Russian oil and gas. But some are saying that regions such as Africa, North America, and South America have the potential to significantly boost their supplies to bridge this gap.

This has led politicians and citizens across Canada and the U.S. to question the possibility of revisiting the construction of the Keystone pipeline, which could help transport vast amounts of oil across North America. The Keystone XL pipeline extension was proposed by TC Energy in 2008 to transport 830,000 bpd of Alberta tar sands oil to refineries on the Gulf Coast of Texas.

The approval of the pipeline extension would suggest that the North American oil industry is likely to thrive for decades to come, due to the significant investment in the transportation line. However, U.S. presidents have gone back and forth on the plan, with the Obama administration vetoing the proposal, and then President Trump bringing it back to the table. Finally, President Biden denied the permit required for the project to go ahead on his first day in office, and the development was officially canceled in June 2021.

But now, with major oil shortages being felt worldwide, many are discussing the possibility of bringing the project back to life. While this would have severe environmental implications, it could help provide North America with the crude it needs during a time of soaring prices and energy insecurity....

If Keystone was approved, the enhanced capacity could help deliver greater levels of oil to North America. This does not necessarily equate to a boost in oil production. This, some experts argue, is the reason why Keystone XL should have been - and still should be - approved.

With TC Energy willing to pump private funds into the project, a movement away from fossil fuels, which could make the pipeline eventually redundant, would not have a negative impact on public funds. Although, this does not consider land use. However, if Keystone XL was deemed necessary, it would provide the U.S. with a close ally to import oil from, moving away from dependence on countries such as Russia, Venezuela, and Iran.

Now, lawmakers in the U.S. are encouraging Biden to reconsider the cancellation of the project. In fact, Montana's U.S. Sen. Steve Daines called on Biden for the immediate restart of the project....

A recent poll also suggested that U.S. citizens are increasingly in favor of the Keystone XL development, following recent world events. With Canada saying it has the potential to meet the oil demand as global supplies become less certain, many Americans are looking to their friendly neighbor for help during this worrying time."

Everything Costs More, and That's Disrupting Retirement for Many -WSJ

"Signs are mounting that high inflation is helping propel more people - including retirees - back into the labor force, economists say.

That is good for the economy overall, as a growing workforce boosts the economy's growth prospects, and it could ease staffing shortages that have pushed up wages and added to price pressures. But for many people, including those relying on pensions or limited savings, rising prices are an unwelcome development forcing them back onto the job market.

'We're beginning to see the migration of the older cohort who expected to live on fixed income in a low interest-rate and low inflation environment,' said Joseph Brusuelas, chief economist at RSM US LLP. 'That has not materialized; therefore they have to come back to the labor force to create the conditions so they can retire.'

'Really what you're dealing with is an inflationary shock that has elicited a change in behavior,' he added.

The share of people age over 55 either working or looking for a job - their labor-force participation rate - rose to 38.9% in March from 38.4% in October, according to the Labor Department. More than 480,000 people in that age group entered the labor force during the past six months, according to the three-month moving average, which smooths out volatility. That was more than the 180,000 who entered the labor force in the six months before the pandemic struck....

Analysts say a number of factors are prompting more people of all ages to go out and look for jobs: Covid-19 vaccinations, school and day-care reopenings, more remote and flexible work opportunities, an end to pandemic-era government support and rising wages....

Roughly 2.6 million Americans retired earlier than expected between February 2020 and October 2021, according to estimates from Federal Reserve Bank of St. Louis senior economist Miguel Faria-e-Castro. Now many are returning to work at rates not seen since March 2020, according to jobs site Indeed."

Social Security: Could raising full retirement age delay benefit cuts? -Motley Fool

"Seniors on Social Security routinely rely on their benefits to make ends meet. But in about a decade's time, current beneficiaries could be in for a rude awakening.

In the coming years, Social Security is expected to owe more money in benefits than it collects in revenue as baby boomers exit the workforce in droves. The reason? The program's primary revenue source is payroll tax funds. Once the labor force shrinks - which is expected to happen as boomers leave it - that funding source will be diminished.

Social Security does have trust funds it can tap for a number of years to keep up with scheduled benefits in the face of declining revenue. But once those trust funds run dry, benefit cuts will be a real possibility seniors will have to grapple with.

Worse yet, those benefit cuts may not be so far off. Recently, the program's Trustees projected that its trust funds could run out of money in a little over a decade....

One idea some lawmakers have proposed is raising full retirement age (FRA) for future beneficiaries. Changing FRA from age 67 to age 68, for example, would potentially prompt more people to stay in the labor force an extra year, thereby pumping more payroll tax revenue into Social Security. That could, in turn, help prevent benefit cuts, or at push them off.

Seeing as how life expectancies have increased through the years, this proposal isn't completely unreasonable. But it's also an idea that's unlikely to go over well.

Right now, Social Security rewards seniors who delay their claims past FRA with an 8% annual boost to their benefits, up until age 70. Yet percentage-wise, few beneficiaries take advantage by postponing their claims until age 70....

Raising FRA is only one of multiple ideas that lawmakers have tossed around in an effort to prevent Social Security cuts. Other options include raising or eliminating the wage cap that applies to payroll taxes on earnings and means-testing seniors so that those who are financially well-off get less of a benefit."

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4.11.22 - Interest-Rate Surge Ripples Through Economy

Gold last traded at $1,942 an ounce. Silver at $24.78 an ounce.

NEWS SUMMARY: Precious metal prices rushed higher Monday despite rising interest rates and a firmer dollar. U.S. stocks fell on growing investor concerns over tighter monetary policy from the Federal Reserve.

Will gold continue to ignore rising US yields? -FX Street

"Despite the broad-based dollar strength and the sharp upsurge witnessed in US Treasury bond yields, the yellow metal managed to hold its ground on safe-haven flows and ended up closing in the upper half of its weekly range above $1,940....

The dollar preserved its strength on Fedspeak but the precious metal stayed resilient. St Louis Fed President James Bullard argued on Thursday that the policy rate would need to go as high as 3.5% to fight inflation....

On Tuesday, the US Bureau of Labor Statistics will release the Consumer Price Index (CPI) data. On a yearly basis, CPI is expected to advance to a fresh multi-decade high of 8.3% in March from 7.9% in February.

As it currently stands, the CME Group FedWatch Tool shows that markets are pricing in a 56% probability of a total of 100 basis points (bps) rate hike in the next two meetings. A stronger-than-expected CPI print could ramp up the odds for two successive 50 bps Fed rate hikes and lift US T-bond yields even higher.

Gold made a daily close above the 20-day SMA for the first time in two weeks on Friday. Additionally, the Relative Strength Index (RSI) indicator rose slightly above 50, pointing to a bullish tilt in the technical picture.

On the upside, $1,950 aligns as first technical resistance. In case gold rises above that level and starts using it as support, it could target $1,970."

recession A "recession shock" is coming, BofA warns -Reuters

"The macro-economic picture is deteriorating fast and could push the U.S. economy into recession as the Federal Reserve tightens its monetary policy to tame surging inflation, BofA strategists warned in a weekly research note.

'Inflation shock' worsening, 'rates shock' just beginning, 'recession shock' coming', BofA chief investment strategist Michael Hartnett wrote in a note to clients, adding that in this context, cash, volatility, commodities and crypto currencies could outperform bonds and stocks.

The Federal Reserve on Wednesday signaled it will likely start culling assets from its $9 trillion balance sheet at its meeting in early May and will do so at nearly twice the pace it did in its previous "quantitative tightening" exercise as it confronts inflation running at a four-decade high.

A large majority of investors also expect the central bank to hike its key interest rate by 50 basis point."

The credibility-challenged Fed is about to be overtaken by reality again -New York Post

"For two years, the Federal Reserve has managed to lose credibility by making strong policy commitments it soon had to reverse once they were overtaken by reality. It's now poised to make yet another major policy pledge it won't be able to keep.

The minutes, released Wednesday, of the Fed's last policy meeting suggest that starting as soon as May, the bank will begin raising interest rates in 50 basis point steps in its effort to get the inflation genie back into the bottle.

The Fed will also commit to shrinking its bloated balance sheet over the next year by $95 billion a month. But it's unlikely to be able to meet that obligation - especially should its abrupt, hawkish policy shift burst the equity, housing and credit market bubble.

With consumer price inflation running at almost 8%, a 40-year high, it's hard to believe that as recently as August 2020 the Fed was fretting about inflation being too low. That worry induced the bank to abandon its 2% fixed-inflation target for a so-called flexible average inflation target....

Seeming oblivious to the inflationary pressures it was creating by allowing the money supply to balloon and keeping interest rates too low for too long, the Fed adopted a policy that would tolerate inflation above 2% for some time. It did so to make up for the period inflation remained below its target....

The reason for doubting that the Fed will be able to keep its balance-sheet-reduction commitment is that it comes against the backdrop of an equity, housing and credit market bubble that the Fed itself created by its earlier ultra-easy monetary policy. Equity valuations still remain at nosebleed levels, housing prices exceed their 2006 peak even in inflation-adjusted terms and credit spreads on highly leveraged loans remain low.

A basic point that seems to have escaped the Fed's attention is that today's everything bubble has been premised on the mistaken assumption that interest rates would remain ultra-low forever. By raising interest rates and committing to rapidly run down the size of its balance sheet, the Fed could very well trigger the bursting of those bubbles."

Interest-Rate Surge Ripples Through Economy, From Homes to Car Loans -WSJ

"The market is finally getting the message that the era of cheap money is ending.

Just look at mortgage rates. At the beginning of 2022, the average interest rate on a 30-year mortgage hovered above 3%. Today it stands at 4.72%, according to Freddie Mac. That translates into sharply higher borrowing costs for Americans looking to buy a home - and it is only the beginning.

For the better part of the past 15 years, households and businesses paid very little to borrow. Americans could get cars and homes and the appliances to fill them at interest rates in the low single digits. Companies, especially profitable ones, could practically name their price in the credit markets....

When the Fed raises rates or signals it is about to, investors tend to sell government bonds, sending their yield higher. That is what is happening now, in dramatic fashion.

Rising Treasury yields, in turn, are cascading throughout the economy in the form of higher borrowing costs, squeezing households and businesses alike. Car loans, credit cards and corporate debt all stand to get more expensive as rates rise....

The Fed's previous attempts to raise interest rates since the financial crisis have faltered. In 2013, then-Chairman Ben Bernanke said the Fed would eventually start slowing the bond purchases it was making to keep rates low. That was enough to induce panicked selling in bond markets. In 2018, the Fed raised interest rates four times. The stock market fell 6%, and the Fed turned around and began cutting rates the next year....

When Jennifer Osorio began making plans to buy a house in Houston early this year, she thought she would end up with a mortgage rate close to 3.5%. By the time she was ready to make an offer last month, the lowest rate she could lock in was 4.99%....

'It's frustrating, but there's not much I can do,' Ms. Osorio said. 'I'm just going to have to hope the market crashes.'....

'Salaries and wages simply are not keeping pace with the double whammy of higher prices and rising mortgage rates,' said George Ratiu, senior economist and manager of economic research at Realtor.com."

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4.8.22 - 'Hold Commodities, Half in Gold'

Gold last traded at $1,942 an ounce. Silver at $24.78 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday amid rising inflation despite a firmer dollar. U.S. stocks traded most lower, ending another downbeat week as investors digested the latest Fed tightening announcements.

Hold commodities and half of it should be in gold as economic risks rise -Societe Generale/Kitco

"The Federal Reserve is embarking on an aggressive monetary policy tightening cycle and one international bank is advising investors to maximize their commodity exposure, including exposure to gold.

In a report published by Societe Generale, the bank said it currently holds a maximum allocation of 5% of gold in its Multi-Asset Portfolio, representing half of its commodity exposure. The comment comes as gold prices continue to consolidate between $1,900 and $1,950 an ounce; however, SocGen analysts expect to see a break out to the upside within the next three months.

'High inflation and lower rates suggest that gold will hit record highs. Indeed, we expect gold to reach $2,200/oz in2Q,' the analysts said.

Looking at the other half of its commodity exposure, SocGen analysts said they prefer rotating out of the energy sector and into base metals like copper. The bank also likes silver as an industrial metal.

'To protect portfolios, buying oil is no longer the panacea, as if central banks react too strongly to inflation pressures building up in the economy, they could push the economy into recession leading to a $60/b oil price,' the analysts said....

'War in Ukraine could be followed by a period of cold war, in which strategic autonomy in defense, energy and food would become key policy features. In our view, the Defence sector will become an area of investment and can be ESGcompliant if one follows some simple rules. Central banks will likely try to protect more of their assets, potentially by adding gold,' the analysts said."

Pat Boone How It All Started - The Pat Boone Show -XOTV

"Welcome to The Pat Boone Show, the exclusive show for Pat Boone fans!

Hear Pat talk about his role models, influences, and upbringing with producer and long-time friend, Michael Lloyd.

Stocked full of clips from his career, in this episode the two dive into the behind-the-scenes of his dream of becoming a famous singer."

Join America's legendary entertainer Pat Boone as he explores a lifetime of entertainment.

The Pat Boone Show is proudly sponsored by Swiss America.

Recession could happen in 2023, Wall Street bank predicts -USA Today

"A recession in the U.S. is brewing as the Federal Reserve is taking a more aggressive stance on raising interest rates to clamp down on inflation, according to economists at Deutsche Bank.

With inflation at a 40-year high, they predict the Fed will raise interest rates by half a percentage point during the next three meetings in May, June and July. That's in line with the Fed's thinking, according to minutes from the latest meeting.

When the Fed raises rates, it becomes more expensive to borrow money since interest rates on mortgages, credit cards and other loans increase in tandem. By taking such action, the Fed hopes to slow down the economy without causing a recession.

In this case, it's going to be unavoidable, the economists said in a note published Tuesday.

The Fed's actions will 'likely to trigger a mild recession around late 2023,' the note said. 'While this will eventually help to push inflation closer to target by the end of 2024, it will also come with a sharp rise in the unemployment rate.'

Deutsche is one of the first major banks to sound the recession alarm.

A spike in oil prices resulting from Russia's invasion of Ukraine has exacerbated inflation, and also increased the odds that the U.S. will experience a recession. That's because higher crude costs are driving up gas prices for Americans, causing them to cut back spending in other areas, top economists say."

Putin's Invasion Reminds Us That We Live in a Finite World -Grantham/GMO

"As a species, we must make the jump to full sustainability. Decarbonizing our economy will be spectacularly resource intensive, and all key commodities required are finite in supply. Russia's desperate attack on Ukraine makes everything more unpredictable but for one certainty - this war will increase the pressure on raw materials in the short term.

It serves as a reminder more broadly that we will have to innovate around the bottlenecks, shortages, price spikes, and climate damage that are almost certainly coming our way so that we might survive to tell the tale.

The simple fact, often ignored, is that all key commodities required by the modern economy are finite in supply, and the cheapest and best have gone first. There is still plenty of oil in the Earth's crust, but the best resources have gone: where simple gushers once were common, we now ingeniously torture the solid rock - euphemistically known as shale - or drill miles below the deep seabed offshore Brazil.

As a result, the real price trend of oil has reached 3 or 4 times its 1965 level in spite of incredible innovation by the energy industry...Oil was the first important commodity paradigm shift, breaking out of a long flat trend back in the early 1970s, with its price trend rising as the prices of other commodities continued to fall. In this sense it was the canary in the mine for other commodities, whose prices also began to rise about 30 years later....

Decarbonizing the global economy at the same time as we have to become rapidly more protective of our limited resources will not be easy. It will take the best period of energy and creativity we have ever had. At best, to replace our destructive reliance on fossil fuels, we might have breakthroughs in one or more of commercial fusion, modular fission, deep geothermal energy, or very much cheaper energy storage - any one of which might save our bacon.

On a smaller scale we will surely have new biologically derived substitutes for many traditional materials and a thousand new innovations of all kinds in agriculture and industrial efficiency.

To succeed, we must put an increasing value on new ideas and new research in these fields. The U.S. does much of this very well in its VC business and its great research universities (to the envy of the world). The U.S. may have slipped in some commercial areas, but in these it really is exceptional, the biggest and the best. But the collective scale is still far too small, for corporate and government R&D has for several decades shrunk rather than grown.

Our best shot for long-term sustainability - even prosperity - is for government, business, and individuals to all get behind these exceptional strengths of the U.S.: research, innovation, commercialization, and our society's unusual willingness to take risk (also an American characteristic widely admired).

Our collective survival as a reasonably stable and livable global society may depend on U.S. leadership in all these areas. As we enter the new age of environmental damage, scarcity, and physical limits, we will need all the innovation and ingenuity we can muster."

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4.7.22 - Strongest Gold Demand in 23 Years -US Mint

Gold last traded at $1,933 an ounce. Silver at $24.64 an ounce.

NEWS SUMMARY: Precious metal prices rose on safe haven buying and dollar weakness. U.S. stocks fell as investors reacted negatively to the latest Fed communications.

U.S. Mint sees strongest gold bullion demand in 23 years -Kitco

"Rising inflation and safe-haven demand resulted in extraordinary demand for physical gold in March, capping off the best start to the year in more than two decades.

In its latest sales data, the U.S. mint reported that it sold 155,500 ounces of various denominations of its American Eagle Gold bullion coins, up 73% from last month. The U.S. Mint saw its best March performance since 1999.

March ended a solid quarter for bullion demand. The U.S. mint sold 426,500 ounces of gold between January and March, up 3.5% from the first quarter of 2021. Similar to its monthly says, this was the mint's best quarter in 23 years.

According to analysts, two factors are driving demand for physical precious metals: inflation and Russia's war with Ukraine. Analysts are focusing a lot of attention on Europe's economy as the region faces rising consumer prices and the growing threat that Russia could weaponize its energy commodities as it faces growing sanctions against Western nations.

'People increasingly realize that high inflation is not temporary but has come to stay - and most likely get even worse, especially in Europe,' said Thorsten Polleit, chief economist at Degussa, in an email statement to Kitco News. 'The war in Ukraine represents a huge risk for the eurozone. For instance, if the inflow of oil and gas and coal from Russia into Europe comes to a shrieking halt, a very severe recession with mass unemployment and the collapse of various industries would be most likely.'"

Moby Dick This Brave Ahab -Bonner Private Research

"Captain Powell faces the coming squall... with your financial security twisting in the winds.

Oh to be as carefree"� as optimistic"� and as brain dead as an American stock market investor!

By our reckoning, US stocks are about $25-$30 trillion overvalued. Typically around 80% of GDP, the Wilshire 5000, which captures all US publicly-traded equities, is now almost at 200%.

What would it take to drive investors away from the stock market? A tsunami washing over Manhattan? A nuclear war? The dead rising from their graves?

Already, there's a war on"� and one of the combatants has nukes in his arsenal. Inflation is already at 8%; it looks like it will hit double digits soon. The bond market has just delivered its most reliable recession signal - the dreaded 'inverted yield curve.'

And now, the Fed is determined to stamp out inflation by raising rates. Higher interest rates will put the refinancing machine into reverse. Instead of refinancing debt at lower rates, debts will be refinanced at higher rates, causing the overall debt pile (and the economy) to shrink.

Many households and businesses will find that when the weather was fair and the going was good, they went a little too far. Cometh the clouds and they will be unable to refinance debt. Instead, they will default....

Among serious commentators (of whom, there are no more than a half dozen), the prevailing view is that the Fed will have no choice. After having recklessly goosed up stock prices for the last 14 years, the Fed must now reckon with its mistakes and goose them down....

And now"� faced with double-digit inflation, what's a poor central banker to do? He has no choice. Not in Europe. Not in Britain. And not in America. He has to take the knife between his teeth and climb the rigging. David Stockman:

'The fools in the Eccles Building will have no choice but to throw on the monetary brakes far harder than now planned or expected during the next 8 months. That's because the inflation menace will be in their face via the 'incoming data' at 8-10% on a Y/Y basis or higher, while the negative GDP of recession will not show up until Q4 2022 or early next year.'

All the world's major central bankers - save for those in Russia, where the key lending rate is already 20% - are in the same boat. All followed the same course. All now find themselves on rough seas...

And all must batten down the hatches, take down the sails, and ride out the storm....Whatever happens - earthquake"� WWIII"� plague - they still believe that Captain Powell will make sure that nothing bad happens to them.

And you know what? They may be right. This brave Ahab"� on the high seas of high finance"� may be just mad enough, weak enough, or just plain dumb enough, to turn a very bad situation into an even worse one."

How Bad Is Currency Debasement of the Dollar? (And Is There Anything We Can Do about It?) -Mises

"Between the end of World War II in 1945 and Nixon taking the US off the gold standard in 1971 the amount of gold held by the Treasury/Fed halved and both the monetary base and M1 doubled. This was enough to end the charade that the US had been a good steward of the international monetary system based upon the 'good-as-gold' dollar at $35 per ounce.

But in hindsight the US's monetary stewardship in the quarter century from the end of the war until the end of the gold standard appears as one of integrity, honesty, etc. compared to what has happened since. The amount of gold held by the Treasury/Fed has shrunk somewhat, but we really don't know if it really is there, since there has not been a physical audit of the nation's gold for many decades.

What's truly shocking is the expansion of both base money and the money stock in the fifty years of pure fiat money. The monetary base has increased by seventy-three (73) times its 1971 level. The money stock has increased by ninety-one (91) times. There is no reason to believe that the money expansion machine will stop or even slow down. In fact it may speed up.

Just consider what the current administration, supported by a majority in Congress, wish to spend--infrastructure bill, build-back-better bill, an increase for the military (of course!), more stimulus checks to help people pay for their increased energy bills. There is no budgetary discipline. Nevertheless, if government will not instill discipline, markets will. The dollar will collapse into worthlessness.

But there is an alternative. Despite the huge ratio of dollars to gold, the US could still tie the dollar to its gold supply. Per Ludwig von Mises in Omnipotent Government: 'Every nation, whether rich or poor, powerful or feeble, can at any hour once again adopt the gold standard.

It would have to set up an independent agency to oversee the absolute right that anyone could redeem dollars for gold at the new higher exchange rate. The Fed would have to be phased out, especially its monetary meddling operation by which it sets interest rates and monetizes government debt. The federal government would have to balance its budget, but it can be done....

The fact that the US has greatly inflated its money stock since 1953 does not change the mechanism by which a gold-backed dollar can be reinstated or the benefit of doing so. Time is running out, though. It may well be impossible to do after the world starts abandoning the dollar."

Tech Sector Leads Stocks Lower -WSJ

"U.S. stock indexes slipped Tuesday as investors weighed the prospect of more assertive actions by the Federal Reserve to curb inflation.

The S&P 500 fell 1.3%, a day after the indexes were pulled higher by rallying technology stocks. The tech-heavy Nasdaq Composite lost 2.3%. The Dow Jones Industrial Average slipped 0.8%.

Fed governor Lael Brainard said Wednesday that the central bank is strongly committed to taking steps that will cut inflation this year, including by announcing a significant reduction in its $9 trillion asset portfolio next month.

Reducing the Fed's balance sheet, reversing its efforts to stimulate the economy through the purchase of Treasury securities and mortgage bonds, will help lift market interest rates - and make stocks more expensive relative to less risky assets, said John Lynch, chief investment officer at Comerica Wealth Management....

Reports of Russian atrocities inflicted on Ukrainian civilians in occupied areas have shocked Western governments, which have called for additional sanctions on Russia. Sanctions have already sent oil prices soaring above $100 a barrel and lifted prices for a swath of other commodities. That has heaped pressure on economies already facing multidecade high inflation....

'Markets are in a limbo state,' said Anthony Saglimbene, global market strategist at Ameriprise Financial. 'Investors are waiting for the Fed meeting minutes tomorrow. And next week is earnings season. We need some corporate updates to see how the first quarter went and, more importantly, what the outlook is.'"

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4.6.22 - Is Gold the Safest Place to Invest?

Gold last traded at $1,918 an ounce. Silver at $24.36 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on safe haven buying and a weaker dollar. U.S. stocks fell anticipating the upcoming Fed rate hikes to help cool inflationary fears.

Biden Is Clueless About Inflation -Reason

"'My dad had an expression,' said President Joe Biden as he announced his budget plan for FY 2023. 'Don't tell me what you value, show me your budget, and I'll tell you what you value.'

So at the very moment that we're experiencing the highest inflation in 40 years, what does Biden value? The same sort of government spending that is already sending prices through the roof.

You'd figure that with Covid receding, debt rising, and a tidal wave of unfunded liabilities staring us right in the kisser, Biden would take the opportunity to radically reset the federal government's balance sheet. Instead, his budget plan could be titled Rearranging Deck Chairs on the Titanic.

The president wants to spend $5.8 trillion, which would include jacking spending on defense, education, and police. He talks about levying a controversial - and probably unconstitutional - wealth tax on billionaires to help pay for it all but still expects a budget deficit of $1.2 trillion. If you're going to tax unrealized capital gains, President Biden, at least spend it on something pretty!

It's debt-financed spending that helps spur inflation in the first place. Rather than cutting spending and reforming entitlements, the government borrows and prints money so it can keep giving more goodies to its favored citizens. You get more dollars chasing the same amount of goods, and that leads to price hikes....

Biden can talk a good game about 'returning our fiscal house to order,' but it's clear he doesn't understand why prices are going up - and that his policies will keep them high for the foreseeable future. That might cost Democrats control of the House and the Senate in the fall and perhaps Biden the White House in 2024.

That will be too bad for him and his party. But his unwillingness to confront massive spending and debt is going to cost all of us a lot more than that."

gold prices Is Gold the Safest Place to Invest During Times of Widespread Market Uncertainty? -FX Empire/Yahoo Finance

"Gold's reputation as a safe space to store wealth during times of economic downturns remains unscathed as the commodity continues to outperform other markets in the wake of the recent inflation-driven cost of living squeezes being experienced around the world.

As we can see from the value of gold over the past five years, the commodity has continually rallied in the wake of wider market uncertainty. Although it experienced a similar dip that was felt across the market as the extent of the Covid-19 pandemic became fully known, gold's recovery was so strong that the asset soared to new all-time highs by the summer of 2020.

Compared to just five years ago, the price of gold has grown by some 55.11% in spite of a highly volatile stock market in the wake of factors amounting to inflation, the pandemic, and geopolitical tensions.

Does gold's recent performance indicate that the asset is the safest place for investors to turn to as the stock market continues to reel from widespread uncertainty?....

Holding wealth in gold may still be a good choice for investors whilst markets continue to suffer from volatility.....

Despite bitcoin's reputation as a safe haven asset, the cryptocurrency's well-documented volatility has led to more investors choosing to opt-out of holding the asset during market downturns....

Although this may point to a bright future for bitcoin, gold's outperformance in 2022 ensures that it remains a relatively safe bet during these jittery times for global markets. Until we see more confidence returning, it's likely that bullion will remain a tried and tested safe haven asset."

A Checklist for Corrections -Compound Advisors

"The markets are volatile, the news is bad, and the value of your portfolio is going down. You're afraid things may get worse and you want to do something about it.

This is a perfectly normal reaction. When faced with something painful, we look for ways to ease the pain....What should an investor be thinking about during market corrections? Here's a checklist to consider"�

1) First, Do No Harm - As John Bogle once said: 'don't do something, just stand there!' Given the risk of a timing error, the hurdle for action should be exceedingly high. That means having a strong, evidenced-based rationale for any change you make....

2) Find Your True Risk Tolerance - Everyone thinks they have a good idea of their risk tolerance until they are punched in the face with a large drawdown....

3) Make Sure You're Really Diversified - Corrections always induce fear, but if you're concentrated in the wrong asset class they can be downright frightening. What's the wrong asset class? Nobody knows, which is why maintaining an diversified portfolio is so important....

4) Rebalance to Manage Risk and Buy Low/Sell High - Large movements in markets can lead to big changes in your portfolio and introduce risks that you may not be aware of....

5) View Declines as Opportunities to Add to Exposure - If you are a long-term investor, every large decline should be viewed as an opportunity. Why? Because time is on your side....

The next time you're faced with a market correction, refer to this checklist. And remember Abraham Lincoln's favorite saying: 'this, too, shall pass.'"

'Biggest fraud in a generation': The looting of the Covid relief program known as PPP -NBC News

"The official in charge of Covid relief tells NBC News' Lester Holt that programs like PPP were structured in ways that were 'an invitation' to fraudsters.

They bought Lamborghinis, Ferraris and Bentleys. And Teslas, of course. Lots of Teslas.

Many who participated in what prosecutors are calling the largest fraud in U.S. history - the theft of hundreds of billions of dollars in taxpayer money intended to help those harmed by the coronavirus pandemic - couldn't resist purchasing luxury automobiles. Also mansions, private jet flights and swanky vacations.

They came into their riches by participating in what experts say is the theft of as much as $80 billion - or about 10 percent - of the $800 billion handed out in a Covid relief plan known as the Paycheck Protection Program, or PPP.

That's on top of the $90 billion to $400 billion believed to have been stolen from the $900 billion Covid unemployment relief program - at least half taken by international fraudsters - as NBC News reported last year. And another $80 billion potentially pilfered from a separate Covid disaster relief program.

The prevalence of Covid relief fraud has been known for some time, but the enormous scope and its disturbing implications are only now becoming clear....

'Nothing like this has ever happened before,' said Matthew Schneider, a former U.S. attorney from Michigan who is now with Honigman LLP. 'It is the biggest fraud in a generation.'

Most of the losses are considered unrecoverable, but there is still a chance to stanch the bleeding, because federal officials say $600 billion is still waiting to go out the door."

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4.5.22 - 1st Quarter: Stocks & Bonds Down, Oil & Gold Up

Gold last traded at $1,923 an ounce. Silver at $24.32 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on safe-haven buying and a weaker dollar. U.S. stocks traded mixed as investors assessed the odds of a recession and the latest developments in Ukraine.

1st Quarter: Stocks Down, Bonds Down, Oil & Gold Up -Forbes

"It's mostly about inflation, the kind that was thought to be transitory last year but then turned out to be more than transitory.

It's the inflation of oil prices that really kicked in during the 1st quarter and that stems from the Russian invasion of Ukraine, the economic sanctions that followed and the general uneasiness of the geopolitical reality, to put it mildly.

Money flowed into assets thought to be more trustworthy than other assets and thus we have a lower equity market, a lower bond market, a raging higher petroleum market and a reawakened precious metals market....

It's been a rollercoaster ride for the 1st quarter in the oil market. West Texas Crude moved from an early January price of $75 all the way up to above $130...then down to around $100. This is the effect of Russia's idiotic invasion of neighboring Ukraine and the effect of the economic sanctions on Moscow that followed.

The yellow metal in the 1st quarter proved again that it's where a lot of people go when more than the usual amount of uncertainty arises. That's $1800 at the beginning of January, a retest of that area later in the month and then the straight-up, unstoppable stuff until mid-March. Gold hit above $2000 before sellers finally stepped up and brought it back to $1900 before that small bounce at the quarter's end.

So, inflation assets win while equity and bond assets lose as 2022 kicks off. It's an old story and it's being replayed yet again."

dollar collapse Is the US dollar in danger? -CNN

"The US may have the world's most powerful military, but the dollar is its greatest weapon. Now, after nearly 80 years of dollar dominance, the US might be in danger of losing its global reserve currency status.

About 60% of the $12.8 trillion in global currency reserves are currently held in dollars, giving the US an exorbitant privilege over other countries. And that privilege pays: Because US government debt backed by the dollar is very attractive, interest rates are lower. The US gets to borrow from other countries in its own currency - so if the US dollar loses value, debt does too. American businesses can make international transactions in dollars without having to pay conversion fees.

Perhaps most importantly, in extreme circumstances the US can cut off dollar access to central banks around the globe, isolating and draining their economies. Raghuram Rajan, the former governor of the Reserve Bank of India calls this power an 'economic weapon of mass destruction.'....

But with great power comes great responsibility: When you use a weapon of mass destruction, even an economic one, people get spooked. To protect themselves from the same fate as Russia, other countries diversify their investments away from the US dollar into other currencies.

That's where the country's reserve currency status could run into problems.

Weaponizing the dollar, said Bank of America strategists' Michael Hartnett, could lead to its debasement. The 'balkanization of global financial systems' erodes America's role as the reserve currency, he added.

A new research paper by the International Monetary Fund found that the dollar share of international reserves have been in decline for the past two decades, around the same time the United States began its war on terror and its counter-terror sanctions. One quarter of reserves have since shifted from the dollar to Chinese yuan, and the other three quarters have moved into currencies of smaller countries"

JPMorgan CEO Jamie Dimon Says Big Risks Loom for the U.S. Economy -WSJ

"Chase & Co. Chief Executive Jamie Dimon said the U.S. economy is facing unprecedented risks that have him preparing for dramatic upheavals.

The head of the nation's biggest bank offered a largely upbeat view of the economy's health in his annual letter to shareholders Monday. Consumers and businesses are flush with cash, wages are rising and the economy is growing rapidly after its pandemic slowdown. While consumer confidence has declined, Mr. Dimon says the more important gauge is booming spending.

Mr. Dimon warned that the war in Ukraine could collide with rising inflation to slow the pandemic recovery and alter global alliances for decades to come.

'They present completely different circumstances than what we've experienced in the past - and their confluence may dramatically increase the risks ahead,' Mr. Dimon wrote....

Mr. Dimon warned that the Federal Reserve could move interest rates 'significantly higher than the markets expect.' The Fed began raising rates last month and signaled several more increases this year, including a potential half percentage point instead of the traditional quarter point at the next meeting.

'This process will cause lots of consternation and very volatile markets,' Mr. Dimon added."

How Biden can start winning on the economy and Ukraine -The Hill

"President Biden's approval rating hit a new low this week, according to an NBC News poll, which found that 55 percent of Americans disapprove of his job performance, while just 40 percent approve.

The president's inability to increase his public support is mainly the byproduct of two factors.

First, Americans are pessimistic about the current state of the country under Biden's leadership and feel that the Democratic Party is out-of-touch and unable to handle major domestic crises, per a recent national poll conducted by Schoen-Cooperman Research....

Second, the inconsistency and incoherence Biden has often exhibited during his handling of the Russian invasion of Ukraine have led many Americans to doubt his ability to lead as commander-in-chief amid international crises....

Ultimately, Biden's perceived weaknesses on the economy - the top domestic concern - and on the Russian invasion of Ukraine - the most important international issue - indicate that Democrats are likely to suffer considerable losses in the 2022 midterm elections.

Fortunately, there are a set of effective policies and steps that President Biden can pursue to shore up public support on these two pivotal issues and help decrease the chances of a Republican insurgency in November....

For both political and practical reasons, President Biden and Democrats should embrace an all-of-the-above energy strategy.

An all-of-the-above energy strategy is a bipartisan approach that would help alleviate costs at the gas pump in the short term. In the long term, it would protect the U.S. from similar supply shocks, bolster America's energy independence and help the country transition to cleaner fuel sources in a responsible and incremental way.

In addition to an all-of-the-above energy policy, there are other important domestic causes Biden can pursue: namely, holding the line on spending to address concerns about inflation and pursuing a grand bargain with Republicans on immigration to alleviate worries of open borders....

Ultimately, if Biden does not embrace these strategic shifts on domestic and international policy, his ratings will continue to drop, and Democrats are almost certain to be brought down by Republicans in 2022 and beyond."

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4.4.22 - Commodities Do Not Cause Inflation. Money Printing Does.

Gold last traded at $1,933 an ounce. Silver at $24.55 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on safe-haven buying despite a firmer dollar. U.S. stocks were mostly flat as traders monitor the bond market's warning signals about the economy and higher oil prices.

Nothing beats gold as real money -Kitco

"The devastation created by Russia's invasion of Ukraine continues unabated and it is now starting to have significant implications for the global economy. According to some economists, we are witnessing the end of globalization.

Lines are being drawn between allies and opponents that won't easily be undone, even if the conflict in Eastern Europe were to end. Gold, it appears, is playing an essential role in this new environment, where currencies and commodities are being weaponized.

Global commodity markets remain in chaos as nations look to establish their own domestic supply chains. The biggest impact is being felt in the energy sector as Russia's nat gas represents 40% of European demand.

There is a growing threat that Russia could weaponize its commodity markets as it demands 'unfriendly nations' pay for their energy in rubles. Russia is also looking to accept gold and even bitcoin for its oil and gas. According to some economists, Europe, already teetering on edge, could fall into a full-blown recession if Russia decides to withhold supply.

As pressure mounts, Europe is looking to wean itself off of Russia's oil and gas, but that won't happen until the end of this decade....

Gold is the most attractive asset because it is seen as a store of value and has no counter-party risk....As long as chaos reigns, gold will shine as solid currency."

Russian Gold Russia's 3-Step Program To Put The Ruble On A Gold Standard -Seeking Alpha

"I believe the Bank of Russia is quickly moving to a gold standard. Here's how I think they are going to pull it off.

Step 1: Offer a premium fixed price for gold to domestic Russian banks who can't sell their gold internationally due to sanctions, encouraging domestic gold flows into Bank of Russia.

Step 2: Strengthen the Ruble internationally by insisting on energy payments in Rubles, turning fixed price into a premium internationally as well, encouraging international gold flows into Russia.

Step 3: Turn the Ruble into a credible gold substitute at a fixed rate....

Russia can simply declare the Ruble a hard gold substitute at a fixed exchange rate. In other words a gold standard. But before it does that, it first must make sure it has the required reserves if tested, which it's now doing by splitting the arbitrage offered by Western powers that have sanctioned its gold and cut it off from global markets.

The Bank of Russia must also make sure its monetary policy is tight enough (now at 20% interest rates) to hold the line. Then it can insist on payment for Russian commodities in Rubles, now hard gold substitutes....

When is that time? Nobody knows for sure, or if it will ever indeed come, but the 5,000RUB/gram gold window closes June 30. What happens then? Does the Ruble become a fully backed gold substitute?

Rather than speculate on the Ruble itself, it's easier, safer, and more practical just to buy gold and let the Bank of Russia decide what it wants to do with its own paper."

Commodities Do Not Cause Inflation. Money Printing Does. -Mises

"In this world of monetary insanity, defenders of central bank constant easing try every day to convince you that inflation is caused by numerous factors, not by currency printing.

Many blame inflation on cost-push factors or even speculation, but ultimately all those are consequences, not causes. Rising prices are always caused by more units of currency being directed to scarce or tangible assets....

The Ukraine war has created another excuse to blame inflation on oil and natural gas. However, it seems that all those who blame inflationary pressures on commodities continue to ignore the massive price increases in housing, healthcare, and education, as well as in goods and services where there was evident overcapacity. Global food prices show a similar problem....

Oil and gas will be used as an excuse for inflation as long as low interest rates and massive currency creation remain. But the reality is that when both deflate somehow, the problem of currency debasement will remain....

Some will blame wages, others will blame the Ukraine war, and others will blame the weak recovery. The fact is that currency destruction is at the heart of generalized price rises everywhere. Everything else is anecdotes or consequences, not causes.

More units of currency are going to scarce assets as investors look for protection against inflation. This is not speculation; it is protection from currency debasement."

Joe Biden has officially entered the "drill baby drill!" stage of his presidency -Slate

"Here are key three things to keep in mind about Joe Biden's splashy new plan to bring down gas prices.

First, it's genuinely historic.

Second, it might only make a modest difference to Americans' wallets.

And third, it sends an important signal about the administration's philosophy when it comes to energy and fighting climate change that will frustrate much of the activist left....

On Thursday, the White House announced that it would sell off an unprecedented 1 million barrels of oil per day for the next six months from America's strategic petroleum reserve in order to bring down energy costs, which have spiked thanks to the economic fallout from Russia's invasion of Ukraine.

It's a drastic move by a president facing desperate political circumstances. Biden's approval rating has fallen to new lows in some polls thanks in large to voters' frustrations over 40-year-high inflation and gasoline prices that now average well over $4 per gallon across the country....

Tapping the existing reserve is only one part of the equation; the other part is more new oil. To put it bluntly, despite his commitments to fighting climate change, Biden has entered the "drill baby drill"� phase of his presidency....Even as the administration is pushing for policies that will decarbonize the economy over the long term, the administration badly wants the oil industry to produce.

This is a pretty subtle but firm rejection of the way many environmental activist groups have approach climate change in recent years. As Robinson Mayer recently wrote at the Atlantic, the guiding principle for many of left-wing climate hawks over the past decade could be summed up by the slogan 'keep it in the ground' - 'it' meaning any sort of fossil fuel.

Practically speaking, this has meant fighting against new drilling and pipelines whenever possible, with the idea being that limiting supply would raise the price of oil and gas and force the world to transition to cleaner forms of energy.

Democrats have clearly realized that if they want a chance to save the planet, they're going to need to drill and chew gum at the same time."

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4.1.22 - Stagflation Requires a Defensive Portfolio

Gold last traded at $1,923 an ounce. Silver at $24.61 an ounce.

NEWS SUMMARY: Precious metal prices eased back Friday as rising interest rates boosted the dollar. U.S. stocks rose as investors assessed a new quarter of trading and a troublesome bond market recession indicator.

Gold set for best quarter in six as Ukraine crisis stokes demand -CNBC

"Gold prices were set for their biggest quarterly gain since September 2020 jon Thursday, as the Russia-Ukraine conflict lifted demand for the safe-haven metal. The metal has gained about 5.6% so far in the quarter and 1% in the month.

Ukrainian forces are preparing for new Russian attacks in the east of the country as Moscow builds up its troops there after suffering setbacks near the capital Kyiv, President Volodymyr Zelenskyy said on Thursday.

The dollar index slipped to a near one-month low in the previous session, making gold less expensive for other currency holders.

U.S. Treasury yields fell while a key part of the yield curve steepened on Wednesday, unwinding recent moves betting that aggressive Federal Reserve policy tightening could send the world's largest economy into recession."

magic formula Nathan Lewis's Very Important 'The Magic Formula' -RealClearMarkets

"Nathan Lewis arguably knows more about money and its history than anyone else writing today. The Magic Formula is an excellent book that those interested in tax and monetary policy would gain a lot from....The policies of 'low taxes, stable money' that Lewis is promoting are the Common Sense formula....

To which some will say per Lewis that 'High taxes are often justified as a "�necessary tradeoff' to finance' the programs meant to aid the have-nots. But as Lewis properly responds to this narrative, 'the anemic economy caused by high taxes' is arguably the driver of the call for government programs in the first place. Lewis would prefer to skip the middleman. Just reduce the tax burden, watch the economy grow as a consequence, at which point the calls for programs will be greatly reduced thanks to the prosperity....

It cannot be denied that the original sin is the taxation. When you penalize work excessively, and in particular penalize the investment in production (capital gains), you get reduced production and innovation; thus sapping the economic progress that always and everywhere results in broad opportunity.

Crucial about all of this is that devaluation acts like a tax in much the same way that direct taxation does. Figure that capital commitments from investors enable entrepreneurs and businesses to be creative in ways that boost opportunity for everyone. Knowing this, it's no surprise that currency devaluation inevitably brings on stagnation....

Which brings us to Lewis's solution for the problem of devaluation, and untrustworthy money more broadly...Lewis so importantly writes that 'Nearly the whole world, it seems, is involved in the production of your daily bread.' Yes! The magic statement in a book about a magic formula. Trusted money is what facilitates the global cooperation among people that enables remarkable leaps in productivity....

What's Lewis's answer for money that is credible and quiet by virtue of it being a stable measure of value? His answer is gold. And his belief in gold as the definer of money par excellence isn't faith based; rather it's rooted in a market truth.

Over the millennia, 'the people recognized that gold and silver - eventually, gold alone - had a much more stable value than other commodities,' thus making it the ideal commodity when it came to imbuing money with the essential stability that would give it the properties of money. Markets chose gold....

It's really so simple. 'Low taxes and stable money' are the path to prosperity, which is really Lewis's important, common sense way of saying that LOW TAXES are the path to abundance. This essential book and history shows the way. Thank goodness for Nathan Lewis, and thank goodness for his increasingly frequently writing partner in Steve Forbes, who writes the foreword to The Magic Formula. They're showing readers the way to a much better world."

Commodities Are Poised for Best Quarter in 32 Years -WSJ

"Commodities are on track for their best quarter in more than 30 years after Russia's invasion of Ukraine supercharged a rally in markets from oil to wheat and nickel.

The war has disrupted traffic on goods coming out of the Black Sea, curtailing supply and sparking sharp price swings across financial markets. Nervous investors are weighing the fallout from the conflict along with higher interest rates from the Federal Reserve, which could threaten the economy's postpandemic recovery.

At the same time, a sharp run-up in commodities prices has some investors and economists worried about inflation jumping even higher from here.

The S&P GSCI, a benchmark tracking the prices of commodities futures from precious metals to livestock, has climbed 34% in the first quarter, on pace for its biggest gain since 1990.

'When the supply and demand situation is tight and then you have another supply shock on top of that, it's not surprising that prices spike even further,' said Chris Burton, global head of commodities and portfolio at Credit Suisse Asset Management.

U.S. crude oil prices have climbed 43% to $107.82 a barrel since the end of last year and rose as high as $123.70 in early March, a level last seen in 2008. That rally propelled gasoline prices to record levels, pinching consumers at the pump.

The ripple effects from higher energy prices have spread to other commodities. Wheat has gained 33% this year to trade at its highest level since 2010, while corn has added 24%. Many metals - aluminum, copper, nickel and palladium - hit new highs as well."

What does stagflation mean for your equity portfolio? -Schroders

"The threat of slowing economic growth and accelerating inflation favors investing in defensive equities.

Russia's tragic invasion of Ukraine has increased the risk of 'stagflation' - where slowing economic growth combines with accelerating inflation.

Global equities tend to suffer in this environment, as companies combat simultaneous falling revenues and rising costs, which squeezes profit margins.

However, this does not mean all sectors have to suffer. Some stocks will be more insulated than others given their defensive properties and/or positive correlation to inflation.

We think a flexible approach to equity investing can take advantage of these performance differentials and potentially minimize significant losses.

Stagflation tends to favor defensive companies whose products and services are essential to people's everyday lives. This means their share prices tend to hold up better when the economy slows.

For example, whether inflation is high or not, people still need to purchase food, pay their electricity bills and rent. However, they may prefer to hold off on buying 'cyclical' items such as a new car or iPhone until prices are lower. ...

Since 1995 the best performing sectors have typically been defensives such as utilities (+16%), consumer staples (14.2%) and real estate (11.8%).

In contrast, cyclicals such as IT (-6.7%), industrials (-3.3%) and financials (-0.5%) have been some of the worst performers. Unlike their cyclical peers, however, energy stocks (+8.4%) have tended to outperform in stagflation environments."

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3.31.22 - Is the World Splitting in Two?

Gold last traded at $1,943 an ounce. Silver at $24.88 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday, on track for a 5.6% gain in the first quarter. U.S. stocks traded lower as Wall Street stock indexes suffer between a 3% to 7% loss in the last quarter.

Gold gains as dollar, U.S. treasury yields weaken -Reuters

"Gold prices rose on Wednesday, supported by a dip in the U.S. dollar and Treasury yields, though signs of progress in Russia-Ukraine peace talks dented the metal's appeal as a safe haven and kept gains in check.

City Index senior market analyst Matt Simpson said investors remain wary of Russia's intentions following its pledge to scale down "military operations"� around Kyiv and another city.

Ukraine reacted with skepticism, and some Western governments fear Moscow aims to intensify its offensive in other parts of the country.

Simpson said gold benefited from both currency and bond market trends.

The dollar index held near a more than one-week low hit in the previous session, making gold less expensive for other currency holders."

China split The World Is Splitting in Two -The Atlantic

"The Russian invasion of Ukraine and a series of COVID-related shutdowns in China do not, on the surface, appear to have much in common. Yet both are accelerating a shift that is taking the world in a dangerous direction, splitting it into two spheres, one centered on Washington, D.C., the other on Beijing.

The world was not supposed to turn out that way. With the disintegration of the Soviet Union three decades ago, globalization seemed to be knitting all types of countries and societies into one prosperous order, bound together by trade, the internet, and, to a greater and greater degree, shared political and economic ideals. China's capitalist revolution raised hopes that even that Communist giant would become too immersed in the democracy-led global system to turn against it.

As the 21st century has worn on, however, only those with rose-tinted glasses can still foresee this future, as political confrontation, economic nationalism, and cultural nativism resurface. Deteriorating relations between the U.S. and China, combined with Beijing's heightened strategic and economic ambitions, have already ushered in renewed great-power competition and an ideological struggle...

And now diplomatic fallout from the Ukraine crisis is ricocheting around the world in unanticipated ways, while the strain of the lengthening coronavirus ordeal has the potential to alter the international economic map. As the Russian invasion continues, and China sticks to its zero-COVID strategy, the likelihood of these tensions solidifying competing blocs is only increasing.

China's leaders have already been unwinding their ties to the world. In recent years, Chinese President Xi Jinping has set in motion policies aimed at creating a new Pax Sinica-an altered world order built by Beijing. With a newly aggressive foreign policy, Xi has apparently come to see the U.S. as China's chief strategic and economic adversary, and the U.S.-led global system as a constraint on Chinese power. He has taken steps to decrease his country's reliance on (and thus vulnerabilities to) the U.S. and its allies....

As the global divergence continues, however, countries will gravitate toward one side or the other, and (as during the Cold War) not necessarily on clear ideological grounds. Communist Vietnam, fearful of rising Chinese power, is open to American overtures, while democratic Pakistan, a Cold War ally of Washington's that is now heavily linked to China through Belt and Road investments, has effectively become a client state of Beijing.

Changes in governments and leaders could prevent what seems an inexorable slide into a new world. Barring that, though, what could emerge are two semi-distinct spheres, with tighter economic ties within than between them."

Is It Possible We Have Too Many New Homes for Sale? -The Big Picture

"New home sales in February totaled 772k, 38k less than expected and January was revised down by 13k to 788k. Keep in mind that the average 30 yr mortgage rate in February according to Bankrate was about 4.10% vs 4.5% today and which compares with 3.55% in January.

Months' supply did tick up to 6.3 from 6.1 and remains about the long-term average in stark contrast to the anemic level of existing homes for sale. This is important to keep an eye on because the supply of new homes has been rising notwithstanding all the supply pressures that is more so altering the timing of finishing the home, rather than starting one. In fact, the number of new homes for sale are at the highest level since August 2008 on the downside of that bubble.

The median home price, which jumps around a lot month to month because of the large influence of the mix, was $400,600, up 10.7% y/o/y. That is down from $427,400 and to the mix point, there was a pick up in the sale of homes priced between $200-400k and a decline for those priced above. The average price is now above $500k for the 1st time.

Bottom line, the lack of existing homes for sale and in the face of labor shortages and trouble procuring enough raw materials, appliances, garage doors, windows, etc"�, builders have the largest amount of homes for sale in 14 years.

As household formation is slowing to a crawl, and with now rising mortgage rates, hopefully, this leads to lower prices which would better position a 1st time buyer to purchase a home instead of having to rent where prices are rising double digits too. Take note of course if you are long homebuilders but I'm sure you already did because of the recent jump in mortgage rates. I'm not long any myself."

Biden's Global Quest for Oil Triggers Political Pushback -WSJ

"President Biden's global quest for more oil is meeting resistance from across the political spectrum.

Republicans have criticized him for scolding the U.S. oil industry and pushing for alternative-energy sources even as Russia's invasion of Ukraine has underscored the world's dependence on fossil fuels.

Mr. Biden has shifted course recently, including announcing that the U.S. would ship more liquefied natural gas to Europe to help countries there reduce their dependence on Russian gas.

That shift, however, drove concerns among progressives who think the Democratic president is stepping back from his campaign promise to transition the U.S. away from fossil fuels. Democrats also have chafed at White House attempts to get authoritarian regimes such as Venezuela and Saudi Arabia to produce more oil....

Analysts said the situation reflects the limited options Mr. Biden has in addressing an energy shortfall that was precipitated by several factors, including the world-wide economic rebound following the Covid-19 pandemic.

Decade-high prices and limited spare capacity give Mr. Biden few places to turn aside from oil companies he has shunned as climate polluters and foreign producers with checkered histories, said Samantha Gross, a fellow specializing in climate and energy at the Brookings Institution think tank in Washington.

'This was always going to be a big problem,' Ms. Gross said. 'There are definitely no easy answers.'

The urgency is rising as the U.S. and other countries have started banning Russian oil exports because of Russia's invasion of Ukraine - and as American consumers and businesses grapple with higher fuel costs."

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3.30.22 - Ukraine: Putin's Unintended Consequences

Gold last traded at $1,932 an ounce. Silver at $24.82 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on a weaker dollar and an inverted yield curve. U.S. stocks retreated amid growing recession concerns as investors continued watching developments play out in Ukraine.

Russia just made a case for owning gold - and nobody noticed -Marketwatch

"Here's a strong argument for adding some gold bullion to your retirement portfolio right now, alongside those stocks and bonds. And it comes courtesy of Pavel Zavalny, the head of the Russian parliament.

Zavalny spoke last week on the subject of all the economic and financial sanctions being levied against Russia following the invasion of Ukraine. Most of the coverage of his remarks implied that Russia might respond to the sanctions by switching from U.S. dollars to 'bitcoin' for international trade.

But a look at the transcript being reported shows something quite different. Zavalny added bitcoin only at the end of a long list of other currency and trading options, almost as an afterthought.

(As you might expect. Not only is bitcoin new, ridiculously volatile, widely open to manipulation, and a massive drain on energy in a world facing an energy crisis, but it also offers no guarantee of privacy. Western authorities can track all transactions on the blockchain, with the result, for example, that they can even get back bitcoin ransoms.)

Much more interesting was Zavalny's main point, even though it has been mostly overlooked. If other countries want to buy oil, gas, other resources or anything else from Russia, he said, 'let them pay either in hard currency, and this is gold for us, or pay as it is convenient for us, this is the national currency.'

In other words, Russia is happy to accept your national currency - yuan, lira, ringgits or whatever - or rubles, or 'hard currency,' and for them that no longer means U.S. dollars, it means gold.

'The dollar ceases to be a means of payment for us, it has lost all interest for us,' Zavalny added, calling the greenback no better than 'candy wrappers.'"

recession chart A Recession Warning Sign? Part of U.S. Yield Curve Inverts for First Time Since 2006 -Bloomberg/Yahoo Finance

"Treasuries slumped anew to send a widely-watched part of the U.S. yield curve to its first inversion in 16 years. The curve is flattening as investors bet the Federal Reserve will tighten policy rapidly enough to risk a sustained slowdown in growth.

U.S. five-year yields climbed nine basis points to 2.63%, rising above those on 30-year bonds. Shorter maturities have been selling off faster than their longer-dated peers this year as investors ratchet up expectations the Fed will hike rates to combat inflation. The spread between five- and 10-year Treasuries inverted earlier this month.

'Fed officials haven't pushed back on aggressive market pricing yet, putting higher yields and flatter curves as the momentum play for now,' said Prashant Newnaha, an Asia-Pacific rates strategist at TD Securities in Singapore.

The Fed raised its benchmark rate this month for the first time since 2018, and has pledged to keep hiking in a bid to slow inflation that was running at the fastest pace in four decades. Traders are betting the central bank will boost its benchmark by 200 basis points by year-end. Chairman Jerome Powell said last week the central bank was prepared to raise rates by 50 basis points in May if such a step was necessary to control price pressures.

Powell also pushed back against concern that an inverted yield curve would signal the economy is headed for a recessions, saying it made more sense to focus on the shorter end, where curves remain steep."

Russia's Ukraine invasion has five unintended consequences for Putin -CNBC

"When Russia invaded Ukraine, it was widely believed to have expected an easy victory over its neighbor.

But so far, Russia has little to show for what it has called its 'special military operation': Its forces have been bogged down in fighting mainly to the northern, eastern and southern fringes of Ukraine and have found the country to be much more organized and well equipped than they expected....

Just over a month into the war, Moscow is facing unintended consequences of its aggression in Ukraine, ranging from high casualties among its troops to economic ruin for years to come. Here are five of them:

1) Russian casualties are high - Russia has been coy about releasing statistics on its losses, but one Russian defense ministry official said on Friday that 1,351 Russian soldiers had died in the war so far, and that 3,825 were injured. Ukraine's authorities claim that more than 15,000 Russian soldiers have been killed in the conflict....

2) Ukrainians now loathe Russia - One of the likely consequences of this war is that many Ukrainians will harbor an abiding animosity toward Russia, particularly after the bombing of homes and civilian infrastructure....

3) Economic ruin - The international community was accused of being slow and ineffective when Russia annexed Crimea from Ukraine in 2014. This time, it upped the ante when Russia's full-scale invasion began, with Western democracies imposing wide-ranging sanctions on key Russian sectors....

4) Europe is dropping Russian energy - The war has also accelerated Europe's transition away from Russian energy imports, putting a large dent in the revenues Russia receives from energy exports....

5) Russia has united the West - Experts think Putin likely expected his invasion of Ukraine to have a disunifying effect on the West, with countries unable to agree on sanctions, or sending arms to Ukraine, but the opposite has proven true."

Biden's job approval falls to lowest level of his presidency amid war and inflation fears -NBC News

"Amid Europe's largest land war since World War II, 7 in 10 Americans expressed low confidence in President Joe Biden's ability to deal with Russia's invasion of Ukraine in a new NBC News poll, and 8 in 10 voiced worry that the war will increase gas prices and possibly involve nuclear weapons.

And during the nation's largest inflation spike in 40 years, overwhelming majorities said they believe the country is headed in the wrong direction and disapproved of the president's handling of the economy.

Those are some of the major findings of the new national NBC News poll, which found that Biden's overall job approval rating had declined to 40 percent, the lowest level of his presidency. The survey also found that Republicans enjoyed a 2-point lead in answering which party should control Congress ahead of November's midterm elections.

'What this poll says is that President Biden and Democrats are headed for a catastrophic election,' said Republican pollster Bill McInturff of Public Opinions Strategy, who conducted the survey with Democratic pollster Jeff Horwitt of Hart Research Associates.

The poll was conducted March 18-22, before the president's overseas trip, where he met with NATO allies, visited with U.S. troops in Poland and delivered a major speech about Russia's war in Ukraine....

Forty percent of adults in the poll approve of Biden's performance, and 55 percent disapprove - the lowest mark of his presidency in the NBC News poll. The movement is within the poll's margin of error - in January, Biden's overall job rating stood at 43 percent approve and 54 percent disapprove."

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3.29.22 - Can Gold Tackle $2,000 Next Week?

Gold last traded at $1,918 an ounce. Silver at $24.78 an ounce.

NEWS SUMMARY: Precious metal prices slipped on profit-taking amid hawkish Fedspeak, and despite a sharply weaker dollar. U.S. stocks rose amid falling oil prices as traders monitored potential progress in Russia-Ukraine negotiations.

Can gold price tackle $2,000 next week? Here's how that can happen -Kitco

"After another solid week of gains, gold could be ready to take on the $2,000 an ounce level next week. But there are a few technical elements that need to come together for that to happen.

Gold was able to advance more than 1.3% on the week despite a massive surge in U.S. Treasury yields, triggered by markets betting on a more aggressive Federal Reserve. This comes after Fed Chair Jerome Powell signaled a possibility of 50-basis-point hikes at upcoming meetings in May and June.

'Higher yields are typically negative for non-interest bearing gold, but for now, the ongoing divergence between the two asset classes highlights the market's newfound sensitivity to inflation and the need to buy any/all real assets (including gold) as a hedge,' said MKS PAMP head of Metals Strategy Nicky Shiels.

There is also a growing concern that the yield curve will invert. The relationship analysts pay close attention to is the 2-year and 10-year Treasury yields.

'Typically, when you see an inversion of the yield curve, it projects a strong possibility of some kind of a recession further out. Markets are expecting to see weakness in the next two quarters. We already had one of the worst Januaries on record for equities. And gold has been making higher lows and higher highs. And it could push back up to $2,000,' said Blue Line Futures chief market strategist Phillip Streible."

stocks The Riskiest Bets in the Stock Market Are the Most Popular -WSJ

"When technology stocks tumbled for a fourth straight day in January, Evan Fetter, a 25-year-old in the U.S. military, saw an opportunity to swing for the fences.

He poured $15,000 into the ProShares UltraPro QQQ, an exchange-traded product that is designed to triple the daily return of the Nasdaq-100 index, bidding for what he called a 'once-in-a-lifetime gain.'

The trade has been underwater at times, but Mr. Fetter says he hopes to hold the shares until his investment is worth $50,000, at which point he plans to put the money toward a down payment on a real-estate property....

Mr. Fetter is one of many traders who have turned this year to exotic exchange-traded products that are designed to turbocharge bets on everything from stocks to commodities to esoteric financial derivatives. Market swings driven in part by the war in Ukraine, the global outbreak in inflation and questions about the pace of global growth have triggered a stampede into these risky investments.

In the coming week, traders will parse economic data on consumer spending and Friday's monthly jobs report for clues on the stock market's trajectory and the health of the economy....

After driving the market's gains for a decade, tech stocks have lost some of their allure as the Federal Reserve raises interest rates. Higher rates place a premium on corporate earnings now, which tends to make shares of firms whose profits may lie in the future less attractive....

The history of riskier exchange-traded products is dotted with blowups that have left traders with big losses. A product that bet against the VIX, the VelocityShares Daily Inverse VIX Short Term exchange-traded note, abruptly shut down in 2018 after a bout of volatility, spurring havoc in the derivatives market."

Biden is planning a new digital currency. Here's why you should be very worried -TheHill

"Whenever the White House says it is working on a plan that would transform a vital part of the U.S. economy, and that the administration is doing so with the 'highest urgency,' it should go without saying that the press should pay close attention to what's going on.

Even more importantly, the press should eagerly and comprehensively inform the public of the potential risks associated with such a proposal. Unfortunately, that's not happening today, and the effects of the media's negligence could reverberate for decades to come.

On March 9, the Biden administration released an executive order (EO) instructing a long list of federal agencies to study digital assets and to propose numerous reports about their use and proposals to regulate them. Much of the executive order is focused on cryptocurrencies such as bitcoin and ethereum, which run on blockchain technology and have become increasingly popular among many investors and consumers in recent years.

But there is an even more important part of the EO: President Biden has instructed the federal government and Federal Reserve to lay the groundwork for a potential new U.S. currency, a digital dollar.

If the United States were to adopt a digital currency like the one discussed in Biden's executive order, it would be one of the most dramatic expansions of federal power ever made, one that could put individuals and businesses in grave danger of losing their social and economic freedoms.

Among other important actions, the White House executive order directs several federal agencies, including the Treasury Department, to study the development of a new central bank digital currency (CBDC) and to produce a report within 180 days of the EO discussing the potential risks and benefits of a digital dollar....

It is important to understand that the digital dollar would not be similar to cryptocurrencies like bitcoin. Cryptocurrencies operate on blockchain technology, which is decentralized by design. No group or individual can truly control cryptocurrencies once they are launched.

Digital dollars, on the other hand, would be traceable and programmable. The Federal Reserve (or some other designated entity) would have the ability to create more digital dollars whenever it sees fit, and, depending on how the legislation is written setting up the currency, the dollars could be formulated to have various rules and restrictions built into their design.

For example, a digital dollar could be crafted to restrict fossil-fuel use, to give bonuses to people for spending at particular businesses, to enact de facto price controls by disallowing users from spending too much on particular products, or even to redistribute wealth."

4 signs you'd be better off selling your home before you retire -Motley Fool/USA Today

"If you're retiring from your job, you need to make sure your finances are in order. And for many seniors, this means making a decision about what to do with the home they live in.

While some seniors prefer to stay put in their current house, others may want to sell - or may need to in order to shore up their financial situation.

It can sometimes be difficult to figure out what group you fit into. But you can get a good indication of whether unloading your property would make the most sense by watching for these four signs that suggest you may be better off finding a buyer for your home before leaving the working world.

1. You're worried about running short of money in retirement - If you are afraid you won't be able to afford to retire, selling your house could sometimes give you much more financial security....

2. You still owe a lot on your mortgage - Ideally, you'll have your mortgage loan paid down by the time you reach retirement. But if that's not the case and you still owe a small fortune, you may not want to commit to sending a lot of your retirement money to your lender....

3. You have very high property taxes - Some homes have very high property taxes. If yours is one of them, housing may continue to cost you a lot of money even if your mortgage is paid off....

4. You're concerned about maintenance and repairs - Maintenance and repairs can become a financial - and physical - burden as you get older....

If any of these four signs apply to you, it's worth thinking seriously about selling and relocating before you leave work. Doing so could make all the difference in terms of the financial security you have as a retiree."

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3.28.22 - Thorny Questions on Bitcoin's Usefulness

Gold last traded at $1,933 an ounce. Silver at $24.99 an ounce.

NEWS SUMMARY: Precious metal prices consolidated recent gains Monday on lower oil prices and a firmer dollar. U.S. stocks traded mostly lower as investors monitored the planned Russia-Ukraine peace talks this week.

How 'Gold' replaced 'Google' in FANG -Bloomberg/Kitco

"Commodities are shoving aside technology, said Francisco Blanch, global commodities head at Bank of America.

In Blanch's interview with Bloomberg...He talked about how the pandemic and the Russia-Ukraine conflict was impacting commodity markets, mostly oil.

Blanch previously had oil hitting $120 a barrel before the conflict due to a post-Covid demand recovery. Russia is a major oil exporter....

Blanch said oil prices could spike even higher depending upon how far Russian sanctions go, seeing $200 plus as his 'ugly scenario.' He notes that oil is the backbone of the economy, which is a major input for travel, industry and agriculture.

Blanch referenced the acronym 'FANG' referring to technology stocks Meta (FB) (formerly Facebook), Amazon (AMZN), Netflix (NFLX), and Alphabet (GOOG). Technology stock performed strongly during the beginning of the pandemic, but commodities are now the focus.

'It's the new FANG: fuel, agriculture, aerospace, nuclear and renewables, gold and critical metals. All have come to the fore with this crisis.'"

bitcoin Bitcoin's Lockstep March With Stocks Raises Thorny Questions About Its Usefulness -Institutional Investor

"The cryptocurrency hasn't worked as the 'digital gold' it was touted to be. Bitcoin was supposed to be immune to the Federal Reserve's policies. It wasn't. The No. 1 cryptocurrency cratered earlier this year on signs the Fed would hike interest rates, which it did on March 16.

Bitcoin was supposed to be impervious to macroeconomic forces. That hasn't proven the case either, with crypto traders reacting to soaring inflation numbers and traditional metrics such as the Bureau of Labor Statistics' monthly jobs report.

Since January 1, Bitcoin has skidded 12 percent and Ethereum has lost almost a quarter of its value amid Russia's military buildup and invasion of Ukraine. Meanwhile, actual gold climbed about 7 percent in the same period.

Why should institutional investors even bother with Bitcoin and its ilk if they're going to behave just like traditional securities, albeit with a lot more volatility?...While we're at it, weren't blockchain-based assets supposed to run in their own separate space, free from the economic and policy noise that has long pervaded the capital markets?

These are all complicated questions - made more so by the surging popularity of nonfungible tokens, the metaverse, and other crypto-powered cultural trends, which show little sign of abating even as a bear market tightens its grip. If all that wasn't enough, Russia's war on Ukraine has spurred efforts to use blockchain-based tokens to provide aid to the embattled nation's citizens....

Bitcoin's supporters bristle at the idea that their beloved cryptocurrency isn't charting its own course. And yet the data is hard to refute....Cryptocurrencies may have to demonstrate that their utility actually differentiates them from other asset classes - and makes them about far more than speculation."

The Russian Bear -Bonner Private Research

"The Russian bear has claws"� and teeth.

Here's the latest, from Fortune: 'In the FX world, the ruble had its biggest gain in the week yesterday, climbing nearly 7% against the dollar. One impetus for that came from Russian president Vladimir Putin's surprise statement on Wednesday to demand that "hostile states" - presumably the European Union - pay for Russian energy imports in rubles.'

The "�democratic alliance,' led by the USA, "�sanctioned' Russia's dollars. Russians who had no part in Putin's war suddenly found their money was no good. They couldn't access their foreign bank accounts. They couldn't go about their business as usual - even as they were offering valuable goods and services to overseas buyers. Financially, they were "�de-platformed.'

What good is money that someone can cancel with a flip of a switch"� on his own say-so? Not much. So, it was inevitable that the Russians would look for workarounds. Michael Hudson comments:

'America is bringing about exactly the opposite of what it intended"� American sanctions are driving Russia and China together, and America has gone to China and said, Please don't support Russia. Most recently, on Monday, March 14, Jake Sullivan came out and told China, we will sanction countries that break our sanctions against Russia. And basically, China said, fine.'

Yes, the decline of the American Empire continues"� one blunder at a time.

The US feds are actively undermining the dollar with inflation"� and reducing its reliability further with sanctions. It is only a matter of time before a replacement is found. Cryptos? A gold-backed ruble? The yuan?

We'll see. In the meantime, fixed-income investments - in dollars - are taking a beating.

In the 1970s, investors thought they could protect themselves from inflation by buying stocks. Stock prices held more or less steady throughout the decade. But inflation steadily reduced real values. By the end of the decade, adjusted for inflation, investors were down about 60%.

But in an inflationary period, bonds get killed even deader than stocks. In the "�70s, bonds were called 'certificates of guaranteed confiscation.' And now, over the last 14 months, $2.6 trillion has been confiscated"� but from whom? Well"� from savers"� retirees"� people with fixed-income investments."

My plan to hold Congress' big spenders accountable - and get transparency for American taxpayers -Paul/Fox News

"Last week, the Senate voted on the 2,741-page omnibus spending package, clocking in at a whopping $1.5 trillion. It was released in the middle of the night, just hours before we were expected to vote on it.

Mind you, when we vote on things, we're expected to know what we're voting on. At least that's the expectation of the folks we represent back home.

But do you really think there is a single person in the United States who actually believes that Congress is filled with speed readers capable of digesting thousands of pages in a matter of hours? Probably not. But the big spenders of both parties in Washington love keeping that under wraps. In fact, they bank on it - literally and figuratively.

For what it's worth, I have legislation in the Senate to fix the issue, a resolution to give members ample time to read the bills before they vote. It would also increase transparency and incentivize legislation to be shorter.

Just imagine! What if we had one day for every 20 pages to read the bills before they were brought up for a vote? We would have had 137 days to truly consider whether the American people's hard-earned tax dollars were worthy of all the ridiculous spending items included in the recently passed omnibus.

We would have had 137 days for the general public to discover exactly what special favors, in the form of earmarks, were snuck in under the auspices of essential budgetary items."

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3.25.22 - US Energy and the Economy - 3 Key Facts to Know

Gold last traded at $1,953 an ounce. Silver at $25.40 an ounce.

NEWS SUMMARY: Precious metal prices steadied Friday following recent safe-haven buying gains. U.S. stocks traded mixed amid downbeat housing data and a volatile week of trading.

Gold higher as Russia-Ukraine war enters second month -Marketwatch

"Gold prices rose Thursday as investors monitored developments around Russia's invasion of Ukraine and hawkish remarks by Federal Reserve officials.

President Joe Biden met Thursday with leaders of the North Atlantic Treaty Organization, the first of a series of meetings with European allies and other world leaders in response to Russia's Feb. 24 invasion of Ukraine. Biden and U.S. allies are expected to roll out further rounds of sanctions against Moscow....

'As the safe-haven trade that propelled the price of the precious metal to above $2,000 per ounce earlier in the month eases, traders' expectations over what the Fed will do over the next few months comes once again under the spotlight,' said Ricardo Evangelista, senior analyst at ActivTrades.

Fed officials this week have signaled they're prepared to raise rates even more quickly than previously expected. Fed Chairman Jerome Powell on Monday said the Fed could move rates up by more than a quarter point at future meetings if deemed necessary. Other Fed officials have echoed Powell, pushing up expectations for a half-point increase at the next policy meeting in May."

gas prices US energy and the economy - 3 key facts to know as Russia-Ukraine crisis continues -Fox Business

"As the whole world watches in horror as events unfold in Ukraine, the primary economic implication for Americans has been its impact on energy prices. Cutting off trade with Russia has not really moved the needle on American economic activity. Russia is not among the U.S.'s top 15 trading partners, substantially lagging even much smaller countries like Belgium and Holland.

However, Russia's role as a supplier of oil and gas around the world gives them huge power over prices - and that impacts all of us. Concerns about Europe's energy needs if Russia cut them off from supply or Europe stopped buying from Russia have finally provoked a needed American conversation: Why are we not acting as the master of our own fate when it comes to our own energy needs?

Oil and gas prices impact all Americans, even outside of automobile usage, as they are relevant to everything from air travel to the delivery of goods to even the cost of household products like cosmetics and handbags. And the $120 per barrel cost of oil we have seen lately (about double what it was at the beginning of 2021) has not gone unnoticed by American consumers - who are also voters....

The miracle of the U.S. fracking revolution was not merely that we could access a greater supply of oil and gas than we ever thought possible, but also that we could even export it to global partners, particularly allies in Europe and Asia. This opportunity has been ignored or diminished time and time again by radical environmentalists. They not only misunderstand that trading partners will instead get their energy needs met from dirtier carbon solutions, but completely ignore the incredible job growth (high-paying jobs) this opportunity represents....

An irrational government ecosystem of policies that frowns on fossil fuel production. Permits for drilling are routinely denied or delayed. Currently, there are more than 4,600 permits that have been waiting on government. New construction of pipelines needed to transport oil and gas has all but disappeared.

Regulatory headwinds are suffocating out of the market over a million barrels of oil per day, barrels that would increase supply to meet demand, and therefore lower prices....

There is no environmental debate about the fact that natural gas emits less carbon than coal, and is a cleaner-burning fuel. Those arguing for greater American energy independence and greater energy sector growth are not arguing for a worse environmental result, but a better one. And the geopolitical leverage that energy independence creates goes beyond the economic benefits. It keeps bad actors in Russia or the Middle East from being able to weaponize energy against America and its allies."

Yield Curve Almost Flashes Recession, Maybe, but Who Knows When -WSJ

"Predicting recessions involves a lot of correlation and not a lot of causation. What many believe is the best predictor is from the Treasury market, and it's back in focus: an inverted yield curve, or higher yields on short-dated bonds than on long-dated bonds.

The correlation is what convinces many that we're close to a flashing warning sign. The yield curve has inverted before every recession, and one widely used version is close to inverting again. The gap between the two-year yield and the 10-year yield fell below 0.2 percentage point in the past week for the first time since the 2020 recession.

The 1973-1974 recession was clearly caused by the Arab oil embargo that began in October 1973, after the U.S. gave aid to Israel to defend itself....The brief 2020 recession was equally clearly caused by the pandemic, and we all remember why. The yield curve had inverted in 2019....

After the yield curve inverted in 1989, for example, stocks rose more than a third before the recession started in mid-1990. Similarly, those who switched from stocks to safer assets when the curve inverted at the end of 2005 had to endure a rise of more than a quarter in the S&P 500 and wait two years before the bet worked out. It's hard to tell the difference at the time between being wrong and being right, but early.

Rather than warn of recession, an inverted yield curve is better read as a sign to investors that the economy is late in its cycle. That is, the Fed is tightening policy in an effort to slow the economy. The deeper the inversion of the curve, the closer the cycle is to its end, and, barring a soft landing, recession....

The correlation doesn't mechanically mean recession is on the way, and especially not soon. But investors should be closely watching the causation. The higher rates go, the more likely the Fed overdoes it and slows the economy too much."

Why Permanent Daylight-Saving Time Is Bad for Your Health, Sleep Scientists Say -WSJ

"Permanently moving to daylight-saving time is likely to cause more harm than good when it comes to our health, sleep science indicates.

For years, researchers have bemoaned the biannual changing of the clocks, saying shifting just one hour is linked to a slew of negative health effects, including an increased risk of heart attack and stroke. But when the U.S. Senate recently passed a bill to make daylight-saving time permanent, sleep experts became more alarmed.

Legislators picked the wrong time, they say.

Our internal clocks are connected to the sun, which aligns more closely with permanent standard time, says Muhammad Adeel Rishi, a pulmonologist and sleep physician at Indiana University. When the clocks spring forward, our internal clocks don't change but are forced to follow society's clock rather than the sun. DST is like permanent social jet lag....

'Of the three choices - permanent daylight-saving time, permanent standard time or where we are now, which is switching between the two - I think permanent DST is the worst solution,' says Phyllis Zee, professor of neurology and director of the Center for Circadian and Sleep Medicine at Northwestern University Feinberg School of Medicine.

Many of us like when the clocks arbitrarily move an hour ahead. Sure, we lose an hour of sleep for one day but springing forward means spring and summer evenings with more light, which is great for socializing and good for many businesses.

But sleep researchers say permanent daylight-saving time means we are always an hour off from the internal clock in our bodies, which disrupts our circadian rhythms, sleep and all of our biological systems. Changing the clocks has been linked to short-term increases in car accidents, medical errors, heart attacks and strokes.

Research suggests there may also be a more sustained negative health impact linked to a chronic circadian misalignment during permanent DST, including increased risks of metabolic and cardiovascular disorders and cancer in areas where the sun rises later."

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3.24.22 - Only 1 in 4 Say They're Better Off Than a Year Ago

Gold last traded at $1,963 an ounce. Silver at $25.60 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on technical buying despite a firmer dollar. U.S. stocks rose as investors tried to recover losses from the war in Ukraine and weigh the Fed's rate hikes amid persistent inflation.

Gold rises as Ukraine, inflation concerns lift appeal -CNBC

"Gold prices gained on Wednesday as investors looked to shield against soaring inflation and uncertainty caused by events in Ukraine, with a pullback in U.S. bond yields also offering support....

'The market seems to be holding quite well since its sharp correction lower,' with support coming from ongoing geopolitical uncertainty and good physical demand, independent analyst Ross Norman said.

Gold prices advanced to near record highs earlier this month, but then saw a steady decline heading into a key U.S. central bank policy meeting last week. They have since moved into a more steady range.

'What's phenomenal at the moment and a good indicator of a beginning of a gold bull market is ETF (exchange traded fund) demand remains remarkably strong' as institutional investors now start to focus on the inflation story, Norman added.

'In view of the latest steep rise in yields, gold is still holding its own pretty well in our opinion,' Commerzbank analysts said in a note."

inflation Inflation is eating into investment returns -Citywire

"Everyone has been feeling inflation at the grocery store. But now investors are starting to feel it in their fund returns.

One big purpose of investing is to make your money grow at least at the rate of inflation in order to have it maintain purchasing power. And over the past decade, through March 18, that's been an easy task with inflation running low until a few months ago....

But over the past year bonds have been down, and the declines first seen in small-cap growth stocks have begun to spread to larger stocks. Combine those trends with an inflation rate of 7.9%, comparing prices in February 2022 to those in February 2021, and 'real returns,' those adjusted for inflation, are starting to look unattractive....

Since the end of November 2021, the one-year real returns of the $24bn Vanguard Target Retirement Income fund have been negative and are steadily getting worse. That's partly because bonds have struggled with interest rates rising. The Bloomberg US Aggregate is down 2.64% for the one-year period ending in February 2022....

Finally, the inflation rate has run at 7.9% from last February through this February, making the the S&P 500 the only broad index that does not fall into negative territory when its nominal return, 16.4%, is docked for inflation and becomes 8.5%.

All of this means most retirees with conservative allocations - not just those in Vanguard's Target Retirement Income fund are struggling to keep up with inflation."

The coming federal weaponization of banking -TheHill

"The largest shake-up in finance since the formation of the Federal Reserve is nearly here. The establishment of a government-backed cryptocurrency is a threat to the freedom of commerce and would give Washington the ability to weaponize banking against political dissent, or even block Americans from accessing their own money altogether.

A digital version of the dollar has been in the works for over a year now. Earlier this month, President Biden signed an executive order both curtailing existing cryptocurrencies and laying the groundwork for a federal digital currency. Crypto regulations have been a favorite topic of Democrats on Capitol Hill and regulators in the federal bureaucracy.

Biden deployed numerous excuses, including the risks of money laundering and the carbon emissions needed to produce crypto, to justify cracking down on these currencies. But the kicker of the statement is the regulatory groundwork for the coming 'digital dollar.' The United States will be the second major power to foster such a move, after China, where efforts to create a digital currency as part of its social credit system are a sign of what might be coming here soon.

Physical currency likely will be phased out entirely over time, in favor of a digital format controlled by the Federal Reserve. The ubiquity of cell phones and scanable codes will make integration of a digital currency, under some form of the blockchain, relatively easy to implement. This soft-nationalization of the banking sector would leave the United States in uncharted waters.

Nearly every transaction, from political donations to purchases as seemingly insignificant as a pack of gum, would be visible to the government and subject to scrutiny. Government regulations could block or track certain transactions with no trial or public recourse. Even worse, if you were placed on a list by a federal bureaucrat - not a judge - your access to banking and credit cards potentially could be shut off without a warrant or trial.

There is a chilling irony that the open-source technology intended to evade government control instead could be used for it. The use of the Homeland Security apparatus after 9/11 could be used as a domestic cudgel, and watchlists and flagging systems similar to those against international terrorists could be used against American citizens.

If your political views are deemed 'extremist,' your ability to purchase firearms or plane tickets could be blocked automatically. Taken to a further extent, the precedent would allow for the federal government (or states or localities in certain circumstances) to restrict purchases of tobacco or fatty foods - or to block people who haven't been jabbed or boosted against COVID-19 (or the latest virus) from dining out in cities with vaccine mandates in place.

At the same time, a centralized digital currency would allow the Federal Reserve to create trillions of dollars with the click of a button, causing inflation to further spiral out of control. Much of this pseudo-printing would be a major boon to Washington. The federal government could distribute social spending in an instant."

Are You Better Off Than A Year Ago? By 4-To-1, Americans Say 'No' -Issues & Insights

"Are you better off today under President Joe Biden than you were a year earlier? And are you financially prepared for a downturn in the economy or a job loss? The March I&I/TIPP Poll suggests most Americans would answer 'no' to both of those questions.

The poll asked: 'Generally speaking, is your family better off today than it was one year ago, worse off than it was one year ago, or about the same as it was a year ago?'

Fewer than one in five (20%) said they were 'better off.' while more than twice that number - 42% - said they were 'worse off.' Another 36% said they were 'about the same.'

Taken as a whole, that means 78% of Americans have seen no progress or improvement at all in their financial and economic lives since Biden took over in early 2020.

Despite this, Biden's recent speeches have included references to the 'best economic growth in the last four decades.'

'We did it alone. Without one single solitary Republican vote,' he said in Philadelphia on March 11, speaking to House Democrats. 'It was the Democrats - it was you - that brought us back.'

If that's the message, Americans don't seem to be buying it. And a big reason for that is likely the sudden scary surge in inflation, which hits low- and middle-class Americans hardest of all.

While wage gains have averaged 5% or higher for four straight months, unfortunately, inflation during the same period has surged by an annual rate of over 7%, and looks likely to go even higher."

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3.23.22 - Dems Vote Against Lower Gas Prices

Gold last traded at $1,938 an ounce. Silver at $25.09 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on safe-haven buying and rising commodity prices. U.S. stocks fell as oil prices again topped $120/barrel, renewing inflation fears.

There's Only One Stock-Market Sector in the Green This Year -WSJ

""�The new FANG is going to be fuel, agriculture, natural resources and gold,' one investor says of the energy sector's rally. Energy stocks are leading the pack in the stock market in 2022.

Russia's invasion of Ukraine has sent crude-oil prices on a tear - and energy stocks along for the ride - as investors monitor looming supply threats and rapidly evolving geopolitical tensions. Gasoline prices, meanwhile, have risen to record levels, punishing consumers at the pump and lifting already high inflation.

Energy is the only sector in the S&P 500 in the green for 2022, up 37%. The benchmark itself is down 6.4% with investors worried about the pace of the Federal Reserve's plan to increase interest rates to curb inflation....

The rally has also coincided with a decline in the big technology shares that powered the market higher for much of the past decade. Investors have sold shares of tech and other growth companies with lofty valuations, concerned about how they will fare in a rising-rate environment. The S&P 500's tech sector is down 11% this year.

'The new FANG is going to be fuel, agriculture, natural resources and gold,' said Nick Giacoumakis, president and founder of NEIRG Wealth Management, referring to the popular acronym for Facebook, Amazon.com Inc. , Netflix Inc. and Google.

The ripple effects from higher energy prices and concerns about potential shortages have lifted prices for many commodities to records. Wheat prices recently hit new highs, as did prices for metals such as palladium, nickel, aluminum and copper....

'Quite honestly unless somebody can predict how the future is going to play out - in terms of Russia and Ukraine, or we're looking toward some kind of resolution in the near future - I can't say I expect commodities to stop climbing,' said Oktay Kavrak, product strategist at Leverage Shares."

ruin A Permanent Ruin -Bonner Private Research

"The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists. ~ Ernest Hemingway

And now we have both, inflation and war!

Any dope could see that when you lend money at below the going rate of inflation"� stymie output with regulations, shutdowns, tariffs, and waste trillions of dollars"� and try to make up for lost production with printing press money - you are asking for trouble. We said so in these pages.

The Fed doesn't have many responsibilities. Controlling inflation is right up there at Numero Uno. Yet, not only did it fail to see the inflation it was causing"� and then misdiagnose it as "�transitory'"� now, it has no idea of how to get the cat back in the bag.

Baby steps of 25 basis points - from here to eternity - will never do it. The Fed will be following inflation, not leading it.

But let us return to our subject from Friday. The question is not what, but who is really behind the US inflation, Covid Panic, and now hysteria over the war between Russia and its former satellite?....

In modern warfare, as we saw last week, the generals get their medals and sinecures. Raytheon shareholders get higher stock prices. The empire's whole military/industrial/surveillance/think tank/university/press complex becomes richer and more powerful. So, it is hardly surprising that this huge complex - about which Dwight Eisenhower warned us 60 years ago, and which has only gotten richer and more powerful since - would want to get the country steamed up for war. ...

The masses will go along with almost any Great Cause. They are the taxpayers"� consumers"� 'cannon fodder' for war"� and 'useful idiots' for the whole elite agenda. Mob Man is always ready to back his leaders"� and get up to mischief. Russians support Putin. Ukrainians support Zelensky. Americans support Biden. And Germans supported Hitler right up until the Soviets turned out the lights.

Taken into a private room"� shown the facts"� and all the money spent"� all the programs"� all the bureaucrats, do-gooders, spooks and paper pushers"� and then handed his share of the bill, the average voter would surely recoil in horror."

From economic sleight of hand to stark reality -TheHill

"Politicians must think voters live in an alternate reality. Why else would they push fantastic fictions about the boogeymen they claim are responsible for inflation, when every morning they see the culprit staring back at them in the mirror?

The bill for years of unbounded spending and pandering for votes is coming due, and, as is often the case, it is being exacerbated by unanticipated events. This time those events include the pandemic, war and technology. So now it's time for adults to step up and stop the rhetorical gymnastics from deflecting from the hard and intelligent conversations that must be had about the serious issues that threaten our nation's future.

Our national debt unceremoniously hit $30 trillion dollars at the end of January - three years sooner than the Congressional Budget Office (CBO) had projected in 2020. That is the equivalent of a $92,000 debt incurred by every person in America. For some perspective, the national debt hovered in the $6 trillion range in 2000, and $14 trillion in 2010

Too much government debt is bad for many reasons, no matter how many times politicians try to portray it as government investment. Governments don't invest, they spend, and that spending leads to higher interest rates and inflation when it gets out of control. Higher interest rates are a double whammy, making it more costly for the government to borrow to service its interest and principal obligations....

Whether the dollar remains the world's principal currency is a very big deal. The United States emerged from World War II as the only superpower and the country with the most gold in its vaults. That allowed it to dictate the terms of the Bretton Woods Agreement in 1944 to cause the dollar to be designated as the global reserve currency....

In 2000, the dollar represented 71 percent of global reserve currencies, with the euro at about 19 percent. Today, the dollar has slipped to just 59 percent....

The United States finds itself in the eye of a geopolitical hurricane being buffeted by high inflation, rising interest rates, increasing threats to the superiority of the dollar and new military and economic alliances...It's time for leaders to step forward who know how to create the future rather than waiting for it to happen and then looking for someone else to blame. And it's time for us to elect them."

Democrats have now twice voted against lowering gas prices -Washington Examiner

"Leadership starts with a strong national energy policy, and the United States must lead in our response to the Russian invasion of Ukraine. Everyone now knows more should have been done to stymie Russia before the invasion, but now we must look forward and lead with confidence and boldness to protect Americans and strengthen our allies in this fight for freedom.

Energy production in the U.S. is among the cleanest, safest, and most efficient in the world, yet President Joe Biden has consistently killed American energy capacity and increased our reliance on foreign adversaries, including Russia and Venezuela. Biden cannot continue standing idle as people spend millions filling gas tanks and heating homes.

Republicans have long warned of the negative implications of energy dependence, but Democrats and this administration have ignored our warnings. In January 2021, Biden issued an executive order suspending all oil and gas leasing on federal lands and waters. Even as a federal judge ruled the ban illegal, we have yet to see a single new lease issued by the administration.

Just four months later, in May 2021, Biden lifted sanctions on the Nord Stream 2 pipeline, which facilitates Russian energy imports to Europe. This decision came after he blocked the Keystone XL pipeline, which would have supplied 830,000 barrels of oil per day from our ally Canada to American refineries to meet domestic and global demand.

With this crisis in Ukraine and after worldwide pressure, the president finally changed his mind and sanctioned Nord Stream 2, but he failed to promote American energy as an alternative for our European allies. Attempting to disguise his mistake, he has twice withdrawn oil from the Strategic Petroleum Reserve in an attempt to lower gas prices. Clearly, Biden doesn't understand that the SPR isn't a presidential piggy bank to cover a flawed domestic energy strategy. The SPR isn't substantially bringing down prices, and the piggy bank is quickly running dry.

I (Rep. Bruce Westerman (R-Arkanas), introduced the American Energy Independence From Russia Act. This bill strengthens U.S. energy security and counters Russia by requiring that the president create a domestic energy plan. It immediately approves the Keystone XL pipeline and fast-tracks the construction of liquefied natural gas export facilities, creating good-paying American jobs. It unlocks America's energy potential by requiring leasing and permitting of energy and mineral development on federal lands and waters, and it protects our domestic energy industries from further attacks by Biden.

Republicans have forced two votes on this bill in the House, but each time, Democrats have voted no. By refusing even to debate the bill, they are holding the public hostage to skyrocketing gas prices, which seep into other industries, including agriculture....

This war on American energy and American families must end. We cannot allow Biden to ignore the key role energy independence plays in national security."

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3.22.22 - 4 Reasons High Inflation Won't Go Away in 2022

Gold last traded at $1,923 an ounce. Silver at $24.83 an ounce.

NEWS SUMMARY: Precious metal prices slipped Tuesday on short-term profit taking and Fedspeak. U.S. stocks rose as traders digested Powell's latest rate hike comments.

Gold firms as Ukraine crisis bolsters appeal -CNBC

"Gold prices edged up on Monday as fighting in Ukraine buoyed demand for the safe-haven asset, although strength in U.S. bond yields restricted bullion's gains....

'We are treading water. The risk is more to the downside than to the upside at the moment, we will have to wait and see,' said Michael Hewson, chief market analyst at CMC Markets UK.

However, Hewson added, there is support for gold prices around last week's lows of near $1,890, which could help gold move towards $1,940-$1,950....

Gold is seeing pressure from Russia-Ukraine talks slowing the rush to safe-havens, and as interest rate hikes by the U.S. Federal Reserve and the Bank of England confirm the hawkish trajectory central banks globally are adopting to tackle inflation."

inflation chart Four reasons high inflation won't go away in 2022 -Stack Economics

"Inflation in 2021 was the highest in four decades: 7 percent according to the Consumer Price Index or 5.8 percent according to the Personal Consumption Expenditures index. As the new year dawned, economists hoped and expected that we'd be able to get inflation back under control in 2022.

[Ed. Note: The Shadowstats.com Alternative CPI chart reflects their estimate of inflation for today as if it were calculated the same way it was in 1990.]

But over the last month, that has started to look increasingly unlikely. Even the Federal Reserve, which officially targets a 2 percent inflation (using the PCE inflation index), acknowledged on Wednesday that inflation was likely to come in way above target again this year....

The most obvious reason is the price of oil, which has been driven upwards by war in Ukraine. But that's not the only reason that inflation is likely to remain high in the coming year.

Reason 1: Expensive oil - In computing the CPI-U price index, the Bureau of Labor Statistics estimates that the average household spends a little less than 4 percent of its income on gasoline. That's not very much in absolute terms. But when the price of gasoline soars by almost 50 percent, as it did in 2021, that directly adds almost two percentage points to the inflation rate.

Expensive oil also feeds into other prices. Most manufactured goods are transported using trucks that are run on fossil fuels. Fossil fuels are also inputs to a wide range of other industrial products. When oil gets expensive, some of these costs inevitably get passed on to consumers....

Reason 2: Rising rents - Over the last few months, there has been a striking divergence between rents estimated by private sources and those published by government agencies. For example, the Zillow Observed Rent Index shows rents rising by 16 percent over the course of 2021, while the Bureau of Labor Statistics estimates that rents for primary residences rose by only 3.3 percent in 2021....

The researchers project that the component of the CPI and PCE focused on owner-occupied homes will rise by more than 6 percent in 2022. And this matters because shelter is one of the largest components of household budgets, accounting for about a third of the CPI....

Reason 3: Expensive wheat and corn - Russia accounts for 19 percent of global wheat exports, while Ukraine accounts for another 9 percent. Ukraine also accounts for 14 percent of global corn exports.

Last week, agricultural economist Aaron Smith wrote a good piece explaining the implications. He argues that the Ukraine war will be a significant shock to global food supplies but not an unprecedented one. He noted that wheat futures had risen by 10 to 30 percent since the Ukraine invasion, while corn prices were 7 percent higher....

Reason 4: More supply chain disruptions - For the last year, anyone selling products with computer chips in them has been forced to cut back production. Apple is reportedly planning to produce 10 million fewer iPhones due to difficulties getting components. Shortages have driven higher prices for a wide variety of products. And there's every reason to think these problems will continue in the coming months....

The resulting shortages make it easy for producers to raise prices. And in a sense those higher prices are due to supply-side problems like an earthquake or war. But the system's sensitivity to these kinds of shocks is itself the result of unusually strong demand."

Cash Crunch Drives Wild Moves in Commodities -WSJ

"Commodity traders are being hit by huge cash requests from banks and exchanges, propelling whipsaw moves in markets and hindering the movement of materials beyond Russia and Ukraine.

The outbreak of war sparked steep price changes by clogging commodity shipments in the Black Sea and leading Western importers to shun Russian exports. A vicious financial cycle is exacerbating the volatility and could worsen shortages in some parts of the world, traders say.

Exchanges and the brokerage arms of banks are demanding big down payments, known as margin, from traders in futures contracts linked to commodities such as oil, wheat and natural gas. To avoid the expense of holding on to positions in markets, some companies are unwinding trades, fueling further price moves.

'Trade that is not even linked to Russia or Ukraine is getting more and more difficult to finance,' said Sebastien Bruyant, a senior portfolio manager at RiverRock European Capital Partners, which lends to commodity traders and producers. He said lenders are withdrawing financing from economically fragile countries such as Egypt and Tunisia to hedge against uncertainty over the length of the war and its economic and geopolitical fallout....

Escalating margin calls are making it difficult for traders to manage the financial risks involved in moving physical commodities. Some producers and traders in diesel and crude have struggled to find buyers in what are normally routine sales. Among the reasons is that hedging costs have made deals unprofitable, traders say."

Gas prices spent weekend lower -Fox Business

"The price of gasoline continued moving lower over the weekend after setting a record high a week ago.

The average price for a gallon of gasoline in the U.S. slipped on Sunday to $4.255 according to the latest numbers from AAA. The price on Saturday was $4.262. The previous record high was $4.33, set on Friday March 11, 2022.

Several lawmakers made moves Friday to lessen the pinch on consumer's wallets caused by the rise in gas prices.

In Michigan, Gov. Gretchen Whitmer proposed temporarily freezing Michigan's 6% sales tax on gasoline and diesel fuel as a way to lower high pump prices and keep intact road and bridge funding.

The Democratic governor's statement came as she told legislators she would veto Republicans' attempt to suspend for six months a different tax at the pump - the 27.2-cents-per-gallon gas and diesel levy.

In Maryland, Gov. Larry Hogan, a Republican, immediately put a 30-day suspension of the state's gas tax into effect in response to skyrocketing prices....

Lawmakers in both chambers of the General Assembly approved House Bill 304 without opposition, in an attempt to give drivers a break from high gas prices."

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3.21.22 - Housing: Predicting the Next Recession

Gold last traded at $1,934 an ounce. Silver at $25.20 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on safe-haven buying despite a firmer dollar. U.S. stocks retreated following a Russian warning to the U.S. that relations are 'on the verge of rupture.'

Gold price has a path to $2,200 after Fed revealed its strategy -Kitco

"The Federal Reserve has laid out a clear tightening path, and now gold prices are free to push to new highs above $2,000 an ounce as inflation will remain a clear threat to consumers, according to one market strategist.

In a telephone interview with Kitco News, George Milling-Stanley, chief gold strategist at State Street Global Advisors, said Wednesday's monetary policy decision was slightly more hawkish than he expected; however, he added that it was a lot more dovish than market outlook.

As expected, the Federal Reserve raised interest rates by 25 basis points. At the same time, it signaled that it could start reducing its balance sheet at the next meeting. The central bank also updated its economic projections, lowered its growth forecast and raised its inflation expectations for 2022. Finally, the central bank also sees the potential for seven rate hikes this year.

While this might sound hawkish, Milling-Stanley said it wouldn't be enough to frighten the gold market.

'If indeed the Federal Reserve does follow through with its plan that will put interest rates at 1.75% by the end of the year,' he said. 'Interest rates will remain under 2% this year. I don't think markets have much to worry about.'....

'With CPI at 7.9%, [Federal Reserve Chair Jerome] Powell had to do something. But he will remain cautious when it comes to fulfilling his dual mandate,' he said. 'The Federal Reserve can only move gradually.'....

Along with the growing inflation threat, Milling-Stanley said that falling global growth forecasts due to Russia's invasion of Ukraine will continue to support speculative investment demand for gold."

canaries Predicting the Next Recession -Calculated Risk

"Way back in 2013, I wrote a post 'Predicting the Next Recession'...In that 2013 post, I wrote:

'Most of the post-WWII recessions were caused by the Fed tightening monetary policy to slow inflation. I think this is the most likely cause of the next recession. Usually, when inflation starts to become a concern, the Fed tries to engineer a 'soft landing', and frequently the result is a recession.'

And this most common cause of a recession is the current concern. With inflation picking up due to the pandemic (stimulus spending, supply constraints) and now due to the invasion of Ukraine, the Fed will embark this week on a tightening cycle to slow inflation.

The Fed cannot ease pandemic related supply constraints (except by curbing demand), and the Fed cannot stop the war. So, there is a possibility that the Fed will tighten too much and that will lead to a 'hard landing' (aka recession).

The key will be to watch housing. Housing is the main transmission mechanism for Fed policy. We have already seen mortgage rates rise enough to sharply slow mortgage equity withdrawal, and further increases will likely slow housing....

If the Fed tightening cycle will lead to a recession, we should see housing turn down first (new home sales, single family starts, residential investment). There are other indicators too - such as the yield curve and heavy truck sales - but mostly I'll be watching housing."

Remove Barriers to Productivity to Stave Off Stagflation -City Journal

"Because of global events, we now face the possibility of a supply-induced recession, the likes of which we haven't experienced since the oil shocks of the 1970s. The war in Ukraine and the spread of the Omicron variant of Covid-19 in China could hit supply chains and production capabilities in the U.S. and around the globe, leading to the return of stagflation: high inflation and low economic growth at the same time.

We need to adjust our economic toolkit to deal with stagflation. While stimulus payments from Congress and the Fed successfully sustained American demand in the face of the global pandemic and averted a much bigger recession, demand-side fiscal and monetary policies won't be nearly as useful in a supply-shock recession. To minimize the severity of the next recession, we must address the supply-side of the economy directly....

Because of global events, we now face the possibility of a supply-induced recession, the likes of which we haven't experienced since the oil shocks of the 1970s. The war in Ukraine and the spread of the Omicron variant of Covid-19 in China could hit supply chains and production capabilities in the U.S. and around the globe, leading to the return of stagflation: high inflation and low economic growth at the same time.

We need to adjust our economic toolkit to deal with stagflation. While stimulus payments from Congress and the Fed successfully sustained American demand in the face of the global pandemic and averted a much bigger recession, demand-side fiscal and monetary policies won't be nearly as useful in a supply-shock recession. To minimize the severity of the next recession, we must address the supply-side of the economy directly....

It's not just oil that's getting scarcer. Industrially important metals like nickel, of which Russia is a major exporter, have doubled in price since the invasion. Interruption of Ukraine's wheat production will raise food prices globally and cause hardship, if not famine, in countries that rely on Ukrainian imports, like Gambia, Lebanon, Moldova, Djibouti, Libya, Tunisia, and Pakistan.

China's struggles to contain Omicron represent a distinct set of shocks. The 'Zero Covid' policies the country used successfully to contain the virus thus far do not appear up to the job of fighting off the new variant. Yet with a population protected only by less effective vaccines and virtually no immunity from prior infection, abandoning these policies would unleash a massive wave of Covid cases that would overwhelm Chinese hospitals and increase the disease's fatality rate.

China is stuck. The country is now locking down multiple cities and even entire provinces. Even if these lockdown measures work in the short term, they may need to be reimposed over and over again, absent a new strategy to contain one of the most contagious diseases in history....

If we can't counterbalance the supply shock in every granular manifestation, we can at least take action to boost productivity and aggregate supply....there is much we could do to boost supply. No, not all these actions will offer relief from the specific supply shocks we could soon face; nor will they all have an immediate effect. Still, doing as much as possible now to remove barriers to productivity and efficiency is our best hope to avoid prolonged stagflation."

The Fed Must Do Much More to Fight Inflation -Summers/Time

"During the 1960s and 1970s it took a dozen years for a toxic cocktail of excessive fiscal stimulus, misguided monetary policy focused on symptoms rather than causes, and bad luck on the supply side to generate stagflation - a combination of high inflation and a stagnant economy. Stagflation and political dysfunction corroded public trust in government, undermined public confidence that the country was on the right track and brought down the Presidencies of both Gerald Ford and Jimmy Carter.

History has sped up over time and in a little more than a year policy errors like those of 1960s and 1970s along with bad luck have brought the U.S. to the brink of stagflation. Income support payments to households and businesses in 2021 far exceeded any reasonable estimate of income reductions due to COVID-19. The Federal Reserve in ways reminiscent of the 1970s proclaimed that inflation was transitory and isolated to a few sectors even as labor shortages became unprecedentedly severe and pervasive.

And now the Ukraine crisis is leading to huge increases in food and energy prices. It is now likely that inflation will continue to accelerate for at least several more months as commodity price hikes work through the system. Then it may recede but not in all likelihood anywhere near the Fed's 2 percent target....

Small businesses are more likely to cite inflation as their principal worry as any time since the beginning of the Reagan disinflation. The Dollar Store has become the $1.25 store as consumers are seeing the worst decline in decades in the purchasing power of their wages....

I welcome the Fed's moves to phase out quantitative easing and raise interest rates. But they are insufficient. The Fed has not explained how with hundreds of economists on staff and almost every employer in the country reporting cost increases they were passing on, it manage to underestimate 2021 inflation by a factor of 3. Without such an explanation it is hard to be confident that they now have things under control.

Nor has the Fed signaled an intention to abandon the operating framework that brought us to this point by ruling out monetary tightening until it was completely clear that the economy was overheating. The President"�s new nominees to the Board while clear on their commitment to disinflation have yet to make clear their recognition that inflation has its roots in an overheated economy....

Some policy problems are intractable. We lack the knowledge or the tools to resolve them. Not inflation. We know what must be done to reduce it. And we know that the slower we are to act, the larger and more painful will be the regimen of restoring price suitability. It's time to act."

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3.18.22 - Can Russia Sell Its $140 Billion Gold Pile?

Gold last traded at $1,925 an ounce. Silver at $24.94 an ounce.

NEWS SUMMARY: Precious metal prices eased slightly Friday on a firmer dollar. U.S. stocks traded mixed as investors digested this week's Fed news and the ongoing war between Russia and Ukraine.

The $140 Billion Question: Can Russia Sell Its Huge Gold Pile? -Bloomberg/Yahoo Finance

"Russia spent years building a giant stash of gold, an asset that central banks can turn to during a crisis. But any attempt to sell it will now be a challenge just when it's needed most.

Bank of Russia expanded its gold reserves almost sixfold since the mid-2000s, creating the world's fifth-biggest stockpile that's valued at about $140 billion. It's the type of asset it could sell to shore up the ruble, which has plunged as global economies isolate Russia following its invasion of Ukraine.

Doing so will be difficult. Sanctions forbid U.S., U.K. and European Union institutions from doing business with Russia's central bank. Traders and banks are wary of buying the country's bullion indirectly or using other currencies out of fear of reputational damage or falling foul of penalties. And senators in Washington want secondary sanctions on anyone buying or selling Russian gold.

'This is why they bought their gold, it was for a situation just like this,' said Fergal O'Connor, a lecturer at Cork University Business School. 'But if no one will trade it with you, it doesn't matter.'

Moscow may need to look east to central banks in nations like India or China to sell gold or secure loans using it, according to CPM Group Managing Partner Jeff Christian, who has followed precious metals since the 1970s.

'They could pick it up at a discount to the market,' Christian said in an interview from New York. Russia could also sell via the Shanghai Gold Exchange, where it has commercial banks as members, though any sales would likely be small, he said.

Still, a move by a bipartisan group of U.S. senators to further hinder gold transactions may deter banks in places like China and India from buying or lending against Russia's bullion -- and Beijing wants to avoid being impacted by U.S. sanctions over the war. That's further reducing Russia's options....

If Russia gets desperate, it could sell bullion domestically to buy rubles, Citigroup Inc. said. If done at a fixed price, that would be tantamount to an internal gold standard."

bear market Prepare for a recession this summer, a bear market in real estate and a drop in stock prices -Rosenberg/Marketwatch

"Inflation has turned out to be not-so-transitory, and the Federal Reserve has its knives out. Well, its hammer, anyway.

Raising interest rates - the U.S. central bank's primary tool to restrain runaway prices - is a blunt instrument, at best, and until now, Fed Chairman Jerome Powell has been reluctant to reach for it, let alone use it.

David Rosenberg expects the Fed's attack on inflation, which begins Wednesday with the first of an anticipated series of interest-rate increases, to slay the U.S. inflation dragon - at a high cost.

Investors accustomed to easy money and meteoric gains in stocks, real estate and other rate-sensitive assets understandably hope for and even expect the Fed to engineer a Goldilocks-like soft landing for the U.S. economy.

But Rosenberg, the widely followed president and chief economist and strategist of Toronto-based Rosenberg Research & Associates Inc., is convinced that the Fed will beat inflation so hard that the U.S. economy will slide into recession as early as this summer.

In fact, Rosenberg sees evidence of a slowing economy already, which for him makes the Fed's timing questionable and only amplifies his recession call - a cycle that may not end with just one recession. It took two painful recessions, in 1981 and 1982, for then-Fed Chairman Paul Volcker - the patron saint of inflation fighters and Powell's role model - to bury a decade's worth of inflation and resurrect the U.S. economy and stock market.

Rate increases depress demand, but when taken too far, crush it. The resulting recession is negative for home prices, consumer-discretionary stocks and nice-to-have goods and services, and positive for Treasury bonds and the producers and purveyors of consumer staples, health care and medicine, energy, food and other things people need to have....

MarketWatch: You're on record about residential real estate being at 'peak housing.' What convinces you that the U.S. housing sector is in a bubble?

Rosenberg: The housing market is in at least as big a bubble as the stock market. When you look at price action, it's absolutely incredible. The year-over-year trend in nationwide home prices is 19%. We've already taken out prior bubble peaks in the late 1970s, mid-'80s and mid-2000s.

Relative to overall inflation, housing is overvalued by 35%, and 27% relative to wages. Home prices relative to residential rents are 25% overvalued by the standards of the past. A single-family home now absorbs more than eight years of Americans' personal income, which is almost 50% higher than the average going back to 1968. In a normal market it takes five years of income to buy a single-family home.

Housing, like equities a long-duration asset and benefiting from years of accommodative monetary policy, is again ensnared in a mess of a price bubble. The price-to-income multiple is just about where it was in 2006 and 2007. Nobody wanted to believe it then, and talking about housing being in a bubble today, it's as if I told somebody that their kid was ugly....

Historically, home prices go up one- to two percentage points above the inflation rate. Right now it's going up 12 percentage points. Residential real estate is a great hedge against inflation. But the excess is practically unprecedented. The laws of mean reversion are telling you that we're going to have anywhere from a 20% to 30% bear market in residential real estate, and that's being charitable. And once again, nobody seems to believe it, let alone prepare for it."

World War III 'may have already started' with Russian invasion -Zelenskyy/NBC News

"Russia may have already started World War III, Ukrainian President Volodymyr Zelenskyy said in an interview with NBC News on Wednesday.

The outcome of Russian President Vladimir Putin's invasion of Ukraine has yet to be decided, but it's possible the decision has set off a path to a full-scale global war, Zelenskyy told ;NBC Nightly News' anchor Lester Holt when asked whether he understood concerns from President Joe Biden about not escalating tensions with or provoking Moscow.

'Nobody knows whether it may have already started. And what is the possibility of this war if Ukraine will fall, in case Ukraine will? It's very hard to say,' Zelenskyy said. 'And we've seen this 80 years ago, when the Second World War had started ... nobody would be able to predict when the full-scale war would start.'

He further emphasized that the outcome of this war puts the 'whole civilization at stake.'

Zelenskyy said the Ukrainian people are 'unconquerable' even if Russian forces overtake cities, including the capital Kyiv. Russian forces may occupy the land, but they cannot take Ukrainian's dignity and love for their country, he said.

'This is what our people have clearly demonstrated,' Zelenskyy said. 'Even those settlements that were ruined to ashes by Russian artillery, even those settlements were left unconquered by Russians.'

Zelenskyy gave a virtual address to both chambers of Congress on Wednesday morning, reiterating his push for NATO to impose a no-fly zone over Ukraine. He appealed for more aggressive support from lawmakers and Biden, calling the invasion a 'terror that Europe has not seen for 80 years.'"

Smart devices are watching you everywhere and violating your privacy -Study Finds

"Do you ever get the creepy feeling you're being watched? According to two computer scientists, you're probably right, only it's not someone watching you, it's something - and that thing is smart technology.

In a paper by University of Maryland, Baltimore County's Roberto Yus and Penn State's Primal Pappachan, the team warns that billions of digital devices are scanning and sensing your movements every day. Some of them are sitting right in front of you - inside televisions, cars, offices, and even your refrigerator.

In 2007, few people could have imagined the countless apps which society now uses on their smartphones each day. However, Yus and Pappachan say this technological revolution has come with a high price to our privacy as internet connectivity now reaches people in more places than ever before.

For all these smart devices to do their job, they need a connection to the internet so they can correlate all the data they're gathering on you. For example, a smart thermostat in your house spends its day collecting information on you and your preferences. However, without an internet connection to see a weather forecast, the thermostat can't decide how to properly set the temperature in your home.

This is just the tip of the iceberg though, as the researchers say devices which gather data on everything people do are infiltrating our workspaces, malls, and cities.

'In fact, the Internet of Things (IoT) is already widely used in transport and logistics, agriculture and farming, and industry automation. There were around 22 billion internet-connected devices in use around the world in 2018, and the number is projected to grow to over 50 billion by 2030,' the team explains in an article published in The Conversation.

Smart security cameras and home assistants like Alexa are basically just cameras and microphones which record you and your activities all day.

While these examples may seem obvious, it might surprise you to know that smart TVs can do the same exact thing. Meanwhile, smart lightbulbs monitor your sleep and heart rate, and smart vacuum cleaners actually map out the interior of your home as it recognizes objects to avoid hitting.

While some products market these features, and others claim that your data will not end up in the hands of other people, the team says this isn't always true....

Making matters worse, many smart devices become virtually useless if you disconnect them from the internet. Additionally, you don't even have the option to choose privacy over connectivity when it comes to the devices in a public place such as an office or mall."

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3.17.22 - Fed Must Choke Inflation it Created

Gold last traded at $1,940 an ounce. Silver at $25.27 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on safe-haven buying and a weaker dollar. U.S. stocks fell as investors digested Ukraine, Fed developments.

Gold steady as dollar dip counters Fed rate hike expectations -CNBC

"Gold steadied on Wednesday, with a weaker dollar offsetting pressure from higher U.S. Treasury yields as investors await the first pandemic-era U.S. Federal Reserve interest rate hike....

'Bullion bears are taking a breather as they await the Fed's highly-anticipated policy guidance,' Han Tan, chief market analyst at Exinity, said.

'Once gold markets have fully digested the Fed's policy signals, attention could swiftly return to the ever-evolving Russia-Ukraine war,' Tan said, adding that any escalation of the crisis would lead to further gold price rises.

The U.S. central bank is expected to announce its first interest rate hike in three years to tackle soaring inflation.

'If there is disappointment that the market has expected more rate hikes that the Fed actually delivers, this could be supportive for gold, and vice-versa,' Fertig added. The U.S. dollar dipped, providing some support to greenback-priced bullion."

the fed Next to Nothing -Bonner Private Research

"Caught between a rock and a hard place, the Fed has to decide. Consumer prices are rising at a politically uncomfortable rate - almost 8% per year. But the stock market is wobbly"� and threatens to crash.

What to do?

Nothing! Or as close to nothing as it can get away with. The Fed will almost certainly announce a tiny 0.25% increase in its key lending rate"� bringing it (adjusted for inflation) to MINUS 7.4%.

To get our bearings, we note that if you're going to stop price increases you have to lend money at a rate that is higher than the inflation rate, not below it. An inflation-killing move equivalent to what Paul Volker did in 1980 would put the Fed rate at PLUS 10% - or 1,740 basis points higher than it is today.

And if the Fed continues its baby steps to nowhere approach, raising the key rate by a quarter point per trimester, it will take 17 years to get there"� or until 2039. By that time, the dollar and the world's US dominated money system will be long forgotten.

'Inflate or Die?' On a scale of 10, we rate the chances that the Fed will mount a serious fight against inflation at 1.

Fed chief Jerome Powell says he is just being cautious. What with a war going on and all"� he didn't want to introduce more 'uncertainty.'

What to make of it? Sarcasm offers the only relief."

The Fed must raise rates to choke off the inflation it created -New York Post

"Jerome Powell could begin to fix the mess he helped create even if it might upset the markets for a bit. He could raise short-term interest rates higher than investors have priced in and announce that inflation is so bad that the Fed will significantly reverse the size of its balance sheet.

Of course, Powell won't do that when he unveils his new interest-rate policy Wednesday because in doing so he would have to admit to one of the biggest monetary-policy blunders in recent history.

It was Powell who promoted the panacea of 'transitory inflation.' As we all know now, it was a cynical PR stunt designed to fool the American people that there would be no consequence to his historic money printing (in the trillions), low-interest rates and support of President Joe Biden's trillion-dollar spending sprees well past the time that COVID was squeezing growth from the US economy.

Talk about cynical: The 'transitory inflation' meme also helped Powell win Biden's blessing and reappointment to another term as Fed chair since it helped the president sell his spending plans until Sen. Joe Manchin said enough.

Enough should have happened sooner, of course. Between the money spent by Biden that literally paid people not to work and the dollar printing by Powell, our Fed chair is now finding himself in the tightest of tight spots. He is tasked with corralling a Consumer Price Index rise of nearly 8% for February, a measure of consumer inflation that is certainly in the double digits today since it doesn't take into account that war in Europe....

Powell, of course, has debased the dollar with his monetary-policy overkill. A more thoughtful soul would admit these mistakes and the pickle he's in and reverse course, telling the American people that if he doesn't act now, and decisively, the economy could end up in shambles....

But Powell will undoubtedly fill the room with bromides about the inherent strength of the US economy, announce a measly 25-basis-point increase and say something modest about the Fed's balance sheet that he will begin to unwind slowly.

Markets might even cheer, but Powell is only delaying the inevitable. If he doesn't move decisively. private investors could take measures into their own hands, selling dollars and bonds in the face of the inflationary threat, leading to widening deficits and higher debt costs."

Molotov Stock Market Cocktail -Smead Capital Management

"In our recent media engagements, we have been asked if the Russian invasion of Ukraine is the cause of the carnage in the stock market this year. Many of the investors suffering stock market failure and financial media participants are looking for some comfort from the declines.

They'd like to think that their portfolios have been hit by a Molotov cocktail and that the stock market will repair itself like it did when the pandemic crushed stocks two years ago. The facts appear to say the invasion is only a catalyst for what was already going on.

This stock market decline is the unwinding of what Charlie Munger says is the wildest euphoria episode he has seen in his career (75 years), because of what he calls 'the totality of it all.'

This euphoria episode wasn't just high price-to-sales tech stocks (it was). It wasn't just cryptocurrencies (it was). It wasn't just SPACs and IPOs (it was). It wasn't just FAANG devotion (it was). It isn't just the most expensive S&P 500 Index in history (it was). It wasn't just growth stock mania (it was).

As market participants for nearly 42 years, we've never seen more group think and widespread devotion to common stocks (think Reddit and Robinhood)....The bull market that ended last year, which started at the pandemic lows, was a function of two things.

First, massive liquidity provided by the U.S. Federal government and an enormous accommodation by the Federal Reserve Board. This combined to create a surge in stocks that benefited from being stuck at home (FAANGs, tech of all kinds, vaccine makers, DocuSign/Peloton/Shopify, etc.)....

Then when everyone had fled the companies hit the hardest by the quarantines, they rebounded as the evidence showed that people will always want to be around people. If you go back and look, you'll see that the stuck-at-home stocks have been crushed in the last year. Even Amazon shares have gone sideways in the last year....

To defend your assets and avoid stock market failure, you must take out the 1970s playbook. Oil stocks and their industry have suffered under-investment. This is due to a mistaken belief that we are close to getting away from using carbon energy. In our eyes, there is a mistaken devotion to green investments which have some validity but are a 'needle in a haystack' from a common stock probability standpoint."

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3.16.22 - 2022: Gold Price $2,500, Oil Price $50

Gold last traded at $1,904 an ounce. Silver at $24.70 an ounce.

NEWS SUMMARY: Precious metal prices steadied Wednesday as investors awaited an expected tiny .025% interest rate increase. U.S. stocks rose as traders tried to build on the previous gains, while Wall Street awaited the Fed's latest monetary policy decision.

What's this year's 'potential end game'? Gold price at $2,500, oil price at $50 -Bloomberg/Kitco

"Could the year-end scenario be gold at $2,500 and crude oil at $50? Gold is one of the assets that could benefit the most this year, while oil is still facing prospects of crippling demand in the future, according to Bloomberg Intelligence.

'Markets may be facing an extended risk-off reversion period, which we see as essential to reduce inflation pressures. Gold stands to be a primary beneficiary, potentially along with U.S. Treasury long bonds and Bitcoin,' said Bloomberg Intelligence senior commodity strategist Mike McGlone. 'Gold is poised to cross the $2,000 rubicon "� Potential end game for 2022 - $50 crude, $2,500 gold, recession.'

Gold has been trading in a narrowing wedge pattern, and these have the habit of breaking out to the upside, McGlone pointed out....

High inflation, surging commodities, risk-off sentiment in U.S. equities are all adding to gold's case at the moment.

'We view the metal as a leading potential 2022 end-game performer, notably when commodities priced for supply shocks succumb to inevitable demand destruction,' McGlone said. We see gold gaining store-of-value demand."

blind Fed The Humbling of the Federal Reserve -WSJ

"The Federal Open Market Committee meets Tuesday and Wednesday, as it seeks to address the worst inflation in 40 years amid new risks to economic growth. Whatever the Fed decides on interest rates, it's worth recalling how the central bank arrived at this unhappy moment.

The first reality to confront is that this is a mess largely of the Fed's own making. The central bank's inflation target is 2% for personal-consumption expenditure inflation, and the rate in February was probably three times higher. The Consumer-price index is higher still.

Government spending excesses in 2020 and 2021 played a role, but the Fed made all of that easier to pass by maintaining the policies it imposed at the height of the pandemic recession for two more years. Low interest rates make deficits seem more fiscally manageable than they really are. The Fed has continued to buy Treasurys and mortgage-backed securities even as inflation nears 8% - right up until this week's meeting.

What went wrong? The Fed is supposed to have the world's smartest economists and access to the best financial information. How could they make the greatest monetary policy mistake since the 1970s?

Part of the answer lies with the Fed's economic models, which are rooted in Keynesian analysis in which demand trumps all. The Fed models give little thought to incentives for or barriers to the supply-side. As finance scholar Emre Kuvvet wrote recently on these pages, among economists in the Federal Reserve System, Democrats outnumbered Republicans by 10.4 to 1 in 2021. They prefer James Tobin over Milton Friedman....

Another answer lies in what has become a lack of institutional accountability. The central bank was humbled in the 1970s, but under Paul Volcker and Alan Greenspan it revived its reputation as it vanquished inflation and produced the Great Moderation of growth and price stability. The Fed receives the most favorable press coverage in the free world. This has led to a failure to admit mistakes or accept responsibility for its contribution to the mania of the mid-2000s and the panic and crash of 2008....

Now the Fed has to find a way to bring inflation down without tanking the economy that faces new headwinds-from rising commodity prices, war in Ukraine, and a Congress and White House whose sole economic strategy is spending more money and heaping regulation and taxes on productive businesses....

But that's the dilemma the Fed created for itself. Better to get on with it than go down in history as the second coming of Arthur Burns and the 1970s."

The alternative to the 'Great Resignation' - phasing retirement -TheHill

"Challenges to today and tomorrow's workforce supply and growth are growing everywhere. The catchphrase 'Great Resignation' describes millions fleeing work because of poor treatment, low pay, limited childcare or poor development. Chilling reports abound of historically low and plunging birthrates and the end of traditionally large immigration flows to staff our growing economy.

Now also comes the recognition that hidden in this massive COVID-inspired turmoil is the unexpected and highly unusual early retirement of millions of aging workers. Washington Post Columnist Helaine Olen observed, 'Goldman Sachs estimated last fall that more than half of those who had left the workforce during the COVID era's Great Resignation were over 55.'

'Many older employees, however, say they would like to stay connected to their jobs in retirement, but worry that they won't be able to do so. In a recent survey conducted by the Harris Poll "� a vast majority of respondents expressed interest in semiretirement, where they could either work a flexible schedule or reduced hours or consult - but only one in five of their employers offered up such an option,' she added....

Enabling regular employees with benefits to reduce their schedules from full to reduced time over an agreed-upon trajectory can meet the employee desire for so-called semi-retirement and the employer need for retention of mature labor and the transfer of critical knowledge to development-seeking younger employees.

Phased retirement programs are not the idealistic stuff of HR think tanks, but business-beneficial initiatives that pioneering companies have had in place for years with great success. Successful programs have been operational for more than a decade at companies ranging from furniture manufacturers Herman Miller and Steelcase to pharmaceutical giants Abbott and AbbVie....

Employers seek to pursue this valuable source of mature and reliable labor, their failure to do so would be a grave error. Creativity and determination in this effort will be amply rewarded. There is no reason that 2022 cannot be the year that phased retirement moved from rare success to obvious solution to a serve and chronic problem."

Biden's Whole-of-Government Equity Agenda Precludes Limited Government -Competitive Enterprise Institute

"A 1977 Reason magazine review of Friedrich Hayek's 'Law, Legislation, and Liberty' (Vol. 2) noted Hayek's contention 'that the prime public concern should be, not to provide for particular needs, but to maintain conditions for a spontaneous order "� where people provide for their own needs'....

'So long as the belief in "�social justice' governs political action,' Hayek wrote, 'this process must progressively approach nearer and nearer to a totalitarianism system,' as the attempted eradication of each 'injustice' expands the state.

Fast forward to 2022. The Biden administration has anchored the pursuit of 'social justice' in such a way that limited government cannot be sustained....

Wherever social 'injustice' is detected, progressives' remedy is usually wealth transfers; Hayek and others used the term 'distributive justice.' Accompanying redistribution are controls of the payer and recipient alike, and enrichment of administrators and consultants.

Foremost during Biden's first week was an executive order with a 'whole-of-government' framing that has defined the administration....Equity in this framing does not mean equality of opportunity or equality before the law, but rather equality of outcomes....

An irony of intervention is that there continues a post-pandemic transfer of wealth upward. That may not be unintended, though. The North Star of progressives is the universal basic income. No one currently in charge seems to care about what Hayek had to say about the prerequisites for social order."

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3.15.22 - Former SEC Head Fears How the Crypto Story Ends

Gold last traded at $1,919 an ounce. Silver at $24.94 an ounce.

NEWS SUMMARY: Precious metal prices retreated Tuesday on profit-taking despite a weaker dollar. U.S. stocks rose as oil prices continued to drop below $100 and a reading of wholesale inflation came in at an .8% increase - slightly lower than expected.

Investors Dash to Haven Assets During Ukraine Crisis Market Turmoil -WSJ

"The Ukraine crisis is turbocharging a dash for haven investments around the globe.

The Russian invasion and the ensuing jump in commodities prices have sent investors barreling into gold and government bonds and scooping up bets that will pay out if they keep rising.

The turbulence has unleashed a frenzy of trading tied to one of the biggest exchange-traded funds tracking gold, while investors have also poured money into government bonds, stemming a flood of withdrawals from earlier in the year....

Investors say they are facing one of the most uncertain economic outlooks of the past few decades, and there is little clarity on how the Ukraine situation will be resolved.

Some have grown concerned about the possibility of a prolonged bout of inflation alongside low economic growth like the stagflation era of the 1970s. Adding to the anxiety, the Federal Reserve is poised to begin raising interest rates this week and likely won't provide support for markets as it has in recent years.

In addition to monitoring the Fed meeting Tuesday and Wednesday, investors will parse earnings reports this week....

The rush for shelter comes as commodity prices around the globe have soared, stoking inflation fears. Oil prices rocketed to trade at times last week above $130 a barrel, the highest level since 2008."

recession Recession Risks Are Piling Up And Investors Need to Get Ready -Bloomberg/Yahoo Finance

"Even after one of the worst starts to an equity trading year in history, the market upheaval might just be getting started.

Ominous signs are piling up that more turmoil is still coming, as key indicators point toward a potential recession. That could deepen the market rout triggered by the Federal Reserve leading a hawkish shift among central banks and war in Ukraine.

The U.S. Treasury yield curve has collapsed to near inversion - a situation when short-term rates exceed those with longer tenors, which has often preceded a downturn. In Europe, energy costs have climbed to unprecedented levels, as sanctions against Russia exacerbate a global commodity crunch.

'Over time, the three biggest factors that tend to drive the U.S. economy into a recession are an inverted yield curve, some kind of commodity price shock or Fed tightening,' said Ed Clissold, chief U.S. strategist at Ned Davis Research. 'Right now, there appears to be potential for all three to happen at the same time.'

Food prices are already past levels that contributed to uprisings in the past, and the outbreak of a war between Russia and Ukraine - which combined account for 28% of global wheat exports and 16% of corn, according to UBS Global Wealth Management - only adds to risks.

Meanwhile, the Fed is unlikely to intervene to prevent sell-offs, according to George Saravelos, Deutsche Bank's global head of currency research. That's because the root cause of the current spike in inflation is a supply shock, rendering the playbook used to fight downturns for the past 30 years all but useless.

The probability of a U.S. recession in the next year may be as high as 35%, according to economists at Goldman Sachs Group Inc., who cut the bank's growth forecasts due to the soaring oil prices and the fallout from the war in Ukraine."

Record gas prices are pushing up everyday costs, dampening economic recovery -Washington Post

"Americans are facing sticker shock at gas stations across the country, but surging global energy costs are rippling through the economy in other ways, too: Airlines are scaling back on flights. Truckers are adding fuel surcharges. And lawn care companies and mobile dog groomers are upping their service fees.

Russia's invasion of Ukraine and the surge in energy prices appears to be making the country's inflation problems much worse.

'Customers really don't want to hear it, but fuel prices are going through the roof so we're having to charge more,' said John Migliorini, vice president of Lakeville Trucking in Rochester, N.Y., where diesel costs have nearly doubled to about $400,000 a month. 'What choice do we have? I've never seen prices jump this high, this fast.'....

Record-high gas prices are seeping into everyday costs beyond the pump, adding new uncertainty to the economic recovery. Prices hit $4.33 this week after the Biden administration took steps to ban Russian oil imports, boosting the prospect of higher short-term inflation while threatening economic growth and spending and even reshaping hiring patterns. Higher energy costs are also complicating the Federal Reserve's efforts to rein in inflation, which jumped to a new 40-year high this week....

As gas prices rise, consumer spending tends to fall. Each 10 percent increase in gas and oil prices means consumers will have to spend an additional $23 billion a year to keep up with earlier spending patterns, analysts at JPMorgan Chase found."

SEC's Former Head of Internet Enforcement Fears How the Crypto Story Ends -Vice

"John Reed Stark spent nearly two decades at the SEC rooting out online fraud, including 11 years as the founding chief of the agency's Office of Internet Enforcement. But he's never seen anything that has concerned him quite like the world of cryptocurrency and NFTs.

'There have been awful frauds from unregulated people and regulated people,' Stark said. 'But nothing comes close to the level of fraud in all these Web3 applications.'

Over the last decade, Stark has become one of the most credentialed critics of the burgeoning industry. After studying the industry at length, he has come to believe that it will end in a 'financial cataclysmic event' that will hurt the most vulnerable of investors.

Stark isn't an all-out cynic. In the lead-up to the dot-com bubble, it was clear to him that the internet would lead to incredible innovation, he said. But with the world of cryptocurrency, he sees little more than a series of frauds and 'get-rich-quick schemes' of remarkable size.

President Joe Biden signed an executive order Wednesday to develop a plan to regulate the cryptocurrency industry while still allowing for innovation. The news was cheered among many in the crypto world, who saw it as further proof that the industry would be accepted by mainstream institutions and no longer struggle with legal ambiguity. Stark, for his part, had a different perspective. 'They always call for clarity,' Stark said. 'Be careful what you wish for.'

Motherboard spoke to Stark about his concerns, as well as the difference between buying NFTs and trading cards on eBay, the "cult-like"� hatred he receives, the growing partisanship around the issue, and the 'regulatory capture' he sees taking over the legal industry.

Motherboard: You recently said never in history has so much fraud been so widespread. When was the moment you realized, in your view, something was amiss with NFTs?

John Reed Stark: The very first time I looked at it, I thought, This is a pet rock. Aside from the market being rigged, and there being no regulatory oversight, it seemed like a silly Beanie Baby thing that made no sense. But initially, I don't think I really had too strong of an opinion. If somebody wants to invest in something really stupid, I don't have a lot of sympathy for him.

But because I'm a cybersecurity lawyer, usually what I look at is, what could happen? How could this be hacked? It became clear to me that the potential for money laundering was significant. I started to investigate the idea with NBA Top Shot because I'm a big NBA fan and my son is a big card collector.

All of a sudden, I thought, This is a market that could really hurt people. It's not just people losing money because they invested in something utterly absurd. But more importantly, this kind of thing could be used by criminal organizations. And it seemed to me that it was being used by criminal organizations to launder money."

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3.14.22 - Gold Price Flirts With Record Highs

Gold last traded at $1,954 an ounce. Silver at $25.03 an ounce.

NEWS SUMMARY: Precious metals prices eased on profit-taking Monday, ahead of this week's Fedspeak. U.S. stocks traded mixed as the Russia-Ukraine war continues to escalate and the Fed could hike rates for the first time since 2018.

Gold flirts with record highs -Axios

"With inflation surging, gold - the traditional hedge on rising prices - has flirted with new record highs.

The big picture: The yellow metal is traditionally viewed as a safe haven during times of crisis, especially by investors in emerging markets.

Russia is also one of the world's largest gold producers, and recent sanctions on the country have made buyers jittery about supply - leading some to stock up.

Worth noting: The crippling sanctions highlight the risks central banks face in holding their reserves in dollars and other foreign currencies.

What they're saying: 'We expect Central Bank gold demand to reach its historical high level as [central banks] globally have both strong diversification and geopolitical reasons to shift reserves into gold,' Goldman Sachs analysts wrote in a note this week."

economy cartoon Inflation's New 40-Year High is Not "Putin's Fault." -Mises

"According to new data released by the Bureau of Labor Statistics, price inflation in February rose to the highest level recorded in more than forty years. According to the Consumer Price Index for February, year-over-year price inflation rose to 7.9 percent. It hasn't been that high since January 1982, when the growth rate was at 8.3 percent....

A clear inflationary trend began in April 2021 when CPI growth hit the highest rate since 2008. Since then, CPI inflation has accelerated with year-over-year growth nearly doubling over the past 11 months from 4.2 percent to 7.9 percent.

For most of 2021, however, Federal reserve economists and their PhD-wielding allies in academia and the media insisted it was 'transitory' and would soon dissipate. By late 2021, however, economists began to admit they were 'surprised' and had no explanation for the inflation....

Now, high level economists have changed their tune again with Janet Yellen admitting this week that 'We're likely to see another year in which 12-month inflation numbers remain very uncomfortably high.' Yellen had earlier predicted that CPI inflation would drop to around 3 percent, year over year, by the end of 2022.

Yellen was also careful to attempt political damage control by insinuating that price inflation is a result of uncertainty over the Russia-Ukraine war.

Never mind, of course, that the inflation surge began last year and that January's CPI inflation rate was already near a 40-year high. The current crop of embargoes and bans on Russian oil imports implemented during March were not drivers of February's continued inflation surge.

Few members of the public, however, will bother with these details, and this will benefit both the Fed and the administration. As far as the Fed is concerned, the important thing is to never, ever admit that price inflation is really being driven by more than a decade of galloping Fed-fueled monetary expansion (aka money printing). This was done largely at the behest of the White House and Congress to keep interest on the debt low and government spending high.

So, we can expect the administration to portray inflation as 'Putin's fault.' In a Friday speech to Democratic activists, Biden even claimed the high inflation rates are not due to 'anything we did.' The tactic will no doubt work to convince many. But it's unclear how many....

The odds of the Fed chickening out and abandoning plans to cut monetary expansion have always been high. They're even higher now that the war and a weakening economy will stoke inflation fears and another round of calls to 'print the money' to prevent recession."

Mises's Free Market Agenda for a Postwar Ukraine -AIER

"Before the Russian invasion of Ukraine on February 24, 2022, the Ukrainian economy was performing fairly well by a variety of official statistics. Price inflation had been declining modestly from nearly 11 percent in the middle of 2021 to an annual rate of 10 percent in January 2022.

The rate of monetary expansion had been accelerating through most of 2021, but in January 2022, all the Ukrainian money supply measurements had modestly decreased compared to December 2021, suggesting possible diminished monetary pressures on prices.

Ukrainian Gross Domestic Product (GDP) had grown in the last quarter of 2021 at an annualized rate of nearly 6 percent, and was expected to grow at a reasonably good clip through 2022...But by the end of 2020, the debt to GDP ratio had declined to less than 61 percent, for a 25 percent decline over four years....

Independent Ukraine has not been a model of a perfectly functioning political democracy, nor has the government always respected the civil liberties of every citizen. Corruption has abounded. Privileges and favors to various individuals and interest groups have been freely meted out. Fiscal mismanagement has always been present, and price inflation has sometimes been high and erratic due to the Ukrainian central bank's willingness to turn the handle of the monetary printing press to finance the government's spending needs.

But whatever the political imperfections, economic regulatory hurdles, and monetary and fiscal abuses, freedoms of the press, speech, religion, and association have been fairly reasonably practiced in recent years.

On the Freedom House's index for overall respect for political rights and civil liberties in countries around the world, Ukraine got 61 percent out of a hundred. Not close to Germany's 94 percent, or the UK's 93 percent or even Poland's 81 percent, among some other European countries. But Ukraine appeared to be a shining example of a politically free society compared to, say, Russia with a score of 19 percent out of a hundred, or Belarus with only 8 percent....

Ukrainians will have to plan for the reconstruction of their economy at some point in the future. The economic policy agenda for such a reconstruction is at least partly at hand, and can be found in the writings of the Austrian economist, Ludwig von Mises. Mises, interestingly, was born in Lviv in 1881, when it was then known as Lemberg in the old Austro-Hungarian Empire....

In the summer of 1918, shortly after returning to Vienna, Mises prepared a policy paper offering 'Remarks Concerning the Establishment of a Ukrainian Note-Issuing Bank.' It was an outline of the institutional rules to be followed by a Ukrainian central bank under a gold standard....

Establishing a gold standard in Ukraine, or anywhere else in the world today seems highly unlikely. Governments value too highly their ability to access fiat money for their deficit-covering purposes, and for central banks to have the means by which to try to influence borrowing, spending, and employment through monetary and interest rate manipulations.

But Mises's central point was that unless there are institutional rules and checks on a central bank to prevent it from arbitrarily changing the quantity of money and credit in the economy, the danger of serious price inflation and the booms and busts of the business cycle will always be present."

Biden needs to rapidly increase U.S. energy production to cut Russia dependence -CNBC

"The United States produces more oil and natural gas than any other country in the world. We are the top exporter of LNG and among the top five oil exporters in the world. As a global energy power, we can provide low energy prices, the creation of steady jobs, dependability, and security for America and our allies.

Republicans understand we are standing on top of the richest resources and have the technology to safely and cleanly harness them. But why stop there? We fundamentally believe in the power of this country, and fear what the world would look like today if American innovators, workers, and leaders before us simply settled.

We should never stop finding ways to make this country better, stronger and more resilient. An empowered Russia invading Ukraine and destabilizing our energy prices is one giant reason why.

Under President Biden's leadership, energy imports from Russia increased by 34%. This administration has not only stalled oil and natural gas exports to our allies, but has blocked further energy transportation infrastructure in the U.S., like the Keystone XL Pipeline, while supporting projects abroad, like Russia's Nord Stream 2 pipeline. With investments in our own pipeline infrastructure, American refineries could have easy access to Canadian crude oil instead of Russian oil....

The only 'plan' President Biden has for the current energy crisis is to release oil from the Strategic Petroleum Reserve and ask other countries to produce more oil.

These shortsighted ideas put America last, and the solution is obvious: rapidly increase American energy production, thus replacing Russian oil and gas with energy made in the U.S.A....

By leaving our resources in the ground and turning to others like Russia, Iran, and Venezuela for help, Democrats are choosing to increase energy costs for and risk the security of American families - either to appease far-left activists or because they lack the moral clarity to do what is right for our citizens. Our source of strength is not far. It is right beneath our feet."

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3.11.22 - Demographics: Expect High Inflation for Decades

Gold last traded at $1,985 an ounce. Silver at $25.93 an ounce.

NEWS SUMMARY: Precious metal prices dipped Friday on short-term profit taking, but headed for fifth consecutive winning week. U.S. stocks headed for a fifth straight losing week, despite an attempted rally on a report Russia/Ukraine ceasefire talks may be gaining traction.

Silver and Gold Explode. How High Can They Go? -TheStreet

"The run in commodities has been stunning. It's not just silver and gold feeling the love, but oil, wheat, aluminum, nickel, soybeans, corn and others.

We've been in a supply-shocked super-cycle for this space and the bulls have reaped the rewards....But the one that suffers from all of it? The consumer.

Rising oil prices impact gas prices. Rising food costs raise the grocery bill. Rising energy prices raise heating costs. It all circles back to the economy as the burden to bear inflation, which is not good for the global economy.

This morning, silver and gold prices were ripping higher, along with many other commodities....Gold prices have been enjoying a steady rise, but really began to roar late last week....

If gold can maintain momentum, this is obviously the next upside level. On a dip, bulls want to see $2,000 act as support, followed by the $1,962 to $1,976 area....

Silver hasn't performed quite as well as gold, but nonetheless has moved quite nicely lately for the bulls....A move and close above today's high could open the door to $28.50, then eventually the recent high up at $30.35."

reversal Will Inflation Stay High for Decades? Influential Economist Says Yes -WSJ

"Charles Goodhart sees an era of inexpensive labor giving way to years of worker shortages - and higher prices. Central bankers around the world are listening.

When the global economy tanked in March 2020, the rate of inflation looked like it was heading to zero. That made it a surprising moment for former U.K. central banker Charles Goodhart to predict that inflation would hit between 5% and 10% in 2021 - and stay high.

Mr. Goodhart reasoned that a seismic shift was under way in the world economy, one that fiscal stimulus and the post-pandemic recovery would only hasten. A long glut of inexpensive labor that had kept prices and wages down for decades, he said, was giving way to an era of worker shortages, and hence higher prices.

'The coronavirus pandemic will mark the dividing line between the deflationary forces of the last 30 to 40 years and the resurgent inflation of the next two decades,' said the 85-year-old economist in an interview. He predicted that inflation in advanced economies will settle at 3% to 4% around the end of 2022 and remain at that level for decades, compared with about 1.5% in the decade before the pandemic.

Mr. Goodhart's theory about how shifting demographics are squeezing the labor force and pushing up prices has drawn the attention of central bankers in the U.S., Europe and China - and has kicked off plenty of debate about whether he is right....

U.S. consumer prices rose at an annual rate of 7.5% in January, a 40-year-high, and data on Thursday are expected to show an increase in February. In the eurozone, inflation in February hit 5.8%, data published last week showed. The conflict in Ukraine is likely to drive inflation higher still as it pushes up global energy, commodity and food prices....

Mr. Goodhart outlined his theory in a book, 'The Great Demographic Reversal,' co-written with London-based economist Manoj Pradhan and published in September 2020.

He argued that the low inflation since the 1990s wasn't so much the result of astute central-bank policies, but rather the addition of hundreds of millions of inexpensive Chinese and Eastern European workers to the globalized economy, a demographic dividend that pushed down wages and the prices of products they exported to rich countries. Together with new female workers and the large baby-boomer generation, the labor force supplying advanced economies more than doubled between 1991 and 2018.

Now, he said, the working-age population has started shrinking across advanced economies for the first time since World War II, and birthrates have declined as well."

There is no climate crisis -Spectator World

"'No climate crisis' is, of course, not the spin the Intergovernmental Panel on Climate Change (IPCC) is putting on its new 3,676-page report released last month. 'The choices we make in the next decade will determine our future,' the IPCC says. 'Any further delay in concerted global action will miss a brief and rapidly closing window to secure a liveable future.'

It could hardly be plainer. The report is political advocacy barely masquerading as science....

The solution to climate change, the IPCC claims, is renewable energy, circular economies, healthy diets, universal health coverage and social protection. The only surprise is that the IPCC didn't include abolishing the Second Amendment in its climate catechism....

Small islands were the poster child of net zero as they claimed they risked sinking beneath the waves thanks to rising sea levels. They successfully lobbied for the adoption of the target in the Paris climate agreement to limit the increase in global temperature to 1.5 degrees Celsius above pre-industrial levels.

The IPCC therefore includes them in a list of global hotspots of high human vulnerability, asserting that their vulnerability will increase in the context of sea level rise. Yet only four years ago, the IPCC in its 1.5 degree Celsius special report stated that 'observations, models and other evidence' indicate that unconstrained Pacific atolls have kept pace with sea level rises and that there had been 'little reduction in size or net gain in land.'

Roger Pielke Jr. of the department of environmental studies at the University of Colorado Boulder notes that the IPCC lifts projections of future climate damages from studies that eliminate the choice of adapting to climate change, a practice Pielke calls 'misleading at best.' Yet buried in the report is a study showing that adequate flood protection, i.e. adaptation, could avoid 95 percent of projected flood damages....

If there were a genuine climate crisis, the IPCC wouldn't feel impelled to surreptitiously turn the dial to claim that there is one. The data wouldn't need the IPCC's helping hand by making nonsensical assumptions such as ignoring the possibility of future adaptation to climate change or using the widely discredited RCP 8.5 climate scenario, which even the Grantham Institute's Bob Ward calls 'extreme.' The fact that it does so constitutes strong evidence for the non-existence of a climate crisis."

Be positive, stay young: The secret to healthy aging may be optimism -Study Finds

"Looking on the bright side of life may actually help you age more gracefully, a new study says. Researchers from Boston University School of Medicine looked at how optimism impacts a person's health and found that staying positive helps people interpret stressful situations differently.

In a study of older men, the team reveals that being more or less optimistic did not make a difference in how the participants reacted to stressors but having more optimism did lead to more emotional well-being. More optimistic men also experienced fewer stressful situations and interpreted fewer events as being stressful to them personally.

'This study tests one possible explanation, assessing if more optimistic people handle daily stress more constructively and therefore enjoy better emotional well-being,' says corresponding author Lewina Lee, PhD, a clinical psychologist at the National Center for Posttraumatic Stress Disorder at the VA Boston Healthcare System, in a university release.

Results show more optimistic men reported fewer instances of being in a bad mood and had fewer stressors during the experiment.

Previous research shows that stress can have a severe impact on a person's health. Studies connect stress to higher levels of inflammation, which in turn can contribute to aging more rapidly and even the onset of diseases like dementia.

Study authors say there's evidence that optimism can help promote good health and a longer lifespan. However, few studies have actually looked at how keeping a positive mindset accomplishes this.

'Stress, on the other hand, is known to have a negative impact on our health. By looking at whether optimistic people handle day-to-day stressors differently, our findings add to knowledge about how optimism may promote good health as people age,' says Lee."

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3.10.22 - Sanctions Against Russia = 2022 Lockdown

Gold last traded at $1,996 an ounce. Silver at $25.85 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday as the U.S. inflation index hit a fresh 40-year high of 7.9%. U.S. stocks fell as peace talks between Ukraine and Russia showed little progress on key issues.

Senators look to lock down Russia's gold reserves -Axios

"A bipartisan group of senators is introducing a bill to prevent Russia from liquidating gold to withstand biting sanctions.

Why it matters: The sanctions against Russia have frozen the country's foreign exchange assets, but its stockpile of gold could be a lifeline. A measure to close the loophole is yet another indication Congress is looking to get ahead of the Biden administration on punitive measures against Russia....

It would apply secondary sanctions to any American entities knowingly transacting with or transporting gold from Russia's central bank holdings, or selling gold physically or electronically in Russia. The goal is to include the legislation in the omnibus spending bill that lawmakers hope to pass by Friday....

Russia holds around $132 billion in gold reserves. Beginning in 2014 - when the U.S. slapped new sanctions on Russia for its invasion of Crimea - Russia upped the pace of its gold purchases....

'Russia's massive gold supply is one of the few remaining assets that Putin can use to keep his country's economy from falling even further,' Sen. Angus King (I-Maine) said in a statement. 'By sanctioning these reserves, we can further isolate Russia from the world's economy and increase the difficulty of Putin's increasingly-costly military campaign.'"

dollar The "R" Word -Bonner Private Research

"Argentines have been living with inflation for a long time. It was 2,000% in 1990. It's 50% now. If they don't know how to survive it, no one does. Can we learn from them? We might have to....

A nearby news item shows regular gasoline at $6.95 a gallon. And the price of oil itself rose to $139 a barrel. Both experience and "�the experts' say a recession is stalking us.

Meanwhile, Congress is working on a bill to exclude Russian oil from the US market. Thus is the US attacking the three key elements of modern prosperity all at once - energy, money, and trust. It cuts off supplies of oil; it undermines the dollar with sanctions on honest savers and investors; and inflation and sanctions erode trust in the whole US-dominated financial system.

Where this leads is anybody's guess. But somewhere, faintly in the distance, we hear a tango beat.

'You look around,' continued our man in Buenos Aires, 'you see people living fairly normally. You see people with new cars - although there aren't many of them. You see houses being built. You see people out and about, having a nice dinner or shopping.

'If you had 50% inflation in the US, it would be another story. It would be a hellacious disaster. You'd have a revolution. (Our contact used to live in Miami.) People depend on credit. They have mortgages to refinance. They have debts to pay. The system depends on credit. Everything is sold on credit. If interest rates go up, the whole economy collapses.'

'That doesn't happen here, basically because the economy already collapsed long ago. People don't have mortgages. They don't have debt. Nobody cares about interest rates, because they can't borrow money anyway.

'As soon as people get money, they spend it.'....

Buenos Aires is a treat. Lively. Sophisticated. Cheap. The food is good. The weather, this time of year, is delightful. The cafes and restaurants are busy. People seem to live well.

But there is more to the story. Here, the economy only works because people have learned to cheat.

'The nice thing about living here,' continued our friend, 'is that the government does the dumbest things. But they are intentionally incompetent. The rules and regulations are never well enforced. There are always ways around them....

Of course, in the poor neighborhoods it's another story. There, people are trapped...Their incomes, sometimes pitifully small, come from normal jobs and are paid in pesos. Government handouts, too, are in pesos - and lose value rapidly.

'It really creates two separate economies,' our friend concluded. 'One of them is miserable and desperate. The other enjoys a very high standard of living.'"

Biden to Order Study of Cryptocurrency Risk, Creation of U.S. Digital Currency -WSJ

"President Biden will sign an executive order on Wednesday instructing agencies across the federal government to study the possible risks presented by the explosion in popularity of cryptocurrencies and consider the creation of a U.S. digital currency.

The executive order will urge federal regulators to review the risks a roughly $1.75 trillion crypto market presents to consumers, investors and the broader economy. Federal agencies will have several months to prepare a report with their findings, which will then inform any new regulatory actions the White House takes, a senior administration official said.

About 16% of adult Americans, or roughly 40 million people, have invested in, traded or used cryptocurrencies, according to a White House fact sheet. That growing prevalence of digital assets, which include volatile cryptocurrencies like bitcoin and so-called stablecoins pegged to assets like the U.S. dollar, has pushed the Biden administration to centralize its work on the topic. White House officials have been working with the crypto industry and experts for several months to prepare the executive order....

Under the executive order, the Biden administration will scrutinize how cryptocurrencies may undercut U.S. sanctions and efforts to fight money laundering, a senior administration official said. Those concerns have been heightened as the U.S. has leveled sanctions on Russia in response to its invasion of Ukraine. The administration will also study the impact that energy-intensive crypto mining has on the climate.

The Biden administration will also formally consider the creation of a possible U.S. digital currency, a cryptocurrency backed by the Federal Reserve, according to a White House fact sheet. The Federal Reserve is already evaluating the possibility of a digital currency, which some other countries, including China, have already adopted. A person familiar with the matter said the executive order will ask the Justice Department to study whether Congress would need to authorize the creation of a digital currency."

Sanctions against Russia Are the Lockdowns of 2022 -Mises

"Russia's invasion of Ukraine is nearing its second week. Vladimir Putin's military continues its push west, with clear attempts to encircle Kyiv. To date, thankfully, America and its North Atlantic Treaty Organization (NATO) allies have held off pleas from President Volodymyr Zelenskyy to enforce a no-fly zone, which would risk the eruption of a new hot world war. So instead, along with supplying arms, intel, and-potentially-runways and planes to Ukraine, the focus of the West has been economic warfare.

What is not clear is whether the West is prepared to deal with the actual consequences of this approach.

It seems that with every passing day, America and its allies find tools to escalate financial pressure on Putin. What began with targeted sanctions on the Russian leaders and oligarchs has expanded to cutting off Russian banks from SWIFT, broad attacks on Russian industries, and now complete bans on Russian oil and other exports by some - though not all - NATO countries. Moreover, Western corporations have reinforced these policies by indiscriminately banning Russian customers from various services.

This coordinate blanket canceling of Russia is not a tool crafted by the necessity of the situation, but rather a new application of the form of warfare that the West has become the most comfortable with. America's weaponization of the dollar-backed financial system began with the war on terror, utilized against rogue state actors like North Korea, Iran, and Venezuela (the latter two Washington is now seeking assistance with for oil) and is increasingly used against domestic enemies.

Unfortunately for the West, Vladimir Putin is a far shrewder adversary than Kim Jong Un or Nick Fuentes. Russia is not only a major energy provider to global-and, in particular, European-markets but is a globally important exporter of wheat, fertilizer, metals, and other strategically important resources. To add to these concerns, the West has become increasingly frustrated by the refusal of other global powers-including India, Brazil, Mexico, and China-to follow their lead....

In America, gas has already hit all-time highs, while market signals indicate that the cost of food, energy, and other vital resources is soon to follow. In response, the Biden White House and its allies have lectured Americans on the virtues of electric vehicles and other forms of 'green energy.' Not even Tesla's Elon Musk believes this line of logic holds up.

Ultimately any attempts by Western governments to soothe the concerns of their citizens depend upon convincing them that the very same expert class that believed preconflict inflation was 'transitory' is intellectually equipped to handle this new conflict. It is uncertain how successful they will be....

What if Russia and China are serious about undermining America, the dollar, and its subservient allies? What if Putin recognizes that the economy of the debt-saturated West is far weaker than our policy makers believe it is? Is there any reason for Americans to question the judgment of the decision-makers at the Fed or Treasury?

As Austrian economists have long pointed out, it is no coincidence that the century of total war rose at the same time as the era of central banking."

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3.9.22 - Russian Bank Run: No Ordinary Panic

Gold last traded at $1,988 an ounce. Silver at $25.59 an ounce.

NEWS SUMMARY: Precious metal prices retreated Wednesday on profit-taking as the recent commodity rally cooled. U.S. stocks rebounded as prices of energy and agriculture products eased following weeks of catapulting higher amid the fighting in Ukraine.

Gold holds above $2015/oz ahead of the European open -Kitco

"Gold climbed just over 1% overnight to cement its position above $2000/oz. Silver also pushed higher by 1.36% to break $26/oz. In the rest of the commodities complex, copper pushed 3.14% higher and spot WTI also rose 2.09%....

Ukraine said that talks with Russia led to small positive developments but there was no ceasefire or truce.

U.K. media reports the EU plans to slash Russian gas imports by two-thirds in twelve months.

Japan bans oil refining equipment exports to Russia.

Venezuela's President Maduro says talks with the U.S. on oil were polite and constructive.

U.S. Senator Schumer says Biden is looking closely at banning imports of Russian oil...."�

Russian Banks Russian Bank Run Is No Ordinary Panic -City Journal

"The war in Ukraine and subsequent international sanctions have triggered a bank run in Russia. But this is no ordinary run-it may become a run on the central bank itself, one that holds important lessons for introducing central bank digital currencies.

Reports show Russians lining up at ATMs to withdraw their cash. For now, the run is largely driven by fears of withdrawal limits and the anticipation that credit cards and electronic means of payments will cease to function.

If that happens, cash at hand is the better alternative. For that scenario, central banks know what to do: provide solvent banks with plenty of liquidity against good collateral, as Walter Bagehot recommended.

But will that be all? As Western countries freeze the Russian central bank's reserves and limit the ability of banks to transact internationally, the exchange rate of the ruble has collapsed, falling by more than 40 percent. Prices for ordinary goods may begin to rise, perhaps dramatically so. If that happens, then rubles would no longer be a good store of value....

We have seen such runs before. The hyperinflations in Germany, Hungary, and, recently, Venezuela are stark reminders. Usually, hyperinflation is driven by a massive and ongoing money-supply expansion. But the collapse of a currency can happen without an expansion in money supply.

Fiat money, such as the ruble or the dollar, is intrinsically worthless: it is valuable only because people trust that others will accept it as a means of payment and that its value remains reasonably stable. Once that trust erodes, people will try to spend it quickly or refuse to accept it altogether.

What are the options for a central bank in that situation?...First, the central bank can watch the price level explode, throwing away its commitment to price stability. Second, the central bank, together with the banking system and the government, can ensure that plenty of goods are available, turning long-term investments into short-term supply and creating problems down the road.

Finally, the central bank can undermine the efficiency of the economy and intervene in the market mechanism: price controls and shopping restrictions come to mind, while investment restrictions at an earlier point could have prevented a central bank run altogether. It's a trilemma: avoiding all three is impossible, and raising interest rates will not work.

Runs on central banks can happen. The Russian example offers an important case study for how one might unfold."

Russia warns of $300 oil if ban goes ahead -CNBC

"Russia has threatened to close a major gas pipeline to Germany and warned of $300 oil prices if the West goes ahead with a ban on its energy exports.

'It is absolutely clear that a rejection of Russian oil would lead to catastrophic consequences for the global market,' Russian Deputy Prime Minister Alexander Novak said Monday in an address on state television.

'The surge in prices would be unpredictable. It would be $300 per barrel if not more.'

Novak also cited Germany's decision last month to halt the certification of the highly contentious Nord Stream 2 gas pipeline, saying: 'We have every right to take a matching decision and impose an embargo on gas pumping through the Nord Stream 1 gas pipeline.'

'So far, we are not taking such a decision,' Novak said. 'But European politicians with their statements and accusations against Russia push us towards that.'

His comments come with Russia's onslaught of Ukraine well into its second week, with the already dire humanitarian crisis expected to worsen as the Kremlin continues its invasion.

The U.N. has said 1.7 million refugees have left Ukraine since Russia's invasion of the country began on Feb. 24, describing it as "the fastest-growing refugee crisis in Europe since World War II."�

The U.S. has been considering whether to impose a ban on Russia's oil and gas exports as a way of punishing Moscow."

U.S. Retirement Funds, Heavy on Stocks, Brace for Losses -WSJ

"Volatile stock markets are eroding the retirement savings of America's teachers and firefighters after public pension systems ended last year with equity holdings at a 10-year high.

Public pension funds had a median 61% of their assets in stocks as of Dec. 31, up from 54% 10 years ago, according to Wilshire Trust Universe Comparison Service. Since then, the Russia-Ukraine War and expectations that the Federal Reserve will raise interest rates this month have battered equity prices, reducing those holdings by billions of dollars.

At the nation's largest pension fund, the California Public Employees' Retirement System, total reported holdings have fallen to $475 billion as of March 2 from $482 billion at the end of January. The S&P 500's total return was minus 2.71% during the same period. Roughly half of the California worker fund is in stocks.

The situation highlights public retirement funds' enduring dependence on the stock market and the potential impact on local government services and municipal-bond prices if losses continue. Smaller retirement systems tend to rely even more heavily on stocks than larger ones, which are more likely to seek returns from private-market assets like infrastructure and private equity....

A downturn could ultimately squeeze state and local budgets. That is because when pension-fund returns fall short, the workers and government employers that pay into them end up helping to make up the shortfall. Annual pension contributions are already a drag on the finances of some cities and states, leaving less money for operations and debt payments and leading to credit-rating downgrades.

Research firm Municipal Market Analytics views a sustained market correction as the biggest threat to state and local general-obligation-bond prices.

'State pensions often have an allocation to equities that is greater than the size of [the states'] annual budgets, so a correction in equity prices can ultimately have an outsize impact on the state,' said Municipal Market Analytics partner Matt Fabian.

States and cities cut services, laid off workers and rolled back benefits for new employees after the 2007-09 recession took a huge bite out of U.S. public-pension-fund holdings."

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3.8.22 - Ukraine Changes the Fed Picture

Gold last traded at $2,043 an ounce. Silver at $26.32 an ounce.

NEWS SUMMARY: Precious metal prices pushed higher Tuesday on safe-haven demand and a weaker dollar. U.S. stocks attempted to recover following the worst day since October 2020, as investors remained on edge about surging commodity prices and slowing economic growth.

Gold crosses $2,000 mark, palladium at record high on Ukraine crisis -CNBC

"Gold prices scaled the $2,000 level for the first time in 1-1/2 years, as investors rushed to the safety of the metal in the wake of an escalating Russia-Ukraine crisis, while supply disruption fears sent palladium to an all-time high on Monday....

'Gold will likely find some heavy traffic around the $2,000 level initially, but once it is cleared, assuming no change in the Ukraine situation, it will quickly move to the $2,100 region and on to new all-time highs,' said OANDA senior analyst Jeffrey Halley.

Fighting stopped about 200,000 people from evacuating the besieged Ukrainian city of Mariupol for a second day in a row on Sunday, as Russian President Vladimir Putin vowed to press ahead with his invasion unless Kyiv surrendered.

Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, rose to their highest since mid-March 2021 on Friday.

Spot gold may keep rising towards $2,065 per ounce, according to Reuters' technical analyst Wang Tao."

energy chart Stairway to Hell -Bonner Private Research

"Ugh, here's an ugly image...

As the author, Luca Paolini at Pictet Asset Management, notices, every 50% rally in the price of oil going back to (at least) 1970 has coincided with the beginning of a recession. Uh, oh...

Of course, correlation does not necessarily equal causation...In any complex economy, there are countless inputs that can send the system haywire. It's all part of the beauty, the allure, the mystique of what F.A. Hayek called 'spontaneous order.' It's also part of what makes studying the whole passing parade so interesting....

Many and varied are the reasons for recessions. (Although, we're guessing war doesn't help.) So too is the price of any one commodity - including oil - dependent on multiple factors....

The balance sheet of the world's largest central bank, the US Federal Reserve has skyrocketed.

And that stairway to heaven (or hell?)...is about to hit nine million million dollars, represents the total assets on that bulging out-of-balance sheet. Billions and billions of freshly inked dollars... chasing an increasingly strained supply of goods...

Call it another 'uh-oh' data point. Of course, the geopolitical backdrop is not helping matters, either...

And now we learn that state money, too, can be 'weaponized.' That is, under sanctions from foreign nations (like those the west has imposed on Russia), deposits in one sovereign country's central bank can be frozen, seized... 'canceled.'

What does this say about the safety and security of those trillions of dollars on central bank balance sheets the world over? Will banks have to choose between having their assets frozen by Beijing or DC? We've seen Canadian and Russian citizens lining up to extract their fiat units from ATMs... could there be a run on central banks, too? What then?

More to come...For now, it's Maximum Safety Mode, indeed."

Commodities: A Recession is Coming in 2022 -Howard Lindzon

"There are so many lessons in this current commodity surge.

I guess the first one is "�when oil goes negative, buy some.' I went back and checked what I did the day oil went negative in April 2020 and thank god I DID buy Exxon.

I wrote "�Oil"�We Got A Bleeder"�

I know LESS than nothing about oil and coal and commodities so I was happy to flip Exxon for a 30-40 percent gain in the following months and stopped following it.

Big. Mistake....

So here we are in March 2022 and while the massive money printing held off a recession in 2020, a recession is coming in 2022. I write this because there has never been a time when oil rose 50 percent and we did not get a recession."

The Fed's Next Move: Ukraine Changes the Picture -Charles Schwab

"There's an old Scottish saying that 'the best-laid plans of mice and men often go awry.' That phrase probably captures the thinking of many members of the Federal Reserve these days.

After months of laying the groundwork for a steady and substantial tightening in monetary policy over the next year, the Federal Reserve now faces a sudden change in the economic outlook. Six months ago, the focus was on the economy's strong rebound from the pandemic and tightening labor market. It seemed clear that the Fed would need to tighten policy quickly to bring down inflation.

Today, the picture is far more complicated. The outbreak of war in Ukraine and subsequent economic sanctions on Russia have caused a surge in commodity prices, due to the prospects of reduced supplies flowing to the markets. The result has seen inflation rise to its highest levels in over 40 years.

However, while these supply-side shocks are exacerbating already high inflation, they also can slow growth down the road. Moreover, this crisis is global in scale, and involves intense efforts to cut Russia's access to the global financial system, which could put stress on Europe's financial system. The unknown consequences of these factors make the actions of the U.S. central bank important to the international economy as well as the U.S. economy.

Given all these uncertainties, expectations about the path of Fed policy have swung wildly in the past few weeks. Two-year Treasury note yields, which largely reflect expectations about the path of the federal funds rate over the next few years, have traded in a huge 35-basis-point range since the outbreak of the Ukraine war....

Past price shocks have tended to produce two outcomes: higher inflation and slower growth. The U.S. economy has suffered through oil price shocks in the past - especially during the 1970s oil embargoes. The result was a period of 'stagflation' and recessions....

Surging energy costs can slow economic growth by acting on a tax on consumer incomes, reducing business investment, and eroding consumer confidence and spending. Estimates of the impact to gross domestic product (GDP) vary from a reduction of 0.2% to as much as 1.0% over the next 12 months."

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3.7.22 - Insane Gov't Spending Hurts Our Response to Ukraine

Gold last traded at $1,994 an ounce. Silver at $25.60 an ounce.

NEWS SUMMARY: Precious metal prices extended gains Monday as gold briefly exceeded $2,000 an ounce on widespread safe-haven buying. U.S. stocks fell for a fifth week as U.S. oil prices jumped over $120 a barrel amid the ongoing Russia-Ukraine war.

'Tremendous momentum' in gold price -Kitco

"There is strong momentum in the gold space as investors repositioned themselves going into another uncertain weekend with all eyes on Russia's intensified attack on Ukraine.

Gold gained more than $35 on Friday as Russian forces took control over Europe's biggest nuclear power plant in Ukraine in a very alarming assault.

'Unfortunately, there are no signs that you are going to see a de-escalation of the war in Ukraine any time soon. As we take a look at the impact that is having on the global economy, you'll see global growth concerns and inflationary pressures become dominant themes,' OANDA senior market analyst Edward Moya told Kitco News. 'That will likely lead to further safe-haven flows, and gold is going to shine.'

The macro picture is set up for gold to hit $2,000 an ounce as other commodities, including oil, palladium, nickel, wheat, and corn surge.

'The way things are looking, you have too many key commodities that are likely to continue to keep on rising - grains, metals, energy. We'll see elevated prices for the foreseeable future,' Moya said.

If commodity spikes have a lasting impact on inflation, central banks will be forced to hike rates more aggressively. But that doesn't mean that's bad for gold, Moya added. 'We could see the Fed becoming more aggressive in fighting inflation this summer. That uncertainty and that debate should be positive for gold and help gold rally to $2,000.'

One key metric to watch next week will be the latest U.S. consumer price index (CPI), which is scheduled to be released on Thursday.

'We could see $150 oil soon. Inflation will be much higher because of energy. Wait until you see the next CPI number. It is going to be above 8%,' Phoenix Futures and Options LLC president Kevin Grady told Kitco News. 'And if they were using the old metrics, annual inflation would be running at 12%-15%.'"

gold bars What Russia's invasion of Ukraine could mean for the US economic recovery -CNN

"Painfully high inflation has become the nation's number one economic problem, ignited by the pandemic, and set to get worse as Russia's invasion of Ukraine sends gasoline prices higher.

In his State of the Union address, President Biden proposed several steps to address the inflation problem, and the Federal Reserve is on high alert. But there is no immediate fix, as neither the President nor the Fed have the appropriate tools to prevent prices from rising higher.

Even worse: there is the growing threat that rising inflation will overwhelm the nation's strong economic recovery, resulting in a recession.

Inflation is as high as it has been in nearly 40 years. Because of the quickly rising prices, the typical American household, which makes less than $70,000 a year, needs to spend about $275 more a month, or $3,330 a year, to purchase the same goods and services they did last year, according to my own analysis.

Fanning the higher inflation is the pandemic, and the severe disruption it has caused to global supply chains and the workforce with the millions of people it has made sick and unable to work or fearful of going to work....

Russia's invasion of Ukraine complicates things further, ensuring the pain of inflation is set to get worse and last even longer. Global oil prices have risen dramatically since the invasion began to more than $110 per barrel....

If inflation expectations start to rise, then the Federal Reserve will likely feel compelled to raise interest rates more aggressively. The Fed knows that if inflation expectations increase, then this may ignite a so-called wage-price spiral."

Our Insane Government Spending Will Hurt Our Response to Ukraine -Reason

"The tragic events of the past week highlight the wisdom in maintaining a fiscally sound house, rather than a highly indebted government, before emergencies strike. Russia's barbaric invasion of Ukraine and the West's response will likely drive inflation even higher.

At home, expect calls for more government spending to help Ukrainians defend themselves and enable us Americans to better deal with supply chain disruptions. No matter what lawmakers decide, they'll be hindered in one way or another by past fiscal mistakes.

The United States finds itself with an inflation rate not seen since the early 1980s, thanks to too much COVID-19 relief spending and significant Federal Reserve accommodation piled onto already outsized deficits. As a result, government debt has now reached 100 percent of gross domestic product, and our fiscal year 2022 deficit will be $1.4 trillion.

If Congress' lack of interest in repaying any of it isn't worrisome enough, our high debt will make controlling inflation more difficult. Any increase in interest rates by the Fed will translate quickly into higher government interest payments and more deficit spending.

Even if we ignore the Fed's failure to see inflation coming, let's at least dispense with the trendy idea that debt can be increased without damaging the government's fiscal sustainability. Indeed, for years now, academics have floated several scenarios under which increasing the debt doesn't threaten our fiscal health....

Politically, of course, there's a lot of blame to go around. Politicians of all stripes long ago stopped caring about ballooning spending and growing indebtedness....

Yet even in a turbulent time, we must face the reality that the debt does matter. As the Hoover Institution's John Cochrane noted recently, big borrowing has to be followed by big consequences like big spending cuts, big tax increases, big inflation, or worse, a big debt crisis. It will also be followed by greater difficulty in responding to emergencies like the one in Ukraine."

Biden's Fossil-Fuel Blockade -WSJ

"Asked Thursday how high gasoline prices would need to rise before she'd support opening federal lands to oil-and-gas production, House Speaker Nancy Pelosi coolly replied: 'I'm not for drilling on public lands.' That's no doubt how Tesla -driving Democratic donors feel. But why is President Biden letting them steer his energy policy?

We reported last month that a federal judge slapped down the Biden Administration's inflated 'social cost' estimate for greenhouse gas emissions. The Administration's estimate captured all of the potential harm from carbon emissions globally over three centuries - yes, centuries. They threw in everything from property damage to health harms and war.

Biden officials were furious at the judge's decision because they planned to use this grossly inflated social cost estimate to support restrictions on fossil fuels - from stricter fuel-economy rules to methane emissions curbs for oil and gas production. Now they can't, so dozens of rule-makings are stalled.

But here's the kicker: The White House budget office says the injunction has caused it to halt permitting work on at least 18 wells on federal oil and gas leases in New Mexico and new lease sales. The White House is blaming the judge for what it was already doing or, rather, not doing....

Meantime, the left-leaning Center for American Progress this week urged the Administration to block ConocoPhillips's project in the National Petroleum Reserve-Alaska, which aims to produce 160,000 barrels of oil per day over 30 years. A federal judge last summer tossed the Trump environmental permit, and now Interior is revisiting the project.

We take the point that reducing regulatory barriers to development won't increase production or reduce energy prices overnight. But as one oilfield services executive recently told Bloomberg, 'Biden is signaling that his environmental goals trump energy security and consumer prices,' and 'that's not lost on public companies or the banks they rely on.'

Regulatory uncertainty and political hostility to fossil fuels discourage long-term investments, which are needed to increase supply and keep energy prices in check."

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3.4.22 - Gold's on a Tear. Will Silver Catch Up?

Gold last traded at $1,961 an ounce. Silver at $25.65 an ounce.

NEWS SUMMARY: Precious metal prices extended gains Friday on safe-haven buying amid rising uncertainty. U.S. stocks headed for their 4th down week as the Ukraine war overshadowed an upbeat jobs report.

Gold Is on a Tear. Is Silver About to Catch Up? -Barrons

"Gold and silver often trade in sync. And after lagging gold for the past eight months, silver appears to be trying to play catch-up. Will it be successful?

For the past 18 months, spot silver has traded between $22-$30 an ounce. It has finally progressed from a 'declining phase' to a period of 'base-building.' This is where the price of a security trades within a well-defined narrow range after being dragged lower for months....

What is encouraging is that volume flows have surged more quickly than silver's price has. Volume flows are computed by adding the day's trading volume on days when silver closes up and subtracting the day's trading volume on days when it closes down. Because volume leads price, it should be only a matter of time before silver's price strengthens.

The weekly chart of the silver/gold ratio (silver divided by gold)...for the past 5 1/2 years has formed a rounding base. It is encouraging that in the latest pullback, the ratio held exactly at the 200-week moving average, which defines the long-term price trend. But before silver can outperform gold meaningfully, it must be able to overcome formidable resistance."

visible hand Book Review: Matthew Hennessey's 'Visible Hand' -RealClearMarkets

"Matthew Hennessey's very enjoyable and very real new addition to the economics discussion is 'Visible Hand: A Wealth of Notions on the Miracle of the Market'. While the Wall Street Journal's deputy op-ed editor has written a book about economics, he's clear in the opening sentence that 'I'm not an economist.' Amen to that! ....

Economists almost unanimously think economic growth causes inflation, even though growth is always and everywhere a consequence of investment that by its very name pushes prices down. Economists believe reductions in government spending (whereby Nancy Pelosi and Mitch McConnell have reduced spending power) actually shrink growth....

Hennessey's book explains economics through the rational (or irrational) individual in us all, and does so happily and properly free of charts, graphs, and any 'whiff of math'; the latter another factor in the author's own avoidance of a science that is anything but dismal for those who understand it. Hennessey obviously does.

And it begins with the first chapter. Hennessey is so very correct in beginning a discussion of economics with substantial time spent on another non-economist: Adam Smith....As Hennessey puts it, 'Adam Smith didn't invent free market any more than Thomas Jefferson invented representative democracy.' In truth, Smith 'illuminated the darkness.' Smith 'took the world as it was...He 'wrote the plain truth about how humans live, work, play, and interact with each other.' ....

Visible Hand reads at times like Hennessey doesn't want to offend the credentialed. That's too bad simply because Hennessey's math, chart and equation-free explanations of choice well exceed how the credentialed explain economics. Hennessey's presumed deference to snooty economists caused him to write things that at times didn't sound like him....

My favorite passage of all was from Chapter Three on 'Motivations.' In writing about restaurants, it's plain from his parents' bar/restaurant that Hennessey knows well of what he speaks on the matter. He writes that, 'A restaurant that buys too much fresh produce and hamburger meat runs the risk of getting stuck with a bunch of spoiled food in its refrigerators if for some reason nobody shows up on Saturday night.'

He goes on to write that restaurants 'live on a knife-edge much of the time' given the uncertainty of too much or too little inventory. It's obviously crucial to not overstock given the perishable nature of food, but 'what if instead of an empty restaurant, a bus pulls up Saturday night filled with four hungry softball teams who just finished a daylong tournament.'

Readers get where this is going. Hennessey's discussion meant a great deal to me simply because it spoke loudly to the tragedy of the lockdowns, and a government with no skin in the game making pronouncements about a virus that made carrying inventory in restaurants (and businesses more broadly) very much of a risk factor....

Inflation is a brutal thing. Of that there's no doubt...All of which speaks to why Hennessey's book is so useful. While he reads at times as too deferential to economists, ultimately his common-sense descriptions of how things work discredit the musings of credentialed individuals long on IQ, but pathetically short in terms of common sense. Matthew Hennessey thinks about economics the right way, which is why readers will enjoy Visible Hand."

The Problem with Woke Capitalism -Quillette

"The last decade has seen Corporate Social Responsibility metastasize into what has become known, derisively, as 'woke capitalism' - a new vision of companies as agents of radical social change. The outward face of this shift has been a torrent of adverts and products laced with political messages. Ben and Jerry's, for example, marketed anti-Trump ice-cream, and Marks and Spencer added guacamole to their BLT sandwiches to mark LGBT Pride in 2019....

The business community's most senior leaders now endorse a vision of stakeholder capitalism in which a company's directors should promote their own nebulous conception of the public good before they consider the interests of shareholders.

Figures like the World Economic Forum chairman Klaus Schwab, BlackRock's Larry Fink, or Marty Lipton, founding partner of Wall Street's most profitable law firm, have assumed the mantle of crypto-politician, absent the accountability of a real public servant. Asset managers like Fink, who is entrusted with $10 trillion of holdings, are willing to use their influence across the market to force smaller companies to conform with their vision of social justice by refusing to invest in them or provide financial services.

Investment banks are getting in on the act too, with Goldman Sachs announcing last year that it would not take companies public unless they hit board diversity targets. Like all prevailing corporate trends, this militant progressivism has garnered an authenticating acronym: ESG (Environmental, Social, and Governance considerations). A cursory Google search will confirm its ubiquity.

In the last five years, there has been a striking change in the perception of ESG from a burden to a benefit. No longer the valiant sacrifice required of a CEO, activism and social engineering are now represented as the means to acquire a competitive edge. Central to this change is the concept of the 'diversity dividend' - the supposed financial benefit derived from a workforce that represents different racial, sexual, and gender minorities in predetermined ratios.

Though this idea has proliferated widely, there have been relatively few attempts to substantiate it....

The diversity dividend inadvertently demonstrates the presence of a new form of regulatory capture which I call 'ESG capture.' By this, I mean the creation of capital burdens and other barriers to entry which undermine smaller players in the market and embed the advantages of incumbents. This phenomenon goes some way towards explaining why woke capitalism has become a 'top down' trend, projecting outwards from the largest and most powerful corporations on the planet. One of the great dangers of ESG capture, then, is that it assists the formation of oligopolies....

ESG capture is actually just accelerating the shift from a liberal market economy to a species of crony capitalism in which oligopolies prevail. The gap between small and large companies has been expanding for decades and has reached new extremes during the pandemic. Like many dangerous ideas, the diversity dividend is seductive. It marries the profit motive with a desire for ethical achievement, creating a righteous fervor among its adherents...To dismiss their corruption as mere 'woke-washing' is wrongheaded and dangerous."

Biden's building bust: Inflation, foolish priorities will zap infrastructure investments -New York Post

"President Joe Biden's only legislative accomplishment is the Infrastructure Investment and Jobs Act, signed about 100 days ago. The $1.2 trillion law is supposed to 'rebuild the backbone of this nation', as Biden said.

But a trillion-and-change dollars doesn't buy as much back surgery as it used to. Thanks to runaway inflation, we'll have to squint to see anything 'transformative.'

The law was always going to be less 'historic' than the president billed it.

No matter who is president, the country spends tens of billions of dollars every year on roads, bridges, flood protection, transit and the like. In December 2015, President Barack Obama signed into law a $305 billion, five-year plan, meaning $61 billion a year. Spread over 50 states, it (mostly) kept the bridges from falling down....

Thanks to our current 7.5% inflation rate, the highest in 40 years, you have to spent $107.50 to buy what a dollar bought just last January.

So compared with what $55 billion a year would have bought, in new roads and bridges in 2015, we're down to $46 billion a year in new spending, or a 75% increase over Obama-era levels.

But inflation in the building industry is running even higher. As The Wall Street Journal reported last week, construction inflation is up 13% from a year ago. Steel, cement, fuel - the price of everything and everyone is up.

The West's failure to deter Russia from declaring war on Ukraine won't help these figures.

If the Federal Reserve can't rein in inflation with higher interest rates, these numbers compound quickly. Four years of 7.5% inflation shaves 30% off the value of the infrastructure bill. Four years at 13% inflation shaves more than half off....

Rather than fixate on a trillion dollars, the White House and congressional Democrats should have decided what infrastructure is important. Instead, they're obsessed with electric cars, to show how green they are.

The private sector has a prayer of keeping costs down in a high-inflation environment. The government, by contrast, wants to keep costs up. The infrastructure law has no provisions for making the inefficient and opaque construction industry - the part of it that depends on government contracts, at least - more productive.

We haven't begun to see what inflation-fueled wage hikes, as opposed to increases in the price of materials, will do to building costs. Half of construction-project budgets are labor, and construction workers will be asking for big raises.

We'll spend more on infrastructure. But we might not get much more infrastructure."

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3.3.22 - Gold Climbs on Global Growth Concerns

Gold last traded at $1,934 an ounce. Silver at $25.16 an ounce.

NEWS SUMMARY: Precious metal prices steadied Thursday despite a firmer dollar. U.S. stocks slid as investors monitored conflict.

Gold Climbs as Sanctions Raise Concern Over Global Growth -Bloomberg/Yahoo Finance

"Gold extended gains as investors weighed mounting risks to global growth from sanctions on Russia in the wake of its invasion of Ukraine.

Treasuries climbed, and traders are abandoning bets on a half-point Federal Reserve hike this month amid concern that an escalation of war will weigh on the economy. U.S. equities fell while the dollar advanced....

Bullion remains 'largely supported amid haven flows due to the Ukraine situation,' said Fawad Razaqzada, market analyst at ThinkMarkets.

The metal also got additional support from falling bond yields, which are further weighing on real yields with inflation continuing to soar. Investors are reducing their expectations about aggressive tightening from central banks, according to Razaqzada.

Bullion ETF holdings registered the biggest daily inflow in three weeks on Monday, according to Bloomberg data.

'Gold ETF inflows is a clear sign generalist investors are sourcing war hedges and safe havens,' said Nicky Shiels, head of metals strategy at MKS PAMP SA."

money The weaponization of finance threatens the future of the dollar standard -TheHill

"Powerful countries that bully weaker ones and target non-combatants are bound to invite a strong response. In the context of the ongoing war in Ukraine, any direct Western military action can essentially be ruled out. (The Cold War concept of Mutual Assured Destruction (MAD) is still in play if it involves a direct conflict with Russia.) This has led many to call for wide-ranging financial sanctions and restrictions to be imposed on Russia.

The decision to remove several Russian banks from the SWIFT financial messaging system and sanction the country's central bank has been popular among the general public but has raised concerns on Wall Street.

Further sanctions on Russian commodity exports might roil the global market and further fuel the inflationary dynamics that have caused food and energy prices to skyrocket in recent months. Potentially destabilizing consequences for the emerging and developing world cannot be ruled out.

Given the heated global political environment, it is necessary to inject a note of caution into ongoing debates centered on the weaponization of dollar-based global finance.

If we take a step back and calmly evaluate the potential long-term strategic and economic threats facing the U.S., one in particular stands out. Ever since the U.S. dollar replaced the UK's pound sterling as the global reserve currency, America has come to depend on its "exorbitant privilege"� to a considerable degree.

The dollar's pre-eminent status as the world's reserve currency ensures that there is a strong and persistent demand for dollar-denominated assets worldwide. It also enables the U.S. to run persistent trade and current account deficits.

Furthermore, the desire among foreign central banks and private parties to hold U.S. Treasuries is to a large extent dependent on the dollar's critical role in the international financial system. It has also allowed U.S. policymakers to pursue profligate fiscal policies for decades without having to face significant market discipline....

China has been open about its long-run desire to supplant the U.S. dollar-centric post-WWII global monetary order. Given recent geopolitical developments, the renminbi internationalization agenda will likely regain momentum.

China's push to establish a digital yuan and create an alternate payments system is part of the plan. The massive Belt-and-Road Initiative (BRI) will also aid China in its attempts to broaden international acceptance and usage of its currency. Back in 2020, given already rising geopolitical tensions, China and Russia agreed to ditch the U.S. dollar for bilateral trade settlements....

Given the emergence of the China-Russia alliance, and, considering China's continuing rise as an economic and military power, we cannot underestimate the future risk to the U.S. dollar's global status. Strengthening U.S. alliances with emerging powers (like India and Brazil) and establishing closer ties with the African continent will be essential for the West as we enter a new era of geopolitical competition."

'The damage is done': Russians face economic point of no return -The Guardian

"From shopping malls to corporate boardrooms, Russians are trying to find their footing in what the Kremlin described as the 'altered economic reality' that the country was now facing following sanctions on Russia's Central Bank and other key financial institutions. There were signs that something extraordinary was taking place: the Moscow Exchange, Russia's largest stock market, has halted trading until 5 March.

With its reserves frozen, the Central Bank announced it would more than double its main interest rates to 20%, the highest this century, and force major exporting companies, including large energy producers like Gazprom and Rosneft, to sell 80% of their foreign currency revenues, effectively buying roubles to prop up the currency rate.

But that did little to calm the frayed nerves at the Metropolis Mall in Moscow, where there were signs that Russians were rushing to turn their cash into consumer goods before prices leapt up. At an M.Video, a popular electronics store, one employee said that rouble prices for iPhones were 'the same for now' but that 'they could change any minute.' 'I'd buy now,' he said.

If there was shock on the streets, then the mood among the business community was even more dour. Several owners of mid-sized companies said that the invasion and subsequent isolation of Russia had made their businesses unprofitable overnight....

There was a sense that this crisis was passing the point of no return, as Russian bombers began flying over Ukraine and rocket artillery began firing on populated districts of Kharkiv, a city of more than one million people.

Even top Russian business people, including the powerful oligarchs, appeared to be unsettled by the instability ushered in by the invasion, as well as the extraordinary measures being taken to prop up the rouble."

Founder of Crypto Trading Platform BitConnect Indicted for $2 Billion 'Global Ponzi Scheme' -Nextgov

"The Department of Justice charged Satish Kumbhani with conspiracy to commit fraud and misleading investors in the latest crypto crackdown.

A federal grand jury indicted the founder of a cryptocurrency investment and trading platform on charges related to fraud and creating a 'global Ponzi scheme.'

36-year-old Indian national Satish Kumbhani is the founder of BitConnect, an online trading platform for investors to exchange virtual currencies. Kumbhani allegedly misled investors about BitConnect's lending operations, which were said to have used proprietary technology that gave crypto investors large returns on market transactions.

Officials at the Department of Justice said that BitConnect paid initial investors with money made from later investors and lied about the worth of the platform's own cryptocurrency, BitConnect Coin. Kumbhani, along with other co-conspirators, is also charged with evading U.S. financial regulations.

'This indictment alleges a massive cryptocurrency scheme that defrauded investors of more than $2 billion,' said U.S. Attorney Randy Grossman for the Southern District of California. 'The U.S. Attorney's Office and our law enforcement partners are committed to pursuing justice for victims of cryptocurrency fraud.'

The Department of Justice is cracking down on cryptocurrency-related fraud and other financial crimes. Earlier in February, government officials arrested two New Yorkers and charged them with money laundering related to the 2016 Bitfinex hack. This was the largest seizure of cryptocurrency in U.S. history, with officials confiscating over $3.6 billion worth of crypto at the time of the seizure.

'As cryptocurrency gains popularity and attracts investors worldwide, alleged fraudsters like Kumbhani are utilizing increasingly complex schemes to defraud investors, oftentimes stealing millions of dollars,' said Special Agent in Charge Ryan L. Korner....

Facing up to 70 years in prison, Kumbhani is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodity price manipulation, operation of an unlicensed money transmitting business and conspiracy to commit international money laundering."

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3.2.22 - Gold Prices Jump on Uncertainty

Gold last traded at $1,924 an ounce. Silver at $25.24 an ounce.

NEWS SUMMARY: Precious metal prices eased slightly from 17-month highs Wednesday on mild profit-taking and a flat dollar. U.S. stocks attempted to rebound as oil prices surged amid the intensifying conflict between Russia and Ukraine.

Gold Prices Jump -WSJ

"Gold prices extended their recent march higher, with the precious metal adding 2.4% in New York to $1,945.80 an ounce.

The rise comes after the metal closed February with its largest one-month gain since May 2021.

Gold is seen as a stable investment in times of uncertainty. However, with the Federal Reserve on course to raise interest rates, its popularity as a safety play may wane, as unlike Treasurys, it doesn't pay interest.

The upward swing also appeared to be benefiting the share prices of some producers. Barrick Gold Corp. gained 1% in premarket trading, and Newmont Corp. added 1%."

the fed The Federal Reserve is in a bad spot -Briefing

"Russia's invasion of Ukraine this week made at least one thing clear: the Federal Reserve doesn't have any live ammunition to fire at malevolent economic forces.

Specifically, the Fed doesn't have any rate-cut bullets in the chamber. Nope. All the Fed can do is fire blanks in the event there is a big economic shock.

The market knows this, which is why it's ironic that the market thinks the Fed could shoot itself in the foot, and kill the economy in the process, by raising rates too aggressively.

Fortunately for the Fed, the Russia-Ukraine situation hasn't blown up into anything worse. It's possible that it still could, but the way the stock market closed this week suggests it is comfortable with the idea that what happens in Ukraine stays in Ukraine.

To that end, the stock market staged a huge rally after President Biden announced a new round of harsher sanctions against Russia for its full-scale invasion of Ukraine. An initial round of sanctions was announced after President Putin recognized the separatist provinces of Donetsk and Luhansk in eastern Ukraine as independent and ordered Russian troops there to 'keep the peace.'

The initial sanctions, obviously, did nothing to deter President Putin from carrying on with his 'special military operation' to force the 'demilitarization and denazification' of Ukraine.

There was some fear in the market that the full-scale invasion of Ukraine was going to become a really bad problem for the global economy....

The Fed needs to hope it isn't faced with an exogenous shock that destabilizes the financial system and/or the U.S. economy just as it hoped inflation pressures would prove to be transitory (ooh, sorry, bad connection there).

It would certainly respond to such a shock. That's a given. What isn't a given is how the market will respond to the Fed's response....

The Fed is now taking aim at putting some of those rate-cut bullets back in the chamber. It will raise the target range for the fed funds rate at the March meeting by at least 25 basis points, but if the Russia-Ukraine situation settles down, as the stock market is hopeful it will, the Fed should take a bigger shot with a 50-basis points increase."

Biden's State of the Union: Key Takeaways -WSJ

"In his first State of the Union address, President Biden stressed unity at home and abroad in responding to the Russian invasion of Ukraine, while also pledging to address inflation and declaring a new "moment"� in the pandemic. Here are some key takeaways from the speech:

Grappling with deep political divides throughout Washington and the nation, Mr. Biden asserted that the U.S. - and the world - is united against Russian President Vladimir Putin and his invasion of Ukraine, winning bipartisan ovations early in his address....

The speech, originally seen as an opportunity to pump up support for his domestic agenda, provided Mr. Biden with his biggest stage yet to detail his efforts to work with allies to counter Mr. Putin. While he has drawn criticism from some Republicans for not issuing sanctions on Russia sooner, Mr. Biden has drawn support from both parties for taking a strong stance against Russian aggression....

Mr. Biden also pointed to steps the administration is taking to limit the amount of pain Americans are facing at the gas pump. Ahead of his address, the Biden administration said it would join with other major oil-consuming nations to release 60 million barrels of oil from their emergency stockpiles and a price surge created by the crisis in Ukraine....

Mr. Biden suggested that the nation was moving into a new phase of the pandemic, calling it 'a new moment in the fight against Covid-19.' Mr. Biden pledged to continue to work to vaccinate Americans and to take steps to be ready for future variants. He said the U.S. had the tools to keep schools and businesses open....

As Americans face rising prices for gas, goods and services, Mr. Biden, who has struggled with surging inflation, said he has a plan to lower costs....Mr. Biden argued that he would target prices by boosting domestic production of automobiles and semiconductors and rebuilding the nation's roads and bridges....

Iowa Gov. Kim Reynolds offered a harsh critique of Mr. Biden's presidency in the Republican response to the State of the Union address as she focused on key GOP messages for the midterm elections, including rising inflation.

"We are now one year into his presidency and instead of moving America forward, it feels like President Biden and his party have sent us back in time, to the late "�70s and early "�80s, when runaway inflation was hammering families, a violent crime wave was crashing our cities and the Soviet Army was trying to redraw the world map,"� Ms. Reynolds said. "

A New Phase With Covid -RealClearHealth

"As Russia's invasion of Ukraine rightly dominates the world's attention, it gives us a moment to step back and examine our two-year crisis with Covid-19 and signs that we are finally entering a new phase.

Nearly one million lives have been lost, with the numbers continuing to rise. Secondary casualties from terrible government policies will be with us for decades. Countless lives could have been saved with more targeted policies.

President Biden began the new year in frustration, 'Look, there is no federal solution,' he said, 'This gets solved at a state level.'

But that didn't stop powerful public health leaders and others in Washington from using the massive power of the federal government to impose top-down edicts, including vaccine mandates and oppressive restrictions from the Centers for Disease Control and elsewhere.

It is a fool's errand to try to contain the virus. Galen Institute Senior Fellow Doug Badger and others who closely follow government Covid policies have been saying for nearly two years that the best strategy is to focus on the most vulnerable and target resources where they can make the most difference....

Florida Gov. Ron DeSantis was an early leader in recognizing the importance of targeted approaches, including focused protection of the most vulnerable, keeping the economy open, and deploying mobile anti-viral treatment vans.

The Supreme Court also put the brakes on the Biden administration's burdensome and unconstitutional employer vaccine mandate, but unfortunately it allowed the mandate to stand for health care workers - leading to massive shortages of medical personnel as the country faced the height of the Omicron wave....

The Great Barrington Declaration got it right from the beginning, yet public health officials like Dr. Fauci actively worked to discredit these brave and foresightful physicians and other leaders....

Validating their predictions, life insurance companies are reporting soaring numbers of non-Covid deaths from people not getting treatments for cancer, heart attacks, strokes, and more....

It's time to move on. To enhance treatment and protect the vulnerable. "�To focus resources and attention on better preparedness and massively improved data collection. To drop mandates, masks, and closures."

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3.1.22 - Markets Hammered by Sanctions

Gold last traded at $1,942 an ounce. Silver at $25.44 an ounce.

NEWS SUMMARY: Precious metal prices extended gains Tuesday on safe-haven buying despite a firmer dollar. U.S. stocks fell sharply as bank stocks slid and oil prices jumped to 7-year high.

Gold set for best month since May as appeal surges on Ukraine crisis -CNBC

"Gold prices rose more than 1% on Monday and were set for their best monthly gain in nine, after Western countries slapped fresh sanctions on Russia for invading Ukraine and President Vladimir Putin put his country's nuclear deterrent on high alert.

The metal rose as much as 2.2% earlier in the session, to hover close to its September 2020 peak. It has gained about 6.3% this month.

Gold is often used as a hedge against inflation and as a means of preserving wealth during times of financial and political uncertainty.

The United States said Putin was escalating the war with 'dangerous rhetoric', amid signs that the biggest assault on a European state since World War Two was not producing rapid victories, but instead generating a far-reaching and concerted Western response.

In their strongest economic sanctions yet, the United States and Europe said on Saturday they would banish big Russian banks from the main global payments system SWIFT and announced other measures to limit Moscow's use of a $630 billion war chest....

Russia's central bank on Sunday said it would resume buying gold on the domestic market from Feb. 28, as it undertakes measures to try and ensure financial stability during Western sanctions against Moscow."

Ukraine Let's 'Intervene' Around the World With Loud Cheers for Capitalism -RealClearMarkets

"No problem in the history of the world has ever been solved without truth being the essential ingredient of the medicine that cures the ill. Rather than demonizing one side of history, it is important to understand what events influenced people to think and act the way they did....

Ukraine was part of the Russian Empire for 263 years. It was the land of the Cossacks. Before 1654, it was ruled by Poland. It asked to become a duchy of Russia and to be under the Tsar's protection. The 1654 Pereyaslev Treaty granted these wishes as well as a large degree of autonomy....

Ukraine was a cohesive cog in the Russian Empire until the 1917 Revolution when it broke off, but independence was short lived. Civil War broke out among its people. By 1922, Poland annexed half the country and the rest became part of the communist Soviet state. Before being swallowed up by the USSR, it had been known as the 'bread basket of Europe.'

It had a prosperous middle class, the kulaks, who grew grain and were proud owners of their own land. The Soviets (including Ukrainian Soviets) committed mass murder against the kulaks to get them off their land and if that wasn't enough, proceeded to starve millions of other Ukrainians by purposefully manufacturing a famine. Millions upon millions died....

Crimea belonged to Russia since 1783, but in 1954, Nikita Khrushchev ceded it to Ukraine. Shortly after the Berlin Wall fell, Ukraine became an independent country in 1991. Although there have been high hopes of Ukraine morphing into a western democracy, and there have been legitimate efforts by a significant percentage of the population to these ends, these efforts have not materialized. Much like Russia, it is run by corrupt oligarchs closely aligned with the political class....

Ukraine is rich in natural resources. Andrew McCarthy, Peter Schweizer and other investigative journalists have uncovered an astonishing level of influence peddling and corruption among the American political class, most notably the Biden family which has received enormous pay offs from corrupt Ukrainian companies and oligarchs....

Vladimir Putin has eyes. He knows of the Biden family's corrupt pay-to-play schemes in Ukraine and around the world, and likely knows a man who is willing to sell out his country for money has no inner core other than political survival. Afghanistan was a living color short film of Biden's incompetence.

Our frail and cognitively depleted president should have been deeply entrenched in the Russian/Ukraine controversy on his first day in office. But instead of being a serious person, he allowed himself and his government to be swept up by the infantile woke ideology of the Left....

Threatening sanctions is like threatening to hit Putin over the head with a feather. They don't work. They are symbolic and just another faux tool of the political class to make it appear that they are serious people. Putin invaded Ukraine because Biden is weak and his government is a clown show....

Our political elites believe that the United States can throw money at foreign governments to solve international problems. The solution for peace in places like Ukraine and Russia is always economic freedom. Capitalism and free markets are a win-win enterprise, a salve that heals old wounds. Our mission should always and unabashedly be to make troubled countries more like the United States.

Happiness and freedom always start with being 'secure in property' and enjoying the 'availability of capital.' This is what makes countries strong and gives them the resources to protect themselves."

Russia's Ruble, Financial Markets Are Hammered by Sanctions -WSJ

"Powerful Western sanctions rocked Russia's financial system and triggered a spiral in the ruble, drawing the central bank into an emergency doubling of interest rates.

The Russian ruble fell as low as 111 to the U.S. dollar from 83 on Friday, a drop of more than 20% and, if sustained, the biggest single-day fall on record. But trading was spotty, with local onshore markets frozen by the central bank and markets outside Russia reluctant to trade the currency.

The Bank of Russia took a raft of measures early Monday to protect Russia's banking system. It raised benchmark rates to 20% from 9.5% in an attempt to attract savings into banks, the largest of which were targeted by Western sanctions and will be all but cut off from international markets.

'The economic reality has changed significantly,' Kremlin spokesman Dmitry Peskov told reporters. 'Now it's important to take actions that minimize the consequences,' he said. 'We will do what is in our interests.'....

Investors increasingly priced the chance that Russia won't be able to, or won't be willing to pay off its foreign debts. The yield on a Russian dollar bond maturing in June 2027 jumped to more than 24% Monday from just under 10% Friday, according to Tradeweb....

The quick unraveling in value of the ruble will impose severe costs on the Russian economy, stoking already-high inflation and likely prompting further aggressive interest-rate increases from the Russian central bank."

'Unretirements' are picking up, and that's good for the economy -Axios

"'Unretirements' are coming back: The share of retirees returning to work is approaching levels not seen since before the pandemic.

Why it matters: The pandemic drove millions of Americans into early retirement. Getting some of those folks back to work should increase the labor supply at a time when companies are still struggling to hire.

'Continued strong demand for workers, and vaccinations, are allowing folks to step back into the workplace,' Nick Bunker, economics research director at jobs site Indeed, tells Axios.

By the numbers: 2.8% of the workers who said they were retired in January 2021 went back into the labor force by January 2022, according to data Bunker pulled from the census bureau's Current Population Survey.

These numbers started picking up in the second half of 2021 and continued their climb even through Omicron.

The big picture: Retirement isn't quite what you might think. Yes, there are folks who walk away from the workforce and disappear into a happy new life golfing or doing stuff in Florida - but there has always been a small percentage of people for whom retirement doesn't quite take, or who just need some cash.

'We often think of retirement as people get Social Security and go on their merry way, the vast majority of Americans need to supplement their income,' Kathy Jones, chief fixed income strategist at the Schwab Center for Financial Research, told Axios earlier this year."

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2.28.22 - Ukraine invasion = global stagflation

Gold last traded at $1,903 an ounce. Silver at $24.38 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on safe-haven buying as high anxiety gripped the markets. U.S. stocks retreated sharply as new global were placed on Russia.

Gold price dips from 18-month high. Good opportunity to buy? -Mint

"After appreciating to its 18-month high on Thursday, Multi Commodity Exchange or MCX gold rate witnessed sharp downside movement on Friday...Spot gold price ended at $1889 levels on Friday after scaling $1975 per ounce levels on Thursday.

According to commodity experts, market has discounted geopolitical tension caused by Russia-Ukraine war and now focus has shifted towards inflation and crude oil price movement. However, they maintained that one needs to keep an eye on Russia-Ukraine news as any military action from NATO can trigger sharp upside move in the yellow metal price....

Speaking on the reason for sharp fall in gold prices across global commodity markets; Anuj Gupta, Vice President at IIFL Securities said, 'Sharp rise in gold price was witnessed after Russian invasion of Ukraine and it seems that market has discounted the Ukraine-Russia war...NATO countries have announced financial support to Ukraine, that means they are in mood to extend moral support to Ukraine instead of military support.'

Echoing with Anuj Gupta's views; Amit Sajeja, Vice President - Research at Motilal Oswal said, 'Focus has now again shifted towards inflation and we need to remain vigilant on crude oil prices, US Fed meeting and expected interest rate hike by various global central banks. As inflation has touched alarming levels, Fed may continue its hawkish stance on interest rate hike. Even though, a 50 bps interest hike won't be enough to contain inflation, but I am expecting US Fed to increase interest rate in upcoming meeting in March.'"

chart Ukraine invasion could lead to global economy stagflation -Axios

"Russia's invasion of Ukraine creates a new wrench in the gears of the global economy that will simultaneously worsen inflation pressures and damage growth prospects. That makes it a stagflationary shock, essentially making things worse on all economic fronts at once.

Why it matters: So far in the pandemic recovery, major Western economies have had boomflation - strong growth with high inflation. What we may face now is the kind of inflation that could undermine the 'boom' part and worsen the 'flation' part.

State of play: The invasion sent commodity prices soaring and global stock markets and bond yields plunging Thursday (initially, at least), continuing moves that had been underway for weeks.

But financial market prices don't tell the full story. They remain highly volatile, as traders react to incoming headlines from the battlefield and from the policy decisions in Washington and European capitals.

Between the lines: What we do know is that there will be continued and escalating financial sanctions on Russia, damage to Ukraine's export industries, and high risk of further ripple effects from both physical and cyber-attacks.

All of those amount to a negative supply shock - meaning that the productive capacity of the world economy is simply lower than it was a few weeks ago.

Higher energy prices - already evident in commodity markets - directly feed into higher inflation, but the risks are more sprawling and hard-to-calculate than that implies.

The risk of disruption to Western European energy supplies and transportation networks, and the potential for cyber attacks contributes to the strain on global supply networks that have already been at their breaking point....

For the U.S., the direct impacts of the conflict are likely to push already-too-high inflation even higher. Those effects should on their own be short-lived, but the timing means they risk further entrenching Americans' rising inflation expectations.

Still, the Federal Reserve is likely to view the crisis as reason to move more gingerly in its monetary tightening campaign, as economic uncertainty grows, based on comments from several Fed officials this week."

Days of Easy Speculation Look Numbered in War-Shaken Stocks -BNN Bloomberg

"First, it was inflation. Then came shaky tech earnings. Now, Russia. Slowly, then all of a sudden, forces are gathering that threaten to wring out the excesses that defined the post-pandemic era in markets.

Within the span of a month, sentiment toward risky assets - which bordered on euphoric - has shifted dramatically. Speculative equities that went straight up for years have fallen back to earth, brought down by the prospect of higher interest rates.

Russia's invasion of Ukraine sparked fears of a global energy crisis and raised the specter of stagflation. It all adds up to a remarkable coda to a two-year run that saw financial assets of all kinds soar as the Federal Reserve's pandemic response flooded the system with money.

The result: Gambler spirits have cooled, the Nasdaq has been flirting with a bear market, and trillions of dollars are being erased from global stocks.

On the way up, Wall Street's old guard warned time and again that people would come to regret the prices they paid for everything from SPACs to meme stocks and crypto. With U.S. shares now down in five of the past eight weeks, they're feeling vindicated, as tightening monetary policy and war endanger what has been the most dramatic episode of speculation since the dot-com bubble. Wherever you look, markets appear vulnerable.

'Zombie companies, non-earning companies, the ones that were getting rewarded for seemingly no reason - they are the ones that are suffering the most, and regardless of how much they're suffering, they're not going to go back to those levels,' said Liz Young, head of investment strategy at SoFi....

For those who rode even relatively safe stocks skyward, there's a sense the safety net has been pulled. Surging commodities will worsen inflation, leaving central banks handcuffed, sworn to higher rates and in no mood for the spendthrift rescues of yesteryear. The U.S. economy may be growing, but investors have pushed many share prices so far beyond expected earnings that even a 20% plunge would fail to make them obvious bargains....

RBA's Suzuki sees the possibility of pain ahead for the poster-children of the pandemic rally: technology and growth stocks...'The elevated valuations embedded two unrealistic expectations. First, they assumed that the growth of the past several years was sustainable for the foreseeable future. And second, that all these new and innovative companies could turn out to be winners,' Suzuki said. 'We think there's still a bubble in parts of the equity market, and that bubble still has a lot of air in it.'"

Empire of Debt -Bonner Private Research

"As you know, the Fed is caught in an 'inflate or die' trap. It either lets inflation rip - with more money printing and ultra-low interest rates - or it crashes the economy with higher rates and QT (quantitative tightening).

Most people - about 90% of the population - gain nothing from inflation. But a few people - the 10% at the top - need more money printing to fund the US budget, Wall Street, the military and their own bubble-era gains. These people, the few, are those who control Congress"� and the Fed.

The Fed knows it ought to tighten up"� but it is desperate for an excuse not to. Here, at Markets Insider, is economist Mohamed El-Erian giving them one: 'Top economist Mohamed El-Erian said the Federal Reserve won't be able to tighten monetary policy as aggressively now that Russia has invaded Ukraine.'

Oh"� what a wicked world! Now America's misbegotten foreign policy is being teed up as a reason not to abandon its misbegotten monetary policy....Dr. Gideon Polya counted 70 different times the US invaded other nations since 1776 - or about once every 3 or 4 years. So, why get upset with Russia when it invades the Ukraine?

Public policy is always mush. Foreign policy is particularly mushy. How do we know what is going on in Afghanistan or the Ukraine? But in today's world, America's foreign policy depends to a large extent on its mush-headed monetary policy....

In our book (written with Addison Wiggin) 'The Empire of Debt,' we looked at how the US has never quite gotten the hang of running an empire. It's supposed to be a paying proposition. You invade, you steal, you enslave"� and you end up richer. That was the formula used by the Romans, successfully, for hundreds of years.

But the US invades"� and then turns its bombed-out target into a money pit - dumping in billions of dollars to support the local warlords"� propping up the economy"� and donating billions more to its own military/surveillance industries. Overseas, local hustlers and criminals get rich...Lobbyists get rich. Retired generals who join their boards of directors get rich. And even their shareholders get rich. But who pays for it?

Over time, the financing has shifted from taxes, to borrowing to inflation. The Empire of Debt loses money on every intervention"� and, while its list of failed wars grows longer and longer, its mountain of debt grows too....

Yes, dear reader, El-Erian may be right; US monetary policy may now be hostage to its foreign policy. But its foreign policy also depends on its monetary policy. Without the inflationary new money, the overseas misadventures may have to be curtailed. And without a "�crisis' - something going on somewhere that is none of our business and nobody really cares about - the Fed might have no excuse; it might have to cut back on inflation."

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2.25.22 - Gold Surges as Investors Seek Safe Havens

Gold last traded at $1,887 an ounce. Silver at $24.06 an ounce.

NEWS SUMMARY: Precious metal prices eased back Friday amid more hopeful geopolitical and economic news. U.S. stocks modestly rebounded as investors continued to assess the risks stemming from Russia's invasion of Ukraine.

Gold Prices Surge as Investors Seek Safe Havens -Barrons

"Gold prices surged Thursday as investors fled to the precious metal, typically seen as a safe haven asset, as conflict erupted in Eastern Europe.

Gold traded on the Nymex rose 1.8% to $1,945 per ounce, bringing year-to-date gains for gold to 6.2%. The metal is at its most valuable since the end of 2020.

Russia launched a full-scale invasion of Ukraine on Thursday. The Ukrainian capital Kyiv and cities across the country came under fire, with reports that hundreds of troops have already been killed in airstrikes. Markets have been on edge for weeks over the prospect of war in Europe, with volatility hitting stocks and lifting gold.

'What happened to 'digital' gold,' writes a Barron's subscriber, 'that was supposed to be a store of value, a hedge against inflation and hedge against geopolitical concerns? It looks like the Emperor has no clothes.'"

gold Gold Might Be the Asset of Yesteryears... Until the Market Looks Like It Does Now -InvestorPlace

"Every Intelligent Asset Allocation strategy must include a commitment to what I call Wealth Insurance. You need a 'policy' that protects your wealth during bear markets and other periods of turmoil.

And when it comes to surviving a bear market, no other 'insurance policy' is like gold.

Like most insurance policies, gold just 'sits there' most of the time. It doesn't do much of anything. This apparent shortcoming is actually its supreme virtue.

It just sits there"� until you need it to do something.

And the funny thing about gold is that it usually starts to 'do something' at the precise moment when most investors have given it up for dead....

Every generation of investors contains a bunch of folks who pooh-pooh gold - who scorn it as a 'barbarous relic' or an irrelevant bauble.

But history has not been kind to gold haters; the naysayers usually face a day of reckoning.

That's why it makes sense to buy gold as Wealth Insurance, and you don't have to buy a huge amount of gold to have an excellent insurance policy. You can allocate just 15% to 25% of your portfolio to gold.

Its place in your portfolio could add a big boost to your portfolio when you need it most."

Here Comes $7 Gas -Bonner Private Research

"Consumers hate rising prices. Investors hate falling prices. About 90% of the voters want prices to stay steady. But the 10% who will decide the issue want them to go up. Here, we reflect on the fine mess the Fed has gotten us into....

Breitbart: 'First gas, then heating and now rents. Runaway inflation is driving rents skywards across Joe Biden's America, delivering an average of a 20 percent increase in the U.S.'s biggest 50 cities over the past 12 months, a study details.'

What are the poor and the middle classes to do? Move to the further-out suburbs where rents are lower and drive their pick-up trucks into the city? Ah ha! Gotcha!

Fuel is going up too. Yahoo News: 'Here comes $7 gas"�Drivers best start bracing for another surge in gas prices amid the conflict between Russia and Ukraine and years of under-investment by the oil industry, warns one veteran energy strategist...oil prices could shoot higher to $150 a barrel, or in line to the 'super spike' highs from 2007.'....

The mortgage finance bubble popped in 2008-2009 and investors were shorn of about 40% of their stock market wealth. So far this year, the Dow has lost about 3,000 points. Another 10,000 points down, and the loss to investors will be around 40%.

That's what we aim to avoid.

But it is also just a beginning. The chilly winds of November prefigure the bitter blows of January. And in the stock market, the 'primary trend' doesn't stop until its work is done. Cycles continue. And we don't put off the undertaker just because we don't want to die. Stocks sell for more than 15 ounces of gold at top; at bottoms they sell for fewer than 5. That puts today's downside risk at about 72%.

By our reckoning, the primary trend began heading down 22 years ago. Through dumbbell wars, grifter bailouts, jackass handouts, an additional $62 trillion in debt"� lockdowns, shutdowns, put-downs"� Bush, Obama, Trump, Biden"� the primary trend has carried the Dow from 44 ounces of gold in 1999 to 18 today. Only 13 more to go!

So buckle up, buckaroo. Inflation"� deflation"� boom"�bust"� it's going to be a rough ride."

To hurt Russia, the West needs to punish itself -CNN

"Punishing Vladimir Putin and Russia for their aggression against Ukraine will cost us at home. Because to hit Russia where it really hurts, we'd have to hurt everyone.

Russia is a top oil and natural gas producer, so the world is addicted to its exports. In fact, the European Union depends on Russia for more than a third of its natural gas.

That's why Germany's move to cancel the certification of the Nord Stream 2 pipeline that would deliver Russian natural gas to Germany is so dramatic. Russia's ex-president seemed to gloat about the EU's dependence Tuesday, tweeting, 'Welcome to the brave new world where Europeans are very soon going to pay 2.000 euros for 1,000 cubic meters of natural gas!'

The most effective way to target Russia with sanctions is to cut off its supply of oil and natural gas to the West. But that could trigger even higher prices and more pain for consumers. Oil prices already are near 8-year-highs and serve as a major driver of inflation. It is already taking a toll politically and these decisions will be tough to enact for the West's leaders.

'Defending freedom will have costs for us as well and here at home,' President Biden said Tuesday. 'We need to be honest about that.' ....

In the meantime, Greg Valliere of AGF Investments is telling clients to expect Russian pushback with three main goals: 'Driving much of the West into a high-inflation economic crisis; dividing the US between isolationists and internationalists, and launching a cyberwarfare assault on the US and Kyiv, disrupting everything from ATMs to corporate boardrooms.'"

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2.24.22 - Stocks: Ukraine Isn't The Problem

Gold last traded at $1,904 an ounce. Silver at $24.23 an ounce.

NEWS SUMMARY: Precious metal prices surged to 20-month highs Thursday as Russia launched a full-scale invasion of Ukraine. U.S. stocks plunged as Russia attacked Ukraine, causing global energy prices to jump and sending investors fleeing to safe-havens.

The case for bitcoin as 'digital gold' is falling apart -CNBC

"A key investment case for bitcoin is deteriorating as geopolitical uncertainty and rising inflation hammer cryptocurrency prices.

The price of bitcoin fell to a two-week low Tuesday after Russian President Vladimir Putin ordered troops into Donetsk and Luhansk, two breakaway regions in eastern Ukraine, shortly after declaring them as independent.

Bitcoin is often referred to as 'digital gold' by its backers. The term refers to the idea that bitcoin can provide a store of value similar to gold - one that's uncorrelated with other financial markets, like stocks.

Bitcoin bulls also see the cryptocurrency as a 'safe haven' asset that can serve as a hedge against global economic uncertainty and increasing prices, which reduce the purchasing power of sovereign currencies like the U.S. dollar.

With inflation at historic highs, you'd expect this would be bitcoin's time to shine...Instead, the cryptocurrency has lost almost half of its value since reaching an all-time high of nearly $69,000 in November. That's led analysts to question whether its status as a form of "digital gold"� still rings true....

'The correlation between crypto and stocks has been high over the last few months on both inflation-related macro news and the Russia-Ukraine geopolitical situation,' Chris Dick, a quantitative trader at crypto market maker B2C2, told CNBC.

'This correlation shows that bitcoin is firmly behaving like a risk asset at the moment - not the safe haven it was touted to be a few years ago.'

In fact, gold has actually been outperforming bitcoin lately. Spot rates for the precious metal reached their highest levels since June 1 on Tuesday, climbing as high as $1,913.89 per troy ounce."

gold candlesticks Ukraine Conflict And Inflation Fears Could Push Gold Prices Above $2,000 -OilPrice.com

"Gold prices have rebounded this month, with the precious metal glittering in the gloom amid escalating tensions between Russia and the West.

The commodity has soared from $1,791 per ounce at the end of January to $1,904 earlier this week, with prices currently hovering around the $1,900 milestone.

The Kremlin's positioning of nearly 200,000 troops within close proximity to Ukraine's borders, followed by Putin's decision to recognize the independence of two breakaway rebel-held states has provided gold with fresh impetus from nervous investors seeking a safe haven.

After a slow start of the year for the commodity, the prospect of Western sanctions, energy shortages, and market chaos has motivated worried investors looking for somewhere to park their cash....

Rupert Rowling, a market analyst at Kinesis Money, said the next few days could be crucial in determining whether gold will tail off or close in on the $2,000 milestone - as it continues to face resistance at $1,900.

He said: 'The next few days will be key in determining whether fears over Ukraine can outweigh the encouraging data on the economic front as well as the likelihood of a series of interest rate hikes this year by central banks with the latter two factors applying the brakes to further gold gains.'

Craig Erlam, a senior markets analyst at OANDA, was more bullish about gold's performance, and expected that a worsening crisis in Ukraine would only be good news for gold.

He said: 'For so long, people have questioned gold's position as a safe haven and an inflation hedge but recent events have put that debate to bed. The yellow metal continues to trade around $1,900 and could go much further in the event of major escalation.'"

Market Pulse: Ukraine Isn't The Problem -Alhambra Investments

"Russia recognized the independence of Donetsk and Luhansk, two breakaway regions in eastern Ukraine that border Russia, and is apparently deploying troops in these regions. This is seen by the west as a precursor to a full-scale Russian invasion of Ukraine. Given that Russia has been playing this game of cat and mouse in southern Ukraine for at least 20 years...

There is no doubt that anytime troops are deployed - and both Ukraine and Russia have had troops in these areas for a long time - there is the potential for an incident that leads to more than either side bargained for but absent that, I don't see what Putin has to gain from a full-scale war.

I can't predict what will happen there, what Putin will do, and what the consequences would be. Neither, I might add, can anyone in the Biden administration or the Trump administration before them. I can't even say, with any conviction, how the Biden administration or our allies will react to this latest provocation....

The other big threat from a Russia/Ukraine war is, supposedly, a spike in crude oil prices. US sanctions would presumably include some ban on importing Russian oil but only about 11% of our energy imports come from Russia; 70% of Russia's oil exports go to the Netherlands, Germany, Belarus, and Poland. If we stop importing Russian oil and oil products, someone else will surely step in to buy those barrels....

The S&P 500 and the NASDAQ are down in February (3.5% and 5.9% respectively) and for most of that time Ukraine has dominated the geopolitical news but that doesn't mean the two are related. If stocks were selling off because of Ukraine, shouldn't European shares be taking the brunt of the selling? Surely Germany and the rest of Europe would be more directly affected by a Russian invasion of Ukraine than the US. And yet, European stocks have outperformed US stocks since the end of January and YTD....

There are plenty of reasons for US stocks to be selling off right now. Rising interest rates and the potential for a Fed policy error have been offered as reasons - excuses - for the selling but interest rates at current levels should not have much impact on valuations. Could the Fed hike rates so far they put us in a recession? Sure and that isn't without precedent but if they do, I would expect the yield curve to invert first and while it has flattened quite a bit from its peak last year, it isn't inverted....

The real reason for the selling, in my opinion, is that, if next year's estimates are to be believed, earnings growth peaked in the 4th quarter....

Earnings growth estimates for Q1, Q2, and calendar year are 5.2%, 4.7%, and 8.6% respectively. Revenue growth estimates are 10.3%, 8.6% and 8.1%. Those aren't bad numbers but they are challenging for a market trading at 19 times those earnings estimates. With valuations high, the price for missing earnings estimates has been very high."

With Russia's Invasion of Ukraine, a New Cold War Arrives -WSJ

"'Who in the Lord's name does Putin think gives him the right to declare new so-called countries?' President Biden asked Tuesday in announcing new sanctions against Russia. The answer is a complacent West, which has failed to impose serious costs despite more than a decade of Russian aggression.

At least the Administration overcame its initial reluctance to call Vladimir Putin's deployment of troops in Eastern Ukraine an 'invasion.' Mr. Biden on Tuesday called it 'the beginning of a Russian invasion,' and he responded with what he said was the beginning of greater sanctions.

The White House bet seems to be that sanctions restraint will cause Mr. Putin to settle for holding the regions his forces now occupy and forgoing an assault on Kyiv. But the Russian has never been deterred before by Western restraint, and he may see this as more weakness. Mr. Putin responds only to strength, and the West still isn't showing enough....

All Russian financial institutions deserve to be cut off from the outside world, and their dollar transactions restricted, until Russia withdraws from Ukrainian territory. The new sanctions on Russian elites look weak in targeting Putin cronies already on the sanctions list, though their sons are newly designated....

The most encouraging surprise came from Germany, which said it is halting the certification for Russia's Nord Stream 2 gas pipeline for now. Better late than never. But that suggests there's an opening to let the pipeline proceed if Mr. Putin doesn't swallow all of Ukraine. But putting too much hope in unreliable wind and solar energy is what has left Europe so vulnerable to Russian gas. It needs more nuclear power as France is pursuing, and more imported U.S. liquefied natural gas....

At this late date nothing may stop Mr. Putin's desire for conquest. But the mistake the West has made for more than a decade is to think the Russian autocrat can be a reasonable geopolitical partner. He doesn't want to be part of the current international order. He wants to blow it up. It's depressing to have to say this, but Cold War II is here."

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2.23.22 - Tech Insider Skewers the Metaverse

Gold last traded at $1,908 an ounce. Silver at $24.55 an ounce.

NEWS SUMMARY: Precious metal prices rose to fresh 8-month highs Wednesday on safe-haven buying. U.S. stocks traded lower with the S&P 500 falling further into correction territory amid escalating tensions between Russia and Ukraine.

Gold to make further gains if the Ukraine crisis escalates -Commerzbank/FX Street

"The Russia-Ukraine conflict has escalated over the past few hours. Subsequently, gold has climbed to around $1,915, the immediate vicinity of last June's high. Strategists at Commerzbank expect gold to post further gains as Ukraine situation looks increasingly alarming.

'If the Ukraine crisis escalates further, we believe that gold will remain in demand as a safe haven amid the increased risk aversion, meaning that its price will probably make further gains.'

'The yellow metal is profiting from the slide on the stock markets and the considerable fall in bond yields - both being indications of high-risk aversion.'

'The firm US dollar, which is likewise being seen as a safe haven, is presumably precluding any steeper upswing in the gold price.'"

overflow Inflation: The Road Ahead For The Rest Of 2022 -Global Macro Monitor

"A reasonably informative video, especially regarding inflation. Not much mention of the growth of money driving excess demand, however....

If I had to use one today to explain what is going on with inflation and the supply chains, it would be the following simple picture of a bathtub overflowing.

Assume the water in the tub above is the global liquidity in the world economy. It consists of the base money created by the central banks, endogenous money created by the credit markets (my 18-year daughter just received an offer for an $18k line of credit), and all the other faux wealth created and associated with the 'everything bubble,' which is extremely difficult to quantify.

The overflow is the inflation now wreaking havoc in the goods & services market. It will cause significant structural and political damage if it continues, such as the floor caving in and flooding the downstairs - ditto for the economy.

If inflationary psychology takes hold in the economy at large, as it has in the supply chain, well "Houston, we have a problem."� It is baffling to us that market analysts maintain, and even the central banks, that inflationary expectations are well anchored in, say, the 5-year break evens.

Can we really infer an economic signal when the U.S. central bank has bought up, albeit indirectly, around 75 percent all coupon Treasury securities and almost 200 percent of the TIPs issuance since COVID? That price is about as well managed and meaningless, at least to us, as the price of sausage 'back in the USSR"�where the Ukraine girls really knock me out.'

We can sit here and wish inflation away, and it's almost laughable that some 'so-called' economists do so, but that ain't going to happen, folks. The major central banks need to take action.

The solution is quite simple, in theory.

Immediately, turn off the spigot (the Fed and ECB are still stunningly pumping away as we write), drain the liquidity to a more acceptable level (quantitative tightening), and increase the temperature to a comfortable level by raising interest rates, where the economy can bathe in a more stable and comfortable equilibrium, if one does exist.

Easier said than done, however. Asset markets are addicted to the excess liquidity, where even the most worthless rubber duckies have floated to the rim as their excess valuations overfloweth on a monster scale. The market is, however, starting its dangerous speed wobble as the 'dogs [rubber ducks] that don't hunt' are rolling over hard and quite rapidly, as more than 40 percent of all Nasdaq stocks are now down over 50 percent from their highs."

President Biden Just Told a Monster Whopper That Both Sides Missed -RealClearMarkets

"Last week President Biden asserted in rather eye-opening fashion that he 'grew up in a family where the price at the pump was felt in the kitchen.' Except that President Biden didn't grow up in a family burdened by gasoline price spikes, and not just because he's long overstated the humble circumstances he emerged from.

Biden didn't endure food shortages related to pricey gasoline simply because he was born in 1942. When Biden was growing up, the price of gasoline was flat. And it was cheap....

While gasoline is abnormally expensive now, these spikes never happened during Biden's childhood, they weren't a factor for the President until he was in his early thirties, at which point he was on the verge of winning a seat in the U.S. Senate. What Biden claims about his childhood is false. Simple as that.

Too bad no one's called him on it. And not just because politicians should have their fibs exposed. Pundits should hold Biden accountable for uttering a blatant falsehood simply because doing so would be a 'teachable moment' extraordinaire.

That's the case because there's a very clear reason why there were never gasoline spikes during Biden's childhood, and also why they've become the norm since the President entered his thirties. And no, OPEC is not the reason....

The simple truth is that before the 1970s, commodity markets were quite dormant, or non-existent. With commodity prices so flat, what was there to trade? Why the lack of volatility? The answer is simple.

The dollar up until August 15, 1971 was clearly defined as 1/35th of a gold ounce, and with the dollar stable, so were the commodities priced in dollars. Biden never felt 'the price at the pump in the kitchen' growing up simply because a soaring price at the pump never factored in his childhood.

Which is why his flamboyant mis-statement is such a worthy teachable moment. Gasoline used to be nominally cheap precisely because the dollar had a stable definition. Since then, gasoline has bounced around wildly much as oil has. With the dollar's price no longer stable, and with the dollar having suffered bouts of weakness at times, it's at times been the case that our dollars haven't stretched as far as they once did.

In other words, the severing of the dollar's link to gold in 1971 was the inflationary outbreak that Americans endured in the 'Me Decade,' and the dollar's instability since then has explained gasoline's volatility over the last 51 years. It's really very basic."

A tech insider skewers the metaverse, Web3's utopian 'propaganda' -PitchBook

"If having an abundance of investable capital is any indication, there has never been a better time than right now for technological innovation....

From curing cancer to producing cleaner energy, there's no shortage of real problems this capital can help solve while generating decent investment returns along the way. And yet, it is far from clear what long-term value the world can hope to get from two areas of tech innovation creating some of the biggest buzz and sucking up a lot of capital: the metaverse and Web3 platforms.

The metaverse, though not yet fully defined, is often described as a persistent 3D immersive world where people will be able to shop, play and work. This is the technology that Meta, Facebook's parent company, is hoping will bring its next wave of growth.

But with the social media giant's stock plunging 25% during the first week of February, on the heels of a weak earnings report and declining user base, it seems that public market investors may not be willing to put too much faith in the long-term promise of the metaverse.

While the entertainment value of this technology may be obvious to gamers, its potential to really enhance productivity, commerce and people's well-being remains questionable.

What's even more elusive is identifying society's need for Web3, a vision for a new iteration of the internet characterized by decentralized platforms based on blockchain technology....

For Phil Libin, a Silicon Valley veteran who emigrated from the USSR as a child, the thesis put forward by proponents of the metaverse and Web3 is reminiscent of Soviet propaganda.

'It's not communism yet; we are still building it,' he said, comparing today's tech buzz to the rhetoric used by party stalwarts....

PitchBook: Why is all this capital being spent on things that don't work or we don't need? Are there better things to invest in, or are we running out of meaningful ideas?

Libin: There is just a lot of money sloshing around, and some of it will wind up in stupid stuff. But I don't think it's a zero-sum game. Investments in dumb things do not take away opportunity or even capital from worthwhile ideas. We see amazing innovation in healthcare, transportation, logistics and space. It doesn't really feel like the development has slowed."

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2.22.22 - Gold Price at Eight-Month Highs

Gold last traded at $1,905 an ounce. Silver at $24.28 an ounce.

NEWS SUMMARY: Precious metal prices held near 8-month highs Monday amid growing geopolitical worry and a weaker dollar. U.S. stocks extended losses as traders continue to monitor brewing tensions between Russia and Ukraine.

Russia-Ukraine Tensions Power Gold to Eight-Month Highs -WSJ

"Escalating tensions between Russia and Ukraine have boosted gold prices to their highest levels since June.

Gold has gained in 12 of the past 15 sessions, including seven straight through Monday, lifted by demand from investors nervous that an outbreak of war could spark losses in other investments. Investors prize gold for its stability in times of turmoil....

'Investors are looking for a geopolitical hedge,' said Matt Miskin, co-chief investment strategist at John Hancock Investment Management. 'The stars are aligning in essence for a gold breakout.'

Further increases in tensions could send gold above its August 2020 record close of $2,051.50 within months, Mr. Miskin said. Bank of America analysts recommended in a recent note that investors should consider buying more gold if prices break out of a range between $1,860 and $1,880, also predicting the potential for new highs.

Investors put money into precious-metal mutual- and exchange-traded funds for the fifth consecutive week through Wednesday, according to data from Refinitiv Lipper. That marks the longest streak since early August 2020, when funds recorded net inflows for 20 consecutive weeks.

The recent climb has broken gold prices out of a 2022 rut. Expectations for rising interest rates have driven U.S. government bond yields to pre-pandemic levels, sparking stock volatility."

tons 16 Tons of Debt -Bonner Private Research

"First, "�you load 16 tons and whaddya get"�?'

We reported last week that inflation is costing the typical household around $300 a month extra, just to stay in the same place. Where does that money come from? Here's part of it; Business Insider:

'Americans have been swiping their credit cards at record speed in the last few months, as rising inflation eats into the savings people accumulated during the pandemic...The total US household debt hit $15.8 trillion in the fourth quarter of 2021, the New York Fed reported this week, seeing an increase of $333 billion from the previous quarter. Credit card balances alone hit $860 billion, up $52 billion in that same timeframe.'

Yes, day by day, you get another day older. And often, deeper in debt ...

If you measure stock market trends in dollars, you will easily be confused and deceived. Like a carpenter with an elastic tape measure, it will be hard to keep things straight. The dollar has lost 96% of its value since the Fed was set up to protect it. It's losing more everyday"� currently at the rate of 7.5% (officially) per year....

In terms of gold, the stock market as a whole has gone nowhere over the last century. In 1929, you could buy all 30 Dow stocks for 18 ounces of gold. Today, you can still buy the Dow stocks for 18 ounces of gold. So, why bother?

But while it is sometimes tempting to be out of stocks"� forever"� it would be leaving money on the table. Companies, driven by a profit motive, create real wealth. And people who own companies - shareholders - get much of it. Stocks pay dividends. If you had simply re-invested your dividends, since 1929, you would have multiplied your original investment by 33 times - even adjusted for inflation.

In short, it pays to be in stocks. But not all the time. When should you get in? When should you get out? That's what we tried to figure out. And we came up with a system, based on comparing the Dow to Gold."

'ACT OF WAR' Putin's tanks & '10,000 troops' invade Ukraine 'breakaway' areas in 'most dangerous moment since Cuban missile crisis' -Sun

"Around 10,000 troops moved into two Russian speaking breakaway areas of Ukraine - leaving the world holding its breath in the shadow of war.

The much anticipated Russian invasion began in the early hours, soon after Putin announced his decision in an address to his nation.

Earlier he chaired an emergency Russian national security council session in which he ordered key allies to personally back the move, that has been branded an 'act of war'.

With a huge 200,000 strong force ringing Ukraine, the world is on a knife edge waiting for Putin's next move, which could see the bloodiest conflict in Europe since WW2....

The much anticipated Russian invasion began in the early hours, soon after Putin announced his decision in an address to his nation.

General Sir Richard Sherriff, Britain's former top Nato commander said: 'This is the most dangerous moment in Europe probably at least since 1962 and the Cuban missile crisis.'

He said Putin's 'invasion of a sovereign country could turn into a catastrophic war with warfare on a scale not seen in Europe since 1945'.

The UK's ambassador to the UN Dame Barbara Woodward said Russia has 'brought us to the brink', warning that the country's actions 'will have severe and far-reaching consequences'.

She said an invasion would unleash 'the forces of war, death and destruction' on the people of Ukraine.

Fears were growing that Moscow is now poised to move beyond the rebel held pockets to snatch more territory from Ukraine."

The stock market is lower priced, but it isn't cheap -Briefing

"'The Stock Market Hasn't Looked This Cheap in Nearly Two Years.' That was the headline for a piece we saw published in The Wall Street Journal earlier this week.

The observation is true. We just happen to disagree with the characterization. The stock market is sporting its lowest forward 12-month P/E multiple in nearly two years, yet that doesn't necessarily mean that it's 'cheap.'

When 2022 began, the S&P 500 was trading at 21.3x forward 12-month earnings. Today it trades at 19.2x forward 12-month earnings. Sounds like a nice discount, yet it is still a premium to the 5-year average of 18.6x and the 10-yr average of 16.7x.

As of this writing, the S&P 500 is down 8.6% year-to-date, whereas the forward 12-month EPS estimate has increased by 2.2%, according to FactSet.

Things would get 'cheaper' from a P/E standpoint if stock prices keep sliding, yet the message of stock prices sliding more than earnings estimates is a telling one. It means investors don't believe the stock price is justified by the underlying earnings -- either the actual earnings or the expected earnings.

Since the stock market is a forward-looking entity, though, it often pertains to misgivings about expected earnings.

Those misgivings could revolve around rising interest rates, higher costs, weakening consumer confidence, disruptions in trade activity, a reduced wealth effect, declines in real disposable personal income, or even a military conflict.

Any of that sound familiar? It should, because all of that is in play right now as a source of upset for the bull market or, specifically, for the earnings growth outlook."

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2.18.22 - Gold Rallies to Multi-Month High, Eyes $1,900

Gold last traded at $1,897 an ounce. Silver at $23.97 an ounce.

NEWS SUMMARY: Precious metal prices steadied near 8-month highs despite a firmer dollar. U.S. stocks retreated, heading for a second consecutive losing week as the Russia-Ukraine conflict loomed.

Gold rallies to multi-month high, eyeing $1,900 amid geopolitical tensions -FX Street

"Gold built on the previous day's positive move and gained strong follow-through traction for the second successive day on Thursday. The momentum extended through the early European session and pushed spot prices to the $1,890 area, or the highest level since June 2021 in the last hour.

A flood of contradicting headlines amid intensifying Russia-Ukraine conflict continued weighing on investors' sentiment, which was evident from a generally weaker tone around the equity markets. This, in turn, was seen as a key factor that underpinned the safe-haven.

Russian media reported earlier this Thursday that the Ukrainian military forces fired mortars and grenades in four Luhansk People's Republic (LPR) localities. The LPR is located in the Donbas region, a territory internationally recognized to be a part of Ukraine but run by Russian backed separatists.

Ukraine, however, denied shelling separatists' territory, suggesting that this could be the false flag that Russia is trying to put out to set a pretext for an imminent invasion. That said, the Organization for Security and Co-operation (OSCE) in Europe has recorded multiple shelling incidents along the line of contact in the East Ukraine in the early hours of Thursday.

The risk-off impulse, along with less hawkish FOMC minutes, showing that policymakers are not set on a particular pace of interest rate hikes, led to a sharp pullback in the US Treasury bond yields. This provided an additional boost to the non-yielding gold.

The upward trajectory took along some short-term trading stops placed near the $1,877-$1,879 region. Hence, the latest leg up could further be attributed to some technical buying, which might have already set the stage for a move towards reclaiming the $1,900 mark."

inflation The Fed's battle to fight inflation could cause more pain than higher prices -CNN

"Rapidly rising prices have caused economic hardship for millions of Americans. But drastic action to rein in prices could lead to even more pain, including job losses.

Overall prices jumped 7.5% during the last year, according to the January consumer price index reading, the fastest pace in nearly 40 years. The increases have squeezed household budgets for consumers, caused political problems for Joe Biden and resulted in calls for the Federal Reserve to take relatively severe action, such as its first half-percentage-point hike since 2000.

But some economists are cautioning that would be a very bad idea, hurting the people that the battle on rising prices is meant to help.

That's because the main tool available to the Fed to fight inflation - raising interest rates - is designed to curb inflation by slowing what has been a very strong economy.

'The people you're drafting into the fight against inflation when you raise interest rates and slow the economy are the most vulnerable,' said Robert Reich, the former US Labor Secretary under President Bill Clinton and a professor of public policy at the University of California, Berkeley.

'The purpose of raising interest rates is to take the air out of the sails of the economy. If it works, you are by definition are going to have fewer jobs. Even small increases in interest rates, if they have the desired effect, will cause job losses and wage losses.'....

he last time the Fed hiked rates by a half point in a single move was May 2000. The labor market was exceptionally strong then....The economy fell into recession in early 2001, and the Fed was soon cutting rates a half-point at a time to try to pull the economy out of recession.

Even if the recession was 'mild' by economic standards, the jobless recovery that followed was no one's idea of a strong economy. That's what has many critics of war on inflation so worried. 'Every time the Fed has tried to slow the economy by bringing prices under control, it has overshot,' said Reich."

How Magical Thinking Led America To $30 Trillion In Debt -Forbes

"Washington, DC must be a magical place. Because the people in charge of it keep conjuring fantasies that defy belief.

In the Wizarding World of Washington, you can now say a multitrillion dollar federal spending bill 'costs zero dollars.' You can claim tax cuts 'pay for themselves.' You can even say the government doesn't need tax dollars to fund anything at all because it can just 'create money.'

Unfortunately, Americans are now paying a heavy price for this magical thinking. Inflation - spurred at least in part by record government spending and inaction on other issues - is running at its highest rate since 1982. The prices for meat and eggs are up 12.2% since last year. Furniture and bedding is up 17% and used cars and trucks are up 40.5%.

Meanwhile, the Treasury Department recently reported America's total national debt is now over $30 trillion-the highest ever. To put this in context: If you stacked $30 trillion of $100 bills you could almost reach the weather satellites orbiting the earth at over 20,000 miles above us.

It's no secret of course that Washington spends recklessly. What's less known is just how much an obscure fifty year-old law enables this behavior. Fixing this law might hold the key to America finally beginning to dig out of this fiscal mess we're in....

The first step to Washington getting a handle on America's fiscal problem is for leaders on both sides to demand more honesty and transparency in accounting for how and what Washington spends.

Maya MacGuineas, who leads the Committee for a Responsible Federal Budget, told me there are several commonsense reforms that could push Congress in this direction....

The time has come for Washington to abandon the illusions and deal with the reality of a debt problem that threatens the security and the livelihoods of every American for generations to come. Our children shouldn't have to watch wizardly fantasies become magical nightmares."

The Midterms Will End the Pandemic -Reason

"Seven out of 10 Americans say 'it's time we accept COVID is here to stay and we just need to get on with our lives.' Politicians are taking notice.

It takes a lot to make a libertarian look forward to the next election.

Like, say, two years of miserable government mandates ignored by some of the very people imposing them. Like watching over 70,000 maskless adults (and many celebrities) partying at a major sporting event in a city where children are required to wear medical-grade masks to school and keep them on while playing sports. Like imposing border controls on immigration and travel meant to stop the spread of COVID-19, and then keeping them in place (with no off-ramp) long after the virus is spreading here.

For once, we can be thankful that another election season is already upon us since politics is the last realm where the pandemic is dominating decision-making. The economy emerged from the omicron wave in better shape than expected....

The Centers for Disease Control and Prevention (CDC) and President Joe Biden might be refusing to offer much hope that COVID-related mandates should be lifted soon, but they are increasingly being undone by rank-and-file Democrats who are looking at favorability ratings that are falling nearly as fast as COVID case counts.

In New York, for example, Democratic Gov. Kathy Hochul announced last week that businesses will no longer be required to enforce masking of unvaccinated customers. California's indoor mask mandate will expire this week, even though some local governments will keep similar rules in place - Sunday's Super Bowl was supposedly subject to Los Angeles' mandate, though you wouldn't have known that from shots of the overwhelmingly unmasked crowd seen on television....

Just 38 percent of likely voters view COVID-19 as 'a public health emergency,' according to a January poll from Echelon Insights, while 55 percent said it 'should be treated as an endemic disease that will never fully go away.'

Those polls and the looming midterms have Democrats searching 'for a new message' on the pandemic in advance of the midterms, The New York Times reported last month. The party is 'keenly aware that Americans - including even some of the party's loyal liberal voters - have changed their attitudes about the virus and that it could be perilous to let Republicans brand the Democrats the party of lockdowns and mandates.'"

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2.17.22 - Mental Health Crisis Afflicting Crypto Investors

Gold last traded at $1,899 an ounce. Silver at $23.87 an ounce.

NEWS SUMMARY: Precious metal prices hit an 8-month high Thursday as Russia was poised to invade Ukraine. U.S. stocks fell as investors eyed the Russia-Ukraine conflict and digested corporate earnings reports.

How to Invest in Silver as an Inflation Hedge -WTOP News

"Silver is popular with investors as one of the most traded precious metals on the market. The metal has several fundamental factors in its favor, including a combination of reduced supply and strong demand. Plus, interest in silver is strong amid rising demand for nearly all commodities, inflation worries and a rebounding global economy.

Silver and other hard assets are often considered good stores of value in inflationary periods - and silver's dual nature as both a precious metal and an industrial metal makes it unique. Aside from coins and jewelry, the metal is used in solar panels, electric vehicles, LED lighting, medical devices and other products....

Silver is sometimes called the 'poor man's gold,' but it isn't just a cheap gold proxy. Silver is about 1.5 times more volatile than gold, says Frank Holmes, CEO and chief investment officer of U.S. Global Investors Inc., because of its lower price and the fact that it can act as both an investment and an industrial metal.

The easiest way to buy silver coins or bars is online through reputable dealers...A good sign is if the dealer is a member of metals industry groups such as the Industry Council for Tangible Assets or Professional Numismatists Guild.

Silver dealers also sell bags of junk silver, which is pre-1965 U.S. currency that contains 90% silver, such as Mercury dimes. Investors can junk silver in quantities of $100 or $1,000 in face value....

Silver can be included in individual retirement accounts, or IRAs. That said, the IRS has strict requirements for how these assets are stored and the type of coins that are permitted - such as American Eagles and Maple Leafs. Silver coins must be sent straight from the dealer to an approved custodial depository."

the feb Unfit for the Federal Reserve -Editors/WSJ

"President Biden is trying to diversify the Federal Reserve, and in more ways than race or gender. The Fed could certainly use more ideological diversity, but two of his nominees to the Board of Governors want to effectively rewrite its mandate to include climate and race. This makes them unfit for the Fed.

Republicans on the Senate Banking Committee on Tuesday denied Democrats a quorum to vote five Biden Fed nominees to the floor. They're not seeking to hold up Chairman Jay Powell, Philip Jefferson or Lael Brainard. But they have raised serious concerns about Sarah Bloom Raskin and Lisa Cook that Democrats have brushed aside.

Start with Ms. Raskin, who has called for the Fed to redirect capital from fossil fuels to green energy. As vice chair for supervision, she'd have sweeping power to regulate the financial system. Progressives claim Ms. Raskin's views on climate regulation are no different from Chairman Powell's. That's false....

Ms. Raskin has published numerous pleas for the Fed to use stress tests and prudential regulation to restrict capital to fossil fuels. ;Regulatory changes relating to disclosure, access to credit, and pricing of risk support a rapid and just green transition,' she wrote last September in a Project Syndicate op-ed....

Republicans have also raised valid concerns about Ms. Cook's lack of monetary policy expertise. Her academic scholarship has focused almost entirely on race, and she seems to think systemic racism is the root of all economic ills. No doubt she would fit in well at university faculty lounges with similar views.

University of Chicago economics professor Harald Uhlig recently detailed in these pages how Ms. Cook called for his removal as editor of the Journal of Political Economy after he criticized the defund police movement....

All this is worth keeping in mind since the left is calling for the Fed to set monetary policy based on the black unemployment rate, not merely maximum employment and price stability. This means the Fed might have to keep interest rates low longer even if it risks stoking inflation.

Democrats and a few moderate Republicans rejected Trump Fed nominee Judy Shelton because they disliked her support for a monetary price rule. But now the left is trying to normalize the truly dangerous monetary views of Ms. Raskin and Ms. Cook. Progressives control almost every institution in America, and they won't rest until they run the Fed too."

The Mental Health Crisis Afflicting Crypto Investors -Vice

"If you have a friend who's 'into crypto', then now is the time to check in on them. In late January, prices of Bitcoin and Ethereum, two of the most popular cryptocurrencies, plunged to levels that many experts never predicted, and memecoins like Dogecoin were dragged down with them.

This was a sudden shock rather than a slow burn. Bitcoin reached an all-time high of around $69,000 in November, but then dropped over 40 percent within a few months. As a whole, the crypto market has decreased in value by more than $1 trillion since Bitcoin's peak....

A recent CNBC survey of 750 crypto investors found that a third actually knew very little about what they were investing in. The question is: What happens to these people when they lose big?

Experts like Peter Klein - a cognitive behavioral psychotherapist who offers CBT for cryptocurrency-related mental health issues - have warned that the market crash will have caused an 'increase in the severity of the crypto addiction symptoms that people are experiencing'. It seems like this fast-growing investor community is generating its own fast-growing mental health crisis.

Contrary to the frequent declarations that investing is an everyman route to wealth and happiness, interviewees told me that crypto had nearly ruined their lives....Coins go higher the more people invest and drop the more people pull out. Crypto might be anxiety-inducing, but people don't make money from acknowledging this and actively lose out if they do."

On the Very Sad Passing of Our Great Friend, P.J. O'Rourke -Cato

"We are saddened to report the death of our friend and colleague, our H. L. Mencken Research Fellow, P. J. O'Rourke, this morning at 74. For those of us who grew up with P.J., this feels like a very personal loss.

When I was in college, the most popular magazine on campus was National Lampoon, which he edited....He then moved on to Rolling Stone, where he was the Foreign Affairs Desk Chief, which was totally cool because they paid him to travel wherever he wanted.

And then, as he moved out of the rock'n'roll stage and into the age of sober reflection, he became a correspondent for the soberest magazine in America, the Atlantic Monthly. He wrote soberly about Medicare reform, Social Security reform, campaign finance 'reform,' and other adult topics.

More recently, as he moved into the age of worrying about retirement and college tuitions, he became the editor of a magazine on finance and investment, American Consequences. Serious topics indeed, but that didn't stop him from having fun with them.

P. J. published more than 20 books, including Holidays in Hell, Republican Party Reptile, Driving like Crazy, All the Trouble in the World, and The CEO of the Sofa....

Yes, P. J. was one of the funniest writers around. Indeed, he has more citations in The Penguin Dictionary of Humorous Quotations than any other living writer. But what people often miss when they talk about his humor is what a good reporter and what an insightful analyst he was....

We're going to miss P. J. terribly. But as long as we have his books and his other writings, we will remember how much he made us laugh and how much we learned along the way."

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2.16.22 - Combating Big Tech's Totalitarianism

Gold last traded at $1,869 an ounce. Silver at $23.57 an ounce.

NEWS SUMMARY: Precious metal prices rose on bullish bargain-hunting and a weaker dollar. U.S. stocks fell for a 4th day in 5 as traders assess geopolitical risks and the next Fed move.

German Central Bank Doesn't Rule Out Gold Revaluation -The Gold Observer

"The more debt is being accumulated on the balance sheets of European central banks, the more likely they will revalue gold to write off this debt. When I asked the German central bank if they consider this option they replied: 'at this stage, we prefer not to speculate about any potential decisions "� that might or might not be taken in the future.'

'There is no limit on gold's price,' according to economist Kenneth Rogoff.

Government debt to GDP levels in many countries are at all-time records and I'm not aware of any politician or economist that has outlined a clear strategy to lower the debt burden. Technically, there are six ways to lower government debt to GDP; Economic growth, Default, Higher taxes, Austerity, Debt relief and Inflation.

I don't think option one, two, three and four are viable, which leaves debt relief and inflation. Inflation is currently elevated and shifting wealth from savers to debtors. But can inflation stay elevated and solve the debt problem without destabilizing societies?

When people on lower incomes can't make ends meet, they tend to revolt. Social instability leads to political instability, which leads to monetary instability, which leads to more social instability. In many countries, like the United States, we can already observe this doom loop.

One possible solution is that central banks use unrealized gains of the gold on their balance sheet to write off sovereign bonds, providing debt relief to their governments. And when the unrealized gains aren't sufficient central banks can revalue gold. Let's have a look at how this works from an accounting perspective....

Because gold is the only international currency that isn't issued by a central bank and thus can't be printed, there is no limit to its price denominated in fiat currencies, which can and are printed. To illustrate, European central banks accumulated most of their gold during Bretton Woods when gold was valued at $35 dollars per troy ounce. At a current gold price of roughly $1800 dollars these central banks have unrealized gains worth hundreds of billions of dollars (denominated in euros on their balance sheet).

When the gold price rises the value of the gold on the asset side of a central bank's balance sheet increases. At the same time, on the liability side of the balance sheet an equal increase will be recorded in what is referred to as a 'revaluation account.' A gold revaluation account, which effectively has no limit, registers the unrealized gains on gold."

debt The $64 Trillion Question -Bonner Private Research

"Today's inflation readings must be coming as a shock to the 1,000 or so Ph.D. economists at the Fed. "�How about that,' they must be saying to each other. "�Printing money really does cause inflation.'

They've added $8 trillion in brand, spanking new money over the last 20 years. And their absurdly low interest rates created an unprecedented debt bubble, with $64 trillion added since 1999.

And now, practically every news item covering the inflation numbers leads with the same idea - that the Fed made an old error and now is under pressure to make a new one....

Our bet is that Fed economists are about to relearn another lesson - last rehearsed 50 years ago. In the early "�70s, inflation rates were rising. Then falling. And then rising again.

In 1970, prices were already going up at a 6% rate. Then, inflation dropped to just 3% in 1973. Back up to over 11% in 1976, the rate then again fell - but only to about 5% - before heading up again. Prices were rising at a 13% clip by 1980....

Paul Volcker took over in 1978. He dilly-dallied for a couple years, and then got serious. Trading punches with inflation didn't work. He needed to deliver a knockout blow. He put the key rate at nearly 20% - 7 full percentage points over rising prices"� and the monster was soon flat on its back.

Today, the Fed is already on the ropes. First, it told the world that it wouldn't have to raise rates until 2024. Here it is, the beginning of 2022 and it is already conceding that it will have to do something now.

Then, when inflation began to make the headlines, the Fed reassured the nation that it was only "�transitory.'...And now the Fed is concerned about protecting its "�credibility,' perhaps with a full 100 basis point (1 percentage point) increase.

And yet, the lesson of the Volcker era was that a 100-basis point jab would do nothing; from today's ultra-low rate, below 1%, it will take an increase of at least 1,000-basis points. Does the Fed still pack that kind of punch?"

Combating Big Tech's Totalitarianism: A Road Map -Heritage

"Applying and modernizing antitrust law, scrutinizing Big Tech's ad tech models, instituting executive accountability, punishing fraud and breaches of contract, and creating private rights of action to enforce consumer rights and protections requires a layered approach to securing fair practices and freedom of expression in the digital world.

Initiatives outside of Congress and enforcement agencies are of equal significance. This layered approach should include efforts to promote the principles of federalism through state legislative action, to build platforms where freedom of expression is protected, and to expose Big Tech's abuses within civil society.

Absent campaigns on all of these fronts, Big Tech will continue to erode individual liberties, segment the American citizenry, and stunt human flourishing and self-governance. Key Takeaways:

The growing symbiosis between Big Tech and government gives these Big Tech companies undue influence over Americans' daily lives and undermines their rights.

Big Tech has increasingly exercised pervasive control of information and access to the digital space in ways that undermine freedom and a functioning republic.

It is time for aggressive reforms to ensure that Big Tech is held accountable, provide scrutiny and oversight, and constrain its ability to reshape society."

The Fed Nominees: Corks on the Water -New York Sun

"The Senate Banking Committee is fixing to send to the full Senate tomorrow five nominees for governors of the Federal Reserve, including the chairman, Jerome Powell. The New York Sun opposes each of them. Yet our overriding concern is not the nominees themselves, but the failure of the senators to consider that the root of the problem in our economy lies with the system of fiat money itself.

We've been beating this drum in one orchestra or another since 1971, when America defaulted on its obligation under Bretton Woods to redeem at a 35th of an ounce of gold dollars presented to it by foreign governments. In the quarter-century of Bretton Woods, unemployment averaged 4.6 percent....

The dollar itself has shed a staggering 98 percent of its value, measured in gold. Today one would have a hard time getting for a dollar more than an 1,800th of an ounce of gold, a circumstance that would have, we have often said, floored the Founders of America - and of the Federal Reserve itself.

A leading founder of the Fed, Congressman Carter Glass, relates in his classic 'An Adventure in Constructive Finance' how, in order to win passage of the Federal Reserve Act, the text had to declare that it would not authorize abrogating the gold convertibility of the dollar. Yet today, the idea that gold should be part of our monetary system is seen as heresy, even as inflation has emerged above seven percent....

At the end of the day, our beef is not with the Fed. It is not responsible for America's economic crisis. Neither, for that matter, is President Biden nor Mr. Trump. That responsibility lies with the branch of government to which the Constitution grants 100 percent of the monetary powers - the power to tax, spend, coin money and regulate its value and borrow on the credit of the United States.

That is Congress. It is Congress that plunged us into the age of fiat money in a series of steps in the 1970s, and it is the only institution that can return us back to honest money. We don't mean that the Fed could never be part of the solution. It forsakes that ambition when it opposes reform and turns its back on our founding principles. The governors-to-be now before the Senate are not going to lead the historic fight. They are corks on the water."

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2.15.22 - $100 Oil Threatens to Compound Inflation

Gold last traded at $1,855 an ounce. Silver at $23.39 an ounce.

NEWS SUMMARY: Precious metal prices pulled back Tuesday on profit-taking despite a weaker dollar. U.S. stocks rose amid cooling of geopolitical tensions.

Gold Gets Good-Old Geo-Political Go-Go -Investing.com

"Not to be taken lightly a wit what's going on with the Russia/Ukraine strain. For as the U.S. President sagaciously stated on Friday: 'things could go crazy quickly' in urging U.S. citizens to vacate the premises. To which the markets responded in kind as they oft do in heated geo-political stew....

We broadly expect price to rise as it historically has (or at least used to) in tandem with currency debasement. For when Gold otherwise rises on geo-political concern...following such induced spike like that on Friday, price then two-to-three days later reverts back from whence it came....

Friday's $1861 was first achieved on 19 August 2011 - nearly 11 years ago - when the U.S. money supply ("M2" basis) was but 43% ($9.5Tn) of what 'tis today ($22.2Tn).

Or by our opening Gold Scoreboard, Friday's $1861 is 45% of the $4125 valuation. Be that as it may, we're conservatively maintaining our forecast high for $2254 in 2022."

markets The New World Disorder -Editors/WSJ

"A Russian invasion of Ukraine would be a seminal event that accelerates the new world disorder. The signs have been building for years, but America and its allies are unprepared, as democracies usually are, for the trouble to come. President Biden has a particular obligation to explain the stakes and unite the country as other Presidents have done to meet the challenge.

The Biden Administration has done a decent rear-guard job of mobilizing Europe and NATO in opposition to Russia's designs on Ukraine - despite his blunder in dropping Nord Stream 2 sanctions....

What Mr. Biden hasn't done is explain to Americans the new global dangers and what must be done to protect U.S. interests. The problem goes far beyond Ukraine. China wants to capture Taiwan and dominate the Western Pacific. The new Russia-China condominium means they'll work together against U.S. interests. Iran is close to getting a nuclear weapon, and jihadists are far from vanquished.

Advancing technology and its proliferation also put Americans at risk - at home and abroad. The cyberattack on the Colonial Pipeline last year was a modest show of the damage a foreign actor can inflict on the U.S. homeland. Hypersonic and antisatellite weapons could take out U.S. defenses around the world in minutes and with little or no warning. Imagine a high-tech Pearl Harbor.

None of this is alarmist or far-fetched to anyone paying attention. Yet most Americans seem indifferent or complacent about the risks. Partly this is the result of fatigue at the wars in Iraq and Afghanistan....

Presidents have to respond to the world as it is, not as their campaign promises wanted it to be. The question is whether he will meet the moment as his predecessors did, or let the disorder spread.

His first obligation is to explain the dangers, why they threaten the U.S., and what must be done in response. This isn't merely about human rights and democracy - Mr. Biden's go-to themes.

The spread of aggression and disorder threaten American freedom and prosperity. No one is about to invade the homeland, but cyberattacks could cripple chunks of the economy....

Above all, Mr. Biden will need to build bipartisan alliances on national security, as FDR and Harry Truman did at other hinge points in history. Isolationist forces always emerge when the world becomes more dangerous, in the hope the U.S. can hide behind a Fortress America. Mr. Biden will need to find allies in both parties to defeat that siren call....

None of this will be easy in our divided politics, and there are those who believe Mr. Biden is too weak and spent to do it. But you cope with disorder, and deter war, with the President you have. Mr. Biden has three years left in his term, and the world's rogues won't wait until 2024 for the U.S. to get its act together."

$100 Oil Threatens to Compound World Economy's Inflation Shock -Bloomberg/Yahoo Finance

"Oil's surge toward $100 a barrel for the first time since 2014 is threatening to deal a double-blow to the world economy by further denting growth prospects and driving up inflation.

That's a worrying combination for the U.S. Federal Reserve and fellow central banks as they seek to contain the strongest price pressures in decades without derailing recoveries from the pandemic. Group of 20 finance chiefs meet virtually this week for the first time this year with inflation among their top concerns.

While energy exporters stand to benefit from the boom and oil's influence on economies isn't what it once was, much of the world will take a hit as companies and consumers find their bills rising and spending power squeezed by costlier food, transportation and heating.

According to Bloomberg Economics' Shok model, a climb in crude to $100 by the end of this month from around $70 at the end of 2021 would lift inflation by about half a percentage point in the U.S. and Europe in the second half of the year.

More broadly, JPMorgan Chase & Co. warns a run-up to $150 a barrel would almost stall the global expansion and send inflation spiraling to over 7%, more than three times the rate targeted by most monetary policy makers.

'The oil shock feeds into what is now a broader inflation problem,' said long-time Fed official Peter Hooper, who's now global head of economic research for Deutsche Bank AG. 'There's a decent chance of a significant slowing of global growth' as a result."

The metaverse is just a new word for an old idea -MIT Technology Review

"I have spent a lot of my career, both in Silicon Valley and beyond, insisting that all our technologies have histories and even pre-histories, and that far from being neat and tidy, those stories are in fact messy, contested, and conflicted, with competing narrators and meanings.

The metaverse, which graduated from a niche term to a household name in less than a year, is an excellent case in point. Its metamorphosis began in July 2021, when Facebook announced that it would dedicate the next decade to bringing the metaverse to life. In the company's presentation of the concept, the metaverse was a thing of wonder: an immersive, rich digital world combining aspects of social media, online gaming, and augmented and virtual reality.

'The defining quality of the metaverse will be a feeling of presence - like you are right there with another person or in another place,' Facebook founder Mark Zuckerberg wrote, envisioning a creation that would 'reach a billion people, host hundreds of billions of dollars of digital commerce, and support jobs for millions of creators and developers.'

We would be remiss if we didn't take a step back to ask, not what the metaverse is or who will make it, but where it comes from - both in a literal sense and also in the ideas it embodies. Who invented it, if it was indeed invented? And what about earlier constructed, imagined, augmented, or virtual worlds? What can they tell us about how to enact the metaverse now, about its perils and its possibilities?

There is an easy seductiveness to stories that cast a technology as brand-new, or at the very least that don't belabor long, complicated histories. Seen this way, the future is a space of reinvention and possibility, rather than something intimately connected to our present and our past....

So where does the metaverse come from? A common answer - the clear and tidy one - is that it comes from Neal Stephenson's 1992 science fiction novel Snow Crash, which describes a computer-generated virtual world made possible by software and a worldwide fiber-optic network....

Before mobile phones and personal computers. Before television, and radio, and movies. Before any of that, an enormous iron and glass building arose in London's Hyde Park. It was the summer of 1851, and the future was on display....The Great Exhibition of the Works of Industry of All Nations, as the extraordinary event was formally known, was the brainchild of Prince Albert, Queen Victoria's beloved consort. It would showcase more than 100,000 exhibits from all over the world....

The Crystal Palace was disassembled in the winter of 1851 and transported to a new site, where it would continue to showcase all manner of wonders until a cataclysmic fire in 1936 reduced it to a smoldering iron skeleton. And if the fancy takes you, you can still visit the Great Exhibition today, via a virtual tour hosted on the website of the Royal Parks.

I think our history with proto- �metaverses should make us more skeptical about any claims for the emancipatory power of technology and technology platforms. After all, each of them both encountered and reproduced various kinds of social inequities, even as they strove not to, and many created problems that their designers did not foresee. Yet this history should also let us be alive to the possibilities of wondrous, unexpected invention and innovation, and it should remind us that there will not be a singular experience of the metaverse....

The metaverse will never be an end in itself. Rather, it will be many things: a space of exploration, a gateway, an inspiration, or even a refuge. Whatever it becomes, it will always be in dialogue with the world that has built it. The architects of the metaverse will need to have an eye to the world beyond the virtual...It will mean thinking deeply about our potential and our limitations as makers of new worlds."

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2.14.22 - Gold Jumps on Rising Safe-Haven Demand

Gold last traded at $1,867 an ounce. Silver at $23.83 an ounce.

NEWS SUMMARY: Precious metal prices traded near 3-month highs Monday on safe haven buying and geopolitical angst. U.S. stocks traded mostly lower as investors evaluated the Fed's plan for interest rate hikes and tensions between Russia and Ukraine remained unresolved.

Gold jumps as rising Ukraine tensions spur safe-haven demand -Reuters

"Gold prices jumped on Friday to a near two-month peak as concerns over surging inflation and escalating tensions between Russia and Ukraine lifted demand for the safe-haven metal....

A Russian attack on Ukraine could begin any day now and would likely start with an air assault, White House national security adviser Jake Sullivan said on Friday.

'Gold is seeing some safe-haven inflows as we got geopolitical risks out there and worries around the impact that higher rates are going to have on global growth,' said Chris Gaffney, president of world markets at TIAA Bank....

Gold is considered a hedge against soaring inflation and is often used as a safe store of value during times of political and financial uncertainty.

The rising Ukraine tensions accelerated a selloff on Wall Street. U.S. equities had declined in the previous session after data showed the biggest annual increase in consumer prices in 40 years, increasing pressure on the Fed to aggressively raise interest rates."

recession Is Recession The Only Cure For Inflation? -The Capital Spectator

"As the Federal Reserve prepares to start raising interest rates, history lurks in the background amid an inflation surge that's remained more persistent than expected.

The standard treatment for a run of inflation that's become too hot to tolerate is to adjust monetary policy to fight the beast. Invariably that shift translates to higher interest rates, which often leads to recession. Not immediately, but the apparent causal link between a rise in the Fed funds target rate is hard to ignore.

A runup in core PCE inflation tends to break either during or soon after economic recessions. It's not clockwork, but neither is this a random relationship and so the question of how to assess future risk arises anew as the start of a new policy regime is set to begin when the Fed rolls out a new policy announcement on March 16....

There's no law iron-clad law that dictates that a central bank that pivots to fight inflation is destined to trigger recession. But history suggests the odds aren't exactly low for predicting otherwise.

'The Fed knows what to do, but they don't necessarily know how to do it without squashing the economy,' observed Lisa Shalett, chief investment officer of Morgan Stanley Wealth Management, in December.

Will it be different this time? Possibly. Using history as a guide to the future for real-time economic analysis is fraught with many caveats. But as a starting point for discussion it's useful to ask if the current runup in inflation will lead to a policy mistake that triggers a recession? Stranger things have happened....

Meanwhile, it appears that the central bank is in a bit of a pickle. As Desmond Lachman, a senior fellow at the American Enterprise Institute, observes: 'The Fed has got itself into the most unenviable of monetary-policy dilemmas.'

'If it fails to raise interest rates aggressively now, it risks allowing both inflation expectations to become entrenched and further froth to be added to already bubbly asset and credit markets. That in turn would set the US up for an even harder economic landing down the road than if it now acted in a timely manner. On the other hand, if it were to raise interest rates aggressively now it might succeed in getting the inflation genie back into the bottle, but at the price of bursting today's everything asset-price and credit-market bubble.'"

A 'firestorm' of hawkish Fed speculation erupts following strong U.S. inflation reading -MarketWatch

"Economists seem to be trying to one-up each other with talk of emergency interest rate hike or a large 75 basis point in March.

How hawkish will the Federal Reserve be this year?

At the moment, Wall Street economists seem to be telling their clients 'more hawkish than we thought five minutes ago.'

The strong U.S. consumer inflation data reported Thursday has set off what looks like a chain reaction of upward revisions to projected interest rates rises and where the Fed is headed with monetary policy.

Fed watchers are talking seriously about an 'emergency' interest rate hike before the Fed's next formal meeting on March 16.

The consumer price index rose 0.6% in January, with broad based gains. The year-over-year rate rose to 7.5%, the highest level in 40 years.

In the wake of the data, Goldman Sachs said it now sees seven consecutive 25 basis point rate hikes at each of the remaining Fed policy meeting this year. The investment bank's earlier prediction was five hikes.

Economists at Citi said that their base case is a now for a 50 basis point hike in March followed by quarter point hikes in May, June, September and December.

Marc Cabana, head of U.S. rates strategy at BofA Securities, told Bloomberg Radio that it is very likely the Fed is going to raise rates by 50 basis points in March and 'who knows, maybe even 50 in May.'

'This is what typically happens in a developing country when a central bank loses control of the policy narrative,' he said."

Analysis: A grim portrait of Biden's unhappy America -CNN

"President Joe Biden often says America's best days are ahead. It just doesn't feel that way right now.

A nation exhausted by a two-year pandemic, struggling against rising food and gas prices, driven to distraction by school closures and torn apart by a political schism that erupted into violence is far from at ease with itself.

The sense of turmoil was captured in a new CNN/SSRS poll released Thursday that showed waning faith in US elections and found that most of the nearly 60% of Americans who disapprove of how Biden is handling his presidency were unable to name one single thing they like that he has done. 'He's not Donald Trump. That's pretty much it,' one despondent respondent said. Another answered: 'I really like his new cat, Willow Biden.'....

This foul national mood is primarily a disaster in the making for Democrats in November's midterm elections, but it's been a long time coming.

The first two decades of this century have delivered morale-busting military defeats, a generational economic crisis and an age of political turmoil, including sweeping social and demographic change and an equally intense backlash....

The sense of national unease is being exacerbated by events abroad. The unipolar world led by America at the end of the 20th century has evolved into multiple challenges to US dominance from a rising China to a revanchist Russia that threatens the democratic world order....

Just 41% of those asked approve of the way Biden is handling his job. His approval rating on the economy has dropped to 37% - down 8 points since early December alone. Only 45% approve of his handling of the pandemic he was elected to end.

When those who disdain Biden's overall performance were asked to name a single thing he'd done that they approved of, 56% had nothing positive to say. 'I'm hard pressed to think of a single thing he has done that benefits the country,' wrote one respondent."

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2.11.22 -Gold to See Additional Major Rally

Gold last traded at $1,855 an ounce. Silver at $23.47 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday despite hawkish Fed comments and a firmer dollar. U.S. stocks traded mixed as investors tried to determine the Fed's next move amid the highest inflation in four decades.

Gold price to see an additional major rally on a break above $1,877 -Credit Suisse/FX Street

"Gold looks to be finding better support in its broader sideways range. But strategists at Credit Suisse notes that the yellow metal needs to break above $1,877 to see a sustained leg higher.

'Gold remains well supported in the converging range of the past year but needs to clear $1,854 to suggest the downtrend from early 2021 break and above $1,877 to suggest we are seeing a more sustainable move higher, for a test of $1,917 next.'

'Below $1,780 is needed to ease the immediate upward bias for a fall back to $1,759/54, but with a break below here needed to clear the way for a retest of key price and retracement support.'"

debt tree The Growing Pile of Public Debt Shows that Inflation Is Here to Stay -Mises

"After more than a decade of subdued consumer price inflation despite gigantic monetary and fiscal stimuli, last year's surge in consumer prices took most central banks by surprise. First, they tried to dismiss it as 'transitory' and caused by pandemic-related supply bottlenecks.

Within a few months, when wages started rising strongly, Fed chairman Jerome Powell had to admit that 'factors pushing inflation upward will linger well into next year.' He is now claiming that the Fed will take appropriate action to address the inflation problem, but the rhetoric is hardly convincing.

Both the Federal Reserve and the European Central Bank (ECB) seem to take only baby steps toward ending quantitative easing and raising interest rates, being unwilling to risk a recession in order to tame inflation.

Hiking interest rates will most likely burst the current stock market, real estate, and corporate debt bubbles, revealing the malinvestments stoked by the growth stimuli. The Fed is well aware of this risk because this is exactly what happened in 2019, when financial markets plunged after four interest rate raises in 2018.

Instead of continuing the normalization of monetary policy, the Fed lost its nerve and promptly reversed course. That is why many analysts doubt the Fed's determination to counter the inflation head-on now. Another obstacle to weeding out inflation is the large stock of public debt accumulated since the global financial crisis (GFC) and a worrying relaxation of public spending even in previously frugal economies....

The last two decades witnessed a surge in public debt worldwide. In advanced economies, the public debt burden soared from about 70 percent of gross domestic product (GDP) in 2001 to above 120 percent of GDP in 2021....

Surveys show that people are starting to realize that inflation is likely to increase further rather than fade away. This is gradually fueling requests for higher wages and a willingness to part more quickly with cash. As argued in a recent article, once inflation expectations become entrenched, the central bank's space to control inflation and use it to inflate debt away will significantly narrow.

Economist Thorsten Polleit brings good arguments that the Fed may only want marginally higher inflation, in a range of 4 to 6 percent per year, without letting it get out of control. But given the toxic interaction with already very high debt levels and rising inflation expectations, the central banks' plans could easily be derailed."

Internet guru on Web3: "Get ready for the crash" -CBS News

"With Web3 touted as the next evolutionary stage of the internet, businesses and investors are eagerly hopping on the bandwagon. Tech giants including Alphabet, Facebook-owner Meta and Microsoft are staking their claim in the emerging blockchain-based economy, some non-fungible token companies are already valued in the billions, and cryptocurrency trading platforms are experiencing hockey stick-like growth.

To cut through the hype, CBS MoneyWatch spoke with tech luminary Tim O'Reilly, who among other things in his long career is known for publishing the world's first website and coining the term Web 2.0. Although he thinks the technology behind Web3 is promising, 'It's a long way from prime time,' he said.

Indeed, the hubbub around cryptocurrency, NFTs and the metaverse, including sky-high valuations for startups, has a familiar ring to O'Reilly, who sees echoes of the dot-com boom and bust in the breathless boosterism around blockchain.

'Get ready for the crash,' he said bluntly of the grandest claims made for Web3. The interview is is lightly edited for clarity and brevity.

Where do you put web3 on a development timeline, relative to historic computing breakthroughs?

Tim O'Reilly: 'As a metaphor, I personally put web three in about 1983. This has been my impression for some time. In a lot of ways, before the dot com bust back in the days when we had FTP and Telenet before the web actually was introduced, we we've had this incredible valuation bubble on a technology that's really not ready for prime time.'

'With the dot com bust, the web arrived and it really exploded. Things really became possible that hadn't been possible before. By '95 you were, you were seeing really significant innovations in media and you're starting to see you innovations in e-commerce with Amazon. The capabilities that you could already see unfolding were quite large.'"

Your Super Bowl party will be much more expensive this year -CNN

"There's an uninvited guest coming to your Super Bowl party this year: inflation.

Last year's shindig may have been a casualty of Covid hibernation. This year, with mass vaccinations and more widespread testing, such a get-together is finally possible. And with it comes a grocery bill that reflects the surging consumer prices.

Wells Fargo crunched the numbers and found the price tag for your Super Bowl party could be 14% higher than last year, depending on what you serve.

Meat prices are the biggest offender. Bad news for fans of wings: prices for fresh and frozen chicken rose nearly 12% from last year. Ground beef for your Super Bowl chili is 13% more expensive. And forget about serving steak - prices are up 21%.

If you want to tweak the menu to keep the bill down, consider hot dogs. Prices for the all-American staple have fallen over the past year, and potato chip prices are up only about 1%.

On the drink cart, beer and wine prices are up just about 4% and 3%, respectively. But soda prices are fizzing. A 12-pack of 12-ounce soft drink cans has risen by nearly 12%....

With overall consumer price inflation running the hottest since the 1980s, you may have to get creative to keep your grocery bill down.

Watch for specials, says grocery store executive Stew Leonard Jr. Some stores may have over-ordered chicken wings for the Super Bowl to compensate for late or canceled deliveries."

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2.10.22 - How To Add $179k To Social Security Benefits

Gold last traded at $1,836 an ounce. Silver at $23.54 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on surging inflation despite rising interest rates and a firmer dollar. U.S. stocks fell as investors digested the fastest, most persistent inflation data in forty years.

A-Mark Precious Metals Sees Tight Market for Gold, Silver -MarketWatch

"A-Mark Precious Metals Inc. said supplies of precious metals continue to be constrained while demand remains robust.

The precious-metals platform saw an increase in gold and silver sales in the last three months of 2021.

On the outlook: 'Precious metals supply remains constrained while demand continues to be robust, resulting in strong pricing premiums for A-Mark given our fully integrated capabilities that provide us with a consistent source of supply,' said A-Mark CEO Greg Roberts.

'Favorable business trends have continued into the third quarter, keeping us optimistic about the outlook for A-Mark. We believe our fully integrated business model allows us to generate profit in stable periods and also benefit from the positive macro tailwinds we continue to experience in the market,' Mr. Roberts said."

gold chart Precious Metals Cup Patterns Have Long-Term Bulls Excited -Investing.com

"Timeframes are particularly important right now for precious metals, especially over the long term.

Today, we look at long-term monthly charts for gold and silver...As you can see, similar-looking patterns are developing for each. Cup with handle for Gold and Silver....

Again, these are very long-term charts. Clearly, the near term has seen some selling and consolidation in Gold and Silver's 'handle' phase. So those are biding their time and will become very bullish when they reassert their up-trend....

The long-term setup is looking good here. Watch to see if Gold and Silver can reassert their up-trends by breaking out of the intermediate consolidation."

Wealth is what you don't spend -Collaborative Fund

"You can't measure the benefit of exercise just by tracking how much you work out. It's the gap between your workout and avoiding offsetting its benefits after the fact that makes all the difference.

And isn't building wealth the same?

The typical American family is earning more than ever before. But for many it probably doesn't feel like that - at least as much as it should - because all of the income gains and then some have been offset with higher spending.

You could say higher spending is the goal. But all new luxuries become necessities in due time as expectations reset. I suspect part of the reason people don't feel better off is because financial progress is better measured by wealth, not income.

And wealth is just the accumulation of income you haven't spent. So a lot of people are the financial equivalent of the exerciser who burns 500 calories then immediately offsets it with dessert and is frustrated by the lack of progress despite working so hard.

All wealth relies on the ability to receive an extra dollar and say, 'I could spend this, and spending feels great, but I'm not going to.' It's the same as turning down a big meal after working out, and it's just as hard. All great things are hard.

Three points stick out here.

Wealth is what you don't spend, which makes it invisible and hard to learn about by observing other people's lives. Spending is contagious; wealth is mysterious.

Money is often a negative art. What you don't do can be more important than what you actively do.

Everything has a price, and prices aren't always clear. The price of exercise isn't just the workout; it's avoiding the post-workout urge to eat a ton of food. Same in finance. The price of building wealth isn't just the trouble of earning money or dealing; it's avoiding the post-income urge to spend what you've accumulated."

Retirement Strategy: How To Add $179,057 To Your Social Security Benefits -Investor's Business Daily

"Your monthly Social Security benefits get bigger the longer you wait to begin collecting between ages 62 and 70. But how long do you have to live before holding off on collecting benefits will pay off?

That's one of the toughest mathematical knots you've got to untie as you decide when to start collecting Social Security. It can even influence your decision about when to retire....

Let's also suppose that you are a single taxpayer who earns $100,000 a year now at age 61. Unless you plug in year-by-year income figures, Social Security calculators plug in the average yearly earnings going back in time for every single filer earning $100,000 at age 61.

What's the result?

If you start to collect at age 62, your initial annual benefit will be $20,075, or about $1,673 per month, according to number crunching by Heather Schreiber, founder of HLS Retirement Consulting....

If you wait until age 67 to start collecting, your initial yearly benefits will be $31,658, or about $2,638 per month.

And if you hold off until age 70? Then your benefits will start at $41,668, or about $3,472 per month....

Waiting until age 70 lands you a benefit that is slightly more than twice as big as your benefit at age 62.

But what about the eight years of benefits that you would collect between 62 and 70? How much is that worth? The answer: $186,131.

So how long does it take for cumulative benefits that start at age 70 to surpass the $186,131 head start in benefits that you get by starting them at age 62? The answer is eight years. If you begin to collect at age 70, by November of the year you reach age 78 you'll have banked $435,074 in Social Security money....

The break-even point basically occurs at the same age for all single people, regardless of income year by year...'So, in theory, whether you file at 62, 67 or 70, you should get the same cumulative benefit if you live to your average life expectancy,' Schreiber said."

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2.9.22 - Inflation in the United States

Gold last traded at $1,834 an ounce. Silver at $23.31 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on bullish technical support and dollar weakness. U.S. stocks rose as investors digested another batch of corporate earnings and bought the recent tech dip.

Gold has remained steady as stocks and bitcoin have plunged -CNBC

"Gold prices have remained resilient in recent weeks in the face of broad market volatility, decoupling somewhat from its typical price drivers - bond yields and the dollar.

Even as 10-year Treasury yields and the U.S. dollar index rose from intra-year lows toward the end of January, the precious metal held above $1,800 per troy ounce. As of Friday afternoon, spot gold was still trading around that $1,800/oz marker.

Despite the challenging macro backdrop of supply chain issues, surging inflation and lingering pandemic risks, Bank of America strategists have noted that some of the investment flows into gold have been very resilient.

'There are significant dislocations buried beneath headline inflation, interest rates and currency moves, raising the appeal of holding the yellow metal in a portfolio and supporting our $1,925/oz average gold price forecast for 2022,' BofA analysts said in a research note at the end of January.

Also central to gold's resilience, according to UBS, is a combination of elevated demand for portfolio hedges and a belief either that the Federal Reserve 'stays behind the curve' on tackling inflation or overtightens, causing growth to falter.

In a note Friday, UBS Chief Investment Office strategists highlighted that gold's 'tried-and-tested insurance characteristics' had again shone through versus other common portfolio diversifiers, including digital assets such as bitcoin."

wealth Inflation in the United States -Imprimis

"Money is just another commodity, no different from petroleum, pork bellies, or pig iron. So money, like all commodities, can rise and fall in price, depending on supply and demand. But because money is, by definition, the one commodity that is universally accepted in exchange for every other commodity, we have a special term for a fall in the price of money: we call it inflation. As the price of money falls, the price of every other commodity must go up.

And what causes the price of money to fall? The answer is very simple: an increase in the supply of money relative to other goods and services. As the Nobel Prize-winning economist Milton Friedman explained, 'Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.'

Inflation has been around almost as long as money itself. In the disastrous third century, inflation wracked the Roman Empire as emperors, unable to pay the bills, increasingly debased the coinage. The once proud silver denarius became a copper coin only thinly plated in silver. Roman merchants demanded more and more denarii in exchange for goods as the coin's intrinsic value declined....

Governments have only three ways to fund operations. They can tax, they can borrow, and they can print....The gold standard, where the government stands ready to buy or sell gold in unlimited quantities at a fixed price for its currency, makes inflation impossible....

While inflation is a monetary phenomenon, it is also a psychological one: when the expectation of inflation becomes widespread, it becomes a self-fulfilling prophecy.

That prophecy was fulfilled in 2021. With the Biden administration continuing pandemic relief, which discouraged many from seeking work, and restricting oil and gas production, inflation set in. Supply chain disruptions also contributed.

By December 2021, consumer prices were up seven percent on an annual basis, the highest in 40 years, while producer prices were up 9.6 percent, the highest since that statistic has been compiled. And the expectation of further inflation is now deeply embedded in the economy....

Unfortunately for the Biden presidency - and for the U.S. economy and the American people - Milton Friedman was right. Create too much money and you get inflation. We are witnessing the proof of that right now."

The preceding is adapted from a lecture by John Steele Gordon, author of An Empire of Wealth: The Epic History of American Economic Power delivered on January 6, 2022 at Hillsdale College.

Are You Diversified? -Alhambra Investments

"There are a lot of companies being weighed by the market since the beginning of the year and I don't think the dieting is over. It is true that a lot of the highflyers have come down a lot. It is also true that many of them -nthe ubiquitous EV makers, the SPACs, the meme stocks, the metaverse plays, fuel cells, payment processing, crypto assets, and development-stage biotechs - are still ridiculously expensive. And it isn't just the very speculative assets that are getting hit.

There are a lot of good companies out there with valuations that just aren't supported by the fundamentals and they are being weighed. Clorox is a great company with a great brand name, a high stock price, and a lot of debt. Higher costs pulled down earnings and the stock was down almost 15% last week. Home Depot is a good company but the stock is down 13% YTD. I could go on but it is a long list.

It is hard to predict what the next popular thing will be, which sector or asset the voters will take a shine to next. That's why you need to diversify and consider a wide range of assets. Diversification can be frustrating at times because while you will probably own some of the winners, you are by definition going to own some of the losers too. In our portfolios, we own value and dividend stocks, which have beaten the market by a wide margin this year.

Our portfolios also have a fairly large strategic allocation to real estate and REITs, the worst-performing sector this year to date. We minimized the damage somewhat by owning half of what our strategic allocation calls for, but we've taken a hit on real estate this year. We also own International value and US financials which have outperformed this year. And some small-cap stocks and large-cap biotechs which haven't.

And we own commodities, which are the best performing asset class year to date. And gold which has done nothing. We own emerging market stocks, which have outperformed, and US bonds which are down on the year. The overall result is a moderate portfolio that is down slightly for the year but less than half the drop of a standard 60/40, US stock/bond portfolio....

Over the last decade or so, it became popular to say that diversification no longer works or, in extreme cases, wasn't necessary. All you had to do was buy large-cap US stocks - preferably tech stocks - and watch the money roll in. We disagreed with that then and we still do. For investors who want to earn a reasonable return without taking excessive risks, diversification is the only free lunch in the investment world. Diversification still works and we think you're going to need more of it this year. The weighing of the highflyers is not over."

Energy markets take a costly turn with the drama of world tensions -The Hill

"The audience has taken its seats. The curtain is going up. The rehearsals during recent weeks are over. The real drama is about to begin. But it is still unclear whether it will be a farce or a tragedy....

Because it is wintertime, at least in the Northern Hemisphere, everyone came to the performance wearing a coat. But the days are already growing longer, and most people are hoping for some warmth of an early spring and a decline in household energy bills....

That should result in lower prices of oil and natural gas as demand eases. But so far it hasn't happened. Oil is heading almost remorselessly for $100 per barrel, and some on Wall Street suggest $120 could be in prospect....

A good play needs a villain and Russian President Vladimir Putin fits the role perfectly. His threats against neighboring Ukraine trigger a range of horrific historical comparisons in the West....

Putin holds several aces in his hand. It's Russian gas that keeps Ukrainians warm. Kiev benefits from transit fees from Moscow for gas piped across the country to customers in Eastern Europe, but that could be cut off, literally, by turning a tap.

The West, in general, and the United States, in particular, have poorer options. Moral indignation counts for a little but public opinion isn't a winning card. The tightness in the oil market could be reduced by greater OPEC production, but the cartel now works hand-in-hand with Russia, as OPEC+. President Biden's incredulous request to OPEC to increase its volumes significantly was ignored.

Domestically, voters better understand high energy prices and higher gasoline costs than the intricacies of Russia-Ukraine tensions. So, the crisis is a hard one for the White House to spin in its favor."

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2.8.22 - The Stock Market Selloff Isn't Over Yet

Gold last traded at $1,827 an ounce. Silver at $23.22 an ounce.

NEWS SUMMARY: Precious metal prices rose further Tuesday despite a firmer dollar. U.S. stocks traded mixed ahead of key inflation data later this week.

Gold ETFs bounce back to begin 2022 led by North American funds -WGC

"Gold-backed ETFs and similar products account for a significant part of the gold market, with institutional and individual investors using them to implement many of their investment strategies.

Flows in ETFs often highlight short-term and long-term opinions and desires to holding gold...Most funds included in this list are fully backed by physical gold.

Global gold ETFs drew net inflows of 46.3t in January, led by North American funds - partially offsetting the region's 2021 outflows. These combined with positive flows from Europe significantly outweighed Asian outflows.

Overall, net inflows were driven largely by gold price strength and a sharp selloff in equity markets, despite a reversal in the gold price on the back of a hawkish US Fed statement towards the end of the month.

North American inflows of 49.0t ($2.9bn) were concentrated in US funds, which tend to be more reactive to changes in the gold price than other regions. Additionally, a significant jump in the gold price leading up to gold ETF options expiration likely contributed to some of the inflows. This resulted in positive flows as gold rallied by nearly 3% in the first part of January to reach an intra-month high of $1,847/oz."

easy money Goodbye Easy Money as Hawkish Central Banks Speed Up Rate Hikes -Yahoo Finance

"The end of easy money is upon us.

Two years after the pandemic sent the global economy into a deep but short recession, central bankers are withdrawing their emergency support - and they're moving faster than they or most investors had foreseen.

The U.S. Federal Reserve is preparing to raise interest rates in March, and last Friday's jobs report fueled speculation it may need to move aggressively. The Bank of England just delivered back-to-back hikes, and some of its officials wanted to act even more forcefully. The Bank of Canada is set for liftoff next month. Even the European Central Bank may get in on the action later this year.

Rates are rising because policy makers judge that the global inflation shock now poses a bigger threat than further damage to growth from Covid-19. Some say it took them far too long to reach that conclusion.

Others worry that the hawkish turn could slow recoveries without offering much relief from high prices, given that some of the surge is related to supply problems beyond the reach of monetary policy....

Economists at JPMorgan Chase & Co. estimate that, by April, rates will have gone up in countries that together produce about half of the world's gross domestic product, versus 5% now. They expect a global average interest rate of about 2% at the end of this year - roughly the pre-pandemic level.

All of this suggests the biggest tightening of monetary policy since the 1990s. And the shift isn't confined to rates. Central banks are also dialing back the bond-buying programs they've used to restrain long-term borrowing costs....

In the process, the pivot may end up having ended a pandemic boom in financial markets that was amplified by loose money. The MSCI World Index of stocks is down about 5% this year. Bonds have plunged all over the world, sending yields higher....

This week, the U.S. is expected to report a 7.3% inflation rate for January, the highest since the early 1980s. Euro-area inflation just hit a record."

Green Startups Stumble, Accelerating Selloff of Risky Stocks -WSJ

"Electric-vehicle startups and other green tech companies soared early last year. Now a wave of investigations, outside allegations and growing investor skepticism have sent shares down 75% or more for many of them.

Last week, investigations by boards of directors into top executives at two electric-vehicle makers led to management changes. A short seller alleged that a startup lithium producer's technology doesn't work. And an agriculture-technology company's shares fell further after it wrote off most of the value of a recent acquisition.

Many of the companies went public through special-purpose acquisition companies, or SPACs, an alternative to traditional initial public offerings that allows companies to make lofty business projections. Some of the deals generated frenzied buying by small investors who are eager to invest in companies they believe will help reduce carbon emissions and limit climate change.

'You were getting complete silliness,' said Sam Peters, a portfolio manager at ClearBridge Investments who has avoided prerevenue electric-vehicle stocks....

At Electric Last Mile Solutions, Chief Executive James Taylor and Executive Chairman Jason Luo resigned after an investigation concluded both men purchased equity in the company at below market value around the company's December 2020 SPAC merger.

The company also said its financial statements might be inaccurate and would be restated. A company spokesman and Mr. Luo declined to comment on the allegations. Mr. Taylor didn't respond to requests for comment. Shares fell more than 50% for the week to $2.28....

The Securities and Exchange Commission has investigated several SPAC deals, including those that took electric-vehicle makers Nikola Corp. and Lordstown Motors Corp. public. Nikola late last year agreed to pay $125 million to settle a regulatory investigation into allegedly misleading statements by its founder and one-time executive chairman Trevor Milton....

Startups that have missed business targets have been among the market's worst performers this year."

It's not over yet -The Reformed Broker

"Where do bounces come from in a midst of a correction?

Sometimes it's just that stocks have fallen too far for sellers to want to keep selling. This isn't bullish. In fact, this type of bounce can suck people back in by creating the appearance that the worst is over.

Growth stocks in particular. Because belief dies hard and enthusiasm for cutting edge technologies fades slowly, not suddenly. Which mean the give-up process is long and drawn out - even after a stock is cut in half sometimes the worst is still yet to come. The slow bleed after is often worse than the initial shocking drop that preceded it.

Over at Verdad Capital, Dan Rasmussen revisits their 'Bubble 500' list of overpriced growth stocks, originally created in the Summer of 2020. It's filled with money-losing companies working in exciting areas of technology such as electric vehicles and gene editing therapy and so on...

Dan explains two very important things in his update this week: The first is that sell-offs for growth stocks differ from sell-offs for value stocks in one very important way:

'Remember, growth stocks trend, and value stocks mean revert. The psychology is simple. People hear about a hot stock that's gone up 3x, they buy some, it goes up 2x, they buy more: the whole attraction of buying a hot growth stock is the historic return trajectory. Value stocks are the opposite: you do well buying them when they're down...'

This idea is counterintuitive - that some stocks actually become worse buys as they are falling to lower prices, but the explanation is psychological, not financial.

Stocks trading at excessive valuations require a fan base to sustain their share prices. That fan base is often a bandwagon-jumping melange of traders and investors who are attracted to recent gains. Yes, they'll latch onto the fundamental story, but the fact that the stock has been and currently is going up is the main thing. When the stock breaks, so too does the fandom....

The spread between growth stock valuations and value stock valuations is still at a record high. So there's a long way to fall for the most expensive cohort within the growth stock bucket before the value players find them cheap enough to be worth buying. The unprofitable companies will find it nearly impossible to attract support from this crowd.

This is why the easiest assumption to make is that the correction in hyper-expensive, extremely speculative growth stocks will continue even after the overall S&P 500 has found a bottom."

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2.7.22 - Someone is Snapping Up Gold Below $1,800

Gold last traded at $1,820 an ounce. Silver at $23.04 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on bargain-hunting and a flat dollar. U.S. stocks traded modestly higher boosted by upbeat quarterly earnings reports and a better-than-expected January employment report.

Looks Like There's a Whale Snapping Up Gold Bullion Below $1,800 -Bloomberg

"Spot gold is again bobbing along near $1,800 an ounce, as it has been since mid-2020. The stickiness of that level, particularly as fundamentals turned more bearish, suggests there's a big buyer somewhere in these waters.

Since breaking above the round number in July 2020, the gold price dipped below it 19 times on a closing basis, only to regain its footing...Clearly, there is a big buyer who considers the metal a long-term hold.

Such whale activity, which shows up neither in ETF holdings nor in futures positioning, would require a substantial buyer, accumulating in size in the London over-the-counter market....

That would suggest that whoever is buying is able to buy in scale, leave little footprint in the market and then take delivery and store the metal in secure, invisible vaults. And that points strongly toward a sovereign buyer."

faceplant Facebook's faceplant on Wall Street could be just the beginning for some tech stocks -Washington Post

"The meltdown in highflying technology stocks like Facebook is just the start of the financial changes that will probably result from the Federal Reserve's decision to end a prolonged era of free money and make borrowing more expensive.

With the Fed signaling that higher interest rates are coming next month, investors have begun shedding some of their priciest stocks in favor of bets on companies poised to prosper as the economy adjusts.

The Fed over the past two years helped insulate the U.S. economy from the worst effects of the pandemic by flooding markets with cash. Holding its benchmark lending rate near zero and purchasing nearly $5 trillion in mortgage-backed and government securities helped drive prices higher on all kinds of assets: stocks, bonds, cryptocurrencies and housing.

Few companies benefited from this heady run more than the titans of Silicon Valley, which saw their share prices swell almost beyond reason as Americans turned to their products to survive the pandemic.

That bubble, for some firms, may be popping....' It feels like the world is entering a different environment than the one we've been in,' said Roger McNamee, co-founder of Elevation Partners, a private equity firm in Menlo Park, Calif. 'The pricing of risk is changing.'

Tech stocks peaked late last year as it became apparent that the Fed was growing more worried about the inflation outlook...January was the worst month since 2008 for the Nasdaq Composite Index, which is heavily weighted toward tech companies. Shares of Amazon fell around 10 percent, Microsoft lost 8 percent, Google and Facebook dropped around 7 percent and Apple dipped by 2 percent."

Neil Young vs. Joe Rogan: Free Speech Wins -Reason

"Who do you trust more about COVID? A legendary rock star or the world's most popular podcaster? The biggest takeaway from the latest culture war battle is that you get to decide.

Neil Young pulled his music from Spotify but you can still listen to his discography easily enough. And even if the world's most popular streaming service had dropped Joe Rogan, he'd still have all sorts of ways to reach his massive audience. The scandal du jour reminds us that radical free speech is alive and well. In a profound way, it doesn't matter if somebody somewhere wants to block it because it'll be available a few clicks away, no matter what.

Young fired the first shots by telling the streaming service Spotify that they had to choose between keeping his music on its platform or continuing to host Rogan's podcast. Young said Rogan spreads dangerous misinformation about COVID.

Spotify updated its rules about publishing content that 'promotes dangerous, false, or deceptive medical information' about COVID-19 and other diseases but has stood squarely by its marquee star, whose contract is worth a reported $100 million. Young almost immediately inked a deal with satellite radio provider SiriusXM to distribute his newest album and curate his back catalog. And his music remains widely available on YouTube, Apple Music, and his own website. Same goes for Joni Mitchell, who quickly followed suit.

Rogan also keeps rolling on, telling listeners via Instagram that the whole point of his show is to have interesting conversations and let people come to their own conclusions. 'If I pissed you off, I'm sorry,' he said. 'And if you enjoy the podcast, thank you.'....

We get to decide what we're going to watch and who we're going to trust, which is a great outcome-but one we should never take for granted."

White House gets set for cautious pivot on pandemic -The Hill

"The White House is preparing to pivot on the pandemic - but with a different approach than the July 4 celebration last summer that some have subsequently criticized as premature.

'No one wants a repeat of last July,' said one Democratic strategist. At the Independence Day event, President Biden declared near 'independence' from COVID-19.

What followed were the delta and omicron variants, which caused spikes in cases and hospitalizations, contributing to the COVID-19 fatigue that has been a factor in declining approval numbers for President Biden.

New evidence is now emerging that gives the White House and plenty of others hope that the nation is veering out of the pandemic.

The omicron variant is showing signs of fading: coronavirus cases are on the decline across the country. The White House is signaling that the new phase is about being able to live with the virus....

'It's definitely time to move towards a more ongoing, robust, resilient strategy to prevent a surge from ever happening again while enabling people to get back to more normal life,' McClellan said.

It's unclear whether or when Biden himself plans to outline the way forward in the pandemic. White House officials and health experts say the country still has some time before reaching some kind of 'new normal.'"

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2.4.22 - What Inflation Means for Your Retirement

Gold last traded at $1,806 an ounce. Silver at $22.48 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday despite a firmer dollar. U.S. stocks were lifted by upbeat jobs data and the latest Amazon earnings report.

Inflation: What it means for your retirement fund right now -Motley Fool

"In 2021, inflation increased by 7% - its highest point since 1982. This means that $1 at the beginning of 2021 was worth around $0.93 at the end of the year. While virtually everyone could feel this decrease in purchasing power, it's especially impactful for those in or nearing retirement.

Here's what the rise in inflation means for your retirement savings.

Inflation is one of the benchmarks the government uses to determine whether they'll increase retirement account contribution limits and Social Security benefits payouts and if so, by how much....

For payments beginning in January 2022, Social Security benefits increased by 5.9%. So if someone receiving Social Security benefits normally received $1,000 monthly, they could now expect around $1,059....

There's no one-size-fits-all answer regarding how much you'll need in retirement, but a good rule of thumb to follow is to aim to have 80% of your preretirement income to maintain your lifestyle....

Unfortunately for most people, it's nearly impossible to achieve these savings goals without investing. The average interest rate on savings accounts is currently 0.06%....

If you're fairly far out from retirement, the present rise in inflation shouldn't impact your retirement savings much, since you'll be trying your best to avoid spending the money. One of the best things you can do is make sure you're investing your money to keep up with (and hopefully surpass) the inflation levels.

If you're currently retired, you may want to consider cutting down on spending until inflation has slowed down and your purchasing power has increased."

gold cube Mystery as gold cube worth $11.7million 'pops up' in NYC's Central Park -The Sun

"A gold cube worth an estimated $11.7million appeared in New York's Central Park on Wednesday morning accompanied by its very own security detail.

The cube, composed of 186 kilograms of pure 24-karat gold, was rolled out in front of a snowy Naumburg Bandshell at 5am in the morning surrounded by photographers and NYPD officers.

The hollow gold block is the creation of 43-year-old German artist Niclas Castello, who has branded it the 'Castello Cube.'

The 410-pound work is not for sale but was used as publicity for the launch of accompanying cryptocurrency, the Castello Coin.

With gold currently priced at $1,788 per ounce, it is worth up to $11.7 millon if it were to be put up for sale....

Castello's Cube measures more than a foot and a half and has a wall thickness of about a quarter inch.

Castello billed the block as a 'socle du monde' (base of the world) sculpture....The Castello Coin is being traded as $CAST and is trading at an initial price of $0.44.

The artist's team told the New York Times that he had privately sold enough of the coins to finance the cube project. On February 21, the coin launch will be followed up with an NFT auction."

ED. NOTE: Gold=Substance, Crypto=Symbolism - It is interesting to note that the virtual world of cryptocurrencies very much likes to associate the value of their tokens with real money; gold. Will the metaverse of symbolism ultimately triumph over the real world of substance? Based on 6,000 years of history, we seriously doubt it.

The Federal Reserve Is in a Catch-22 -Rogue Economics

"The Fed claims to care about the economy above all. It operates under a dual mandate that became law in 1977.

That law says the Fed must balance price stability (meaning control inflation)"� and full employment (its metric of economic strength).

But in reality, the Fed cares most about its shareholders - the big banks.

The big banks care about their mega-customers, the big corporations. And the big banks and big corporations both care about liquidity - and their share prices rising....

The Fed is in a Catch-22. It's trying to serve two masters - the markets and the economy. At the end of the day, the financial system is more afraid of losing its cheap-money fix than of inflation or a virus.

I don't believe the Fed is going to raise rates six or seven times this year...Still, when there's uncertainty over something as addictive as cheap money"� the markets tend to overreact....

Since the Fed cares about markets, it will not raise rates by too much or too quickly if the markets react badly.

What that means is that"� if the markets freak out when the Fed makes its initial rate hike"� the Fed is likely to reconsider the pace or magnitude of future cuts. (That rate hike will still cause another volatility spasm."�

In Clash with U.S. Over Ukraine, Putin Has a Lifeline from China -Yahoo

"As the United States moves to exert maximal pressure on Russia over fears of a Ukraine invasion, the Russian leader, Vladimir Putin, has found relief from his most powerful partner on the global stage, China.

China has expressed support for Putin's grievances against the United States and NATO, joined Russia to try to block action on Ukraine at the United Nations Security Council, and brushed aside American warnings that an invasion would create 'global security and economic risks' that could consume China, too.

On Friday, Putin will meet in Beijing with China's leader, Xi Jinping, ahead of the opening ceremony of the Winter Olympics that President Joe Biden and other leaders have pointedly vowed to boycott.

Although details of any potential agreements between the two countries have not been disclosed, the meeting itself - Xi's first in person with a world leader in nearly two years - is expected to be yet another public display of geopolitical amity between the two powers.

A Chinese promise of economic and political support for Putin could undermine Biden's strategy to ostracize the Russian leader for his military buildup on Ukraine's borders. It could also punctuate a tectonic shift in the rivalry between the United States and China that could reverberate from Europe to the Pacific."

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2.3.22 - Gold Climbs a Third Straight Day

Gold last traded at $1,803 an ounce. Silver at $22.37 an ounce.

NEWS SUMMARY: Precious metal price eased back Thursday on mild profit-taking despite a weaker dollar. U.S. stocks fell after Facebook earnings missed investor expectations.

Gold climbs a third straight session to highest finish in a week -MarketWatch

"Gold prices tallied a third straight gain on Wednesday, as an unexpected monthly fall in U.S. private-sector jobs, weakness in the dollar, and a further retreat in yields for government debt helped lift the precious metal to its highest settlement price in a week.

'While gold is likely to exploit the dollar's weakness to push higher, its near-term outlook remains influenced by the U.S. jobs report on Friday,' said Lukman Otunuga, manager, market analysis at FXTM.

'A strong jobs report that shows robust job and wage growth may reinforce expectations of a hawkish [Federal Reserve], dragging gold prices lower as the dollar regains its mojo,' he told MarketWatch. However, 'if the jobs report disappoints, this could offer some relief to gold bugs, resulting in an incline back towards $1,831.'

On Wednesday, gold got a boost after data showed privately run U.S. businesses reducedemployment by 301,000 jobs in January -- the biggest drop since the start of the pandemic. Economists surveyed by The Wall Street Journal had forecast a 200,000 gain....

'Gold is hovering right above $1,800 and there is meaningful safe haven interest with market volatility along with the Ukraine crisis to support this level,' Jeff Wright, chief investment officer at Wolfpack Capital, told MarketWatch."

debt chart Welcome to Mt. Debtmore -Bonner Private Research

"This just in. USA Today: 'Sound the alarm: National debt hits $30 trillion as economists warn of impact for Americans...'

'It does not make sense as a society to simply spend more than we take in on a permanent and growing basis,' said Michael A. Peterson, the group's chief executive officer. 'What that essentially does is place the burden onto our future and onto the next generation.'

Globally, the situation is no better. The borrow-and-spend spree of the 21st century has led to worldwide debt of $300 trillion - more than 3 times world GDP....

Without two decades of jackass policies, America wouldn't be facing $30 trillion worth of "�national' debt...Barack Obama and Ben Bernanke rescued Wall Street's bonuses in 2008-2009, they added $8 trillion to the debt. In 2020, along came the COVID crisis. Stocks fell. The feds panicked, and another $8 trillion in debt was piled on, making the rich richer than ever.

Thanks to the Fed's ultra-low interest rates, they've added a total of $24 trillion to federal debt since 1999. The low rates also made borrowing more attractive to the rest of the economy. So, now - in addition to the stinking federal pile - we have a $56 trillion mountain of household and corporate debt....

Causes have effects. Actions have consequences. Borrow too much today and your credit score goes down tomorrow. Then, if you're able to borrow at all, you'll have to pay a higher interest rate. And with $86 trillion outstanding, even very small increases in interest rates (carrying costs) can be devastating.

A real 'normal' interest rate is, say, 3%. With consumer prices rising at a 6% rate, that would mean a nominal rate of 9%. If the entire debt had to be refinanced at 9%, it would cost about a third of annual GDP. Obviously, normal is not going to happen."

Facebook's Shares Plunge After Profit Decline -Wall Street Journal

"Facebook parent Meta Platforms Inc. startled investors with a sharper-than-expected decline in profits and a gloomy outlook in its first earnings report since Chief Executive Mark Zuckerberg outlined a pivot to the metaverse.

Meta shares plunged after the results were announced, dropping more than 20%. If shares dropped that much when trading opens on Thursday, it would wipe more than $175 billion from the tech giant's market capitalization.

The company said it expected revenue growth to slow because users were spending less time on its more lucrative services. Meta cited inflation as a weight on advertiser spending and estimated that ad-tracking changes introduced by Apple Inc. last year would cost Meta some $10 billion this year.

Meta also lost about a million daily users globally and stagnated in the U.S. and Canada, two of the company's most profitable markets, the results show.

The results show Facebook's business under pressure on a number of fronts at a moment when Mr. Zuckerberg is betting the company's future on VR headsets, AR glasses and virtual worlds, known as the metaverse, in which users can live and work.

'Although our direction is clear, it seems that our path ahead is not quite perfectly defined,' Mr. Zuckerberg told investors during a conference call Wednesday....

The latest earnings come as Meta continues to face criticism from lawmakers and users over revelations in The Wall Street Journal's 'Facebook Files' series, which showed that the company knows its platforms are riddled with flaws that cause harm."

Web3 is the future, a scam, or both? -Vox

Web3 is a scam.

Web3 is a world-changing opportunity to make a better version of the internet and wrest it away from the behemoths who control it today.

Web3 will make some people a lot of money. But many other people will lose their shirts on it.

I know! I'm confused, too.

The fact that Web3 is hard to define...It's a nascent idea floated by a mix of buzz, optimism, confusion, theological battles, and pure unadulterated speculation, which means it's incredibly malleable....

You can explain why Web3 is a fundamental remaking of the internet, and some people will take you very seriously. And you can argue that it's an MLM scheme built to enrich people who are already rich, and find plenty of people nodding along.

What you can't do, right now, is ignore Web3 if you work in or around tech. Because it's all anybody has wanted to talk about for the past several months....

At its core, Web3 is a rebranding of crypto and blockchain, the technology based around a worldwide network of computers that talk to each other and validate and record transactions without human intervention or centralized oversight.

Blockchain tech has been around in some form for more than a decade, and for much of that time most people who thought about it focused on bitcoin, the digital currency created in 2009 that was most closely associated with blockchain. But you couldn't really do much with bitcoin except buy or sell it and debate whether it was going up or down....

Now you can actually do some things with the blockchain. Not many things, yet. And most of it is still about buying and selling stuff - except now instead of digital currency, you can also buy and sell digital art, or plots of digital land or other items you can earn in a handful of video games....

So ... I don't know. Web3 turns on a lot of my early warning indicators that light up when things don't make sense to me. And I'm convinced that a lot of people who are piling into NFTs and lots of other get-rich-quick pitches are going to get burned because that's what happens to most people who go for get-rich-quick pitches.

We may find out quite soon, especially if the value of the crypto currencies that fuel so much of Web3 keeps falling."

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2.2.22 - U.S. Economy is About to Slam into a Wall

Gold last traded at $1,810 an ounce. Silver at $22.74 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on safe-haven buying and a weaker dollar. U.S. stocks rose modestly amid upbeat tech earnings reports.

Gold Breaks Above $1,800 as Dollar Weakens After Fed Commentary -Bloomberg

"Gold rose for a second straight day as the dollar weakened after U.S. Federal Reserve officials played down prospects of aggressive rate hikes coming imminently.

The softness in the greenback helped gold cross the psychologically important $1,800-an-ounce threshold, which is just above the metal's average price last year.

On Monday, Fed officials including Kansas City's Esther George and San Francisco's Mary Daly stressed that they want to avoid unnecessary disruptions to the U.S. economy as they prepare to start raising interest rates.

'Gold has been finding support from the weaker U.S. dollar,' said Daniel Briesemann, an analyst at Commerzbank AG.

Exchange-traded funds inflows are also providing support, Briesemann said. Those tracked by Bloomberg added more than 5 tons of bullion Monday, extending this year's gain to 42 tons.

Investors will be watching January's U.S. jobs report, out on Friday, for more clues on the trajectory for inflation."

consensus After a huge year for growth, the U.S. economy is about to slam into a wall -CNBC

"Spurred by a massive inventory rebuild and consumers flush with cash, the U.S. economy last year grew at its fastest pace since 1984.

Don't expect a repeat performance in 2022.

In fact, the year is starting with little growth signs at all as the late-year spread of omicron coupled with the ebbing tailwind of fiscal stimulus has economists across Wall Street knocking down their forecasts for gross domestic product.

Combine that with a Federal Reserve that has pivoted from the easiest policy in its history to hawkish inflation-fighters, and the picture has suddenly changed substantially. The Atlanta Fed's GDPNow gauge is currently tracking a first-quarter GDP gain of just 0.1%.

'The economy is decelerating and downshifting,' said Joseph LaVorgna, chief economist for the Americas at Natixis and former chief economist for the National Economic Council under then-President Donald Trump. 'It's not a recession, but it will be if the Fed tries to get too aggressive.'....

Goldman Sachs slashed its first-quarter GDP outlook to 0.5%, down from 2%. The bank also cut its full-year view to 3.2%, well below the current 3.8% consensus.

'Growth is likely to slow abruptly in 2022, as fiscal support fades and, in the near term, virus spread weighs on services spending and prolongs supply chain disruptions,' Goldman economist Ronnie Walker said in a note for clients. 'Q1 growth is likely to be particularly soft because the fiscal drag will be accompanied by a hit from Omicron.'

Likewise, Bank of America knocked down its first-quarter number to 1% from 4% and cut its full-year forecast to 3.6% from 4%, with risks to that forecast seemingly tilting to the downside."

National debt surpasses $30 trillion for the first time -CNN

"America's national debt just hit another sobering milestone.

Total public debt outstanding is now above $30 trillion, according to Treasury Department data published Tuesday.

Government borrowing accelerated during the Covid-19 pandemic as Washington spent aggressively to cushion the economic blow from the crisis. The national debt has surged by about $7 trillion since the end of 2019.

It's impossible to know how much debt is too much, and economists remain divided over how big of a problem this really is. But the latest debt milestone comes at a delicate time as borrowing costs are expected to rise.

After many years of rock-bottom interest rates, the Federal Reserve is shifting into inflation-fighting mode. The Fed is planning to launch its first series of rate hikes since 2015. Higher borrowing costs will only make it harder to finance that mountain of debt....

Interest costs alone are projected to surpass $5 trillion over the next 10 years and will amount to nearly half of all federal revenue by 2051, according to the Peter G. Peterson Foundation, an organization focused on raising awareness to the fiscal challenge."

Consumer Pessimism Grows as Inflation Accelerates -Wall Street Journal

"While Americans' feelings about their personal finances slid through much of 2021, concerns about buying conditions - amid continuing worries about inflation - fell drastically for much of the year.

Household income has declined from spikes that occurred as the government distributed pandemic-related stimulus. Still, many Americans have seen wages and benefits increase, as the economy rebounded from earlier disruptions from the pandemic.

At the same time, decades-high levels of inflation have tempered enthusiasm for spending.

The University of Michigan has seen less enthusiasm for large purchases during the pandemic, with 41% of consumers citing high prices as a reason not to buy in December. Uncertainty and a lack of affordability were the leading causes for hesitance throughout much of 2020....

Supply constraints caused by the pandemic and high consumer demand has helped to drive up prices. This imbalance in the economy is dragging down Americans' confidence to make purchases but could be short-lived. A Wall Street Journal survey of economists shows this rate is expected to rapidly fall."

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2.1.22 - The Fed's Plan to Kill Your Cash

Gold last traded at $1,801 an ounce. Silver at $22.57 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on safe-haven buying and a weaker dollar. U.S. stocks drifted lower as investors paused following a wild January rollercoaster ride.

How Can Putin Afford War In Ukraine? His $130 Billion Gold Horde Helps -Forbes

"How can Russian President Vladimir Putin afford the costs - both direct and indirect - of a new war in Ukraine? Easy - he's been preparing for years. Russia's central bank reserves now stand at $640 billion, a record. That pile is equivalent to 17 months of Russian export revenues, and continues to grow, thanks to surging oil prices.

Russia exports some 5 million barrels per day of crude oil, plus 2.5 million bpd of refined petroleum products, according to Cowen & Company, amounting to about 10% of the global oil trade. With Brent crude hitting an 8-year high of $88.88 this morning, that amounts to more than $600 million a day in petro-cash.

On top of that is 23 billion cubic feet per day of natural gas exports (roughly 2 bcfd of which now transits through Ukraine) - worth another $400 million a day at today's elevated European prices.

Importantly, it's no longer apt to refer to Russia's fossil fuel income as 'petro-dollars,' as Putin has been working hard to 'de-dollarize' the Russian economy. Back in 2013 Russia received dollars for 95% of its exports to Brazil, India, South Africa and China. Today, according to the Congressional Research Service, after a decade of de-dollarization just 10% of that trade is in greenbacks.

And Putin has created new payment processing systems, as a replacement for SWIFT, the Society for Wolrldwide Interbank Financial Telecommunication (from which Biden has threatened to cut Russia off); in 2015 after U.S. sanctions Moscow launched the Mir payment platform (now even connected to Apple Pay)....

Putin is not the only goldbug - central banks have added 4,500 tons of gold reserves over the past decade."

money The Fed's plan to kill your cash -Bonner Private Research

"The Biden Administration will soon release a national security memorandum that calls for regulating Bitcoin, cryptocurrencies, and digital assets as a matter of "�national security,' according to story published by Barron's on Thursday night. The report did not say whether the Administration views Bitcoin and digital assets as a threat to US national security. But that's the most likely conclusion. Why?

Because controlling the nation's money is the source of great power; power for the Federal Reserve and power for members of Congress and the Executive Branch who spend trillions of dollars every year and can borrow money on the credit of the United States (money which you have to repay through higher taxes or lower growth and inflation).

Neither the Fed nor the US Treasury want any competition when it comes to money. Bitcoin is a threat the hegemony of the US dollar. And the US dollar is a great source of power to the US government.

The Fed didn't put it quite like that in its long-awaited report on a central bank digital currency. That report was published last week. It's called Money and Payments: The US Dollar in the Age of Digital Transformation. You can read it for yourself here. Here are my five big takeaways after reading it over the weekend.

1) The demonetization of cash is inevitable, if not imminent. By "�demonetization,' I mean that cash will eventually be phased out and replaced by digital money (public and private)...From the government's perspective, there are too many benefits to a CBDC to allow cash to continue to exist. I'll get to those "�benefits' in a moment.

2) The Fed doesn't want competition. Although the report is superficially about making the payments system more efficient, less costly, and more accessible to ordinary Americans, it's really about is making sure CBDCs issued by other countries or "�private money' like Bitcoin (not issued by anyone but whose supply is strictly limited) don't threaten the US dollar's status as the world's reserve currency....

3) Our monetary authorities are deluded. The word "�safest' appears in the document five times. Here are two examples: "�Central bank money carries neither credit nor liquidity risk, and is therefore considered the safest form of money"�.A CBDC would be the safest digital asset available to the general public, with no associated credit or liquidity risk.'...To believe that government money is safer than gold is to believe that government bonds are "�risk free.' While not deluded in the literal sense, it's the kind of thinking about money that shows little imagination or knowledge of history....

4) CBDCs provide more control. Cash does not. The paper argues that a CBDC must be "�identity verified' yet "�privacy protected.' These are mutually exclusive design principles. Cash is a bearer instrument. It allows for private transactions between two parties, without the permission of the State...Cryptocurrencies and Bitcoin - private forms of money that use the blockchain and distributed ledger technology to authorize transactions - don't require the government's knowledge or permission. A CBDC would require both.

5) CBDC benefits outweigh risks for the Fed. The Fed lists lots of technical risks from a CBDC. The biggest one is that retail investors would prefer a CBDC to a regular bank account. They would withdraw their money from retail banks, creating a bank run, or at least eroding the capital base of systemically important banks (and thus the financial system). The Fed proposes limiting how much an individual could hold in a CBDC....

The good news is that a ban on cash and the introduction of a CBDC don't appear to be imminent. The bad news is that they seem to be inevitable, if only for the reason that it more firmly centralizes control of the money system in a few powerful hands.

The WORSE news is that in the last two years, we've learned the hard way that any kind of emergency can lead to a sudden acceleration of a trend...The solution? Save in gold and accumulate other precious metals. Yes, it's possible those could be banned too, or even confiscated. But that is not a risk you can easily or reasonably hedge against. "

How the Fed's Policy Shift Is Rippling Through the Housing Market -Wall Street Journal

"The Federal Reserve's decision to end its era of easy money is rippling through the mortgage market, driving up the cost of buying a home.

The central bank had been the biggest buyer of pools of home loans since the start of the pandemic. Now it is reversing course, winding down its purchases and laying the groundwork to shrink the $2.7 trillion stockpile it has built up. These mortgage-backed securities, hot investments for much of the pandemic, are now selling off.

'When you go from quantitative easing to quantitative tightening in two months, this is what happens,' said Walt Schmidt, a mortgage strategist at FHN Financial....

The upheaval in mortgage bonds affects households in an especially direct manner. Less demand for mortgage bonds means issuers must offer higher yields to attract investors. So lenders have to raise interest rates on the mortgages inside those bonds. Already, the 30-year fixed mortgage rate is around its highest level since the beginning of the pandemic."

As Biden doubles down on his War on Energy, prices keep shooting up -New York Post

"Think energy costs are high now? Just wait: President Joe Biden is doubling down on his War on Energy, and that's sure to keep prices zooming up, up and . . . up.

Biden's Environmental Protection Agency is writing new rules that will raise costs for fossil-fuel-based power plants. And, as Kenneth R. Timmerman noted in The Post last week, Team Biden has also moved to kill the Eastern Mediterranean Gas Pipeline, which would've brought Israeli and Cypriot natural gas to gas-starved Europe, helping ease shortages there.

The prez is also reviving Obama-era loan guarantees for 'clean energy' producers, starting with $1 billion in backing for a Nebraska company that will make 'clean' hydrogen.

That guarantee could cost taxpayers; think Solyndra, the solar-panel company Team Obama aided to the tune of $500 million before it went belly-up - only with the stakes now twice as high. Favoring such companies also puts traditional energy producers at a competitive disadvantage.

Meanwhile, a Russian invasion of Ukraine would worsen European energy shortages; Russia provides 30% to 40% of Europe's oil, gas and coal. Team Biden is working on a plan to get global producers to increase output and divert gas shipments just in case, but many are already near maximum. Brace for worldwide prices to skyrocket even more.

Americans are already paying about $3.33 a gallon for gas at the pump, nearly 40% percent more than a year ago. US benchmark crude oil just hit a seven-year high, $87 a barrel. Home heating fuel costs are up more than 40%."

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1.31.22 - IRS Needs Reform, Not New Power

Gold last traded at $1,796 an ounce. Silver at $22.41 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on bargain-hunting and a weaker dollar. U.S. stocks traded mixed ending a volatile month of trading.

Gold is shining again as stocks wobble and cryptos melt down -CNN

"Stocks have slumped this year. So has bitcoin. But gold, by comparison, has had a fairly solid start to the year. The price of the yellow metal is roughly unchanged, hovering just below $1,800 an ounce.

Gold prices are up slightly over the past three months as well. So will the commodity's climb pick up steam? Could it head back towards its all-time high above $2,000 during the early stages of the pandemic in the summer of 2020?

Gold is often viewed as a good hedge against rising interest rates and inflation since it should, in theory, hold onto more of its value given that it is a tangible and scarce asset - unlike paper currencies and cryptos.

The return of market volatility this year, which has hurt meme stocks and bitcoin in particular, could lead to further gains for gold, according to some experts.

'Cryptos stole all the oxygen out of gold last year, and people go into crypto for many of the same reasons as gold,' said Robert Minter, director of ETF Investment Strategy, noting that bitcoin bulls had argued that cryptos should be a good hedge against inflation.

But this year is proving that's not the case.

'Investors are starting to realize bitcoin is more of a risky asset. It's less of a portfolio diversification tool and more of an energy drink,' Minter said, referring to the big highs and equally epic pullbacks for crypto prices compared to far more stable moves in gold.

Gold is likely to remain a better bet for investors looking for protection from interest rate hikes as the Fed fights surging consumer prices."

position 4 Good Reasons to Sell Stocks Now -Morningstar

"Stocks have been volatile recently, seesawing all over the place, but mostly trending down. The S&P 500 has lost about 9% so far in 2022, and the tech-stock-heavy Nasdaq 100 has lost more than 13%.

You don't have to be an investment legend to know that it's rarely wise to be a seller in such environments if you can avoid it. Selling into a downturn violates one of the key tenets of successful investing: selling high. And investors who panic-sell are prone to make emotional decisions that undermine the success of their plans....

For all of these reasons, the admonition to stay the course in a falling market is often--indeed usually--sound advice. But it also presupposes a few key things that may or may not apply. The biggie is that it assumes the underlying investment plan and asset allocation are well-thought-out and well-tended.

At least until recently, however, we were living in an era of FOMO, fear of missing out, in which many novice investors barreled into risky assets with the hopes of overnight riches....

I think there are plenty of investors who should, in fact, be lightening up on stocks during the current market downdraft...Here are a few key situations when selling stocks might be warranted right now.

Reason 1: You're getting close to retirement and need to de-risk....the ability to absorb big losses in our equity portfolios--declines as we get close to drawing from our portfolios....

Reason 2: You have a short-term investment goal....The unlucky soul who invested in the S&P 500 in early 2008 and needed to get his money out a year later would have had to settle for a 43% loss, for example....

Reason 3: There's a chance you'll capitulate if things get worse....capitulation risk. That's my own term, referring to the chance that the investor could become so nervous during periods of losses that he sells himself out of stocks, thereby turning paper losses into real ones....

Reason 4: You have tax losses....for investors who recently purchased securities in their taxable accounts that have subsequently declined, selling to harvest a tax loss can be a way to find a silver lining."

This tax filing season, IRS needs reform, not new power -Washington Examiner

"Tax refunds and other services provided by the IRS will be delayed this year, according to reports out of the Treasury Department. The IRS complains that this is because of challenges presented by the coronavirus pandemic as well as cuts to the agency's budget over the last 10 years. This failure to perform its most basic function is yet another example of the agency's incompetence.

As tax filing season gets underway, the IRS noted it will likely have a backlog of several million unprocessed tax returns. This means many people will wait for months to get their hard-earned money back from the government. This amounts to the government forcing taxpayers to give them an interest-free loan and then delaying repayment indefinitely.

Stunningly, amid all this, there are policymakers in Washington suggesting the IRS should have more power. Sen. Elizabeth Warren, a Massachusetts Democrat, has introduced the 'Tax Filing Simplification Act,' which would put the IRS in charge of filing tax returns itself and sending taxpayers the bill when all is said and done. Simply put, this would be a disaster scenario.

When taxpayers file taxes, they choose the deductions that work best for them and their families. The IRS has no such motive at heart, and as its name suggests, it is solely concerned with bringing in revenue. There is no incentive for the IRS to work in the best interest of the taxpayer. Further, when there are disputes between taxpayers and the IRS, the burden of proof would be shifted to the former, making it harder for citizens to get access to money they were rightly owed and wrongfully denied by the government.

Not only has the IRS proven it does not act in the best interests of taxpayers, but it has shown that it often actively works against those interests. Analyses of its audit data show the agency often targets the poorest counties in America for excess scrutiny. The expressed reason behind this was that these communities do not have the resources to fight back....

The proper solutions would be to scale back the agency's role altogether. If the IRS is still searching for things to do, it can try to locate the sources of multiple illegal taxpayer information leaks in the recent past. It can also ensure no more people are targeted for scrutiny because of their political or socioeconomic statuses. Any solution that begins by further empowering an agency with such glaring holes misses the mark."

The Fed Has No Real Plan, and Will Likely Soon Chicken Out On Rate Hikes -Mises

"The Fed's Federal Open Market Committee (FOMC) released a new statement purporting to outline the FOMC's plans for the next several months. According to the committee's press release:

'With inflation well above 2 percent and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate. The Committee decided to continue to reduce the monthly pace of its net asset purchases, bringing them to an end in early March....'

The lesson here is that even when inflation is high and the labor market is supposedly strong, the Fed will still only proceed toward tapering and tightening in the slowest, most cautious manner possible.

Although price inflation is at a forty-year high, the Fed is still unwilling to commit to a rate hike in March, and it's planning to only end new asset purchases for its balance sheet by March. The Fed still refuses to acknowledge any connection between inflation and the incredibly large amounts of money creation and credit creation it fostered over the past decade and especially over the past two years....

All of this, however, only amounts to what the Fed is willing to say right now. The 'plans' outlined here are no more than the stated, tentative plans for the FOMC. Whether or not any of this actually happens is another matter.

Indeed, the Fed's fear and lack of backbone was much more clearly emphasized in Jay Powell's Q&A with reporters, which followed the release of the FOMC's statement.

During the presser, Powell repeatedly emphasized that the Fed must remain flexible and that the targeted policies could change at any time, depending on the economic situation. 'We need to be adaptable,' he said, and managed to include the typical dovish remarks when he stated that really the current goal with the balance sheet is - at some point - 'allowing the balance sheet to begin to run off.' ....

So, while some news reports covering the Fed's announcements appear to conclude that the Fed will surely begin raising rates in March, that remains very much up in the air."

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1.28.22 - Prepare for Unsettling Tightening Cycle

Gold last traded at $1,787 an ounce. Silver at $22.30 an ounce.

NEWS SUMMARY: Precious metal prices declined for a third day on Friday despite rising inflation and a flat dollar. U.S. stocks traded mostly lower - despite upbeat Apple earnings - to end a roller-coaster week with the S&P 500 headed for its worst month since March 2020.

Investing in Precious Metals -Motley Fool

"Precious metals are rare metals that have high economic value. They're valuable because they're scarce, useful for industrial processes, or have investment properties that make them a good store of value. Notable precious metals include gold, silver, platinum, and palladium....

Gold is the most well-known and investable precious metal. It's unique for its durability (it doesn't corrode), shaping capability, and ability to conduct heat and electricity. While it has some industrial uses in dentistry and electronics, it's primarily used to make jewelry or as a form of currency. It has long been a store of value. Because of that, investors seek it out during times of economic or political turbulence and as a hedge against rising inflation.

There are many ways to invest in gold. You can purchase physical gold coins, bars, or jewelry. Investors can also buy gold stocks (shares of gold mining, streaming, or royalty companies), gold-focused exchange-traded funds (ETFs), or gold-focused mutual funds. Each gold investment option has its pros and cons....

Silver is the second most-common precious metal. It's an important industrial metal used in the electrical, electronics, and photography industries. For example, because of its electrical properties, silver is a vital component in solar panels. Silver is also a store of value that's used to make jewelry, silverware, coins, and bars.

Silver's dual role as an industrial metal and store of value tends to make it more volatile than the price of gold...In some cases, silver prices can outperform gold during periods of high industrial and investor demand.

Precious metals provide several benefits to investors, including:

- A hedge against inflation: Precious metals prices tend to rise at or above the inflation rate.
- Tangible asset: Precious metals are real assets that hold value beyond investment purposes such as jewelry or industrial uses.
- It's a fairly liquid investment: You can quickly sell precious metals (especially investment products) and convert them to cash.
- Provides portfolio diversification: The price movements of precious metals don't always go in the same direction as the stock or bond markets."

punch bowl Prepare for an Unsettling Monetary Tightening Cycle -Wall Street Journal

"If you were born after 1980, the monetary tightening that the Fed said this week will begin in March will be unlike any you've seen.

This is for two reasons, both unsettling for markets. First, when the Fed began raising interest rates in 1994, 1999, 2004, and 2015, inflation was near or below its desired level (now formally enshrined as 2%). The tightening was thus pre-emptive, intended to keep inflation from going up rather than to push it down. That gave the Fed considerable latitude about how fast to raise interest rates and how to respond to new data.

Today, inflation is too high. Even if December's 7% rate is adjusted for temporary effects such as higher oil prices and used-car shortages, underlying inflation is well above 2%. With unemployment at 3.9% and falling, the economy is at maximum employment, putting upward pressure on inflation. This is normally where the Fed wants the economy to be when it finishes tightening, not when it starts.

The Fed is thus so far behind the curve that it needs to get interest rates up almost irrespective of what incoming data say about the economy or inflation.

The second way this cycle will be different became clear during Chairman Jerome Powell's press conference Wednesday: The Fed won't hold the market's hand by committing to a particular path of rate increases....

It's been a long time since markets had to grapple with a Fed behind the curve and unwilling to commit to an interest-rate path. It's a recipe for unpleasant surprises, more market volatility and a risk premium in the form of higher bond yields or lower stock-market valuations."

GDP grew at a 6.9% pace to close out 2021, stronger than expected despite omicron spread -CNBC

"The U.S. economy grew at a much better-than-expected pace to end 2021 from sizeable boosts in inventories and consumer spending, and despite signs that the acceleration likely tailed off toward the end of the year.

Gross domestic product, the sum of all goods and services produced during the October-through-December period, increased at a 6.9% annualized pace, the Commerce Department reported Thursday. Economists surveyed by Dow Jones had been looking for a gain of 5.5%.

The increase was well above the unrevised 2.3% growth in the third quarter and came despite a surge in Covid omicron cases that likely slowed hiring and output as businesses dealt with large numbers of sick workers.

Potential headwinds still exist, as the global risks associated with the COVID-19 pandemic persist. Labor conditions in the U.S. remain exceptionally tight, while constraints on production and kinks in the global supply chain are proving more difficult to fix than policymakers had anticipated a year ago.

In other economic news Thursday, jobless claims totaled 260,000 for the week ended Jan. 22, slightly less than the 265,000 estimate and a decline of 30,000 from the previous week."

Why Green Energy is a Luxury Belief - But Won't Be One Forever -Contrarian Edge

"Being a rich country has allowed us to develop what some call 'luxury beliefs' - ideas that make us feel good but that fail upon contact with objective reality. We ignore inconvenient truths about green energy and keep marching on, trying to convert an even larger portion of our economy to wind and solar, without contemplating the related costs. When it comes to electricity generation, luxury beliefs can be dangerous....

Question: How is our portfolio going to be impacted by the transition to new "greener"� energy sources?

Answer: The transition to 'green' energy will be rocky, expensive, and not-so-green - our CO2 emissions will likely go on rising....

Solar and wind are not good sole sources of energy - they are intermittent, relying on the kindness of Mother Nature, who is temperamental and not always kind. To compensate for this weakness in our green sources, when Mother Nature takes a break, we need either cheap and ample batteries (we have neither), or to turn on peak demand power plants that run on natural gas (if we are lucky) or coal.

The US is not the only country that is inhibited by luxury beliefs. Take Germany for instance. After Japan's Fukushima incident, it gave up nuclear and went 'green.' Except that 'green' was anything but. Germany's CO2 emissions went up and so did its electricity prices.

Yes, the coal-fired peak power plants that Germany uses to provide electricity on the days when the wind doesn't blow or the sun doesn't shine are more expensive and produce more greenhouse gasses than nuclear power plants. Another example, just a few months ago, electricity prices in Europe skyrocketed because (I kid you not), the wind stopped blowing in the North Sea.

When it comes to power generation, luxury beliefs are dangerous. Electricity is anything but a luxury; it is a necessity. In addition to powering the internet, which allows us to watch cat videos on Facebook, it is what separates our society from our ancestors in the Stone Age. As we keep decommissioning nuclear power plants and going 'green,' in the end we'll go 'brown' as our CO2 levels mount, or in the worst case it will simply be lights out as we are forced to ration power."

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1.27.22 - Goldman Sachs Sees Gold at $2,150

Gold last traded at $1,796 an ounce. Silver at $22.74 an ounce.

NEWS SUMMARY: Precious metal prices retreated Thursday after the Fed's projected interest rate hikes boosted the dollar. U.S. stocks rose as investors mulled over a better-than-expected fourth-quarter GDP report.

Goldman Sachs long gold, sees prices rising to $2,150 -Kitco

"Goldman Sachs is not ready to give up on gold as the investment banking giant is raising its price forecast and recommending a long gold trade for the year.

In a report published Thursday, the bank said that it is raising its 12-month price forecast to $2,150 an ounce, up from its previous target of $2,000. The bank also recommends buying December 2022 gold futures.

The new bullish outlook comes after a disappointing 2021 for gold as prices ended the year down nearly 4%. Goldman said that the decline in gold last year made sense in an environment of strong economic activity and expectations that rising inflation would only be temporary.

'Crucially, high growth and seemingly stable prices led to a surge across all risk-on assets, in particular cryptocurrencies. As a result, not only did gold face falling investment demand from investors no longer looking for a debasement hedge, it faced direct competition in bitcoin as a store of value,' the analysts said in the report....

'While there is not yet talk of recession, our economists forecast a material deceleration in U.S. growth, while the imminent prospect of a new hiking cycle is leading to a risk-off environment across long-duration asset classes,' the analysts.

'For investors looking for a way to hedge their portfolios from risks of a growth-slowdown and falling valuations, we believe a long gold position would be more effective in the current macro environment.'"

fear and greed Fear Makes A Comeback -Alhambra Investments

"'Fear tends to manifest itself much more quickly than greed, so volatile markets tend to be on the downside. In up markets, volatility tends to gradually decline. -Philip Roth

Be fearful when others are greedy and be greedy when others are fearful. -Warren Buffett

The new year hasn't gotten off to a great start for growth stocks or any of the other speculative assets that have drawn so much attention over the last couple of years. Bitcoin is down 25% since the beginning of 2022 and almost 50% from its high in November...And bitcoin is not even close to the worst-performing thing in the crypto space. To be honest, I saw a list over the weekend of various crypto assets and how they've performed and I didn't recognize half of them. All I can say is 'ouch'.

But the large-cap growth stocks are certainly of concern for most investors, if for no other reason than the outsize portion of the large-cap indexes they occupy. At the end of 2021, the top ten holdings in the S&P 500 represented 30% of the index and traded for an average of 44 times earnings and 12 times sales. Valuation is a lousy timing tool but it is a wonderful measure of risk, something a lot of people have learned anew since the beginning of the year....

The top 10 still represent 28% of the index but they do trade now for a mere 37 times earnings. What is more interesting in my opinion is that 7 of the 10 did outperform the S&P 500 growth index. The damage to that index and the NASDAQ has been done by their lesser members. If the top 10 start to join the laggards, the effect on the index could get ugly quickly....

Overall, the correction or selloff (the S&P 500 hasn't reached official correction territory of down 10%) has been mostly about the US growth stocks. Value stocks, dividend stocks, and foreign stocks have all outperformed the S&P 500 so far this year. That may or may not continue, I suppose, and value investors should probably be careful not to celebrate what may be just another false start like so many others over the last decade. But for now, they are doing what we expect them to do in a selloff....

So, I guess the question is whether it is time, according to Warren Buffet's pithy saying, to get greedy. I got asked that, in one form or another, just about every day last week, which makes me think the answer is probably no.

There are other reasons but this market was driven by sentiment - greed - on the way up and this correction is being driven by emotion - fear - as well. And there just doesn't seem to be enough of it yet to make a durable bottom. Retail traders are driving the indexes up early in the day and institutions are selling it in the afternoon....

So far, this is nothing more than a garden variety correction (and not even that for the S&P 500). Will it get worse? You know I hate trying to predict the future but my guess is yes."

Federal Reserve points to interest rate hike coming in March -CNBC

"Facing both turbulent financial markets and raging inflation, the Federal Reserve on Wednesday indicated it could soon raise interest rates for the first time in more than three years as part of a broader tightening of historically easy monetary policy.

In a move that came as little surprise, the Fed's policymaking group said a quarter-percentage point increase to its benchmark short-term borrowing rate is likely forthcoming. It would be the first rise since December 2018.

Chairman Jerome Powell added that the Fed could move on an aggressive path.

'I think there's quite a bit of room to raise interest rates without threatening the labor market,' Powell said at his post-meeting news conference. After being up strongly earlier, the major stock market averages turned negative shortly following Powell's pronouncement.

The committee's statement came in response to inflation running at its hottest level in nearly 40 years. Though the move toward less accommodative policy has been well telegraphed over the past several weeks, markets in recent days have been remarkably choppy as investors worried that the Fed might tighten policy even more than expected."

Russia moves troops and U.S. sends weapons as fear of war mounts in Ukraine -Washington Post

"President Biden and Russian President Vladimir Putin traded provocations Tuesday, with the Kremlin broadcasting a new round of military exercises within striking distance of Ukraine and Washington rushing a fresh shipment of weapons to Kyiv while suggesting thousands of U.S. troops could be deployed soon to shore up allies' defenses in Eastern Europe.

Officials on both sides accused the other of bringing Europe closer to a full-blown war - an outcome Biden said would have 'enormous consequences worldwide.'

'This would be the largest "� invasion since World War II,' the president told reporters in Washington. 'It would change the world.'

U.S. officials have said there are no plans to increase the U.S. military presence inside Ukraine, where approximately 200 American troops are training and advising Ukrainian forces, but Washington has stepped up other forms of assistance. At Boryspil International Airport outside Kyiv on Tuesday, Ukrainian personnel unloaded some 300 Javelin missiles, shoulder-launched multipurpose assault weapons and bunker-busters that had come from the United States. Standing beside the weapons in the freezing night air, the top U.S. diplomat in Ukraine, Kristina A. Kvien, warned Moscow that Ukrainian troops are 'well equipped and they're ready.'....

U.S. officials in Washington said they are coordinating with crude-oil and gas suppliers across Asia, North Africa and the Middle East in the event Moscow cuts off fuel shipments to wary European allies and such supplies need to be found elsewhere. One U.S. official, speaking on the condition of anonymity under terms set by the White House, said that if Putin takes such measures, the lost gas revenue would hurt Russia more than anyone else. 'This is a one-dimensional economy, and that means it needs oil and gas revenues at least as much as Europe needs its energy supply,' the official said.

The Pentagon, meanwhile, indicated Tuesday that the 8,500 U.S. military personnel who a day earlier were put on 'prepare to deploy orders' may be only a starting point, saying U.S. commanders could reposition some of the 64,000 troops permanently stationed in Europe, should they be needed. Two defense officials, speaking on the condition of anonymity because the plans were not yet public, said that elements of the Army's 82nd Airborne Division and 101st Airborne Division were expected to be among the first units sent to NATO's eastern flank if Biden gives the order....

The moves come amid a flurry of diplomatic efforts to find a way out of the crisis, but the United States and NATO have firmly ruled out Moscow's core demand against further NATO expansion, raising fears that Russia could use the failure of diplomacy as a pretext for the 'military-technical' response that Putin has threatened.

Russian officials blame 'Western aggression' for the crisis, repeatedly warning that Moscow will accept nothing less than an end to NATO's long-standing open-door policy for new member countries."

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1.26.22 - Fed Determined to Make a Major Policy Error

Gold last traded at $1,830 an ounce. Silver at $23.79 an ounce.

NEWS SUMMARY: Precious metal prices steadied near 2-month highs Wednesday despite a firmer dollar. U.S. stocks opened higher after an upbeat quarterly report from Microsoft as investors await results from a Federal Reserve meeting.

Gold Investors Don't Care About the Stock Market's Taper Tantrum -Bloomberg

"Money managers see negative real rates supporting bullion and this week's Fed meeting may further shape gold's prospects.

The end of an easy-money era should normally spell bad news for gold. But right now, fund managers are keeping their holdings.

At a time when equities and Bitcoin - often touted as digital gold - are sinking as loose monetary policy draws to a close, bullion exchange-traded fund holdings are proving resilient.

Despite expectations for multiple U.S. interest-rate hikes this year, bets for real rates to stay negative and demand for an inflation hedge are supporting the appeal of the time-honored haven."

the Fed The Fed looks increasingly determined to make a major policy error -The Bellows

"Making monetary policy is hard, and I sympathize with officials at the Fed who have to make very difficult and very consequential decisions under extreme uncertainty....

But hard is what you sign up for when you take a job making monetary policy. And it seems increasingly clear to me that the Fed is in the processing of making a potentially significant error....

The costs of making a dovish error are substantially lower than the cost of making a hawkish error. If you tighten too little, then a year from now inflation is higher than you'd like it to be, which annoys people and imposes some small efficiency costs across the economy, but at least you have all the tools you need to address the problem....

I am skeptical that the Fed will actually find itself able to go through with all of this, but if it does it will pack into about one year what took roughly four during the last tightening cycle.

In doing this, the Fed has given itself very little margin for error. If it turns out that the economy can't handle that amount of tightening that quickly"�well, we're all in trouble.

By the time the data makes clear that the Fed has taken a wrong turn, the slamming of the brakes will already have had a big impact on the economy.

Financial markets will provide a much earlier warning, but the Fed may find it difficult to respond to markets while actual inflation data remains above target. This sort of rushing is exactly the thing that major policy errors are made of."

Inflation is cutting into wage gains for U.S. workers -Washington Post

"After years of barely budging, wages are finally up. But the same strong recovery that is emboldening workers is also driving up inflation, leaving most Americans with less spending power than they had a year ago.

Wages in the hospitality and leisure industry rose an average of 14 percent last year, making it the only sector where pay increases outpaced inflation.

Ty Stehlik, who works the front desk at a hotel in Milwaukee, pleaded for a raise all through the pandemic - and finally got an extra $1 an hour in the fall to make $15.

But higher prices for rent and food have completely negated that 7 percent bump. Stehlik, who identifies as nonbinary, says they're still relying on family for help covering rent and groceries."

'Crypto winter' fears send chills to battered Bitcoin faithful -Straits Times

"There are few things scarier for investors than a bear market - unless you're involved in crypto, in which case a winter is worse.

The chilling term refers to a sharp slump, followed by a drop-off in trading and months of market doldrums - a phenomenon that memorably befell the crypto market in 2018.

Bitcoin's price plunged by more than 80 per cent to as low as $3,100 from the end of 2017 through December of the following year, a period characterized by the boom-and-bust of initial coin offerings and several big banks shelving their plans to start cryptocurrency trading desks. Bitcoin would not reach a new high until December 2020, according to data compiled by Bloomberg.

Memories of 2018 are sparking fears that a repeat is playing out now after the world's largest cryptocurrency plummeted 50 per cent from its most recent high of almost $69,000 in November.

The crypto universe has shed more than $1 trillion ($1.35 trillion) in market value on growing conviction that the United States Federal Reserve is set to start ratcheting back the ultra-accommodative policy settings that fueled a boom in risk assets. The pullback has hit all corners of the crypto ecosystem, from Bitcoin to memecoins and publicly listed crypto exchanges.

While the collapse has been rattling enough on its own, it has spawned an even bigger concern that the pain may persist for many months, according to UBS.

'There's this question of how do we characterize that and the nearest analogy is probably 2018, which is this idea of a crypto winter,' said UBS head of foreign exchange research James Malcolm.

'It looks likely to be a fairly difficult and potentially prolonged period and therefore, the crypto winter analogy is quite good. Remember, the crypto winter in 2018 wasn't just over the Northern Hemisphere winter months. It basically extended for a whole year - so it was a crypto winter that lasted effectively a year.'"

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1.25.22 - Gold Prices Near Two-Month Highs

Gold last traded at $1,851 an ounce. Silver at $23.87 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on Fed uncertainty despite a firmer dollar. U.S. stocks extended major losses as the January market selloff continues.

Gold nears two-month high as Russia-Ukraine tensions simmer -Reuters

"Gold prices advanced towards last week's two-month high on Monday as U.S. bond yields continued to fall and investors looked to invest in the safe-haven metal amid concerns over the prospect of a Russian attack on Ukraine....

Investors are looking towards the U.S. Federal Reserve's two-day policy meeting starting on Tuesday. The Fed is expected tighten monetary policy at a much faster pace than thought a month ago to tame persistently high inflation.

'I don't expect (Fed) to have a significant impact on what gold prices are doing at this moment because the markets are more concerned about what's going on in eastern Europe,' said Michael Hewson, chief market analyst at CMC Markets UK....

The U.S. State Department has ordered diplomats' family members to leave Ukraine, as U.S. President Joe Biden weighs options to counter a buildup of Russian troops in Ukraine.

Signs of poor risk appetite were displayed across markets as Asian and European shares slipped on worries over tighter monetary policy.

'The markets have already priced in a March hike so I don't think there's going to be any surprise.'"

cliff The End of FOMO (Fear of Missing Out) -Howard Lindzon

"I hate the terms bull and bear market, overbought, oversold, cheap, expensive and price targets.

Investing is about money management and all of us have different risk profiles.

If you own gold, oil and defense stocks...you think the world is looking up.

I have a pretty good view of greed and fear from my seat at Stocktwits and as a long time investor in startups as a first check writer.

The last twelve to 18 months was a FOMO era....Now the media will hop on how bad it is because the "�bear market meme' is just getting started.

As a stock investor it is easy...stop buying. As a seed investor the last 12 months have been a lot of work to sit on my hands as I say no to high prices....

In most recent era"�too much liquidity created an environment of sloppy founders and investors.

This reset was due and if the FOMO era is indeed over, I am thrilled."

The No. 1 Secret of Investing (and Life) -American Consequences

"This is one of the most important ideas you'll ever learn. And it's definitely the most important investing idea you'll ever learn.

Without this one concept, you'll never make a dime in the stock market. Without mastering it, you'll flounder in your career"� And even worse, you'll live a wasteful, frustrating life.

This idea separates the best investors from the rest....Author and trader Nassim Taleb summed it up best in his must-read book, Antifragile, when he wrote"�

'The learning of life is about what to avoid.'

Taleb calls this idea 'via negativa,' which is Latin for the 'negative way.' Among other benefits, via negativa can help you assess my value to you. More from Taleb in Antifragile "�

'Charlatans are recognizable in that they will give you positive advice, and only positive advice, exploiting our gullibility and sucker-proneness"� Yet in practice it is the negative that's used by the pros, those selected by evolution"� people become rich by not going bust (particularly when others do).'

It's easy to keep investors engaged with positive advice"� Anyone can see a connection between buying a stock, a bond, or an option and making money.

It's much harder to keep investors engaged with 'negative advice'"� foundational guidance like don't lose money, don't take too much risk, or don't blow yourself up....

Only a deep understanding of via negativa can prevent that from happening. That's why via negativa is the primary secret of the wealthiest investors. Ask any of them, and that's exactly what they'll tell you"�

Warren Buffett once said, 'The first rule of investment is don't lose and the second rule of investment is don't forget the first rule, and that's all the rules there are.'"

Buy Things, Not Experiences -Harold Lee

"There's a phrase going around that you should 'buy experiences, not things.' People, it's claimed, think that having a lot of stuff is what's going to make them happy. But they're mistaken...The drive to accumulate stuff is an evolutionary relic that no longer fits our modern situation. Better to embrace minimalism and focus on immaterial things like experiences, whose memories you can treasure forever.

While I appreciate the Stoic-style appraisal of what really brings happiness, economically, this analysis seems precisely backward. It amounts to saying that in an age of industrialization and globalism, when material goods are cheaper than ever, we should avoid partaking of this abundance. Instead, we should consume services...taking long vacations and getting expensive haircuts which are just as hard to produce as ever.

Put that way, the focus on minimalism sounds like a new form of conspicuous consumption. Now that even the poor can afford material goods, let's denigrate goods while highlighting the remaining luxuries that only the affluent can enjoy and show off to their friends.

But I think there's more to it than that. The advocates of the new minimalism are, by and large, urban dwellers, tied to stratospheric real estate markets in prime locations...As the dream of homeownership fades further away, it makes total sense to economize by buying a few, high-quality items and just accept the loss of capability from not having, say, a well stocked toolshed....

But what this rationalization ignores is the extent to which tools and possessions enable new experiences. A well-appointed kitchen allows you to cook healthy meals for yourself rather than ordering delivery night after night. A toolbox lets you fix things around the house and in the process learn to appreciate how our modern world was made....

Indeed, much of what is wrong with our modern lifestyles is, in a sense, a matter of overconsuming experiences. The sectors of the economy that are becoming more expensive every year - which are preventing people from building durable wealth - include real estate and education....

So I would, if anything, reverse the maxim: 'Buy things, not experiences!'...Thoughtfully chosen material goods can enable new activities can enrich your life, extend your capabilities, and deepen your understanding of the world."

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1.24.22 - U.S. Market Approaches End of 'Superbubble'

Gold last traded at $1,842 an ounce. Silver at $23.86 an ounce.

NEWS SUMMARY: Precious metal prices steadied Monday as investors braced for a volatile week on Wall Street. U.S. stocks extended heavy losses following the S&P 500"�s worst week since March 2020, while investors awaited corporate earnings results and a key policy decision from the Fed.

Gold price gives breakout in spot market. Good opportunity to buy, say experts -Mint

"The yellow metal price in the spot market has given fresh breakout at $1835 per ounce levels on closing basis as spot gold price on Friday closed at $1839 levels...commodity experts are of the opinion that overall outlook for gold is bullish and any dip in gold price should be seen as big buying opportunity in near term.

According to commodity market experts, gold prices coming down on Friday in spot and domestic markets should be seen as profit-booking as the precious metal price has rallied strongly this week...They said that gold price has given breakout at $1835 per ounce levels in the spot market and now it may go up to $1900 to $1910 per ounce levels in next one to two months.

Asked about the triggers that will support gold price rally in near term; Anuj Gupta, Vice President - Commodity & Currency Trade at IIFL Securities said, 'Global inflation is going to further worsen as rising crude oil prices are not going to take any pause in near term. In fact Brent Crude oil price is expected to go up to $100 per barrel.'"

money Federal Reserve is taking the next step toward possibly launching a digital dollar -Washington Post

"The Federal Reserve is taking the next step in weighing whether to launch a U.S. digital currency, issuing a report Thursday that explores the potential benefits and drawbacks of such a move without indicating where it will land.

The central bank is asking the public to provide feedback on the question over the next 120 days. And it said that in any event, it would only seek to create a digital currency with "clear support"� from both the executive branch and Congress.

'We look forward to engaging with the public, elected representatives, and a broad range of stakeholders as we examine the positives and negatives of a central bank digital currency in the United States,' Federal Reserve Chair Jerome H. Powell said in a statement accompanying the report.

Top Fed officials themselves so far have appeared divided on the matter. Powell last year said the project would need to demonstrate 'clear and tangible benefits that outweigh any costs and risks.'....

Liberal advocates of a digital dollar have focused on its potential to get cash quickly to Americans in financial straits who lack bank accounts, a need highlighted by the challenge the federal government faced distributing relief money during the pandemic.

The specter that a government-issued digital dollar would open the door to the Fed offering banking services to consumers has drawn objections from the banking industry. Commercial banks have raised alarms that the move could drain their deposits and destabilize financial markets. And while the Fed, in the Thursday paper, avoids firm conclusions about how it would proceed, it suggested it does not favor offering accounts directly to consumers."

'Good luck! We'll all need it': U.S. market approaches end of 'superbubble,' says Jeremy Grantham -Marketwatch

"The U.S. is approaching the end of a 'superbubble' spanning across stocks, bonds, real estate and commodities following massive stimulus during the COVID pandemic, potentially leading to the largest markdown of wealth in its history once pessimism returns to rule markets, according to legendary investor Jeremy Grantham.

'For the first time in the U.S. we have simultaneous bubbles across all major asset classes,' said Grantham, co-founder of investment firm GMO, in a paper Thursday. He estimated wealth losses could total $35 trillion in the U.S. should valuations across major asset classes return two-thirds of the way to historical norms.

'One of the main reasons I deplore superbubbles - and resent the Fed and other financial authorities for allowing and facilitating them - is the underrecognized damage that bubbles cause as they deflate,' said Grantham.

The Federal Reserve doesn't seem to 'get' asset bubbles, said Grantham, pointing to the 'ineffably massive stimulus for COVID' (some of which he said was necessary) that followed stimulus to recover from the bust of the 2006 housing bubble. 'The only 'lesson' that the economic establishment appears to have learned from the rubble of 2009 is that we didn't address it with enough stimulus,' he said.

Equity bubbles tend to begin to deflate from the riskiest parts of the market first - as the one that Grantham is warning about has been doing since February 2021, according to his paper. 'So, good luck!' he wrote. 'We'll all need it.'"

Bitcoin Price Falls Below $36,000 in Tandem With Stock Selloff -Wall Street Journal

"It is becoming a more common occurrence: When stocks fall, so does bitcoin.

Bitcoin, the world's largest cryptocurrency by market value, fell below $37,000 Friday to its lowest dollar value since August 2021, according to CoinDesk. The selloff continued into the weekend, falling to $35,822.41 on Saturday morning. Bitcoin is down 47% from its record in November 2021.

The drop came fast on the heels of a late-afternoon swoon in the stock market on Thursday....

'Cryptocurrencies are no longer an isolated risk asset and are responding to changes in global policy,' said Clara Medalie, research director at cryptocurrency market data provider Kaiko. 'It's not surprising that both will start to become more volatile as the liquidity taps turn off.'....

The decline in bitcoin's dollar value on Friday coincided with a 20% fall in Netflix's shares, erasing more than $40 billion of market capitalization. The streaming giant said it expects to add a much smaller number of subscribers this quarter than it did a year ago.

Some analysts suggest that selloffs among popular tech stocks could prompt investors to liquidate positions in their crypto holdings to limit overall losses and meet margin calls, demands from brokers to post cash to cover possible losses on trades made with borrowed money."

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1.21.22 - 2022 Midterms Are a No-Win for Dems

Gold last traded at $1,832 an ounce. Silver at $24.27 an ounce.

NEWS SUMMARY: Precious metal prices steadied Friday on normal profit-taking and a weaker dollar. U.S. stocks traded lower as sharp losses in Netflix dragged the Nasdaq Index deeper into correction territory.

Gold at Highest Since November as Bond Yields Pare Gains -Bloomberg/Yahoo Finance

"Gold touched the highest in almost two months, after rallying on easing U.S. bond yields and a weaker dollar.

Treasury yields extended a decline from the highest in two years. Gold nudged higher on Thursday, having broken through a key resistance near $1,835 an ounce on Wednesday.

The decline in yields and a softer greenback both provided support to the metal. Volatility in U.S. equities is also stoking demand for havens, with the S&P 500 suffering its biggest two-day decline since December this week.

Gold has managed to gain this month even as central banks prepare to dial back stimulus and inflation-adjusted bond yields rise....

'$1,820 is the new floor for now, and interest should follow,' Nicky Shiels, head of metals strategy at MKS PAMP, wrote in a note. 'There will, however, be more futures buyers (not sellers) above $1,850, who have currently been flat.'"

Fed The Bond Market Is Calling the Fed's Bluff -American Consequences

"Simply put, the bond market has a way of forecasting or discounting economic trends much better than stocks do"� It's forward looking.

So when we think about the current environment and what Jerome Powell and the Federal Reserve are saying they're about to do (which is raise rates substantially), I've been focusing on the price action of the bond market.

And it's not lining up with the consensus. What do I mean by this?

Inflation is at 40-year highs, our Fed Chairman (Powell) just last week told Congress he will fight inflation by raising rates, and many Fed members are saying the Fed is going to raise rates two, three, or even four times this year.

And yet"� bonds have hardly moved. In fact, they rallied for a bit after Powell's speech"� That's not the price action of a bond market expecting runaway interest rates higher. The bond market is calling the Fed's bluff - and quite frankly, so am I.

So, what's the bond market discounting? What's it pricing in for the future? I don't know for certain, but it sure isn't buying what the Fed is selling....

I want to focus on the spread between stocks and interest rates...Most important is that stocks rallied for almost three weeks after this Fed meeting (February 19, 2020, to be exact). Interest rates did not. The bond market was not buying the growth story or the stabilization story.

This was the trap. The bond market was discounting trouble ahead. Was it discounting a virus? Probably not, but it was discounting lower growth, not higher growth like the Fed wanted us to believe. So stocks (and the Fed) got it wrong and bonds sent the warning....

If everyone knows the Fed is raising rates and inflation is here to stay, but the bond market is saying otherwise, then no one is thinking. That is the trap that's being set"� at least that's what the market is telling me right now.

So what do we do? The cat is out of the bag in terms of when I'm expecting this rally in stocks to come to a halt. I've said I expect the market to drop fairly soon, in February/March."

2022 Midterms Are a No-Win for Democrats -Wall Street Journal

"Anyone who's served on a White House staff, Democrat or Republican, has some sympathy for what President Biden and his team are going through. Crisis after crisis at home and abroad, a stalled legislative agenda, lousy polls, a divided party, plenty of critics - including usually friendly voices - and internal backbiting spilling into public view: Team Biden is beset by all this and more.

For beleaguered West Wing denizens, there's some good news. Things will probably get better. The bad news? Not much better, and it won't be enough. Democrats will still suffer a whooping this fall....

Mr. Biden liked being seen as more transformational than President Obama, 'seeking a much more dramatic sea change.' Caught up in the hype, Mr. Biden threw his weight behind the proposed Build Back Better Act to transform fundamentally America's economy and climate policy, and joined the push for a federal takeover of local elections.

The problem is that Americans are generally not fond of transformation, except for a few exceptional moments in our history. This isn't one of them. Most times, Americans like changes to be incremental and, if they're really significant, approved by commanding congressional margins and strong bipartisan support. Mr. Biden had neither.

The more he pushed for transformational change while holding a razor-thin House margin and a 50-50 Senate, the more negative public opinion grew. The president's job approval fell from 56% approve, 36% disapprove at the start of his presidency to 41% approve, 53% disapprove now in the RealClearPolitics average.

The Committee for a Responsible Federal Budget's Covid spending tracker says $5.6 trillion has been spent or distributed to deal with the virus - while another $1 trillion of appropriated money hasn't been deployed. Despite this, Congress is talking about appropriating more money, leaving a growing number of Americans to wonder why.

This compounds the administration's mistake of dismissing inflation as transitory, which undermines public confidence. Many Americans understand that Mr. Biden's massive federal spending has been a big contributor to inflation, flooding the market with too much money chasing too few goods....

Presidents can recover from difficult moments like this, but there's no easy way back. Even a dramatic reset, shuffling Mr. Biden's staff and upgrading his lackluster cabinet all seem unlikely to make a difference for the president. For now, Team Biden is stuck riding it out. It's their own damned fault."

Survey: Internal Combustion Favored Over Battery Power -WardsAuto

"While automakers advance toward an electrified future, consumers wary of electric vehicles' limitations continue to be drawn toward internal-combustion-powered vehicles (ICE), a global survey by the Deloitte consultancy finds.

In the U.S. alone, 69% of consumers say they expect their next vehicle to have an ICE powertrain. And despite a growing interest in sustainability across the globe, more than half of U.S. consumers (53%) are unwilling to pay more than $500 for alternative engine technology.

Deloitte's 2022 Global Automotive Consumer Study is based on responses from more than 26,000 consumers from 25 countries conducted between September and October.

The study explored issues affecting the global automotive sector including advanced technologies, sustainability, cost expectations on new vehicles, virtual purchasing and mobility services.

'While the automotive sector focuses on the road ahead and a return to its pre-pandemic pace of growth, consumer values remain aligned with familiarity and affordability,' Deloitte says in a news release summarizing the report's findings.

That is underscored by general consumer resistance to paying for advanced technologies including autonomous driving, enhanced safety and connectivity."

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1.20.22 - America Lurching from Pandemic to Recession

Gold last traded at $1,841 an ounce. Silver at $24.65 an ounce.

NEWS SUMMARY: Precious metal prices extended gains Thursday on safe-haven buying and a weaker dollar. U.S. stocks rebounded a day after dipping into correction territory, as investors tip-toed back into technology names.

Gold, silver see price gains in inflation worries -Kitco

"Gold and silver prices are higher in early U.S. trading Wednesday, with silver notching a seven-week high. The precious metals are seeing buying interest amid growing worries about rising global price inflation, as well as some geopolitics presently at play....

Global stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins, following solid losses Tuesday. Risk aversion is heightened at mid-week.

The Biden Administration said it thinks Russia may be on the brink of invading Ukraine. North Korea is test-firing missiles again, and terrorists attacked the United Arab Emirates with drones a few days ago. And bond yields are rising on rising inflation concerns.

In overnight news, U.K. inflation rose to a 30-year high as the consumer price index rose 5.4% in December, year-on-year.

The key outside markets today see crude oil prices higher, at a seven-year high and trading around $86.50 a barrel. The International Energy Agency forecast that global oil demand in 2022 will exceed that of the pre-pandemic levels....

Technically, the February gold futures bulls have the overall near-term technical advantage amid a price uptrend in place on the daily bar chart. Bulls' next upside price objective is to produce a close in February futures above solid resistance at $1,850.00."

free lunch What the Left Will Never Understand About Capitalism -Daily Signal

"The American economy, according to the left, is built on inequality and deepens that inequality at every turn, excluding great numbers of Americans from opportunity. We have heard this since we were in knee socks.

What has reemerged, undeterred by decades of bleak failure, is a fideistic belief in near limitless government spending, planning, and collectivism to heal and augment America's economic scene.

The American Rescue Plan of March 2021 spent $1.9 trillion in funds the federal government did not have, most of it not going to COVID-19 relief efforts, the purported reason for the legislation. And it spread these funds across economic sectors.

Other goals of the legislation were to further secure single-payer health care with premium support even for the employed, while instilling in many the experience of a universal basic income courtesy of monthly checks received by roughly 85% of households.

Indeed, so pervasive has the left's critique become that it is wrapped in a justifying monetary framework known as Modern Monetary Theory, which posits the unique insight that government spending faces no hard constraints from tax receipts or borrowing costs because it is only money that we owe to ourselves. The federal government should accordingly set vast public spending goals that reframe the economy in a progressive direction.

But there is nothing 'modern' or innovative about Modern Monetary Theory or any of the other policies set before us. For this and other pieces of market and fiscal wisdom, we can turn to a timely volume titled There's No Free Lunch by David Bahnsen....

What is evident is that a free economy is bound to the basics of thrift, courage, risk-taking, virtue, alertness, restrained laws, and liberty. The book also puts to the reader something even more controversial than just market economics.

Bahnsen underscores that we also need an anthropology of man under God, rooted in freedom and virtue, to make sense of the high adventure of wealth creation and its responsible stewardship....

According to Bahnsen, this means that: 'Business flows from the creative spirit of mankind, and the creative spirit of mankind comes from our status as image-bearers of God. If you get this wrong, you will get everything else wrong. Lenin is a case in point.'

The economists need to get right with the truths about God and man, Bahnsen says. The failure to do so plagues our thinking about what defines us as a trading people. And, I would add, as a constitutional people who must accept hard limits on what the government can do for us.

This argument is sorely needed right now as we hear voices reducing us to egalitarian monads who should bemoan inequality, inequity, and unfairness. The assumption being that an economy is materialistic, its evaluation and correction should take place along lines of income redistribution, government-created jobs, and a providential welfare state."

America is lurching from pandemic to major recession, after Biden unleashed inflation -Daily Mail

"As we emerge from the pandemic, Joe Biden's economic policy bungling is driving America into a brick wall of malaise and stagflation.

For those of us who lived through it, the comparisons to Jimmy Carter's failed presidency are hard to ignore.

So, why is the Biden administration so determined to ignore both the cause of Carter's economic failure and President Ronald Reagan's very successful formula for reversing it?

Like Carter, the Biden administration is acting as though it can ignore fundamental economic problems forever. News flash - it can't.

The longer we wait to seriously address inflation, labor shortages, and supply chain problems, the worse the threat of an inevitable and deep recession becomes....

Unlike both Republicans and Democrats during the Reagan years, the people who hold power in Washington today clearly have no respect for the free market. But the free market doesn't care what they think. The law of supply and demand is not a law you can amend.

I'm extremely concerned about what lies in store for this country. The longer Biden and his allies keep their heads buried in the sand, the worse the eventual reckoning will be....

Now, we're staring down the maw of a major recession that will cause serious economic pain for millions of Americans, as the economy jumps from the pandemic frying pan into the inflation fire."

Enter the Metaverse, the Promise of Autonomy from the Physical World. -City Journal

"It is no coincidence that the metaverse as a practical project emerged out of the experience of the Covid-19 pandemic....

The great migration to digital during the pandemic showed the enormous advantages of being able to work and live within an artificial, secondary universe.

In this universe, the laws of space and time no longer apply, or at least they can be bent, enhancing human powers in ways still to explore: an end to long commutes and the achievement of measurable increases in productivity; the ability to participate in meetings and conferences on different continents and on the same day; and children still able to attend school, even amid the worst public-health emergency in a century.

The immediate appeal of the metaverse is that it promises to marshal the virtues of digital life, while addressing many of its shortcomings. Instead of business meetings on Zoom, imagine entering a digital room and talking to our colleagues around a virtual table, or even walking together in an electronically conjured garden...Is there a reason to travel physically to Venice to visit the Biennale instead of jumping into the metaverse and enjoying all the art and video installations with the latest fully immersive technology? Traveling to exotic locations could happen while we sit in our own living room....

What truly distinguishes the metaverse is its autonomy from the physical world. The metaverse exists on its own. It has a life of its own. It creates a genuinely alternative world. As Mark Zuckerberg does not tire of pointing out, the metaverse cannot be compared with the Internet because it aims to place us within the digital experience, inside an embodied Internet, on a more or less unending basis. One accesses the Internet. One enters the metaverse....

The difference matters. To see why, consider how the relation between user and the digital environment gets turned on its head. With the Internet, the user remains sovereign, dictating when and how digital interactions take place. In the metaverse, the user finds himself entirely surrounded by the platform, and the quality of the experiences will frequently depend on whether he or she accepts that fact....

One day, the Internet arrived, seemingly from nowhere, and we got used to thinking that it would be forever. It now seems clear that we are on the cusp of a successor: the metaverse. Much has been written about a clash of titans between Facebook and Microsoft to decide which will control the new virtual world to which humanity as a whole is supposed to migrate....

The metaverse represents the most recent battle between human freedom and the constraints of reality. It could also become a battle to define reality itself."

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1.19.22 - The Fed is Behind the Curve (As Usual)

Gold last traded at $1,840 an ounce. Silver at $24.18 an ounce.

NEWS SUMMARY: Precious metal prices rushed higher Wednesday on rising inflation and a falling dollar. U.S. stocks fell despite several strong earnings reports, as investors remained cautious on equities amid elevated rates.

Oil Pushes Toward $90; Gold Seen Holding $1,800 -Investing.com

"Oil bulls are getting all the support they need in their quest for $90-and-above a barrel as the week opens with a deadly air raid on the United Arab Emirates (UAE), a major producer, and a positive supply-demand forecast due from crude exporters group OPEC.

The Iran-allied Houthi movement launched drone and missile strikes on Sunday which set off explosions in fuel trucks in the UAE that killed three people, and warned that it will target more facilities, prompting Abu Dhabi to say that it reserved the right to 'respond to these terrorist attacks.'

The Organization of the Petroleum Exporting Countries (OPEC) is, meanwhile, slated to release its monthly oil market report later on Tuesday. Those long the market will be hoping to use that report as leverage for getting crude to its first target of $90 a barrel and eventually beyond $100.

At $84.50 a barrel for US crude's West Texas Intermediate and $87.50 for London-traded Brent, oil prices are already up 12% this year, extending 2021's rally of more than 50%.

The gains came amid evidence that months of fears about the Omicron variant of COVID may have been exaggerated, as the variant has hardly caused as many deaths or illnesses as other strains, including Delta....

On the gold front, longs are expected to keep the yellow metal above the key $1,800-an-ounce support, following through with last week's 1% gain that left the front-month contract in New York's COMEX gold at above $1,816."

The Fed is behind the curve (as usual) -TheMoneyIllusion

"There's a widespread impression that the Fed has recently tightened monetary policy. And it's true that they have taken specific steps to signal an intention to raise rates and end QE earlier than had been expected six months ago. Nonetheless, monetary policy has effectively eased in the past six months, becoming more expansionary. The stance of monetary policy is not about Fed actions, it's about market expectations of inflation/GDP growth.

During the summer of 2021, 5-year TIPS spreads hovered around 2.5%. As of today, they are over 2.9%. The problem is that the equilibrium interest rate is rising faster than the Fed's signals about future rate increases. This is actually the typical pattern over the business cycle. The Fed tends to raise rates too slowly during booms and cut them too slowly during recessions.

Actually, the situation is even worse than suggested by the rising TIPS spreads. The Fed isn't targeting inflation; it's targeting average inflation. That means a period of above target inflation should be followed by expectations of lower inflation going forward. Ideally, after the high inflation of the past 6 months, TIPS spreads should have declined, as markets anticipated a make-up period of below 2% inflation....

Monetary policy is not binary situation of 'success' and 'failure'. All monetary policy ends in failure of some sort, it's just a question of how bad. There's still time for the Fed to remedy the situation and produce a soft landing. To do that, they need to aim for no more than 4% GDP growth going forward, and no less than 3%. (In my view, trend GDP growth is now below 2%) To do that the Fed needs to get ahead of the curve. Tighten policy enough to significantly reduce market inflation forecasts."

With Rate Increases Looming, Investors Dump Shares of Money-Losing Companies -Wall Street Journal

"Moonshot stocks are coming back to Earth.

As the Federal Reserve moves closer to raising interest rates, investors are repricing their bets on one of the riskiest corners of the market: shares of companies that don't make money. Cash-burning technology firms, biotechnology companies without any approved drugs and startups that listed quickly via mergers with blank-check companies - some of which soared during the pandemic - have dropped sharply....

On average, loss-making companies in the analysis slid 25% from the market's close on Sept. 30 through Friday. Profitable companies in the index, meanwhile, gained an average of 1.4% for the same time frame....The performance of riskier growth stocks, which aim to deliver sharp profit growth in the future, also lagged behind broader indexes in the latter part of 2021....

Hawkish Fed policy is driving a rotation toward stocks that generate higher-than-average dividend yield, such as areas like banks and insurance, said Jonathan Garner, the Hong Kong-based chief Asia and emerging-market strategist at Morgan Stanley.

'That's playing out on a world-wide basis, and we expect it to continue,' Mr. Garner said."

Biden's Georgia Speech Is a Break Point -Wall Street Journal

"The president's Tuesday speech in Atlanta, on voting rights, was a disaster for him. By the end of Senate Minority Leader Mitch McConnell's answering speech on Wednesday you knew some new break point had occurred, that President Biden might have thought he was just crooning to part of his base but the repercussions were greater than that; he was breaking in some new way with others - and didn't know it.

It is poor political practice when you fail to guess the effects of your actions. He meant to mollify an important constituency but instead he filled his opponents with honest indignation and, I suspect, encouraged in that fractured group some new unity.

The speech itself was aggressive, intemperate, not only offensive but meant to offend. It seemed prepared by people who think there is only the Democratic Party in America, that's it, everyone else is an outsider who can be disparaged. It was a mistake on so many levels.

Presidents more than others in politics have to maintain an even strain, as astronauts used to say. If a president is rhetorically manipulative and divisive on a voting-rights bill it undercuts what he's trying to establish the next day on Covid and the economy. The over-the-top language of the speech made him seem more emotional, less competent.

The portentousness - 'In our lives and . . . the life of our nation, there are moments so stark that they divide all that came before them from everything that followed. They stop time' - made him appear incapable of understanding how the majority of Americans understand our own nation's history and the vast array of its challenges.

By the end he looked like a man operating apart from the American conversation, not at its center. This can be fatal to a presidency....Most wince-inducing: 'Will you stand against election subversion? Yes or no? . . . Do you want to be on the side of Dr. King or George Wallace ? Do you want to be on the side of John Lewis or Bull Connor ? Do you want to be on the side of Abraham Lincoln or Jefferson Davis?'

If a speech can be full of itself this speech was. From the floor of the Senate the next day came Mr. McConnell's rebuke. It was stinging, indignant to the point of seething. He didn't attempt to scale any rhetorical heights. The plainness of his language was ferocious....

When national Democrats talk to the country they always seem to be talking to themselves. They are of the left, as is their constituency, which wins the popular vote in presidential elections; the mainstream media through which they send their messages is of the left; the academics, historians and professionals they consult are of the left. They get in the habit of talking to themselves, in their language, in a single, looped conversation.

They have no idea how they sound to the non-left, so they have no idea when they are damaging themselves. But this week in Georgia Mr. Biden damaged himself. And strengthened, and may even have taken a step in unifying, the non-Democrats who are among their countrymen, and who are in fact the majority of them."

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1.18.22 - Gold Holds Ground Despite Fed Rate Signals

Gold last traded at $1,814 an ounce. Silver at $23.56 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Tuesday as rising interest rates boosted the dollar. U.S. stocks fell sharply after Goldman Sachs reported disappointing earnings and as government bond yields hit Covid-era highs.

Gold holds ground despite Fed's rate rise signals -Reuters/Kitco

"Gold prices held their ground on Monday, with gains capped by expectations of monetary policy tightening in the United States.

Spot gold rose 0.1% to $1,819.41 an ounce while U.S. gold futures also edged up by 0.1% to $1,818.80. U.S. markets were closed for a public holiday.

'A tightening money policy could have negative impacts on gold, but despite that gold has been holding up very well. I think it's mainly because the overall Fed balance sheet is still at elevated levels,' said Xiao Fu, head of commodities markets strategy at Bank of China International....

The focus is now on the U.S. Federal Reserve's Jan. 25-26 meeting after policymakers signaled that they would start raising interest rates in March to tame inflation."

inflation Here's why inflation numbers are about to get worse -TheHill

"This week the government announced that the inflation rate - as per its Consumer Price Index - has reached 7 percent, the highest it's been since 1982. But ask any business owner and they'll tell you that the consumer price index only tells us about the past. It isn't the true indicator of future inflation.

The future is all about the Producer Price Index (PPI), which measures the costs to make things. That index rose a whopping 9.7 percent. And - bad news, everyone - inflation is going to go a lot higher in the months to come because of this.

Why? Because there are many different materials that go into the PPI. Some are used more frequently than others. So we have to dig further. And when we unpeel the PPI and look closely at the costs of the core materials and labor used in manufacturing, farming and construction, we find that prices have risen much, much more than the reported 9.7 percent. And those prices are ultimately going to find their way to customers in the coming months.

For starters, the costs of most of the core raw chemicals that make up just about everything we use are skyrocketing and show no sign of future relief. Aluminum is used in just about all sectors of the economy, and the costs of this core material have risen 37 percent in the past year and show no sign of letting up. Tin, which is used as a protective coating and alloy for steel, has gone up 116 percent. Speaking of steel, the cost of iron and steel has shot up 87 percent.

Yes, many of these materials are commodities, and the price of commodities can fluctuate. But there's no indication that our worldwide supply chain and labor shortage problems are going to be resolved any time soon....

All in all, the total costs of manufacturing have increased more than 15 percent over the past year. But it's not just the manufacturers that are suffering. Farmers are paying almost 16 percent more to feed their animals and 92 percent more for potash, which is one of the main ingredients in fertilizer....

The Fed already plans to have anywhere from three to four interest rate hikes this year to taper down this liquidity. Will their strategy work to curtail inflation in 2022? Given its performance over the past couple of years, many business owners I know are skeptical. They have a right to be."

Real Wages Plummet as Inflation Hits the US Recovery -Mises

"The headline 3.9 percent unemployment rate looks positive, but job creation fell significantly below consensus, at 199,000 in December versus a consensus estimate of 450,000.

The weak jobs figure should be viewed in the context of the largest stimulus plan in recent history. With massive monetary and fiscal support and a government deficit of $2.77 trillion, the second highest on record, job creation falls significantly short of previous recoveries and the employment situation is significantly worse than it was in 2019.

The most alarming datapoint is that real wages are plummeting. Average hourly earnings have risen 4.7 percent in 2021, but inflation is 6.8 percent, sending real wages to negative territory and the worst reading since 2011....

Now put this in the context of a massive $3 trillion stimulus and the evidence is clear. There is no bang-on-the-buck from this unprecedented spending spree. All the jobs recovery comes from the reopening. The stimulus plan has not accelerated job growth, it has slowed it....

No US citizen should be happy about plummeting real wages and stagnant labor participation in the middle of a strong recovery and the second-largest deficit on record....

There is a clear threat to American workers from persistent high inflation and the higher taxes that the massive deficit includes: the destruction of the middle class and fewer job opportunities in the future as small and medium enterprises, the largest employers in the United States, suffer rising input prices and weaker margins.

The United States will not have a strong job market unless it recovers the trend of rising real wages and increasing labor participation rate that existed in 2018-2019. Everything else is just a poor and unproductive bounce."

A Simple Plan to Solve All of America's Problems -The Atlantic

"During the holiday week, I spent a frigid afternoon standing in a long line outside the local library to pick up a rapid COVID test. Lines for essential goods are a pretty good sign of failed public policy.

When food runs low, there are bread lines. Where gasoline is in short supply, there are gas lines. But there I stood, nearly two years into a pandemic, shivering inside a depressing metaphor of state failure. As I bounced from foot to foot to stay warm, I asked myself: How on earth did this happen?....

Zoom out, and you can see that scarcity has been the story of the whole pandemic response. In early 2020, Americans were told to not wear masks, because we apparently didn't have enough to go around.

Last year, Americans were told to not get booster shots, because we apparently didn't have enough to go around. Today, we're worried about people using too many COVID tests as cases scream past 700,000 per day, because we apparently don't have enough to go around.

Zoom out more, and you'll see that scarcity is also the story of the U.S. economy. After years of failing to invest in technology at our ports, we have a shipping-delay crisis...After decades of letting semiconductor-manufacturing power move to Asia, we have a shortage of chips, which is causing price increases for cars and electronics.

In the past few months, I've become obsessed with a policy agenda that is focused on solving our national problem of scarcity. This agenda would try to take the best from several ideologies. It would harness the left's emphasis on human welfare, but it would encourage the progressive movement to 'take innovation as seriously as it takes affordability,' as Ezra Klein wrote.

It would tap into libertarians' obsession with regulation to identify places where bad rules are getting in the way of the common good. It would channel the right's fixation with national greatness to grow the things that actually make a nation great - such as clean and safe spaces, excellent government services, fantastic living conditions, and broadly shared wealth.

The abundance agenda aims for growth, not because growth is an end but because it is the best means to achieve the ends that we care about: more comfortable lives, with more power to do what we want, with more time devoted to what we love."

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1.13.22 - 'The Most Undervalued Metal on Earth'

Gold last traded at $1,820 an ounce. Silver at $23.10 an ounce.

NEWS SUMMARY: Precious metal prices consolidated recent gains Thursday amid mild profit-taking and a weaker dollar. U.S. stocks moved higher as investors hoped for a rebound from a rough start to the new year.

This is 'the most undervalued metal on the planet' -David Morgan/Kitco

"Expect silver, the 'most undervalued metal on the planet' to finally breach $30 an ounce in 2022, said David Morgan of TheMorganReport.com.

'I think [retail demand for silver] is going to be up because the stock market starts to sell off, the 10-year goes through the golden cross, we start to see more uncertainty in the market, and then if the cryptocurrency market starts to wane, we will see a lot more interest in the precious metals, so I think all three of those things are synergistic to push the metals higher,' Morgan said.

Industrial demand continues to provide tailwinds going into 2022, Morgan added.

'Electrification...anything electrical or electronic will probably [be the main driver]. Solar panels will probably play a big role,' he said.

As fossil fuels hit 'the energy cliff,' renewable energy sources, like solar power, will play a bigger role in energy generation. However, there's a major problem, Morgan noted.

'There isn't enough silver to put the United States housing market on solar, let alone the industrial side of the United States. In other words, all commercial activity in the United States that require electricity would require about two years' worth of all the silver we mine on the planet. To put all the houses on silver would take about one year's worth of silver,' he said."

crash The Everything Crash -Bonner Private Research

"Keeping people in a state of alarm seems to be a good strategy for the major media - and the government itself. They seem to want to keep you glued to the news cycle"� and ready to follow orders.

That's part of the reason the Fed can no longer tolerate a normal market correction. Or normal interest rates. Now, they're like normal flu seasons"� or a normal recession -the media treats them like the end of the world. Something must be done!....

In these pages for example, we calculated that the FANGMAN stocks alone could hold as much as $8 trillion in vanishing liquidity.

But wait"� a TV financial commentator tells us we have a whole new source of 'liquidity' - cryptos. They are certainly 'liquid' forms of wealth, readily exchanged for other cryptos"� and even dollars. That market is said to be worth nearly $3 trillion, 'that's $3 trillion dollars of purchasing power that didn't exist before,' he beamed.

But it's also $3 trillion that could evaporate as easily"� and much faster"� than it accumulated. Ex nihilo nili fit. So the nili might go right back to the nihilo whence it came.

In fact, the total market cap of cryptos hit that $3 trillion peak in November of last year. As of Thursday, it was $1.99 trillion, according to coinmarketcap.com. The big culprit is Bitcoin - the largest crypto by 'market cap' - which has fallen from $69,000 at its high to around $41,000 (a respectable correction of 40%).

Taken as a whole, if the stock market were to go back to normal range, about $20 -$30 trillion would go away. That's based on the historic mean of Warren Buffett's famous market-cap to-GDP indicator, which is 86%.

In other words, with GDP around $23.2 trillion today, stocks would be worth around $29 trillion. The total market cap of the Wilshire 5,000 - the broadest measure of US stocks - hit $48.7 trillion earlier this week.

You do the math. Or we'll do it for you. Stocks would lose around $28.8 trillion if they declined from 211% of GDP to 86% of GDP. Give or take a couple of trillion, given how markets tend to overcorrect.

How much liquidity would you have then? Not much. And that would be a big surprise to everyone."

How Easy Money Inflated Corporate Profits -Mises

"In the incessant media discussion about whether inflation is transitory there is a big elephant in the room about which all are silent...The elephant is the fantastic surge in US corporate profits that monetary inflation has fueled during the second year of the pandemic. This elephant's unremarked appearance is likely transitory, unlike the simultaneous jump in US consumer prices.

Transitoriness is the essential theme of the contemporary Fed show - a point it has in common with Arthur Miller's Death of a Salesman. There antihero Willy Lowman laments that in the twilight of his working life he still feels 'temporary.' The Fed show, though, fits best into the theater of the absurd. The big elephant occupies a large part of the stage, but the characters never acknowledge its existence.

Instead, the lead character, Jerome Powell, spends spring, summer, and autumn 2021 telling all that the contemporaneous jump in consumer prices is transitory. In no way does he mean goods and services prices on average will fall back down to prepandemic levels once the notorious bottlenecks resolve themselves....

Bluntly, when the Fed machinery of money is splurging out fantastic profits amid understandable praise from the powerful beneficiaries, why hurry to make an exit from emergency stimulus?....

How has monetary inflation driven this profits boom?

Quite simply demand across an array of business sectors has surged (one factor here has been the tremendous growth in demand for consumer durables) albeit offset in part by demand weakness elsewhere especially for service output suffering from infection risk, while a range of factors (including so-called global bottlenecks) have been constraining supply.

The new money demand has entered the system in a way which has driven up profit margins and corporate revenues. We should include here the spending out of fantastic wealth gains, whether in equities, real estate, or the crypto space, even if much of this is ultimately illusory....

The catalyst to asset market deflation would be a dose of reality which prompts first of all the US equity market space. Perceptions there would shift. The elephant - the giant profits surge of 2021 - would lose its permanence and become transitory in appearance."

The New Trend in Healthcare: Do-It-Yourself -Wall Street Journal

"Two years into a pandemic that has strained health systems and made booking doctors' appointments next-to-impossible for some, patients are providing more of their own care at home....

Frustrated with an overburdened health system, more consumers are turning to gadgets, home kits, apps and monitors for tasks and tests previously handled by trained medical workers.

They are monitoring their own blood pressure, conducting EKGs, tracking blood sugar and cholesterol levels, and pricking their own fingers for blood tests normally done at the doctor's.

Many doctors support patients taking more responsibility for their own care, but warn that too much DIY without expert guidance could miss important health problems.

Despite those concerns, more physicians are recommending that patients shoulder at least some additional work, because staff shortages and worker burnout mean that patients often face long wait times for appointments and overloaded care providers.

'I tell my patients, You are your first line of defense. The system can't take care of you,' says Wendy Wright, a nurse practitioner who owns Wright & Associates Family Healthcare, two clinics in southern New Hampshire. Her wait list has grown to more than 100 people. 'We can diagnose and treat you. But it might not be in a timely manner,' she adds."

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1.12.22 - D.C. Has an Insider-Trading Problem

Gold last traded at $1,826 an ounce. Silver at $23.16 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on rising inflation and a falling dollar. U.S. stocks inched higher despite a key consumer price inflation report showing a historic 7% gain.

Gold tip-toes up on inflation risks despite strength in yields -CNBC

"Gold prices edged higher on Monday despite U.S. 10-year Treasury yields hitting a two-year high, as traders hedged their positions against inflation and ongoing geopolitical risks....

Gold is holding around the $1,800 area despite the rise in yields, showing that the market is looking at other factors such as the inflationary environment and geopolitical tensions, said Saxo Bank analyst Ole Hansen.

'The weakness in stocks has potentially also added some support to the precious metal market,' Hansen said, adding that yields will nonetheless remain in focus this week, along with U.S. CPI inflation data.

U.S. core CPI is expected to have risen by an annual 5.4% in December, up from 4.9% in the prior month, which could stress the need for earlier-than-anticipated interest rate hikes by the Federal Reserve."

new normal The Post-Normal Economy -The Big Picture

"The past week, I have been looking at some of the more interesting and unusual market charts. I started doing the same for a few of my favorite economic data series: NFP, Quits Rate, Wages, Housing Prices, Business Formation, Inflation, Retail Sales, Car sales, etc.

Pick any economic chart of your choosing; the simple truth is that nothing is 'normal.' And by normal, I mean a traditional run-of-the-mill recession and recovery cycle. Everything today is aberrant and excessive, fast/strong/deep/record-breaking . . . Unprecedented....

It began with the externality of the pandemic, followed by a massive fiscal stimulus to accompany the ongoing monetary stimulus...These are massive, enormous, unusual inputs, and we have simply become accustomed to them....Whatever part of the economy you want to review, you will be hard-pressed to find a data series that looks remotely normal....

The economy is not in a 'New Normal,' but rather is in a 'Post-Normal' state....Spend a few hours watching FinTV or reading financial media. You might wonder where these pundits' self-confidence comes from. How can they so self-assuredly discuss not only what is happening today, but then so very comfortably explain what comes next?

Pardon my skepticism, but I have a sneaking suspicion the pundits haven't the slightest idea as to what is going to happen. Not about the markets or inflation or elections or pretty much anything else that will occur between today and when the ball drops again on New Year's Eve.

I understand the game, the 'fake it til you make it' aspect to all this bravado. But that does not mean I have to like it, or not remind you that much of what you hear is unadulterated bullshit (and I mean that in the technical, professor Frankfurt version of the word).

The bottom line is that consumers of financial media need to constantly remind ourselves as to what we actually know, and what is unknowable."

Washington, D.C., Has an Insider-Trading Problem -New York Magazine

"The central bankers running the U.S. Federal Reserve are the closest thing we have to gods of the markets, their decisions on interest-rate policies and their bond-buying sprees watched breathlessly by everyone on Wall Street - and increasingly Main Street.

Last year, the Fed's influence became even more pronounced after the central bank pumped trillions of dollars into the markets when the global COVID-19 pandemic hit and financial assets of all kinds went into free fall.

As markets began to bounce back on the Fed's massive effort, two regional Fed presidents - Boston's Eric Rosengren and Dallas's Robert Kaplan - were not sitting in some ivory tower pouring over economic data. No, they were actively trading their personal stock portfolios, benefiting from the Fed's intervention.

The Fed has been criticized for many things in the past: It has been called a handmaiden to the big banks and accused of widening the gulf between the haves and have-nots in this country with a decade of rock-bottom interest rates that fueled raging-bull markets in stocks and bonds disproportionately benefiting the one percent. But until last year, its members had not been viewed as using their insider status to profit ahead of the public.

Of course, Fed officials aren't the only Washington insiders who had access to market-moving information during the pandemic. A surprisingly large number of Congress members also appeared to have been able to use their inside knowledge for financial gain while unemployed Americans were lining up at food banks.

Four senators were probed by the Department of Justice for insider trading, and at least one of them is still part of an active SEC investigation.

Meanwhile, the winning trades of Speaker of the House Nancy Pelosi have become so legendary they have inspired social-media accounts with large followings. On TikTok - for both ironic and unironic reasons - the 81-year-old California Democrat's investments are a subject of viral interest. One widely viewed video described her as 'the stock market's biggest whale.'

Pelosi has come under scrutiny several times, including for purchases of Tesla stock made by her husband a little more than a month before President Joe Biden announced an executive order requiring that all federal vehicles must be electric.

And last summer, her husband exercised call options worth $5.3 million to buy shares of Google parent Alphabet just before the House Judiciary Committee passed a series of tech antitrust bills so mild the market yawned."

Get Ready for a New Roaring Twenties -RealClearScience

"Mark P. Mills, a physicist, senior fellow at the Manhattan Institute, faculty fellow at Northwestern University, and a partner in Montrose Lane, an energy-tech venture fund, is out to rekindle our collectively dashed hopes. In his new book, 'The Cloud Revolution: How the Convergence of New Technologies Will Unleash the Next Economic Boom and a Roaring 2020s', Mills convincingly argues with verve, vitality, and - most importantly - evidence, that humanity is about to take a great step forward in the coming decade....

Mills says. 'What comes next will likely be more consequential than the comparable technological flourishing that began in the 1920s. We will again see a boost to the economy's productivity, which always increases overall wealth. The "�rising tide' does "�lift all boats.' The future will repeat a central pattern of the past. The 25 percent in the near future will live like the 5 percent today, and the future 5 percent will live like today's 1 percent, and so on.'

The key driver of this collective boon will be the Cloud, Mills says, along with the knowledge and technologies it spawns. The most basic definition of this nebulous term is software and services run on computer servers in data centers accessed via the Internet.

But the Cloud is much more than just Netflix, Google Drive, and Apple iCloud. It democratizes technology as never before, connecting everyone and everything, allowing unprecedented gathering and splicing of information....

The Cloud, Mills argues, brings together the three foundational spheres for technological revolution: 'the means for gathering and propagating information, the means (machines) of production, and the class of materials available to do everything.'

Mills offers copious examples of recent advancements in these three spheres. He lists numerous discoveries currently relegated to esoteric academic journals; any of these innovations could profoundly affect our everyday lives soon without us really noticing....

'We do in fact live in a time of a new normal,' Mills writes. 'But instead of our future being one of perennial slow growth and technological stagnation, it will be just the opposite.'

What could get in the way of this optimistic view? What could spiral a new Roaring Twenties down into a second Great Depression? Mills sees China and climate change as the biggest dangers, primarily because they are linked with thinking, business practices, and government policies that encourage controlling or even limiting growth and innovation."

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1.11.22 - 23% of Workers Plan to Quit in 2022

Gold last traded at $1,818 an ounce. Silver at $22.74 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on bargain-hunting and a weaker dollar. U.S. stocks fell after Federal Reserve officials hinted at fighting inflation aggressively in the year ahead.

Big Gold Breakout Nearing -Seeking Alpha

"A major gold breakout is nearing, with a massive pennant formation converging. Gold climbed into this big continuation pattern from below in powerful uplegs and has been consolidating high since.

Prices usually break out of big pennants in the same direction they entered, implying gold's imminent breakout will be to the upside. That will ignite strong gold-futures momentum buying.

The resulting acceleration and amplification of gold's breakout rally will start enticing investors to return, fueling a major upleg. Fed tightening shouldn't matter, as Fed officials mostly just talk hawkish.

The bottom line is a major gold breakout is nearing, with a massive pennant formation converging. Gold climbed into this big continuation pattern from below in powerful uplegs, and has been consolidating high ever since.

Prices usually break out of big pennants in the same direction they entered, implying gold's imminent breakout will be to the upside. That will ignite strong gold-futures momentum buying from specs.

The resulting acceleration and amplification of gold's breakout rally will start enticing investors to return, fueling a major upleg. Fed tightening shouldn't matter, as Fed officials talk tough but rarely follow through with all threatened actions. The FOMC surrenders after stock markets fall sufficiently on rate hikes and balance-sheet runoffs. And gold has tended to power strongly higher during past Fed-rate-hike cycles anyway."

MMT The Power and Poison of MMT -Project Syndicate

"While MMT is not new, it has been gaining traction in recent years. And a significant share of its following nowadays comes across almost as zealots, unwilling to brook any dissent. Meanwhile, mainstream economists largely regard MMT as tantamount to professional heresy, with some avoiding so much as uttering its name.

Needless to say, the rigid stances of MMT's devotees and detractors have not lent themselves to productive discussion. This is a serious loss for policymakers, because MMT includes both problematic propositions and perfectly reasonable - even highly useful - positions.

In the latter category, the idea that stands out is essentially functional finance theory (FFT). Proposed by Abba Lerner in 1943, FFT holds that, because governments borrowing in their own currency can always print money to service their debts, but still face inflation risks, they should aim to balance supply and demand at full employment, rather than fret about balancing the budget....

MMT and FFT are not synonymous. MMT includes two additional propositions that, in my view, are unsound. The first is that monetary policy should be conducted in such a way that it facilitates fiscal-policy decisions, such as by maintaining a constant (very low) interest rate....

More important, if interest rates are held constant, and prices start to rise, inflation could snowball. MMT proponents would advocate tax hikes as a way to manage aggregate demand and control inflation. But, given what we know about asset dynamics, this would be a hard sell.

MMT's second problematic proposition - that governments should provide a job guarantee in order to maintain full employment, while mitigating inflationary pressures - is even harder to defend. It simply moves too far in the direction of socialist labor allocation, and enables governments to wield excessive control over workers' wages.

When I explained MMT to former Japanese Prime Minister Shinzo Abe, he compared it to preparing fugu. If done correctly, the puffer fish is a sublime delicacy. But if the chef makes even a minor mistake, the diner could suffer a rapid and painful death."

Inflation up, virus down as priorities in US -AP News

"Heading into a critical midterm election year, the top political concerns of Americans are shifting in ways that suggest Democrats face considerable challenges to maintaining their control of Congress.

A poll from The Associated Press-NORC Center for Public Affairs Research finds that management of the pandemic, once an issue that strongly favored President Joe Biden and his fellow Democrats, is beginning to recede in the minds of Americans. COVID-19 is increasingly overshadowed by concerns about the economy and personal finances - particularly inflation - which are topics that could lift Republicans.

Just 37% of Americans name the virus as one of their top five priorities for the government to work on in 2022, compared with 53% who said it was a leading priority at the same time a year ago. The economy outpaced the pandemic in the open-ended question, with 68% of respondents mentioning it in some way as a top 2022 concern....

Consumer prices jumped 6.8% for the 12 months ending in November, a nearly four-decade high. Meanwhile, roughly twice as many Americans now mention their household finances, namely, the cost of living, as a governmental priority, 24% vs. 12% last year."

Nearly a quarter of workers plan to quit in 2022, report shows -Protocol

"The Great Resignation will likely continue into 2022. About one-quarter of workers are looking to get a new job this year, according to a report from ResumeBuilder.com released earlier this week. Of those employees, some want to move into tech-related industries such as IT, business and finance.

Roughly 23% of those surveyed last month said they want to quit this year. Another 9% have already found a new job, and an additional 9% said they'll retire this year. Most of those resignations are happening in the retail, food and hospitality industries, according to the report.

'Employees may wait for end-of-the-year bonuses to make a change or see what new opportunities arise in the new year,' career strategist Carolyn Kleiman said in the report. 'Plus, as the pandemic continues, people continue to evaluate their lives, and work is a large part of that.'

Better pay and benefits, finding remote work and landing a job people are passionate about are some of the top reasons for seeking new work, the report shows. Time and time again, remote tech work has proven to be hugely popular and will likely continue to grow in 2022. The hunt for a more purposeful job also checks out, given that more people have said they lost a sense of meaning in their work since the COVID-19 pandemic began.

Of those looking for new jobs, about one-third want to stay in their current industry, while another third want to switch to industries including IT, media and communications, and business and finance."

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1.10.22 - What Is the Great Reset?

Gold last traded at $1,801 an ounce. Silver at $22.51 an ounce.

NEWS SUMMARY: Precious metal prices steadied Monday despite rising interest rates and a firmer dollar. U.S. stocks fell, extending a rocky start to 2022 for equity markets as the 10-year Treasury yield moved above 1.8%.

10 reasons to be bullish the gold complex in 2022 -Kitco

"With bearish gold headlines making the rounds as the new year came to a close last week, you would think bullion was down double-digits in 2021. But after gaining a stellar 18% in 2019, then another 24% in 2020, the gold price consolidated those huge gains as much as 20% by Q2/2021 and ended last year down just 3.5%....

On Thursday, St. Louis Fed President James Bullard said the Fed could raise interest rates as soon as March and is now in a "good position" to take even more aggressive steps against inflation, as needed, after a policy reset last month....

Despite the continued under-performance for gold as we begin the new year, the fundamental backdrop in 2022 for precious metals and related mining share prices continues to strengthen.

Below are 10 reasons why I expect the gold price to eventually rise above $2,000 per ounce in 2022, along with the mining sector creating a significant bottom in Q1/2022:

1) Inflation has become increasingly problematic and more persistent than previous sanguine assessments by Federal Reserve Chairman Jerome Powell and other Fed officials.

2) Real interest rates are expected to remain deeply negative. Higher inflation combined with continued low interest rates should ensure negative real rates, always a strong buy signal for gold investors....

3) The Federal Reserve's more aggressive tapering and the expectation of three rate hikes in 2022 have already been largely priced in....

4) Geopolitical fears include the ongoing threat of war between North and South Korea that would draw in the United States; tensions between the U.S., China and its neighbors over Taiwan....

5) The global economy is beginning to sputter. Spreading economic weakness will make any tightening moves by central banks difficult to implement without broader repercussions....

6) During the last tightening cycle, between late 2015 and 2019, the Federal Reserve raised interest rates nine times and gold prices rallied nearly 35%. And between 2004 and 2005 the U.S. central bank raised rates 17 times and gold prices rallied 70%....

7) Physical gold buying centered in India and China has risen dramatically....

8) Net buying of gold bullion by central banks is likely to continue and may possibly increase....

9) Positioning by commodity traders is at negative extremes and is usually followed by short-covering rallies....

10) Gold mining equities are trading at deep value while generating record cash flow."

reset What Is the Great Reset? -Imprimis

"Is the Great Reset a conspiracy theory imagining a vast left-wing plot to establish a totalitarian one-world government? No. Despite the fact that some people may have spun conspiracy theories based on it - with some reason, as we will see - The Great Reset is real.

Indeed, just last year, Klaus Schwab, founder and executive chairman of the World Economic Forum (WEF) - a famous organization made up of the world's political, economic, and cultural elites that meets annually in Davos, Switzerland - and Thierry Malleret, co-founder and main author of the Monthly Barometer, published a book called COVID-19: The Great Reset. In the book, they define the Great Reset as a means of addressing the 'weaknesses of capitalism' that were purportedly exposed by the COVID pandemic.

But the idea of the Great Reset goes back much further. It can be traced at least as far back as the inception of the WEF, originally founded as the European Management Forum, in 1971....

The specific phrase 'Great Reset' came into general circulation over a decade ago, with the publication of a 2010 book, The Great Reset, by American urban studies scholar Richard Florida....

The Great Reset aims to usher in a bewildering economic amalgam - Schwab's stakeholder capitalism - which I have called 'corporate socialism' and Italian philosopher Giorgio Agamben has called 'communist capitalism.'....

Proponents of the Great Reset hold 'neoliberalism' responsible for our economic woes. But in truth, the governmental favoring of industries and players within industries - what used to be known as corporatism or economic fascism - has been the real source of what Schwab and his allies at the WEF decry.

While approved corporations are not necessarily monopolies, the tendency of the Great Reset is toward monopolization - vesting as much control over production and distribution in as few favored corporations as possible, while eliminating industries and producers deemed non-essential or inimical....

Another way of describing the goal of the Great Reset is 'capitalism with Chinese characteristics' - a two-tiered economy, with profitable monopolies and the state on top and socialism for the majority below....

The Great Reset represents the development of the Chinese system in the West, but in reverse. Whereas the Chinese political class began with a socialist political system and then introduced privately held for-profit production, the West began with capitalism and is now implementing a Chinese-style political system....

The draconian lockdown measures employed by Western governments managed to accomplish goals of which corporate socialists in the WEF could only dream - above all, the destruction of small businesses, eliminating competitors for corporate monopolists favored by the state.

In the U.S. alone, according to the Foundation for Economic Education, millions of small businesses closed their doors due to the lockdowns. Yelp data indicates that 60 percent of those closures are now permanent. Meanwhile companies like Amazon, Apple, Facebook, and Google enjoyed record gains....

As if the economic and governmental resets were not dramatic enough, the technological reset reads like a dystopian science fiction novel. It is based on the Fourth Industrial Revolution - or 4-IR for short. The first, second, and third industrial revolutions were the mechanical, electrical, and digital revolutions.

The 4-IR marks the convergence of existing and emerging fields, including Big Data, artificial intelligence, machine learning, quantum computing, genetics, nanotechnology, and robotics....

In terms of the social order, the Great Reset promises inclusion in a shared destiny. But the subordination of so-called 'netizens' implies economic and political disenfranchisement, a hyper-vigilance over self and others, and social isolation - or what Hannah Arendt called 'organized loneliness'on - a global scale....

Let me end on a note of hope. Because the goals of the Great Reset depend on the obliteration not only of free markets, but of individual liberty and free will, it is, perhaps ironically, unsustainable.

Like earlier attempts at totalitarianism, the Great Reset is doomed to ultimate failure. That doesn't mean, however, that it won't, again like those earlier attempts, leave a lot of destruction in its wake � - which is all the more reason to oppose it now and with all our might."

This Is How Bull Markets End -American Consequences

"Based on history, I'm seeing the same price action that usually marks the end of a bull market...So this is something to keep in mind as we continue to witness stocks rocketing to new highs....

I'm going to analyze two big stocks today"� Caterpillar (CAT) and Microsoft (MSFT).

These stocks represent different sectors of the economy, and when they're rallying together, it's a sign of strength. When they're not, it's usually a warning.

Right now, we're seeing a very wide divergence....In 2008, this wide divergence between CAT and MSFT led to a massive crash and big bear market....

The price action in the Nasdaq 100 from 1998 to 2000 and from 2020 to 2021 are still very much in sync.

So when I lined this up with what happened between CAT and MSFT back then and now, it gives me more evidence that history is indeed repeating.

All is not well under the hood of the stock market. What else does it mean for the market if this analog continues?

It means I'm expecting this bull market to end by February or March 2022....So prove me wrong, Mr. Market"� But for now, I'll respect your history."

What The Climate Scare And Pandemic Fearmongering Have In Common -Issues & Insights

"Climate alarmists have said it's necessary to ratchet up the fear about global warming to get the public's attention. It's the same story with the coronavirus outbreak. Authorities wanted to strike fear in the people, so they exaggerated the lethality of a virus deadly to only a narrow demographic segment.

Compare and contrast: Global warming, 1988. '"�"�We have to offer up scary scenarios, make simplified, dramatic statements, and make little mention of any doubts we might have,' about global warming, said Stanford climatologist Stephen Schneider....

Pandemic, 2020. Britain's "�"�Scientific Pandemic Influenza Group on Behavior warned 'that ministers needed to increase the perceived level of personal threat from Covid-19 because a substantial number of people still do not feel sufficiently personally threatened,' the London Telegraph reported....

Global warming, 2014. The American Journal of Agricultural Economics said their article 'provides a rationale for the tendency of news media and some pro-environmental organizations to "�"�accentuate or even exaggerate the damage caused by climate change.'

'We find,' they wrote, 'that the information manipulation has an instrumental value.'

Pandemic, 2020. The Scientific Pandemic Influenza Group on Behavior recommends the perception of fear regarding the coronavirus needed to 'be increased among those who are complacent, using hard-hitting emotional messaging.'....

The chilling fact there is much to be afraid of - not of a falling sky or a virus that we hope is on the wane, but of those eager to stir up dread and anxiety so they exercise the raw power they covet."

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1.7.22 - $2,100 Gold Ahead -Commodities Analyst

Gold last traded at $1,798 an ounce. Silver at $22.36 an ounce.

NEWS SUMMARY: Precious metal prices steadied Friday as downbeat economic data weakened the dollar. U.S. stocks fell after the December jobs report came in short of expectations.

Spot gold at $2,100? Commodities analyst says gold could test new highs this year -CNBC

"Gold could test new highs of $2,100 per ounce this year, according to a resource analyst at fund management company Fat Prophets.

U.S. dollar weakness and inflation are some factors that are likely to boost the precious metal's prices, David Lennox told CNBC's 'Street Signs Asia' on Monday.

'We do think across the course of 2022, we will see the gold price testing at the all-time record highs, but we can't see it traveling much beyond that once it gets there,' he said.

Lennox said it looks like everything is in place for the U.S. dollar to decline, though it hasn't happened yet. If the greenback weakens, it would be a 'boon' for gold, he added.

Meanwhile, inflation in the U.S. is close to 6% - up from around 1%, he said. Gold is seen as a hedge against inflation and increases in value as the dollar declines, but its track record has been spotty in the past.

'We do believe that high momentum in inflation and that lower U.S. dollar is going to drive the gold price higher in 2022,' he added."

cash app Venmo, PayPal and Cash App will now have to report transactions totaling more than $600 to the IRS -Daily Mail

"President Biden's IRS is cracking down on payments made through third-party apps, requiring platforms like Venmo, PayPal and Cash App to report transactions if they exceed $600 in one year.

The new reporting requirement will ensure that small businesses that receive payments through those apps are paying their fair share in taxes on them.

Beginning Jan. 1, 2022, third-party payment processors were required to report such transactions. Though businesses were always required to self-report such incomes to the IRS, many often did not keep record of their smaller transactions.

The payment apps were previously required to send users 1099-K forms if their gross income exceeded $20,000 or they had more than 200 transactions per year.

The new tax law was part of the March 2021 American Rescue Plan, which passed with no Republican votes....The cash apps will now be required to send the 1099-K form to businesses with electronic transactions greater than $600. The new change will apply for the 2022 tax season.

'For the 2022 tax year, you should consider the amounts shown on your 1099-K when calculating gross receipts for your income tax return,' PayPal warned on its website. 'The IRS will be able to cross-reference both our report and yours.'"

The great population growth slowdown -Vox

"Fewer babies were born in New York City in 2020 than any year on record, while the US population grew by just 0.1 percent in the year between July 2020 and July 2021, with the country adding just 392,665 people from net migration and births over deaths.

That's the lowest numeric increase since the Census Bureau began making annual population estimates at the beginning of the 20th century. On a percentage basis, it's the lowest growth in the nation's history.

Increased deaths from the pandemic plays a role, as do inevitably creeping mortality rates in an aging population. But the primary cause is declining fertility rates, as fewer Americans have children, and those that do tend to have smaller families.

The total fertility rate in the US - an estimate of the average total number of children a woman will have over her lifetime - has declined from 2.12 in 2007 to 1.64 in 2020, well below the 2.1 needed for a population to replace itself without immigration.

Nor is this merely an American phenomenon. By one estimate, half the world's population lives in countries with below-replacement-level fertility, and nations like Japan - with very low birth rates and little immigration - are already experiencing population decline....

Despite that, global population at the start of 2022 was nearly 7.87 billion, and should cross the 8 billion mark over the next few years. For those worried about climate change, fewer people - especially in some of the richest and most carbon-intensive countries in the world - might seem like an unmitigated good.

Indeed, there's evidence that a growing number of young people are opting out of having children specifically because they're worried about what life would be like for their offspring in a hot and chaotic world. Such concerns may be more intense these days, but they aren't new - human overpopulation has been a major concern for the environmental movement for decades....

And while population growth plays a role in climate change - it's called anthropogenic warming for a reason - it's not as big a factor as we might expect, as Sigal Samuel wrote for Future Perfect in 2020....Change in consumption patterns - through a mix of better efficiency and new technologies that don't emit carbon - and there's room enough to keep growing the population without cooking the planet."

Bitcoin, other cryptocurrencies drop on hawkish Fed minutes -CNBC

"Bitcoin and other cryptocurrencies fell sharply on Thursday as hawkish minutes from the Federal Reserve's December meeting hit global risk assets.

Bitcoin was trading at $42,739.52, down more than 7% from the 24 hours previous, according to Coin Metrics data. It fell as low as $42,503.88 in the last 24 hours, the lowest level in more than a month.

Other cryptocurrencies fell too. Ethereum dropped nearly 12% to $3,335.99 while solana sank 12% to $146.84.

The crypto sell-off comes after stocks fell on Wednesday following the release of minutes from the Fed's December meeting in which the central bank indicated it would dial back its supportive monetary policy, including reducing the amount of bonds it holds.

The Fed also indicated that it may have to raise interest rates sooner than expected....

Growth assets such as technology stocks tend to be hit when rates rise, as future earnings becomes less attractive to investors when yields are higher. That sentiment has filtered through to cryptocurrencies, which are seen as risker assets."

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1.6.22 - US Mint Sees Strongest Gold Sales in 12 Years

Gold last traded at $1,789 an ounce. Silver at $22.18 an ounce.

NEWS SUMMARY: Precious metal prices eased back Thursday following hawkish Fed comments and a flat dollar. U.S. stocks continued their slide amid investor worries over tighter monetary policy in 2022.

U.S. Mint sees strongest gold coin sales in 12 years -Kitco

"Despite gold's uninspiring performance in 2021, the precious metal saw an impressive wave of physical demand throughout the year.

Updated sales data released from the U.S. Mint on Monday showed demand for physical gold hitting its highest level since 2009. The U.S. Mint said that in 2021 it sold more than 1.25 million ounces of gold in various denominations of its American Eagle gold coins, up more than 48% from last year.

According to the sales data, the mint's busiest month last year was in January when it sold 220,500 ounces of gold. Another memorial month for the mint included June when it sold 182,000 gold ounces as gold prices dropped more than $100 in the month as the Federal Reserve signaled that it was looking at reducing its monthly bond purchases before the end of the year.

August was another busy month for the mint as it sold 136,000 ounces of gold. Early in August, the gold market experienced a flash crash, which saw prices drop more than 4% falling to a new low for the year. However, investors were quick to buy on the dip below $1,700 an ounce.

October and November also saw strong gold sales. Physical gold started to attract new investor attention in the final quarter of 2021 as inflation pressures saw extraordinary increases, jumping to multi-decade highs."

gold chart The Impact of Higher Inflation on US Asset Class Returns -AIER

"Which US asset classes perform best or worst amid periods of high inflation (6% or more)? Answer: commodities perform best, while bills perform worst. It's commonly recognized that bonds are not a good inflation hedge - and they aren't - but less recognized is that equities also fail in this regard; each has returned only a bit more than bills amid periods of higher inflation....

With the US CPI up by 6.9% over the past year - the highest rate since 1982 - have US asset returns reflected this longer-term history? Mostly, but not perfectly....Commodities have outperformed all other assets over the past year, with a real gain of 46%. Bills have lost 6.2%, also consistent with the history.

The outlier is equities, which have gained 19.7% in real terms. This is contrary to history. Why? Probably because the Fed until recently chose not to 'chase' the higher inflation rate with rate hikes; yet this month it hinted that it would raise rates three times (by 75 basis points) in 2022.

Now consider the longer-term history....Commodities have materially outperformed equities (13.2% versus 1.8%) under periods of high inflation while significantly underperforming amid low inflation. Equities have returned far more (16.4% p.a.) under episodes of low inflation versus 9.1% p.a. under moderate inflation and only 1.8% p.a. under high inflation. Meanwhile, bonds have returned 7.7% p.a. under low inflation, 5.7% p.a. under moderate inflation, and just 0.9% points p.a. under high inflation.

Clearly, financial assets perform poorly under high inflation (versus tangible assets). Less recognized is that equities serve no better than bills or bonds in protecting investors from the erosion of capital caused by high inflation (and by the higher interest rates that typically result). Huge equity gains amid high and rising inflation are historically (and economically) unjustified and unsustainable....

The Fed seems to be...mimicking the BoJ by refusing to raise rates, not because US inflation is 'too low' or high or 'transitory,' but because the Fed likewise is intent on satisfying the US Treasury's need to borrow cheaply. The ratio of US federal debt to GDP ratio is now 125% - double what it was in 2007."

Inflation or Recession? The Fed Faces a Choice. -Mises

"Despite Federal Reserve chairman Jerome Powell originally proclaiming this inflation spiral to be transitory, the Federal Reserve has announced that they will end their bond buying program three months earlier than expected, in addition to speculating three interest rate hikes in the coming years as opposed to the originally planned single rate hike.

With the quantitative easing policy maintained throughout the covid-19-induced recession finally ending, the federal funds rate is expected to rise to 0.9 percent in 2022, 1.6 percent in 2023, 2.1 percent in 2024, and 2.5 percent in the undetermined long run.

Mortgage-backed security and bond purchases will be reduced by $10 billion and $20 billion a month, respectively, in order to expedite the conclusion of the program by March 2022, rather than June. While this course of action is likely to mitigate the soaring inflation, it may lead to a myriad of detrimental effects to other facets of the economy.

To start, the aforementioned contractionary monetary policies will presumably slow GDP growth, wage growth, and possibly even job creation over the course of their implementation....

Furthermore, a rise in the federal funds rate will undisputedly lead to a rise in net interest payments made by the government. In fiscal year 2020, the United States federal government spent $345 billion in net interest payments alone, despite near-zero interest rates.

The nonpartisan Committee for a Responsible Federal Budget found that even a 2 percent increase in interest rates would cause net interest payments to rise to a whopping $750 billion....

What's more, interest rate hikes will most certainly have strong effects on many Americans' fiscal behavior. The upcoming interest rate increases will pull the prime rate up, thus furthering the burden of credit card holders paying interest. It would be in the best interest of consumers to pay off their debts in a timely manner in order to avoid further economic strain later on. We should also anticipate a rise in fixed mortgage rates....

In the final analysis, while contractionary monetary policy may be necessary to combat the recent rise of inflation, the sheer number of adverse effects of these actions remind us why we should try to avoid these situations altogether."

Has COVID Run Its Course? This Chart Suggests The Answer Is Yes -Issues & Insights

"Two years after COVID first landed on our shores, the rate of new cases has absolutely exploded. That's making headlines. Here's what isn't making headlines: Daily COVID deaths are down....

While the number of people testing positive for COVID has indeed soared - the CDC reported almost half a million new cases on Dec. 29 alone, nearly twice the daily peak from last year - the number of people being admitted to intensive care units and the number reported to have died from COVID hasn't followed suit.

Johns Hopkins University reports that from Dec. 27 to Jan. 2, there were 17,759 ICU beds occupied with COVID patients. That's down from 25,000 in mid-September 2021.

The number of inpatient beds occupied by patients with COVID is currently 93,282, which is below the number of beds occupied in mid-September. And many of those are in the hospital for other reasons, but just happened to test positive for COVID.

What's more, the seven-day moving average for the number of people who died with COVID is lower than it was on Oct. 24, which was the day that the current wave started - 1,100 compared with 1,323.

That's strikingly different from previous waves, which as this chart shows, saw daily deaths starting to climb along with cases, with only about a two-week lag.

If this outbreak had been like the previous ones, COVID-related deaths would have started climbing weeks ago.

What does this mean? Most likely it means that the disease is getting less lethal as it gets more transmittable, which is how viruses work.

As an article in New Scientist explains, 'In time, virologists predict, the virus will become more benign, following an evolutionary pathway previously taken by four other human coronaviruses that today cause nothing more than the "�common cold.'

If this is in fact what's happening right now, why isn't this news being shouted from the rooftops? We can only speculate, but our guess is that power-mad politicians and public health tyrants like Anthony Fauci don't want this sort of good news getting out."

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1.5.22 - The Case Against Cryptocurrencies

Gold last traded at $1,824 an ounce. Silver at $23.13 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on safe-haven buying and a weaker dollar. U.S. stocks traded flat as investors looked for clues on where the economy stands heading into the new year.

Gold firms above $1800 per ounce as pandemic, inflation risks linger -CNBC

"Gold climbed above the key $1,800-per-ounce level on Tuesday, after a sharp retreat in the last session, as some investors sought cover from pandemic-led uncertainty, inflation and its impact on the U.S. Federal Reserve's rate hike trajectory....

'Gold prices are seeing some relief after being pummeled by surging U.S. Treasury yields on Monday,' said Han Tan, chief market analyst at Exinity.

'Still, lingering concerns over a possible turn for the worse in the worldwide battle against COVID-19 should offer some measure of support for gold prices while waiting for the global outlook to brighten considerably,' Tan added....

'Once the dust settles it is very important to watch what the FOMC does and not what it says,' Saxo Bank analyst Ole Hansen said in a note.

U.S. real yields may not rise as much as expected by the market 'and with that in mind and given the prospect for U.S. stocks coming off the boil, we believe gold as well as silver and platinum will offer a positive return in 2022,' Ole added.

In the physical market, the world's second-biggest bullion consumer India splurged a record $55.7 billion on gold imports, amid lower prices and pent-up wedding demand."

crypto The Case Against Crypto -Stephen Diehl

"These days so much of my free time is booked with calls to explain to people outside the software industry why crypto assets are such a destructive force and why I support forceful regulation to halt this financially corrosive enterprise from spreading further into markets.

I basically have to repeat myself on the basic arguments for every call covering the same basic monetary theory, American history and technical limitations. Thus I'm going to summarize the basic argument so we have a reference and I don't have to keep repeating myself all day.

1. The technology does not solve a real problem. -- The crypto project has had 13 years to try and find a problem to solve. It has not found one.

The real world has fundamental constraints that make the technology unworkable, whenever it has to interact with the outside world the benefits of decentralization disappear and the solutions end up simply recreating slower and worse versions of processes and structures that already exist.

Despite that, for the last thirteen years these projects have done nothing but scam people by creating synthetic asset bubbles for gambling and destroying the environment....

2. So called 'cryptocurrencies' aren't actually currencies, and cannot fulfil the function of money. -- Money exists to exchange for goods and services in an economy. It is created to mediate the exchange of goods so that we have a common unit of account we can trade instead of bartering goods directly.

Money needs to have a reliable and stable value compared to a domestic basket of common goods and services, in order to achieve that the supply of the money needs to be controlled by a monetary authority which can expand or contract the supply according to market fluctuations....

The crypto project contains unresolvable logical and economic contradictions in its stated purpose. State controlled money embeds control and accountability for fiscal stability and market intervention in the democratic process where it inevitably and rightly belongs.

3. The history of private money is one of repeated disasters that destroy public trust. -- The lessons of history are quite clear on this issue because the United States flirted with such a system back in the Free Banking Era from 1837 to 1863. In this time period there were hundreds of private entities that went about issuing their own private bank notes allegedly created one-for-one with state bonds.

The problem with these so-called wildcat banks is that their reserves were not always verifiably backed and were thus subject to runs on the bank in which customers could not access their funds. The second issue is that unlike public money which is universally accepted at par, the wildcat bank notes had a massive secondary exchange market where notes from different banks would not trade at par....

4. Crypto assets are all unregistered securities. -- Crypto assets are simply unregistered securities on ventures whose stated aspiration is to develop technology to become digital wildcat banks. They've just synthesized their corporate equity and alleged notes into one financial product.

Cryptocurrencies aren't currencies and have no mechanism to ever become currencies. They are effectively unregulated securities where the only purpose of the products is price appreciation untethered to any economic activity. The only use case is gambling on the random price oscillations, attempting to buy low and sell high and cash out positions for wins in a real currency like dollars or euros.

Public money should just work for most people without them having to be concerned with the details. This is ultimately where cryptocurrencies tap into the ignorance, desperate faith in technical solutionism and political resentment of the public and weaponize it for the aims of these libertarian private money charlatans to engorge themselves. These guys aren't building a new financial system, they're just lining their own pockets.

History repeats itself first as tragedy and then as farce. The wild economic oscillations of yesterday's gold standard is today's dog meme mania. Human nature is remarkably invariant through the ages and if we don't learn the lessons of history then we're doomed to repeat the mistakes of past generations."

Why Commodities Could Absolutely Soar in the Next Decade -American Consequences

"Equities are near all-time-high valuations today, and anybody who has held them for decades knows they've been a tremendous long-term investment.

Today, though, I want to focus on something else - and get a sense of where the broader world of commodities stands. In short, while this is a volatile asset class, we could be on the verge of a new market cycle....

Commodity prices have ripped higher this last year. The S&P GSCI is up 33%"� That's about eight percentage points better than the S&P 500.

It's important to compare commodities to stocks and see where we stand in the cycle"�.

You see, learning to read commodity market cycles can be a very lucrative proposition - and it can offer excellent diversification during times of poor equity returns....

Commodities are highly cyclical and tend to be volatile, but they've provided an effective hedge in decades when equity returns have disappointed. And as I mentioned earlier, they've done better than stocks so far this year.

We can't know what will happen in the future"� but perhaps this is a glimpse of a new market cycle.

My sense for where we stand in the present suggests that the markets are approaching an important turning point"� a decade of higher commodity prices and generally poor equity returns would be right in line with the picture we've just painted.

We'll see what happens between now and 2031"� But keep this in mind as we head into the new year."

A Holiday Ad To Make Us Feel Good About America -New York Post

"It's not often that a television commercial draws us into a story, reminds us of the best parts of ourselves and moves us deeply...But this holiday season, one of America's last iconic brands, Chevrolet, accomplished just that - a pitch perfect ad that comes at just the right moment in our national story.

When many Americans are having trouble simply recognizing the country they've known all their lives, when there is division over race, politics, leadership, the press, and even Covid we wonder who we are, even what we are. It is at this moment that Chevrolet has come forward with a decidedly non-woke message to evoke the essence of our lives and America....

In Chevrolet's four-minute commercial called 'Holiday Ride,' directed by Academy Award winner Tom Hooper ('The King's Speech'), we see a widower struggling with his grief by visiting the barn where he keeps a now-beat-up 1966 Impala that belonged to his late wife. In a flashback, he remembers his pretty young wife, her radiant smile, her excitement, through an old 8-millimeter film taken when she is first given the car so many years ago.

Then, in what may be the most important scene, his daughter, now grown, goes to the local garage and explains to the guys sitting around, about her father's sadness. Before she can even ask, the guys completely understand and jump in to help. 'It's your mother's car ... ?' One of them asks. Then he turns to the others with just one question: 'Anyone up for some night work?'

They are all in. This is a sense of caring and generosity we have always seen in America and we still do - after tornados in Kentucky, floods in the Ohio Valley, fires in the West, ice storms in Texas ... and after 9-11. We are the wealthiest nation on earth, the most generous, and filled with decent neighbors.

In 'Holiday Ride,' we watch the old guys lovingly restore the car, we see how the father is moved by his daughter's caring, by the community's kindness and by the memory of his beloved wife. This hits all of us in different ways. There are 15-million widows and widowers in America who immediately understand this man's pain....

In this ad, we also see community, connection to our neighbors, generosity, caring and, especially, love. It's amazing how this is all wrapped up in four minutes around a gorgeous 1966 blue Impala convertible. Amazing, but not at all surprising. Happy holidays, America."

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1.4.22 - Money Has Never Felt More Fake

Gold last traded at $1,814 an ounce. Silver at $23.03 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on bargain-hunting and a weaker dollar. U.S. stocks traded mixed as investors considered whether the economy can overcome the latest surge in Covid cases and continue riding 2021's momentum.

Retail investors see gold hitting record highs above $2,000 in 2022 -Kitco

"Retail investors remain significantly bullish on gold prices next year as the precious metal looks to end 2021 with nearly a 4% loss.

Gold prices have seen a solid push higher, moving above $1,800 an ounce on the last trading day of 2021. Spot gold prices last traded at $1,827.95 an ounce....

Analysts note that the rise in consumer prices this past year has been met with expectations that the Federal Reserve will tighten interest rates soon than expected. At its December monetary policy meeting, the U.S. central bank signaled that it would end its monthly bond purchase by March and could raise interest rate three times in 2022.

However, U.S. monetary policy is not scaring many retail investors who appear to be significantly bullish on gold heading into the new year. According to Kitco News' annual outlook survey, a clear majority of Main Street investors expect gold prices to push new record highs in 2022.

This year, nearly 3,000 people participated in Kitco's annual online survey. Of those 1,605, 54% said they see gold prices above $2,000. Meanwhile, 592 voters, or 20%, said that gold would trade between $1,900 and $2,000."

monopoly Money has never felt more fake -Vox

"NFTs - non-fungible tokens, little digital assets that exist on a blockchain - are having a moment. What's not really clear is why. Then again, everything about money feels a little strange at the moment.

Between NFTs, crypto, and GameStop, AMC, and other meme stocks, money has rarely felt more fake. Or, at the very least, value has rarely felt so disconnected from reality.

The concept of value is a fuzzy one, and valuation is often more art than it is science. Psychology has always played a role in money and investing - and there have always been bubbles, too, where the price of an asset takes off at a rapid pace and disconnects from the fundamental value....

Historically, the economy was theoretically based on labor and value creation at the individual level, and on the structural level, voting shares in companies based on their financial fundamentals and future value, said tech industry veteran Anil Dash, CEO of the programming company Glitch. But that idea died long ago.

'A machine is what it does, and the purpose of the system is the output of the system. And the purpose of our financial systems ... is to create ever more detached financialization that can just generate what the industry calls wealth and what the rest of the world just doesn't see.' In other words, the confusing status of value today is a feature, not a bug

You can see this clearly in the markets in 2021.

One of the first big stories of the year was the GameStop saga, and it was a fun one. An army of day traders on the Reddit forum r/WallStreetBets drove up the price of the game retailer's stock in a matter of days, forcing halts in trading and costing some hedge funds that had been betting against the stock quite a bit of money....

'For a huge swath of the retail world, the mentality has merged of what is trading versus what is investing versus what is essentially just gambling,' said Tyler Gellasch, executive director of Healthy Markets, a nonprofit....

It's easy to be dismissive of the current state of casino capitalism, where random people are just tossing random money at random anything. It's also relatively easy to recognize that this landscape is likely to be one where there are few winners, and the winners are probably going to be the people who were already winning, financially.

'For every one person that makes money, you have 100 people that have lost money. It's basically just a giant wealth redistribution scheme,' said Stephen Diehl, a software engineer in London....If and when the bubble around some of these hyped investments bursts, a lot of people are going to get hurt and lose money."

What will happen with house prices in 2022? -Calculated Risk

"Earlier I posted some questions on my blog for next year: Ten Economic Questions for 2022. Some of these questions concern real estate (inventory, house prices, housing credit, housing starts, new home sales)....

It appears house prices - as measured by the national repeat sales index (Case-Shiller, FHFA, and CoreLogic) - will be up around 18% to 20% in 2021. What will happen with house prices in 2022?....

Both Case-Shiller and FHFA noted the recent deceleration in house price growth. From the FHFA:

'House price levels continue to rise but the rapid pace is curtailing through October,' said Will Doerner, Ph.D., Supervisory Economist in FHFA's Division of Research and Statistics. 'The large market appreciations seen this spring peaked in July and have been cooling this fall with annual trends slowing over the last four consecutive months.'....

There are a wide range of price forecasts for 2022, from around 2% YoY growth to as much as 14%.

If inventory doesn't increase in 2022, house prices will continue to increase at a double-digit pace. There are several possible reasons for an increase in inventory in 2022. Here are a few:

1) A sharp increase in mortgage rates.
2) Economic problems overseas that spillover into the US.
3) Unregulated areas of finance causing economic problems.
4) Affordability (a combination of higher mortgage rates and higher prices).

A sharp increase in mortgage rates is possible, especially if inflation stays elevated and the pandemic subsides (each wave of the pandemic has pushed down interest rates)."

The Hangover: Covid Stimulus Spending Aftermath -National Review

"The Covid-19 epidemic and the federal response follow a familiar pattern: A crisis emerges, extraordinary action is taken, that extraordinary action acquires interest groups who wish to see it become ordinary action, economic troubles inevitably follow, and sorting it all out gets pretty hairy pretty quickly....

Emergency. Emergency spending. Inflation. Recession. Recovery. The pattern is not difficult to discern.

Because our current tribal rage causes us to see everything in the dumbest possible binary terms, it is sometimes difficult to make the case that Covid-19 was a genuine crisis, that it required an extraordinary response, and that, at the same time, the crisis has been exaggerated, the response has overreached and over-persisted, and that an unpleasant process, something like the economic version of drug withdrawal, is now necessary....

There is no easy fix. The usual way to put a brake on inflation is to raise interest rates. That is a hard thing to do for the U.S. government, which is the most indebted organization in world history and already spends a substantial share of each year's tax revenue on interest payments for prior years' spending.

Both the government and the broader economy have become very accustomed to ultra-low interest rates - free money, in effect - and both will have a tough time adapting to a different credit environment.

Prosperity will emerge - if we let it. But first, we have to do the hard part: reforming our public finances with an eye toward long-term stability and following a more sensible long-term monetary policy, thereby creating the conditions of stability and predictability in which sensible and profitable long-term investment is possible.

The hangover is coming. That's the bad news. The good news is that hangovers end."

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1.3.21 - U.S: From Greatness to Obscurity?

Gold last traded at $1,799 an ounce. Silver at $22.80 an ounce.

NEWS SUMMARY: Precious metal prices eased back to kick off 2022 amid profit-taking and a firmer dollar. U.S. stocks traded mixed as investors reflected on the economy's ability to overcome the surge in Covid cases.

Gold Price Prediction for 2022 -Yahoo Finance

"As a technician, I'm always looking for historical price patterns to help forecast future moves. In gold, I see overwhelming similarities between now and the 18-month consolidation between 2004 and 2005. This pattern, if it holds, supports a convincing breakout in 2022 and a rally towards $3000 by year-end.

Gold is in a similar setup to 2005. The post-breakout consolidation that started in August 2020 is almost over. Expect renewed bullishness beginning in Q2 2022 that should last into year-end. Our most bullish case suggests gold could challenge the $3000 level.

I believe we are finalizing the ending triangle consolidation now, and a decisive breakout should follow in the second quarter of 2022, possibly as soon as February or March.

We expect much better performance from gold in 2022, with the potential for a 60% advance from current levels. Gold miners could outperform to the upside and may double from current levels. Our Basic Metals Portfolio is overweight and will continue to add high-quality assets in 2022."

markets The Fed's Moves Pumped Up Stocks. In 2022, It May Pull the Plug. -DNyuz

"For two years, the stock market has been largely able to ignore the lived reality of Americans during the pandemic - the mounting coronavirus cases, the loss of lives and livelihoods, the lockdowns - because of underlying policies that kept it buoyant.

Investors can now say goodbye to all that.

Come 2022, the Federal Reserve is expected to raise interest rates to fight inflation, and government programs meant to stimulate the economy during the pandemic will have ended. Those policy changes will cause investors, businesses and consumers to behave differently, and their actions will eventually take some air out of the stock market, according to analysts.

'It's going to be the first time in almost two years that the Fed's incremental decisions might force investors or consumers to become a little more wary,' said David Schawel, the chief investment officer at Family Management Corporation, a wealth management firm in New York....

'The nightmare scenario is: The Fed tightens and it doesn't help,' said Aaron Brown, a former risk manager of AQR Capital Management who now manages his own money and teaches math at New York University's Courant Institute of Mathematical Sciences. Mr. Brown said that if the Fed could not orchestrate a 'soft landing' for the economy, things could start to get ugly - fast.

And then, he said, the Fed may have to take 'very aggressive action like a rate hike to 15 percent, or wage and price controls, like we tried in the '70s.'"

How Nations Slip from Greatness to Obscurity -Frontpagemag

"Men, like nations, think they're eternal. What man in his 20s or 30s doesn't believe, at least subconsciously, that he'll live forever?

In the springtime of youth, an endless summer beckons. As you pass 70, it's harder to hide from reality.

Nations too have seasons. Imagine a Roman of the 2nd. century contemplating an empire that stretched from Britain to the Near East, thinking: This will endure forever. Forever was about 500 years, give or take....

America has moved from a relatively free economy to socialism - which has worked so well nowhere in the world. We've gone from a republican government guided by a constitution to a regime of revolving elites. We have less freedom with each passing year.

Like a signpost to the coming reign of terror, the cancel culture is everywhere. We've traded the American Revolution for the Cultural Revolution. How do nations slip from greatness to obscurity?

-Fighting endless wars they can't or won't win
-Accumulating massive debt far beyond their ability to repay
-Refusing to guard their borders, allowing the nation to be inundated by an alien horde
-Surrendering control of their cities to mob rule
-Allowing indoctrination of the young
-Moving from a republican form of government to an oligarchy
-Losing national identity
-Indulging indolence
-Abandoning faith and family - the bulwarks social order.

In America, every one of these symptoms is pronounced, indicating an advanced stage of the disease.... If we let America slip through our fingers, if we lose without a fight, what will posterity say of us?"

How Biden's Agenda Is Causing Inflation -Reason

"The Consumer Price Index (CPI) tracks the cost of everyday items. It's jacked up a whopping 6.8 percent over the past year, the biggest increase in almost 40 years. Gas is up 51 percent, beef is up 20 percent, and furniture by 11 percent....

Biden, his advisers, and his champions in the press are ignoring the tough lessons of the past by downplaying inflation or bizarrely claiming it only freaks out rich people.

Even worse, Biden and crew are delusionally pronouncing that we can tame inflation by pumping massive amounts of government money into the economy - a course of action that will almost certainly make everything more expensive.

'What this package will do is lower some of the most important costs, what [families] pay for health care, for child care. It's anti-inflationary in that sense,' said Treasury Secretary Janet Yellen in defense of the recently passed $1.2 trillion infrastructure bill and promises of even-bigger bills related to the president's 'Build Back Better' agenda.

What Ford, Biden, Warren, and Yellen have in common is a failure to understand inflation's most important underlying cause, which the Nobel Prize-winning economist Milton Friedman was explaining with unique clarity back in the 1970s.

'To understand the cause of inflation, you must understand that it is anywhere and everywhere a monetary phenomenon,' said Friedman. Supply-chain issues and rising demand are factors too, but the biggest contributors come from the government and the Federal Reserve....

Back in the '70s, Friedman likened the early stages of inflation to alcoholism. Politicians get to spend more money, tax revenues increase without passing new legislation, and some consumers feel like they are gaining purchasing power as their wages go up.

'Inflation is just like alcoholism,' he warned. 'In both cases, when you start drinking or when you start printing too much money, the good effects come first and the bad effects come only later. That's why in both cases there's a strong temptation to overdo it, to drink too much and to print too much money.'

Here's a final insult: Even the price of booze is going up, so not only will we have more sorrows, it's going to cost us more to drown them."

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