Swiss America Blog Archive

Swiss America Blog Archive


6.16.21 - G7 Promotes “More Spending”

Gold last traded at $1,840 an ounce. Silver at $27.40 an ounce.

NEWS SUMMARY: Precious metal prices traded steady Wednesday. U.S. stocks traded flat ahead of the Federal Reserve’s update on monetary policy.

Gold holds tight range as markets await Fed cues -Reuters

"Gold prices were subdued in a tight range on Tuesday ahead of a U.S. Federal Reserve meeting that could provide an indication on the eventual withdrawal of economic support....

'Investors are being cautious ... with very little appetite at the moment to drive gold in one direction or the other,' said CMC Markets UK’s chief market analyst, Michael Hewson.

For the second time in less than a decade, the Fed is getting ready to launch a debate over how and when to sunset a massive asset-purchase program.

'It’s just not necessary; that amount of stimulus, at this stage of the economic rebound, so that’s why we’re seeing a little bit of weakness in gold prices over the past two to three days. The picture will become a lot clearer tomorrow,' CMC’s Hewson added....

Investors also awaited a slew of U.S. economic data, including monthly retail sales.

'There’ll be some focus on the Producer Price Index (PPI) for May ... it could provide clues on whether to expect further inflationary pressures down the road,' Lukman Otunuga, analyst at FXTM, said in a note."

G7 World Economic Leaders Promote “More Spending” -Rogue Economics

"Newsflash from the G7 summit in Cornwall! Financial Times: 'Biden wins backing from G7 leaders to 'carry on spending'....You’d think leaders might want to show some restraint. Some moderation. Maybe even trim a little fat.

Instead… the spend-a-palooza continues. And why? To 'tackle inequality'?

Right. The U.S. leaders, who shifted (by our rough estimate) $30 trillion to the top 10% of the population, are now going to address the 'inequality' issue.

How? Cutting off the tall man’s legs and lowering the smart man’s IQ by making him watch TV? Forcing thin women to eat more so they will be as roly-poly as the fat ones?

No, Dear Reader, the leveling will be done with money. And like the rest of the stimmy program – fraudulently.

Last week, we saw that 'inflation' is not just a matter of rising consumer prices. It is an intentional 'inflation' of the money itself – like counterfeiting.

It’s not the higher prices that do the damage. It’s the fraud behind them....

The trouble with the feds’ plan to 'carry on spending,' is that it eventually comes crashing through the window like a rock."

JPMorgan hoarding cash because ‘very good chance’ inflation is here to stay -CNBC

"'We have a lot of cash and capability and we’re going to be very patient, because I think you have a very good chance inflation will be more than transitory,' said Dimon, longtime JPMorgan CEO.

'If you look at our balance sheet, we have $500 billion in cash, we’ve actually been effectively stockpiling more and more cash waiting for opportunities to invest at higher rates,' Dimon said. 'I do expect to see higher rates and more inflation, and we’re prepared for that.'....

Later Monday, Morgan Stanley CEO James Gorman told CNBC’s Wilfred Frost on Closing Bell that he, too thinks that higher inflation may be lasting and the Fed may be forced to hike rates earlier than expected.

'The question is when does the Fed move?' Gorman said. 'It has to move at some point, and I think the bias is more likely earlier than what the current dots suggest, rather than later.'″

Forget Going Back to the Office - People Are Just Quitting Instead -Wall Street Journal

"More U.S. workers are quitting their jobs than at any time in at least two decades, signaling optimism among many professionals while also adding to the struggle companies face trying to keep up with the economic recovery.

The wave of resignations marks a sharp turn from the darkest days of the pandemic, when workers craved job security while weathering a national health and economic crisis. In April, the share of U.S. workers leaving jobs was 2.7%, according to the Labor Department, a jump from 1.6% a year earlier to the highest level since at least 2000.

The shift by workers into new jobs and careers is prompting employers to raise wages and offer promotions to keep hold of talent. The appetite for change by employees indicates many professionals are feeling confident about jumping ship for better prospects, despite elevated unemployment rates....

Several factors are driving the job turnover. Many people are spurning a return to business as usual, preferring the flexibility of remote work or reluctant to be in an office before the virus is vanquished. Others are burned out from extra pandemic workloads and stress, while some are looking for higher pay to make up for a spouse’s job loss or used the past year to reconsider their career path and shift gears."

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6.15.21 - Fed Taper Talk; Oil Eyes High $70s

Gold last traded at $1,858 an ounce. Silver at $27.65 an ounce.

NEWS SUMMARY: Precious metal prices steadied Tuesday as the wholesale inflation index hit a new high of .8% in May. U.S. stocks dipped as all eyes focused on the next Fed statement due Wednesday.

Gold Caught In Fed's Taper Talk; Oil Eyes Higher $70s -Investing

"Will this be the week the Fed faces up to inflationary forces and lays down a timetable for the tapering of its monthly asset buying?....

Most analysts are not expecting the central bank to begin discussing scaling back its asset purchase program before its annual conference in Jackson Hole, Wyoming, in late August.

Even so, investors will be zeroing in on the Fed's statement on Wednesday at the conclusion of its two-day policy meeting for June, held against a backdrop of persistent concerns over inflation spikes and whether these could prompt the central bank to pull back its monthly asset purchases faster than thought....

Since hitting record highs above $2,000 an ounce in August, gold has had spotty returns over the past few months despite creeping price pressures and fears that US inflation in 2021 could be the worst in 35 years....

On the oil front, crude prices ticked higher again, with US benchmark West Texas Intermediate holding above $71 per barrel and global gauge Brent trading above $73, after closing up for a third straight week on speculation of runaway summer demand for fuels."

punch bowl The Fed Can Neither Leave Out The ‘Punch Bowl,’ Nor Take It Away -Forbes

"It’s probably true in all areas of thought, but in economics it’s most certainly true that bad ideas never really die. To economists and those who write about economics, the notion of an all-powerful Fed controlling credit availability is one of those laughable myths that has many more than nine lives....

If economists are to be believed, the Fed rolling out the punch bowl and providing so-called 'money supply' for Johnstown would bring on an economic boom for the struggling town.

To economists, money equals wealth. It all seems so simple. Except that if it were, a Fed focused on 'equality' would have long ago solved poverty in America’s poorest locales via bond buying. Basically, the central back would have long ago put out the proverbial 'punch bowl' wherever economic struggle revealed itself.

So why hasn’t it? The answer is kind of obvious.

Any attempt by the Fed to rewrite on-the-ground economic realities would (in addition to rendering the central bank insolvent) be corrected more quickly than you can read this sentence. Put another way, if the Fed boosted so-called 'money supply' in Johnstown, the dollars would flow out of the town as quickly as they arrived....

Which is why the Fed presuming to take away the 'punch bowl' is similarly of no consequence. In the real economy, myriad sources of finance compete daily with one another to finance today’s and tomorrow’s businesses, along with the movement of wealth to ever-higher uses....Sorry, markets don’t work that way....

Basically there’s no 'there' to the popular notion that the Fed can turn on or turn off economic vitality and happiness. Yes, there’s no such thing as a 'punch bowl.' Serious people should stop pretending that there is one."

How SEC boss should deal with ‘meme’ stock schemes -New York Post

"Gary Gensler thought he had all the answers when he took the helm at the Securities and Exchange Commission this spring....

Then the meme-stock frenzy came roaring back, and Gensler was reminded that being the sheriff of Wall Street means you get held account­able when bad stuff happens on your watch.

These money-losing stocks went bonkers in January, fell back to earth and then soared recently thanks to hordes of retail investors once again plowing whatever savings they had into some of the most speculative companies in the market....

But the madness of crowds only lasts until something changes the sentiment, making investors suddenly suspicious of hype. People start selling stuff. The smart money gets out first, while the average investor is usually left holding the bag.

That’s when the pitchforks come out and public starts looking for scapegoats....Here is an easy way for Gensler to avoid ­being the next market scapegoat: He should pick up the phone and call Fed Chair Jerome Powell.

Then Gensler can alert Powell that printing money always leads to speculative bubbles and investor losses. If Powell normalizes now, the meme bubble might burst on its own - before people mortgage their houses to buy more AMC."

Oil Price Hits Pandemic High as Investors Bet on Green Energy -Wall Street Journal

"Some investors are wagering that Wall Street’s preference for green energy will depress spending on oil extraction, setting the stage for supply shortages and higher fuel prices.

The bets come as money managers line up trillions of dollars for wind, solar and other renewable programs and expenditures on oil projects tumble. The drop in fossil-fuel spending is becoming so severe that energy companies could struggle to quench the world’s thirst for oil, some analysts say....

Crude is still expected to remain in high demand over the next decade to make transportation fuels and petrochemicals used for plastics and other household products. U.S. consumption has surged lately following the worst of the coronavirus pandemic, and output cuts by the Organization of the Petroleum Exporting Countries have given prices a further boost....

Leigh Goehring, managing partner at commodities-focused investment firm Goehring & Rozencwajg Associates, said he thinks prices will soar in coming years as consumption tops production capacity for a sustained period for the first time ever. His firm lifted its investments in energy producers during last year’s crash and has maintained those holdings.

'This is the basis for the next oil crisis,' he said. 'We’re in uncharted territory.'....

For now, many are positioning for shortages. Hayal Ahmadzada, chief trading officer at the trading arm of Azerbaijan’s national oil company, drives a Tesla Inc. electric car but expects crude to rise above $100 a barrel next year."

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6.14.21 - A Made-in-Washington Inflation Spike

Gold last traded at $1,864 an ounce. Silver at $27.86 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Monday on a flat dollar as investors await the Fed statement later this week. U.S. stocks traded near the flatline after closing at a record high in the previous session.

Gold Getting Ready to Rumble -Sprott/Zero Hedge

"'Goods prices are up 6.5% YoY - the highest since 1982.' Why? Because bond yields rise at the same time as inflation expectations. Simply put, real yields = bond yields – inflation expectations....

What is causing inflation? Something I’ve been saying since Gold soared post the March 2020 collapse due to money printing combined with mining closures due to Covid 19 pandemic. Supply shocks combined with massive currency printing and fiscal spending means prices have to go up. It’s not rocket science, it’s just economics 101. Fewer goods and services being chased by more and more dollars. One can only imagine how high inflation could get should we see Universal Basic Income rolled out and people doing nothing and producing nothing consume goods and services with dollars printed out of thin air.

The size of government debt in the US and globally is gargantuan and rising at a parabolic rate. This can never be paid off. A partial jubilee may be possible but that will not solve the problem. Then there is default. On the multiple occasions when regimes have faced the prospect of a debt-driven collapse, politicians have never agreed to outright default, they have always preferred to inflate it away. A less obvious default to the masses at large but far more destructive.

This has been my expectation since 2017: hyperstagflation followed by the collapse of the Everything Bubble and the beginning of the Greatest Depression. Precious metal are the new TINA (There Is No Alternative) for such an outcome. Keep in mind, back in the early 1930s, while the prices of everything else collapsed, Gold rose over 60%. I expect Gold and especially Silver to reach stratospheric price levels in the years to come.

In the meantime, I’m looking for a move up to the 1950-60 area in Gold before a pullback to ~1845 before take off to new highs. The same goes for Silver and the miners. Silver miners could double in the months ahead. Any further dips from here should be bought into given what’s coming."

arc A Made-in-Washington Inflation Spike -Wall Street Journal

"The Labor Department’s consumer price index surged 5% year-over-year in May, the largest increase since August 2008 when oil was $140 a barrel. But don’t worry, Americans. The Federal Reserve says inflation is 'transitory' and that it has the tools to control prices if they start to spiral out of control. Let us pray.

Nobody should be surprised that prices are increasing everywhere from the grocery store to the car dealership. Demand is soaring as the pandemic recedes while supply constraints linger, especially in labor and transportation. As always, this is a price shock largely made by government. Congress has shoveled out trillions of dollars in transfer payments over the past year, and the Fed has rates at zero while the economy may be growing at a 10% annual rate....

Congress’s $300 unemployment bonus and other welfare payments for not working have contributed to an enormous worker shortage, which is magnifying supply shortages.

All of this is showing up in higher prices. Over the last 12 months, core inflation excluding food and energy is up 3.8% and much more for used cars (29.7%), airline fares (24.1%), jewelry (14.7%), bikes (10.1%) and footwear (7.1%). Commodity prices from oil to copper to lumber have surged. Higher lumber prices are adding $36,000 to the price of a new home....

What Congress has given in relief payments, inflation is taking away. The Fed says annual inflation only looks high compared to depressed pandemic price levels. But core inflation on an annual basis was 9.2% in May and 5.2% over the first five months of 2021. Most ominously for the political class, rising inflation for the last two months has outstripped wage gains, meaning that real average earnings have fallen.

The Fed believes all of this is temporary, that supply shortages will work themselves out, and the demand surge will subside. Chairman Jerome Powell may even want more inflation since his new policy doctrine, issued last year at Jackson Hole, is to wait until inflation averages higher than 2% for a sustained period. Markets may agree with him, as bonds and equities reacted to Thursday’s price news with relative calm....

What’s undeniable is that Washington is conducting one of the most radical fiscal and monetary experiments in peacetime history. Even if the current inflation is transitory, Americans are paying more for it now."

Inflation: The defining macro story of this decade -Deutsche Bank Research

"It is no exaggeration to say that we are departing from neoliberalism and that the days of the new-liberal policies that begun in the Reagan era are clearly fading in the rear view mirror. The effects of this shift are being compounded by political turmoil in the US and deeply worrying geopolitical risks.As we step into the new world, we are no longer sure how much of what we thought we understood about financial and macro-economics is still valid.

We have lived through a decade of extraordinary and unconventional monetary stimulus to prevent economies from sliding into deflation, but this effort barely succeeded in propping up growth at what have been historically low levels.The most immediate manifestation of the shift in macro policy is that the fear of inflation, and of rising levels of government debt, that shaped a generation of policymakers is receding.

As we step into the new world, we are no longer sure how much of what we thought we understood about financial and macro-economics is still valid. We have lived through a decade of extraordinary and unconventional monetary stimulus to prevent economies from sliding into deflation, but this effort barely succeeded in propping up growth at what have been historically low levels

The most immediate manifestation of the shift in macro policy is that the fear of inflation, and of rising levels of government debt, that shaped a generation of policymakers is receding. Replacing it is the perspective that economic policy should now concentrate on broader social goals....

Two of the biggest historic constraints on macroeconomic policy – inflation and debt sustainability – are increasingly perceived as not binding. In turn, the removal of these constraints has opened the door for new goals for macro policy, which go far beyond simply stabilizing output across the business cycle....

In short, we are witnessing the most important shift in global macro policy since the Reagan/Volcker axis 40 years ago. Fiscal injections are now “off the charts” at the same time as the Fed’s modus operandi has shifted to tolerate higher inflation.Never before have we seen such coordinated expansionary fiscal and monetary policy. This will continue as output moves above potential. This is why this time is different for inflation."

Young people make the least money on stocks -Science Norway

"Financial researchers have previously found that the rich and experienced investors are those who over time make the most money on shares by far. The researchers conducted the new study from the Oslo Stock Exchange with data and new methods that give them even more confidence in the results’ validity.

Figures from the non-profit foundation AksjeNorge show that more young small investors have entered the stock market in the past year than ever before. In March 2021, the Oslo Stock Exchange passed the half million mark for shareholders for the first time. As many as 40 percent of all new shareholders in the last three months are under 30 years old. And approximately 40 percent of shareholders have only invested in one stock.

Compared with pre-pandemic times, more than 130 000 new private individuals have started trading on the Oslo Stock Exchange The media constantly reports on young people and students who have doubled or tripled their money through bold stock purchases in companies such as Kahoot, NEL, Gamestop and Tesla.

When the coronavirus hit us in March a year ago, the Oslo Stock Exchange crashed. But the COVID-19 decline was quickly turned into a stock market party....

Amuli Knüpfer is a professor at BI and one of the researchers behind the new study of developments on the Oslo Stock Exchange... 'It’s good that more people – and especially young people – are interested in stocks and mutual funds,' says Knüpfer.

At the same time, the financial researcher is far from convinced that all these young investors will make good investments. Knüpfer and his colleagues see from their study that stock market success has a lot to do with experience....

'I’m afraid that a lot of people who’ve now made money on the stock exchange have a slightly overly rosy perception of what the future will bring,' he says.

'A lot of them could get burned....I’m afraid that a lot of people who’ve now made money on the stock exchange have a slightly overly rosy perception of what the future will bring,' he says."

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6.10.21 - US Double Eagle Gold Coin Sold for Record $18.9m

Gold last traded at $1,895 an ounce. Silver at $27.94 an ounce.

NEWS SUMMARY: Precious metal prices rose on safe haven buying Thursday as the U.S. official inflation index hit a 13-year high of 5% in May. U.S. stocks rose as investors shrugged off a key inflation report that showed a bigger-than-expected increase in price pressures.

"Supply Bottlenecks" as an Excuse for Inflation -Mises.org

"One of the arguments most used by central banks regarding the increase in inflation is that it is because of bottlenecks and that the recovery in demand has created tensions in the supply chain. However, the evidence shows us that most commodities have risen in tandem in an environment of a wide level of spare capacity and even overcapacity....

Inflation is not a transport chain problem either. The excess capacity in the shipping and transport sector is more than documented and in 2020 new capacity was added in both freights and air transport....

Why does inflation rise if overcapacity is perpetuated and there is enough transport capacity?

We have forgotten the most important factor, the monetary one, or some central banks want to make us forget it. 'Inflation is always and everywhere a monetary phenomenon,' explained Milton Friedman many decades ago. More supply of money directed towards scarce assets, be it real estate or raw materials. The purchasing power of money goes down.

Why did they tell us that there was 'no inflation' before covid-19 if money supply increased also massively?

The big difference between 2020 and the past years is that previously, the Federal Reserve or the ECB increased money supply at or below the levels of demand for money (measured as demand for credit and use of currency)....

The risk of stagflation is not small, and the so-called value stocks are not a good bet in this environment. In stagflation, commodities with tight supply dynamics, gold and silver, high margin sectors and bonds of stable currencies support a portfolio."

gold coin US Double Eagle gold coin sold for record $18.9m -BBC/Yahoo

"A 1933 US gold coin has been sold at a Sotheby's auction in New York City for a record $18.9m (£13.4m).

With a face value of $20, the Double Eagle was the last gold coin produced for intended circulation in America.

But it was never issued as President Franklin D Roosevelt withdrew the US from the gold standard, in an effort to lift the country from depression....

Most of the coins were then destroyed and declared illegal to own - with the exception of the one sold on Tuesday.

It had belonged for a time to King Farouk of Egypt, and was later seized in a secret service sting operation in New York City.

On Tuesday, it was sold by shoe designer Stuart Weitzman to a bidder whose identity has not been revealed."

Rising prices: Companies struggle to restock their inventories post pandemic -CNN

"Steel, lumber, plastic and fuel. Corn, soybeans, sugar and sunflower oil. Houses, cars, diapers and toilet paper. Prices are rising almost everywhere you look.

The post-pandemic recovery is in full swing and the global economy is struggling to keep up. Following a collapse at the start of the pandemic as businesses closed and millions of workers lost jobs, demand has rebounded with a vengeance, spurred by government stimulus and consumers flush with savings....

There's no telling how long demand will outpace supply, especially as the pandemic continues to rampage through some of the world's biggest economies. But there have already been shortages of everything from microchips and chicken to chlorine and cheese, and prices are spiking.

Rising costs have pushed producer price inflation in China to its highest level in nearly 13 years. The country's producer price index - which measures the cost of goods sold to businesses - soared 9% in May from a year ago, according to government data released Wednesday....

In the United States, lumber shortages tied to sawmill shutdowns earlier on in the pandemic have spiked prices, adding nearly $36,000 to the price of an average new home, according to an analysis by the National Association of Home Builders Association....

Policymakers in the United States and Europe are 'looking through' upward pressure on prices and 'basing monetary policy decisions on where they think inflation will be in two years' time rather than in the next six to 12 month,' said Kenningham of Capital Economics."

Rightsizing not Downsizing -Wisdom Well

"I have finally moved into my new digs, smack bang in the middle of the city and it feels good.... but if I’m honest, it also feels a smidge confronting. Maybe that’s because I have officially stepped into that ‘new chapter’ that I’ve been pontificating about for the past few years and now I need to actually make good on all those grand plans I have for the second half of life.

After decades of ‘sameness,’ my life is changing shape...quickly. But contrary to popular opinion, it isn’t getting smaller. I may have downsized my dwelling, but my life hasn’t shrunk along with it. My life’s just transitioning...morphing into a different shape and I am in the throes of racing alongside it in an attempt to hurl myself through the window and get back into the driver's seat. The idea of ‘downsizing’ feels loaded with innuendo...like a euphemism for a smaller life? My space might be smaller, but my life certainly isn’t. I’m not downsizing. I’m rightsizing.

Part of the challenge of 'rightsizing' has been melding my life and my new space, a quest which has coincided with this deep-seated yearning to feel leaner, lighter and less encumbered by the collective weight of a lifetime of accumulation. But it’s not just the stuff; it’s also the responsibilities, friendships, identities and invisible name tags that have defined who I am for so long.

The time has come to peel back and examine all the complex layers of life and make space for all the beautiful unknowns that lie ahead (like the inevitable proposal from Lenny Kravitz, which will necessitate my swift move to LA). I need to release what was, to make room for what is yet to come, by freeing up space in my head, my house and my heart. By letting go, not just of stuff but also old habits and thoughts that no longer serve me, and even some friendships (If any friends are reading this...I’m definitely not talking about you).

I’m not advocating a midlife fire sale, more of a controlled ‘life back burn’, as a way of promoting new growth and renewal. It feels liberating to lighten the load of life...to slowly shed all the excess baggage and moving to a more nimble, ‘carry-on’-only life; because as Carl Jung said; 'We cannot live the afternoon of life according to the program of life’s morning, for what was great in the morning will be little at evening and what in the morning was true, at evening will have become a lie.'"

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6.9.21 - How to Save in a 401(k) & IRA in the Same Year

Gold last traded at $1,890 an ounce. Silver at $27.84 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on bullish sentiment and a weaker dollar. U.S. stocks traded mixed as investors await the next reading on inflation.

2021 Central Bank Gold Reserves Survey -World Gold Council

"Central banks continue to be positive on gold, with roughly the same number of central banks expected to buy gold compared to last year.

Gold’s performance during periods of crisis has risen to become the top reason for central banks to hold gold.

Central banks have also been venturing into non-traditional asset classes in recent years...

The majority of respondents believe that central banks will add more gold over the next 12 months, with 52% saying that global central bank gold reserves will increase. However, this is a decrease from last year when 75% of respondents felt that central banks would add more gold in the next 12 months.

The number of respondents who will increase their own gold holdings has climbed to 21%, compared to 20% last year. No central bank is planning to decrease its gold reserves, a decline from 4% in last year’s survey....Good Delivery bars continue to be the mainstay of central bank gold purchases."

jobless Looking For Workers In All The Wrong Places -Alhambra Partners

"There are strange things going on in the labor market right now and I don’t think anyone really knows what will happen over the next few months. For a while, there was this expectation of a boom as everyone went back to work and play but that seems to have faded with the reality of this recovery from the biggest supply shock in history. Everyone seems to still be thinking of this as the standard recession and recovery cycle just like all the others we’ve had in my lifetime and my father’s too. But it isn’t and we shouldn’t be expecting it to stick to the script written for the demand-led recessions of the post-war period.

My wife and I enjoy fine dining and we are lucky to live in a small town with a plethora of options. Our town is a unique place with an official permanent population of about 30,000. But the non-permanent population is what makes it more than it appears on the map...I bring it up because those fine dining and drinking establishments we’ve come to love have a problem right now. Our favorite hotel has no head chef and is looking for a head cook as well....

So, why can’t these businesses find workers?...The unemployment rate here is 3.6% and that is double the low set in September 2019. And when you scroll through the unemployment rates by metropolitan area on the BLS website you find that we aren’t even that unusual. The best in the country is Logan, UT with an unemployment rate of just 2% and #2 is Huntsville, AL at 2.2....

New York-Newark-Jersey City is 8.2%. If you look down the list of places with higher than average unemployment you find a bunch of places in TX (shale isn’t working right now), places around NYC, Chicago, a whole bunch of places in CA, Las Vegas, and Los Angeles way down there at 377th in the country at 9.9%....

As for CA and NY, I’d say their problems are mostly self-inflicted but that’s just my own internal bias showing. There is a lot we don’t know about how the economy is changing and will continue to change because of COVID. My town and a lot of small and mid-sized cities would benefit from some internal migration from the large cities where work is harder to find. Will that happen? It certainly seems like it should but a decision to leave your home and move somewhere you don’t know is a difficult one, to say the least.

There are certainly remaining supply-side issues in the economy which is what we should expect in a recovery from a supply shock. Our politicians have from the beginning of the COVID pandemic responded with traditional demand-side tools. We propped up incomes for people who didn’t need help as if they could keep spending if they just had the means....

If the Biden administration really wants to help the economy maybe they could provide some relocation incentives to get workers from where they are to where they’re needed. Or maybe I shouldn’t pretend to know what the economy needs either. As I have said many times, don’t just do something, stand there."

How to Save in a 401(k) and IRA in the Same Year -U.S. News

"You can save for retirement in a 401(k) plan and an individual retirement account at the same time. Both types of retirement accounts allow you to defer paying income tax on your retirement savings, and contributing to a 401(k) and IRA could allow you to significantly reduce your tax bill. However, high earners may not be able to claim a tax deduction on contributions to both types of accounts in the same year.

Here's how saving in a 401(k) and IRA can improve your retirement finances: Many people are eligible to save for retirement in a 401(k) plan and an IRA. You may be able to defer paying income tax on as much as $25,500 ($33,000 at 50 or older) if you max out both accounts. There are income limits for tax-deductible IRA contributions if you also have a 401(k) plan. Contributing to a 401(k) account and Roth IRA can help you manage your retirement tax bill.

Employees are eligible to defer paying income tax on up to $19,500 that they contribute to a 401(k) plan in 2021. Those age 50 and older can additionally make catch-up contributions of up to $6,500 for a total 401(k) contribution of $26,000. An employer may make additional contributions to the 401(k) plan on behalf of employees or provide matching funds.

IRAs have a much smaller contribution limit of $6,000, plus an additional $1,000 catch-up contribution for workers age 50 and older. Contributing to both types of accounts in the same year can allow you to defer income tax on as much as $25,500 if you are 49 or younger and $33,000 at age 50 or older."

An Alzheimer’s Breakthrough, At Last -Wall Street Journal

"The Food and Drug Administration gave hope to millions of Americans suffering from Alzheimer’s disease on Monday by approving Biogen’s aducanumab, the first treatment shown to slow cognitive decline. Credit to Acting Commissioner Janet Woodcock for resisting pressure from the public-health left who campaigned against the drug.

Aducanumab’s twisted path to approval illustrates the challenges of drug development. Hundreds of experimental Alzheimer’s treatments have failed in clinical trials over decades. While some approved drugs can temporarily mitigate behavioral and cognitive symptoms, none before aducanumab had shown an impact on disease progression.

One reason a breakthrough has proven elusive is that researchers haven’t figured out exactly what causes Alzheimer’s. Its hallmark is an accretion of amyloid plaque and tau tangles in the brain, which usually begins long before people show symptoms. Some scientists believe that removing amyloid could slow disease progression....

Enter aducanumab, which is a monoclonal antibody cloned from older people who showed unusually slow cognitive decline. It works by clearing amyloid. A high dose of the drug in a late-stage trial removed 71% of the amyloid buildup after 18 months....

In one trial, patients receiving a high dose of the drug demonstrated significant benefits. They showed 28% less memory decline than the placebo group, and benefits were greater for everyday tasks like making meals.

Patients receiving the high dose in the other trial didn’t show a significant benefit. Biogen believed this was because they got the drug for less time. After working with Biogen to analyze the data, the FDA described the results as 'exceptionally persuasive.' ....

Aducanumab won’t help all patients, but it could delay disease progression as research continues on potentially more effective treatments. More than 70 are in the clinical pipeline.

The real progressive objection seems to be cost more than effectiveness. New blood tests can identify the disease years before signs of cognitive decline, so the potential patient pool may soon expand. But Alzheimer’s costs the U.S. an estimated $277 billion a year, and early treatment will be crucial to slowing progression."

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6.8.21 - We'll Know Crypto Is For Real When Its Coins Start Collapsing

Gold last traded at $1,893 an ounce. Silver at $27.61 an ounce.

NEWS SUMMARY: Precious metal prices steadied near 5-month highs Tuesday as inflation worries flattened the dollar. U.S. stocks traded flat as investor concerns about the market's lofty prices and future economic growth prospects for the second half of the year.

Gold Rebounds as Dollar Drop Blunts Yellen Inflation Comments -Yahoo Finance

"Gold headed for a second straight gain, recovering from earlier losses that came after U.S. Treasury Secretary Janet Yellen’s comments on interest rates....

Gold has been hovering around $1,900 an ounce amid a debate around price pressures and speculation over whether the Federal Reserve will start talks on tapering its massive bond-buying program. On Friday, bullion jumped after a U.S. report showed job gains in May fell short of estimates, curbing expectations for early monetary tightening.

Gold is taking 'a short breather before it makes its next bid for the $1,900 mark,' Commerzbank AG analyst Carsten Fritsch said in a note. 'The environment is conducive to further price rises.'

Hedge funds trading the Comex increased their net-long position in the metal for a fifth straight week, according to weekly U.S. government data published Friday."

oil Options Traders Bet on Return of $100 Oil -Wall Street Journal

"Traders have alighted on what some believe to be a one-way bet in the world’s most important commodity market: oil prices going to $100 a barrel.

They have scooped up call options tied to Brent and West Texas Intermediate crude-oil prices reaching $100 by the end of next year. Oil prices haven’t topped that milestone since 2014, when a gush of U.S. crude depressed energy markets.

Owners of $100 options - now the most widely owned WTI call contracts on the New York Mercantile Exchange - are making a leveraged bet that oil prices will hurtle higher after already surging more than 40% this year. The roaring rally, goosed by thawing coronavirus restrictions, has lifted WTI prices to their highest level since 2018 at almost $70 a barrel and average U.S. gasoline prices above $3 a gallon, according to GasBuddy....

'Everyone’s been looking at it,' Adam Webb, chief investment officer of trading firm Blue Creek Capital Management LLC, said of $100 call options for oil delivered in December 2022. 'It’s a no-brainer.' Mr. Webb thinks the rebound in the U.S. economy will help to catapult WTI prices toward $100 a barrel....

Some traders are betting $100 oil could happen this year: $100 December 2021 calls are tied to 15.9 million barrels of WTI....Even some of those buying the options don’t expect oil prices to hit $100 but think they will profit regardless."

Energy chief cites risk of cyberattacks crippling power grid -ABC News

"Energy Secretary Jennifer Granholm on Sunday called for more public-private cooperation on cyber defenses and said U.S. adversaries already are capable of using cyber intrusions to shut down the U.S. power grid.

'I think that there are very malign actors who are trying,' she said. She added: 'Even as we speak, there are thousands of attacks on all aspects of the energy sector and the private sector generally.'....

Granholm noted, without mentioning the company by name, that Colonial Pipeline Co. was hit in May with a crippling cyberattack by a ransomware group. Colonial temporarily shut down its gasoline distribution networks in the South before paying $4.4 million to the hackers. She urged energy companies to resist paying ransom.

'The bottom line is, people, whether you’re private sector, public sector, whatever, you shouldn’t be paying ransomware attacks, because it only encourages the bad guys,' she said.

Granholm even spoke in favor of having a law that would ban paying such ransom, though she said, 'I don’t know whether Congress or the president is at that point.' Asked whether American adversaries have the capability now of shutting down the U.S. power grid, she said: 'Yes, they do.'"

We'll Know Crypto Is For Real When Its Coins Start Collapsing -Forbes

"The dirty little secret that’s well known in Silicon Valley but that’s largely unknown outside of it is that the vast majority of technology companies die. Over 90 percent for sure. Pundits who should know better claim that Silicon Valley is full of socialists, but the reality is that the locale from which remarkable technology emerges is the most relentless and ruthlessly capitalist commercial zone on earth.

And so it was in the early 2000s that so many internet companies died. Clueless pundits said the internet was dead, dangerously confused politicians called for investigations of the failures, and jail for the 'greedy' (you guessed it, 'Wall Street') financiers who allegedly put lipstick on the proverbial commercial pig, but the happy reality was that the U.S. economy had just experienced yet another technology-propelling growth spasm that would forever change how we lived and worked for the exponentially better.

Which brings us to the cryptocurrency wave. Jeff Bezos long ago made plain something along the lines of 'your margin is my opportunity.' Oh well, ever since the severance of the dollar’s link to gold in 1971, currency trading has become a necessary way to at least somewhat mitigate the monetary equivalent of a foot, degree and minute that change in length, heat intensity and time all day, every single day....

With currencies no longer having strict meaning as agreed upon measures of value, the trading of same became a thing. Per Gilder, currency trading these days is a $5 trillion per day constant. And while trading is not as lucrative as investment banking, it’s proven a source of Wall Street and hedge fund profits. Except that margins once again exist as opportunity for innovators....

Enter crypto entrepreneurs. Their number seemingly expands by the day, along with investor interest in them. Call Bitcoin the Netscape of the crypto boom. Just as countless investors passed on Netscape only to regret it, we’ve obviously seen the same with Bitcoin. The latter’s rise from basically nothing to $35,000/coin proved a powerful magnet for investors willing to seed the creation of monetary forms that would be better than BTC.

Which is why there are presently many more crypto concepts than there are global currencies. Once again, witless pundits, economists and politicians don’t understand what’s happening. In this case they don’t because they’ve never understood what money is in the first place. If you don’t get that it’s a measure, and nothing else, you can’t really analyze 'money.' So they focus on the prices of the coins, which is for them to miss the point. Good money is never a speculation....

Most of these currencies will crash. Yet another growth spasm that pundits and politicians will wholly misunderstand, but that will transform how we live, work, and transact, and that will end the cruel currency devaluations that are as old as money is."

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6.7.21 - Gold Price Holds Bullish Line

Gold last traded at $1,899 an ounce. Silver at $27.93 an ounce.

NEWS SUMMARY: Precious metal prices steadied Monday ahead of fresh inflation data. U.S. stocks traded flat amid optimism about the economy’s ongoing reopening this summer.

Gold price holds bullish line: Inflation and U.S. dollar are key -Kitco

"Gold saw a lot of volatility last week - first falling more than $40 and then climbing back up towards the $1,900 an ounce level. And the bull trend is far from over, according to analysts....

On Friday gold received a boost from May's disappointing U.S. employment report. Nonfarm payrolls increased only 559,000 in May, which is below the 671,000 estimate.

'The weaker economic data are better for gold. Many thought the employment report would beat expectations as the ADP data did on Thursday,' TD Securities head of global strategy Bart Melek told Kitco News. 'If employment continues to be lousy, the Fed wouldn't see inflation as an issue. And yields are not likely to react either, which is good for gold.'

Also, the employment report revealed that the labor participation rate continues to be low, which is a red flag. 'This means the Fed will continue to accommodate as long as it needs to in order to get the participation rate higher,' Melek noted.

Overall, May's bullish gold trend is still intact, said RJO Futures senior commodities broker Bob Haberkorn.

'The uptrend will continue based on this morning's employment data. Gold will try to get back to its August highs. I see gold trading back up to $1,920 into early next week,' Haberkorn said....Investors should keep a close eye on the U.S. Treasury yields and any new inflation headlines, with markets gearing up for the June 16 Fed's monetary policy meeting."

food costs Worldwide food costs hit decade high -Axios

"Global food prices aren't leaving any wiggle room for bad harvests or demand spikes.

The state of play: A UN index of food prices 'has reached its highest since September 2011, climbing almost 5% last month,' reports Bloomberg. Another tracker of 'prices from grains to sugar and coffee is up 70% in the past year.'

Why it matters: The real threat comes in countries where large portions of the population live close to the edge of hunger, Axios' Bryan Walsh wrote.

Even in the U.S., rising prices hit the poorest Americans, who spend more than one-third of their income on food. 'The pain could be particularly pronounced in some of the poorest import-dependent nations,' Bloomberg reports.

The big picture: COVID-related labor disruptions probably aren't helping, but climate change-related shifts in precipitation and temperatures are expected to lead to more volatile food production in the coming years, Axios' Andrew Freedman tells me.

That volatility can destabilize fragile countries. This already played out, studies show, with the Syrian Civil War, which began during a severe drought."

Here's Why Renting is Smarter Than Buying Now -Bloomberg

"Most people make the mistake of evaluating the housing market in terms of whether it's a market for buyers or sellers. But the better question, especially for those looking for a new place to live and have the means to do either, is whether it's a buyer's market or a renter's market.

When the demand for housing overall is high and both rents and housing prices are going up, as they are now, it might be hard to think of it as a better time to rent. But right now, the increase in housing prices is eclipsing the rents in many places.

In the U.S., prices of single family homes increased by 24% while rents rose 5.4%. It's a similar picture in many cities too. For example, in Austin, housing prices jumped by 25% while rents increased 6.4%. In big metro areas like San Francisco and New York, housing prices have increased even as workers fled during the pandemic, while rents dropped significantly....

The rental market is competitive, but still makes more financial sense when I apply a metric Nobel prize winning economist Bob Shiller uses: a price to earnings ratio.

According to Shiller, you're in an overheated housing market and should rent if the ratio between the price of the house and the profit you could make renting it is over 20....

From an economics point of view, renting may make more sense than buying for a while. The forces pushing up housing demand are overwhelming the forces pushing housing supply, and interest rates are likely to stay low."

The Surrender Budget -New York Post

"President Biden’s budget has drawn a lot of flack from conservatives. Larry Kudlow notes that it would put the country on the path to a growth recession. The Wall Street Journal points out that it would essentially require the Federal Reserve to maintain abnormally low interest rates for a decade. A troubled domestic economy notwithstanding, the worst thing about this budget is the national security implications - it risks putting Communist China into the passing lane....

Mr. Biden’s Memorial Day gift to Americans was a tax increase in virtually every aspect of life. There were increases in income taxes, capital gains taxes, corporate taxes, and estate taxes....

Mr. Biden’s budget proposal, if history is any guide, will be a growth killer. To be fair, the President is almost honest about this. He is projecting economic growth only 1.9%. That’s pretty anemic. And since these are his numbers, it wouldn’t be surprising were it to turn out that they exaggerate what growth they really expect....

It turns out that while America is projecting to grow, at best, at 1.9% a year, Communist China is projecting to grow at around 6% as far as economists can see. At those relative growth rates, by the end of the budget period, 10 years out, China’s GDP would have grown by roughly 80% and then roughly equal the United States. In other words, China would make up all the ground that today separates the two economies.

What does that mean? Should the United States fail to grow - not an impossibility given Mr. Biden’s war on wealth and capital - China would have essentially surpassed the United States by the end of the budget period....

Which is why I suggest calling Mr. Biden’s fiscal folly the Surrender Budget. His plans might be a bad news budget for America, but it’s great news for China. I know we import a lot of things from China - pet toys, Walmart fashions, viruses - but it never occurred to me that we might adopt a budget that might as well have been made in Beijing."

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6.4.21 - A Lottery Mentality Creates Illusions of Safety

Gold last traded at $1,890 an ounce. Silver at $27.75 an ounce.

NEWS SUMMARY: Precious metal prices rebounded Friday as May jobs data failed to boost the dollar. U.S. stocks rose on news of unemployment falling to 5.8% from 6.1%, boosting confidence in the economic comeback.

How Governments Killed the Gold Standard -Mises Institute

"The historical embodiment of monetary freedom is the gold standard. The era of its greatest flourishing was not coincidentally the 19th century, the century in which classical liberal ideology reigned, a century of unprecedented material progress and peaceful relations between nations. Unfortunately, the monetary freedom represented by the gold standard, along with many other freedoms of the classical liberal era, was brought to a calamitous end by World War I....

Now, it is true that the gold standard did not disappear overnight, but limped along in weakened form into the early 1930s. But this was not the pre-1914 classical gold standard, in which the actions of private citizens operating on free markets ultimately controlled the supply and value of money and governments had very little influence....

Thus, governments and commercial banks under the gold standard did not have much influence over the money supply in the long run. The only sizable inflations that occurred during the 19th century did so during wartime when almost all belligerent nations would "go off the gold standard." They did so in order to conceal the staggering costs of war from their citizens by printing money rather than raising taxes to pay for it....

Unfortunately, contemporary economists and economic historians do not grasp the fundamental difference between the hard-money classical gold standard of the 19th century and the inflationary phony gold standard of the 1920s.

Thus, many admit, if somewhat grudgingly, that the gold standard worked exceedingly well in the 19th century. However, at the same time, they maintain that the gold standard suddenly broke down in the 1920s and 1930s and that this breakdown triggered the Great Depression. Monetary freedom in their minds is forever discredited by the tragic events of the 1930s....

The monetary system that sowed the seeds of the Great Depression in the 1920s was a central-bank-manipulated and inflationary pseudogold standard. It was central banking that failed in the 1920s and stands discredited to this day as the cause of the Great Depression."

dollar Biden and the Fed Are Creating an Inflation Crisis -American Spectator

"The Federal Reserve Bank (the Fed) and the Biden administration are systematically undermining the stability of the American economy with a variety of unwise and destructive policies. The Fed and the administration defend these policies by denying obvious economic truths, which include their own inflation data.

Treasury Secretary Janet Yellen asserts that inflation is transitory and shortages are temporary....Yellen also presses Congress to spend more money to aid the economy. She is likely detached from reality, as the Biden administration policies include massive spending up to a $6 trillion budget for fiscal year 2022, which expands deficits to frightening levels. Modern Monetary Theory, which promotes massive government spending and borrowing, has infected the brains of the Biden administration....

Milton Friedman said many years ago that inflation is 'too much money chasing after too few goods.' This assertion has been challenged in recent years, but today’s crises provide plenty of evidence for it: witness the massive inflation of the U.S. stock markets, housing, and most all capital goods. Consumer product inflation has been tame, but now the federal government is wiring money to consumers and states while expanding the federal government. This is why we’re seeing shortages, high demands, and inflation.

Jerome Powell is determined to be the worst Fed chair since Arthur F. Burns (1970–78), who created massive inflation with his policies and arrogance. Burns denied hard, factual data, and now Powell is following in his footsteps....

Policymakers are headed to an economic cliff, which will lead to uncontrolled inflation and a recession. The U.S. dollar could lose its reserve status if the market loses confidence in it. If this happens, we’ll learn the hard way: the U.S. will have a lower standard of living, and the federal largesse will cease to exist."

Illusions of Safety -HumbleDollar

"If we wanted to design a portfolio that appeals to our worst investment instincts, we might couple a savings account with lottery tickets. Some governments have even issued bonds with just these characteristics.

What’s the attraction? The savings account ensures that part of our portfolio never loses value, while the lottery tickets let us dream of riches in return for a relatively small investment.

This year, we’ve seen the lottery-ticket mentality writ large, as investors take fliers on meme stocks, nonfungible tokens and cryptocurrencies in hopes of hitting the jackpot. For instance, earlier this year, dogecoin could be bought for under a penny - less than the price of a lottery ticket. With a little daydreaming available for so little money, maybe it’s no surprise that dogecoin is up more than 6,000% in 2021, even after this month’s shellacking....

But while this year’s frenzy over fringe investments has hogged the headlines, let’s not forget our other behavioral impulse: our strong aversion to losses....

1. Confusing stability with safety. If we own stocks and stock funds, the market tells us every day what they’re worth. Let’s face it: Most of us would rather not know, which helps explain why we’re drawn to investments where the price seems stable, even if that stability is an illusion...? It seems many folks happily overlook these drawbacks in return for the illusion of safety....

2. Chasing yield. In the quest for psychological comfort, some investors focus not on price, but income. If a bond, stock or other investment kicks off a generous and predictable stream of interest or dividends, we can imagine it’s super-safe. Sometimes, that may be the case....

3. Forgetting taxes and inflation. While some purportedly conservative investments turn out to be riskier than investors expect, there are many truly safe investments, such as savings accounts, short-term Treasury bonds, bank certificates of deposit, savings bonds and gold. Investors shouldn’t ever wake up one morning and discover these investments are worth far less than they imagined."

How Covid Inspired a New Generation of Entrepreneurs -Bloomberg

"Humans normally respond to big unforeseen shocks in one of two ways: either they recoil from risk-taking like we saw after the Great Depression, leading to creation of the modern welfare state and a generation that feared the stock market; or they accept that risk is part of life and learn to embrace it - like they did in the Roaring Twenties after the 1918 flu and 1920 recession.

So far it looks like we’re going with the 1920s - at least from an economic risk perspective. Entrepreneurship rates are up. That might seem counterintuitive. After all, the past year was exceptionally hard on small businesses, leading many to shut down. But the number of new business applications from the U.S. Census is up 38% compared to the year before the pandemic....

Even before the pandemic there were reasons to think the traditional employer/employee model was not necessary for the new economy. Technology makes gig or contract work easier because it’s easier to find customers and work for people far away. Work has also become more uniform.

Consider, for instance, that everyone uses the same word processing software. This makes consulting and contract work more viable because you can support multiple clients. Despite these big technology shifts, self-employment and contract work had not taken off in a big way in the last few decades.

It could be now. The pandemic forced everyone to adopt new technology and rethink work, and it may have accelerated those long running trends. Many people have come to like working from home and having more flexibility. But that may not fit with traditional employment once we go back to normal.

Employers are already demanding people return to the office and hinting (strongly) that while working from home may be an option at least some of the time, it will signal you are less dedicated and engaged with your job. If people want to continue with remote work and crave more flexibility, contract, gig work or consulting may be their best option....

The next few years will reveal how meaningful these trends are and if they do signal a new way of working. But there’s one last consideration that suggests at least some of the burst of entrepreneurship will recede: the Biden administration so far is not embracing independent work. It’s favoring more unions and forcing companies to classify contractors as employees. This is seen as a good way to protect workers from undue risk. But if people prefer non-traditional work - and many do - the government shouldn’t fight it."

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6.3.21 - Hocus-Pocus Scheme to Cause Dramatic Gold Surge

Gold last traded at $1,871 an ounce. Silver at $27.45 an ounce.

NEWS SUMMARY: Precious metal prices slipped Thursday as upbeat jobs data boosted the dollar. U.S. stocks fell amid heightened speculative trading activity, while investors shrugged off better-than-expected labor market data.

Hocus – pocus scheme to cause dramatic gold surge -Gold Switzerland

"This article will discuss gold’s growing importance as the principal protector of wealth and also that the coming price evolution of gold will be dazzling as it reaches heights that no one can imagine....

The biggest Hocus-Pocus scheme ever produced in history, to further deceive the people, the so-called experts have come up with the name MMT (Modern Monetary Theory).

When you need to deceive the people, you invent expressions which sound very fancy and creative like MMT or QE (Quantitative Easing). Both these two expressions mean forging money but that would clearly be too obvious. Much better to hide behind fancy words or a theory which no one understands, not even the inventors....

But the risk that the cost will be the survival of the whole financial system. MMT or money printing lasts until the world wakes up to the fact that there was no substance and no value in the money that inflated all the bubble assets of stocks, bonds property etc....

After the massive creation of more fake money with zero economic benefit, all assets including paper money will implode with devastating effects on the world financial and economic situation. And that is how the world goes from a depressionary hyperinflation to deflationary implosion and depression. So this is in my view a very likely scenario in the next 3-10 years and probably sooner rather than later....

Wealth preservation is what it says, protecting current wealth and also generational wealth. European families who have survived financially for centuries have always had major portions of their assets in land and in physical gold. Gold is a 100%-proof bet on the continued failure of governments’ monetary policies....

Gold went up for 12 years in a row 2000 to 2012. After a 3 year correction, this bull market is now resuming. I expect gold to do as least as well in coming years as the 2000 to 2012 run which was a compound annual growth rate of over 20% for 12 years."

ride Why stocks could tumble even as the post-pandemic U.S. economy grows -Marketwatch

"U.S. corporate profit margins may finally start to decline. I say 'finally' because it was almost 20 years ago that corporate profit margins rose to above-average levels, yet instead of regressing to the mean as on previous occasions, they have stayed at elevated levels more or less continuously ever since.

Wall Street’s graveyard is filled with the failed predictions of eminent analysts who predicted that corporate margins couldn’t remain so high for so long....

Joseph Kalish, chief global macro strategist at Ned Davis Research, contends that a perfect storm is brewing that could put 'profit margins… under attack from all sides.' In an interview, Kalish speculated that the profit margin could decline significantly over the next couple of years - perhaps by enough to once again break below the 7% level.

If his prediction is right, then the U.S. stock market will almost certainly produce disappointing returns in coming years. That’s because corporate profits would be falling even as the economy is strong....

Given these assumptions, if the corporate profit margin declines by one percentage point each year over the next four years, the S&P 500 SPX, 0.25% at year-end 2024 will be 19% lower than at year-end 2020....

Kalish identifies a number of factors that could conspire to cause profit margins to decline, including:

Higher labor costs. 'With a record number of job openings and anecdotal reports of shortages of skilled labor,' companies will quite likely have to pay more for labor.

Higher interest costs. With the economy re-opening and inflation heating up, it seems likely that corporations will have to pay more in interest in coming years.

Taxes. This category includes both direct (through higher corporate tax rates) and indirect (taxes on production and imports)."

Corporations Re-open Their Offices for Fewer Workers -USA Today

"Corporate America is reopening its offices as the COVID-19 pandemic wanes. But many workers won’t be there.

Seventy-two percent of companies say employees will be able to return to the workplace over the next five months, with 50% reopening between August and October, according to a Conference Board survey of 231 human resource leaders April 5-16....

Yet 79% of the mostly large businesses say 10% or more of their employees will be able to work remotely at least three days a week a year after the pandemic subsides. That compares with 26% of firms that permitted staffers to primarily work from home before the health crisis.

Nearly nine in 10 of the HR executives surveyed say they’re also willing to hire remote employees around the country or globe in some form, compared with about half before the outbreak.

Overall, the survey depicts an American workplace that will be transformed for the longer term as a result of the pandemic....

'Remote work is really going to stay here,' says Frank Steemers, senior economist for the Conference Board. It’s 'probably going to be one of the main organizational legacies of the pandemic.'

Employers are embracing teleworking at least in part because they're reporting that productivity has increased during the crisis, the survey shows, though the higher output is taking a toll on the mental health and well-being of workers."

Biden Budget Puts America on a Course for a 'Growth Recession' -New York Sun

"Late Friday afternoon of the Memorial Day weekend - when basically no one was looking, President Biden finally put out his budget. That’s when you drop bad news on the press. Find a long weekend, wait until the close of business, and then head for the hills.

There was minimal coverage, and what coverage appeared was mostly about the usual topics of $6 trillion more in spending, $4 trillion more in higher taxes, deficits as far as the eye can see, etc. etc.. There was very little new in the budget.

Except one tiny detail - there is virtually no growth in this budget...the Biden budget still shows the same sub-2% growth of the Obama-Biden stagnation years.

So I ask, if that’s all you’ve got, why do it?

I mean, if government has any real purpose, it’s to foster policies that will make citizens safer, more secure, and more prosperous. If you’re going to transform the economy and the culture, at least show that you believe it will create more jobs, higher wages, bigger family incomes, and a rejuvenated economy = one that is, after all, still recovering from the biggest pandemic in 100 years and a terrible economic contraction that went with it.

All this, though, for less, for substandard, stagnant, less than 2% economic growth? I don’t get it....Not only will it not work, but common sense, knowing that it will not work, strongly suggests that if it isn’t broken, don’t fix it. We are in an economic boom. A Trumpian boom."

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6.2.21 - Will Inflation Herald Wild Markets?

Gold last traded at $1,908 an ounce. Silver at $28.17 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on safe-haven buying despite a firmer dollar. U.S. stocks hovered near an all-time high, following a muted start to June.

Gold could test new highs this year -Analyst/CNBC

"Gold could test new highs again this year, according to David Lennox of Fat Prophets, who said he sees 'a fairly big tick' ahead for prices of the precious metal....Higher readings of inflation are set to be a 'boon' for gold, a physical asset, Lennox said.

'Inflation's coming back because we’ve seen such a significant surge in U.S. money supply,' he explained. 'Whenever we've seen that surge in the past, it’s been accompanied — probably five of six months later — by higher inflation.'....

Meanwhile, the dollar is also expected to weaken, and could be another potential tailwind for gold — considered a safe investment asset in times of market uncertainty.

'We’ve got rising debt, we've got more physical money inside ... the U.S. dollar pool,' Lennox said. 'Those two factors in themselves would suggest that we’re going to see a weaker U.S. dollar going forward.'

Furthermore, the economies of major currencies that trade against the U.S. dollar are in some instances doing better than the U.S., he said without elaborating.

'We think there's further (dollar weakness) to go and that’s going to be a very good tailwind for the gold price and precious metals,' said Lennox."

The Wall Street Players Who Worry Inflation Heralds Wild Markets -Wall Street Journal

"Some investors are preparing for wild swings in financial markets, worried that inflation, and the Federal Reserve’s pledge to let it rise, will lead to a more volatile world.

The reason: The economic policies aiming to create inflation now are the opposite of the ones that kept markets relatively stable for decades....

The Fed has promised it won’t tighten monetary policy until inflation is well and truly here and has run hot for a spell. This means the Fed will end up restricting credit when higher inflation is already making markets more volatile, and that action will feed volatility, ' he said....

Artemis Capital's answer is to buy insurance against rising volatility through options markets and bet on trends in commodities and currencies to the same extent as owning traditional stocks and bonds. There is a fifth leg to this stool too: owning alternatives to regular currency, which means gold and to a cautious extent cryptocurrencies....

Ruffer's strategy is to own inflation-linked bonds, gold and potentially bitcoin to protect against inflation—although a recent experiment owning bitcoin ended in April because its huge rally made it too risky."

One way companies are concealing higher prices: Smaller packages -Washington Post

"Consumers are absorbing higher labor and materials costs in the form of thinner rolls, smaller cans and lighter bags, and experts say such 'shrinkflation' will ramp up in the months to come.

Consumers are paying more for a growing range of household staples in ways that don’t show up on receipts — thinner rolls, lighter bags, smaller cans — as companies look to offset rising labor and materials costs without scaring off customers....

'Consumers check the price every time they buy, but they don’t check the net weight,' said Edgar Dworsky, a consumer advocate and former assistant attorney general in Massachusetts, who has been tracking product sizes for more than 30 years. 'When the price of raw materials, like coffee beans or paper pulp goes up, manufacturers are faced with a choice: Do we raise the price knowing consumers will see it and grumble about it? Or do we give them a little bit less and accomplish the same thing? Often it’s easier to do the latter.'

Such cutbacks, economists say, typically coincide with economic downturns, when shoppers tend to be more mindful of cost. There was similar product shrinkage during the 2008 recession, according to John Gourville, a marketing professor at Harvard Business School....

costs are ticking up again as the industry grapples with pricier raw materials and packaging, as well as a shortage of manufacturing workers and truck drivers. 'We’ve seen costs rise before,' he said, 'but we’ve never seen it happen so rapidly and all at the same time.'"

15 'Bizarre' Facts And Figures About The US Housing Market -Redfin CEO/Digg

"The US housing market is booming, home prices are soaring and demand is off the charts. To illustrate the insanity of the current moment, Redfin CEO Glenn Kelman shared 15 insights into the US real estate market on Twitter, writing, 'It has been hard to convey, through anecdotes or data, how bizarre the US housing market has become.'

1 of 15: A Bethesda, Maryland homebuyer working with Redfin included in her written offer a pledge to name her first-born child after the seller. She lost.

3 of 15: Inventory is down 37% year over year to a record low. The typical home sells in 17 days, a record low. Home prices are up a record amount, 24% year over year, to a record high. And still homes sell on average for 1.7% higher than the asking price, another record.

5 of 15: In 2020, new-construction permits were *down* 13% in DC and New York, 40% in LA, 48% in Chicago, 50% in Seattle, 79% in San Francisco. Permits were *up* 25% in Miami, 56% in Vegas, 96% in Greenville, 122% in Detroit, 246% in Knoxville.

7 of 15: In Redfin's annual survey of nearly 2,000 homebuyers, 63% reported having bid on a home they hadn't seen in person.

11 of 15: This migration to lower-cost areas may lead to lower workforce participation. For many families Redfin has relocated, the money saved on housing costs lets one parent stop working. A wave of Redfin customers are retiring early."

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6.1.21 - An Obvious Solution to America’s Economic Problems

Gold last traded at $1,899 an ounce. Silver at $27.88 an ounce.

NEWS SUMMARY: Precious metal prices steadied near 5-month highs Tuesday on rising inflation and a falling dollar. U.S. stocks rose as enthusiasm about the economic reopening lifted travel and energy stocks.

Is Gold Set to Tear Even Higher? Four Key Charts to Watch -Yahoo Finance

"Gold bullion is one of the best-performing commodities this month, erasing almost all of this year’s losses. Investors have been lured back by gold’s appeal as an inflation hedge, while the Federal Reserve maintains its monetary stimulus and says price pressures should prove temporary. Spot gold rose 0.4% on Friday, capping a fourth straight weekly gain.

Diego Parrilla, who runs the Quadriga Igneo fund, is among those who recently boosted their exposure to gold, saying that central banks won’t risk increasing interest rates to combat inflation for fear of 'pricking the enormous bubbles' they’ve created.

'We have entered a new paradigm that will be dominated by deeply negative real interest rates, high inflation, and low nominal rates - an extremely supportive environment for gold,' said Parrilla, who manages $350 million.

It’s been the hottest question in finance this year, and probably the biggest one for gold: will current inflationary pressures be transitory or persistent?....

The dollar has been another important driver of gold this year...Most analysts don’t see much movement in the dollar going forward, with the median forecast compiled by Bloomberg suggesting only a slight strengthening."

An Obvious Solution to America’s Economic Problems -Rogue Economics

"Yes, Dear Reader, the U.S. is already on the Zombie Highway... tripping lightly over good intentions and stomping down hard on the bad ones... with no exit ramp.

But that last dot is one most dear readers don’t want to connect. They imagine that there must be some way to change course... some trick that will 'save' us...

The remedy is so blindingly obvious, there is surely no need to mention it: Stop printing fake money... Allow interest rates to go where they want... And balance the federal budget. There’s no mystery to it.

In seconds, interest rates would shoot up… the stock and bond markets would collapse... the economy would go into a deep depression... the president and most of Congress would be impeached or recalled...

Goofy, wealth-destroying bailouts, boondoggles, and giveaways would have to be abandoned (there would be no further talk of a Green New Deal… or reparations… or another round of stimmy checks)... and millions of businesses and households would go broke...

And while this sharp correction would set the stage for a long period of real prosperity, there is no chance – none – that the deciders would permit it.

Normally, this perverse system is held in check by money itself. There’s only so much of it... and people are reluctant to hand over their own good money to be squandered on the feds’ bad programs. That’s why fake money is the linchpin of the whole corrupt system."

Our Increasingly Unrecognizable Civilization -Imprimis

"I live about 20 minutes south of the Canadian border, which used to be called the longest undefended frontier in the world. People moved freely back and forth across it all day every day. But now it’s been closed for over a year...

I don’t know how this happened, but it is just one indication that America, and the West in general, have become almost unrecognizable from what they were not that long ago. Look at just three things we have lost.

One is equality before the law, something absolutely essential to a free society. In its place, we now have politicized law...

Second, border control. Functioning societies, at least since the Peace of Westphalia three centuries ago, have borders. America has no southern border and no plans to get one. The official position of our government seems to be that any of the seven billion persons on this planet has a right to come and stay in the U.S. for three years, until his or her assigned court date comes up....

And third, dare I bring up the fact that it is a real question whether we can go back to agreeing to have open and honest elections? And if we don’t have open and honest elections, control of our borders, and equality before the law, then we don’t have the conditions for politics or free government.

And here’s the thing. It is not at all clear to me that many of America’s conservative politicians understand the seriousness of all this. You can see it in the fact that they go around trying to scare people with the specter of a 'radical socialist agenda.' For well over a year now, we have been living in a world in which it’s accepted as normal that the state has essentially unlimited power—and in which our freedom to decide for ourselves has been diminished almost to invisibility....

We are way beyond tax cuts. We’re broke. We’re just a smidgen away from $30 trillion in federal debt—something with no historical precedent. Talking about tax cuts today is like talking about VAT tax refunds on the Titanic. It’s not actually what’s necessary at the moment....

I’ll end by pointing out that the Left wins because it seizes language...Don’t surrender the language. Reclaim the language. It’s the first step to recovering our civilization."

In visions of post-pandemic life, Roaring '20s beckon again -Associated Press

"History repeats itself. But do decades duplicate?

As hopes rise that the pandemic is ebbing in the United States and Europe, visions of a second 'Roaring Twenties' to match last century’s post-pandemic decade have proliferated. Months of lockdown and restrictions on social life have given way to dreams of a new era of frivolity and decadence. For some, it feels like party time....

a coming summer and a soaring stock market have lifted optimism and fueled predictions of a new Roaring Twenties. This time, Bill Maher has suggested, we do it without 'the Depression at the end of it.' The New Yorker joked that prohibition in 'the New Roaring Twenties' should be on 'company-mandated virtual happy 'The New Normal Is Coming.' Summer travel is booming. A summer of love 'sexplosion' is predicted. Even the bob is back in style.

Is it fair to connect these twin ’20s, both decades that follow closely on the heels on of worldwide pandemic? Could two ’20s really roar? Do we all need to start buying flapper dresses and brushing up on our F. Scott Fitzgerald?

Some of the parallels are legitimate, says Nicholas Christakis, professor of sociology and medicine at Yale University and author of Apollo’s Arrow: The Profound and Enduring Impact of Coronavirus on the Way We Live. After an interim period of 'coping with the clinical, psychological and economic shock of the virus,' he says, we’ll see an uplift this summer, with a post-pandemic period taking root by 2023. It will, he says, be 'a bit of a party.'

Forecasts on Wall Street, of course, vary. The United Nations last month raised its global economic forecast to 5.4% growth in 2021. While many analysts are predicting the pace to quicken in the months and years ahead, Tina Fordham, partner and head of global political strategy for Avonhurst, foresees a post-lockdown period that will feel like The Great Gatsby only to a few.

'For many, it could be more like The Grapes of Wrath, unless steps are taken to address inequities — which accelerated during the pandemic — and the gaps in the social safety net,' Fordham concluded.... Whether the same response will happen in the aftermath of this pandemic is something to watch for. The crisis is far from over."

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