Far From Ordinary Times For National Economies

Empires rise and fall. Nations traverse through periods of feast and famine, disputes with other nations, sometimes wars, and economic booms and busts. History is rife with stories detailing the life and times of nations and their leaders.

The vast majority of nations today face conditions that are far from normal.

There are at least three major migrations taking place, Africans to Europe, Chinese to Africa, and South Americans to North America. These are disruptive events, not only for the individuals involved but for the entire populations of the nations affected. Changes are gradual, mostly, but the mundane can be cracked by atrocities, absurdities and maladjustments committed by migrants in the clash of cultures.

Such conditions are prevalent in Europe and the United States, with migration reaching epidemic proportions. Indeed, President Trump himself calls the illegal immigration at the southern US border an "invasion." He is not wrong. The United States was built on the back of immigrants - legal ones - whose individual efforts and respect for their fellows built the greatest nation on Earth.

Illegal immigration is challenging the normative behavior of well-established citizens. According to certain left-leaning politicians and a corrupted media, illegal immigrants should receive free health care, free schooling, and largely, freedom from gainful employment. Ordinary, established US citizens do not receive such largesse, nor should they. Nor should the illegal entrants, who have violated our borders, broken our laws and flaunted the lifestyles and even the national flags of whence they came.

Such activity is largely disruptive to the fine working condition of a nation and the United States has been building to this state of affairs for more than 40 years. Estimates of people living in the US illegally range from 11 million to as many as 60 million people. The higher end of that range is probably closest to the truth, which is why immigrants - mostly the illegal ones - disrespect US laws, commit crimes, and take advantage of an overly generous social framework and increasingly undisciplined judicial process.

The condition in many European countries is far worse, where theft, rape, and other human crimes are committed with impunity. Often, if an immigrant is accused of crime, there exists no punishment. The system feeds upon itself and eventually fails to protect the national culture.

That is not all. Every nation on earth is controlled economically by an unelected elite, otherwise know as a central bank. In Europe, where the financial condition is dire, all nations on the continent are controlled by one central bank, the ECB. Nations have usurped their right to issue currency, having been overwhelmed by the collectivist desires of the European Union. The ECB issues fiat currency, in the form of a counterfeit euro, bolstered most recently by negative interest rates because the system is a fraud and it imploded over 10 years ago, during the Great Financial Crisis. The global central banks added untold amounts of liquidity, but it will never be enough because the crisis is one not of liquidity, but of solvency. All central banks create currency out of thin air, charge interest for its use, and, via the magic of fractional reserve lending, multiply the amount of currency in circulation by ghastly amounts.

The system is broken and will remain broken until it is completely rejected by the various populaces which employ it. That moment in time is unknowable, but it is inevitable.

There is more.

Great Britain, wise enough to keep their currency - the pound - national in nature, is attempting to exit the EU, but has been met with resistance three years since a national referendum preferred exiting, or, in common parlance, Brexit.

This is a further disruption to the status quo, and the elites will have none of it.

President Donald J. Trump, of the United States, foments more radical departures, not the least of which being his penchant for fair trade via tariffs. For three decades, the globalists have promulgated their "free trade" jingoism, which is commonly broken, cheated upon, corrupted, deceitful, unequal, and decrepit. Global trade should well collapse, and if President Trump's tariffs are the agent of change, all the better.

Thus, these days are far from normal. Superficially, people go about their business as if nothing is brewing beneath the casual calm. There will be a shock, probably multiple shocks, similar to, and many of them larger than the events of 2007-2009.

How long the politicians, bankers, and the media can keep a lid on the calamity that is bubbling up below, is anyone's guess, but their time is running short. Currencies will collapse, nations will fall, there will be wars.

It would pay to keep a sharp eye on one's assets, hard and soft. Anything that is not well-protected can be stolen away in a flash. Consider the number of security breaches at financial institutions as warnings. The money is unsafe. Hard assets are safer, but must be protected, defended.

All of this is frighteningly real and happening at breakneck speed. The usual media sources will not tell you the truth. You must find it on your own.

Ten years is a long time for the central banks and their friends to keep the spinning plates of a corrupt, defunct global financial construct from experiencing inertia and crashing to the floor, shattering into millions of tiny, unrecoverable pieces.

The spinning will end. Everything will change.

At the Close, Monday, August 12, 2019:
Dow Jones Industrial Average: 25,897.71, -389.73 (-1.48%)
NASDAQ: 7,863.41, -95.73 (-1.20%)
S&P 500: 2,883.09, -35.56 (-1.22%)
NYSE Composite: 12,586.24, -162.18 (-1.27%)

WEEKEND WRAP: Another Shaky Week for Stocks; Bond, Gold, Silver Rallies Extend

As the global ponzi turns, the week now left behind shares a trails of tears and cheers, sadness for equity holders, joyous celebrations in the bond pits as US rates re-approach the zero-bound (despite the Fed's reluctance).

While stocks bounced like a rubber ball on a string, the losses were limited by some mysterious dip-buying mid-week as news flow changed not just by the day, but seemingly by the hour.

At the same time, the bond market in the US was mimicking Japan and Europe, grinding yields lower, with the 10-year note closing out the week at 1.74%, which is lower than the 1,2,3,6-month and one-year yields, making the case for an already inverted yield curve. The 2-year continues to be resilient, though one has to wonder how much longer it can hold the narrow margin below the 10-year, which is currently a scant 11 basis points (1.63%).

Precious metals have also benefitted from global uncertainty, with gold hovering around $1500 and silver teasing the $17.00 mark. Both are significantly higher from lows spotted in late May. The ascent of the metals has been swift and without any major pullback. If the metals are in an overbought condition, they certainly aren't showing any signs of it. As usual, however, the persistence of central banks to keep "real money" on its heels is probably keeping PMs from going vertical. That story seems to have no end, except that a hyperbolic rise in gold and silver would signal the death of not just the US dollar, but probably all fiat currencies in use by every nation, developed or not. After fiat finds its proper value (ZERO), barter will follow. It's a natural progression. The central question, as has been for centuries, is, "what do you give for a live chicken?"

Though it may appear that the global economy is about to implode, it's useful to be reminded that the Great Financial Crisis (GFC) is well beyond its 10th anniversary, thanks to massive infusions of counterfeit fiat ladled out to the unwashed by the BOJ, FRS, BOE, SNB, PBOC, ECB. Spelling out the acronyms somehow yields negative interest rates and the death of money. Nobody knows when this will occur, but it will, and the effects will devastate many. Think billions of people, not just millions.

In the interim, as the world is roiled by international, geopolitical events, the wall of worry is being built upon the current crises (not in any particular order):

• The Epstein "suicide"
• Honk Hong protests
• Brexit
• Trade War and tariffs
• Middle East tensions
• Mass Shootings, Gun Control Legislation, Red Flaw Laws (won't happen)
• 2020 presidential election hijinks
• Ongoing migrations (Africa to Europe, South America to North America, China to Africa)

That's more than enough to keep traders up at night and on their collective toes during the days ahead.

Incidentally, all of this anguish has shielded the markets somewhat from a less-than-rousing second quarter earnings season, even as the corporates float through the third quarter. The Dow Transports re-entered correction territory two weeks past week and extended it last week with the worst showing of all the US indices, by far.

Recession is almost a certainly, though it needn't be particularly horrible for the US, since employment is still strong, despite weakening earnings in the large cap corporate sector. Since the US is a very big country, different areas will be affected in different ways. Areas of the country that have been growing (most of the South, Midwest and Pacific Northwest) will continue to do so, albeit at a slower pace. Those areas in decline (Northeast cities, California, rural enclaves) will see conditions worsen. Those areas in decline will continue to do so through good times and bad and some may be exacerbated by outflows of high income individuals due to SALT taxes. It's a big country, a panacea for speculators with long time horizons.

At the Close, Friday, August 9:
Dow Jones Industrial Average: 26,287.44, -90.76 (-0.34%)
NASDAQ: 7,959.14, -80.02 (-1.00%)
S&P 500: 2,918.65, -19.44 (-0.66%)
NYSE Composite: 12,748.42, -80.38 (-0.63%)

For the Week:
Dow Industrials: -197.57 (-0.75%)
Dow Jones Transports: -167.22 (-1.61%)
NASDAQ: -44.93 (-0.56%)
S&P 500: -13.40 (-0.46%)
NYSE Composite: -91.08 (-0.71%)