Tuesday, June 30, 2020

Boeing Leads Stocks Another Bump Higher; What Your Life Will Be Like in 2021 and Beyond

The economy is changing, rapidly.

Under the surface of government's official statistics and the normally noisy gyrations of the stock market there's a literal revolution going on in America and around the globe about how business gets done, how society operates, how people live day-to-day.

Changes, brought about not by the coronavirus itself, but by government and popular response to it are quietly, relentlessly occurring just beneath the surface of everyday life.

Some of the changes are overtly obvious. Forced to stay home during the various state lockdowns, people didn't drive as much, if at all. Nobody sat down for a meal at any restaurant. Most of them were closed. If you had kids, you got to know them better... much better. How people dealt with that was a variable count. Your house is probably cleaner than it's ever been. With nothing much to do, many people cleaned like they were on maid service.

These are just a few of the changes that have already happened. What happens next?

As the government and propaganda media - by inference, any national TV or radio network, mainstream newspaper, and local affiliates - push the agenda of a second wave of virus outbreak more people will be wearing masks, the overall level of stupidity will rise, more businesses will be forced into bankruptcy, homelessness will become endemic in cities over 100,000 population, and you will likely make less money than you did at the same time in 2019.

What the government and media don't want you to know is that the virus is getting weaker, not stronger. As is usually the case, COVID-19 will succumb to the same conditions that have befallen every virus before it and likely every virus afterwards. As infections (cases) proliferate, more and more people become immune. People prone to serious, sometimes deadly outcomes - the obese, those with prior medical conditions (especially diabetes and heart conditions), the elderly - will be more effectively isolated, resulting in many fewer deaths than were experienced during the initial blast of the novel coronavirus.

When the virus reaches a stage at which it has either infected almost everybody (herd immunity) or has mutated so much that it's about as deadly as a common cold, it will be a non-issue, but the media and government agitprop actors like Drs. Birx and Fauci from the CDC will continue to push the "wear a face mask and social distance" mantra. Eventually, even the dumbest people on the planet will be able to see through their agenda for the Covi-Pass (now a real app for your tracking device cell phone), vaccine (don't take it; it won't be effective and may make you sicker) and the wreckage of the US economy (well underway) and begin to ignore all their dire warnings and fear-mongering.

Here's a fact: Over the past week (6/23-6/29) there have been 3,791 new deaths attributed to COVID-19, an average of 542 per day. Compare that to roughly two months ago (4/21-4/27), when there were 12,859 deaths, an average of 1,837 per day. That's quite a drop. In fact, it's a decrease of 70.52%.

Confirmed cases, from the same periods were:
6/23-6/29: 275,501 total; 39,357 per day.
4/21-4/27: 206,818 total; 29,545 per day.

What this means is that more people are testing positive, but fewer are dying. Instead of scaring everybody into believing that the virus is advancing into a "second wave," we should be celebrating that it's on the decline because the case fatality rate (number of deaths divided by the number of confirmed cases) is cratering.

In April, it was 0.062 (or 6.2%), meaning that six out of every 100 confirmed cases resulted in death.

In June, it is 0.014 (1.4%). Only one or two out of every hundred confirmed cases is resulting in death.

That's HUGE! The virus is being defeated. Kudos to honest doctors, nurses and health care professionals. A middle finger to the CDC, mainstream media, the federal government, Drs. Birx and Fauci, and anybody else preaching the apocalyptic message of the COVID-19 "we're all gonna die" false prophecy narrative.

Regardless, life (for most people with an IQ over 100, which excludes most of the BLM and ANTIFA goons) is changing.

Here is a short list of what your life may be like in 2021:

  • You will work from home more often
  • You may have started or expanded your own home business
  • You will watch less TV
  • You will get more, better, relevant information from the internet
  • You will not trust the government at all
  • You will dress more casually
  • You will be eating better (home-cooked meals over restaurants)
  • You will probably have become a better cook
  • You will be making less money (but saving more)
  • You will be more diligent about budgeting and saving
  • You will not be wearing a mask in public
  • You will go to a restaurant, sporting event or concert
  • You will appreciate your car more
  • You will take a trip or vacation, but you will drive, not fly
  • You will be happier, less stressed, and healthier

If all that sounds too good to be true, believe it. Many people who lived through the depression have attested to those years being the best of their lives. Money wasn't a top-of-the-list agenda. Living was what everybody had top of mind. People helped each other. People cared for each other. Almost nobody invested in stocks. Food was cheap; almost everybody had a back-yard garden. Many raised chickens or rabbits.

As one person who lived through the 1930s in a medium-sized city once put it: "Nobody thought of themselves as poor because we all were poor."

The standard of living in the Great Depression didn't go down. Perhaps it did at first, but, in terms of human well-being and satisfaction, it went up and continued to improve until the entire country was once again gainfully employed due to the World War II effort. And then, America boomed, becoming the greatest country with the greatest economy the world had ever seen.

So, if you get a little stressed out over the current conditions, remember that it's temporary and it will pass. Make your life better. Make your neighbor's life better. Care more. Give more. Live more. The future looks brighter than ever.

In case you still have an interest in stocks, they did well on Monday (as they almost always do... it's a psychological thing. The stock market going higher on Mondays supposedly gives everybody a rise). The Dow was the big winner on the day, with Boeing leading the charge, up 24.48 points (+14.40%).

Imagine that. A company that's losing money, on the brink of bankruptcy, which makes airplanes that crash and kill people, selling to an industry (airlines, air travel) that's collapsing is the leading stock of the day.

Go right ahead. Put more money into that failing enterprise. The rest of us are moving on to a better life without Boeing, or the stock market, or the Federal Reserve, all of which deserve to die painful deaths.


At the Close, Monday, June 29, 2020:
Dow: 25,595.80, +580.25 (+2.32%)
NASDAQ: 9,874.15, +116.93 (+1.20%)
S&P 500: 3,053.24, +44.19 (+1.47%)
NYSE: 11,777.08, +172.66 (+1.49%)

Sunday, June 28, 2020

WEEKEND WRAP: Stocks Slide; Island Reversal Seen; Gold, Silver Soar; Treasuries Flatline; Argentina On The Ropes

For a second time in the past three weeks, stocks suffered another round of losses which accelerated as the week progressed. Of the major indices, taking the biggest hit were the Dow Industrials, followed by the NYSE Composite, S&P 500, and NASDAQ, in percentage terms.

The Dow's 3.31% fall was made possible by a Friday selloff which saw the blue chips decline by 730 points, the largest selloff since June 11, when stocks suffered a major blow preceded by an ominous island reversal of June 5, 8, 9, and 10. (see video below for more)

Friday's action may be presaging an oncoming decline of a magnitude rivaling the initial slide in March. The second quarter comes to a close on Tuesday and everybody on wall Street knows that it's difficult to "price in" a GDP decline which may be on the order of 35-50% when the first figure is announced on July 30.

Prior to that momentous milestone, corporate earnings reports will begin to flow to the street following next week's July 4 Independence Day holiday. The coming week will be shortened by a day, as Friday is a national holiday, giving most Americans a three-day weekend. Stock markets, banks, the postal service and most city and county offices will be closed. Hopefully, most of them will reopen on July 6.

For the week just concluded, treasury yields were clobbered, the 10-year note falling from 0.71 to 0.64%, the lowest since May 14 and approaching the record low of 0.58% from April 21st. As the 30-year bond yield fell from 1.47 to 1.37 over the course of the week, the curve flattened significantly, 125 basis points covering the entire complex. If this is what the Fed considers success in "curve control," they can have it, with the short end - one-month to two-years - covered by just five basis points (0.12 to 0.17%).

These low rates at the front end aren't by accident. They are policy and they are indicative of a recession if not outright depression. Adamant that they will not go to negative rates as has been the case in the Eurozone and Japan for years, the Fed's real rates have been in the red pretty much since the previous crisis in '08-'09, i.e., they were lower than the inflation rate. The one year note only crested above one percent in 2017. A year ago, it was yielding 1.92%, a stark comparison to Friday's close at 0.17%.

The Fed promised cheap credit and they are delivering.

Oil prices were slapped down after WTI crude tested $40/barrel, peaking at $40.73 on Monday, only to close out at $38.49 on Friday. Expect oil to continue trading sideways to lower if stock prices begin to falter, or, vice versa. Oil declines could help trigger or exacerbate a rundown on equities.

Precious metals were by far the big winners for the week. Both gold and silver advanced smartly despite a desperate attempt to crater their prices Friday on the NYMEX failed miserably. The morning rout sent gold reeling $20 to the downside, bottoming just below $1745 per ounce. So enamored with "V"-shaped recoveries, Wall Street got an unexpected one when gold prices recovered all of the losses within an hour and proceeded to close near the high for the day at $1771.50. Laughably, Friday's recorded London PM fix was set at $1747.60, setting up a $24 weekend arbitrage gap. Maybe, considering the problems the paper COMEX markets have had in recent months, it's not so funny for gold shorts, which are burning.

Silver savers should be delighted with the price action this week. Not only was a raid similar to the gold price suppression thwarted on both Thursday and Friday, but spot edged three cents higher than the closeout future price, at $17.83 the ounce, the highest Friday price since February 21, just prior to the epic COVID collapse.

Current physical prices continue to demand high premiums. This week saw prices for silver art bars absolutely explode higher, some one ounce bars selling above $40. Average and median prices for one ounce gold coins and bars were captured at prices $33 to $45 higher than a week ago.

Here's a glimpse at current selected prices on eBay (shipping included):

Item: Low / High / Average / Median
1 oz silver coin: 25.95 / 40.95 / 30.92 / 29.47
1 oz silver bar: 27.00 / 45.44 / 34.62 / 32.93
1 oz gold coin: 1,827.85 / 2,109.95 / 1,919.39 / 1,901.60
1 oz gold bar: 1,861.66 / 1,920.65 / 1,879.77 / 1,873.92

Argentina's Debt Crisis Far From Resolution

Argentina's government continues to play cat and mouse with international creditors, extending the deadline for negotiations concerning $65 billion worth of bonds to July 24.

Having already defaulted on a $500 million interest payment on May 22, the government is doubling down, indicating that it will miss another similar payment in June, which has a 30-day grace period. The chances of a settlement agreeable to the government and its creditors continue to deteriorate as interest payments are missed and the value of the bonds plummets, some selling off to as low as 37 cents on the dollar.

Talks stalled over the past two weeks as investors including BlackRock, Fidelity, AllianceBernstein, and Ashmore Group PLC, rejected a government proposal tied to agricultural exports while seeking recovery of between 49 and 57 cents on the dollar.

At the same time, the province of Buenos Aires, Argentina’s largest province, is negotiating with bondholders on the restructuring of $7.148 billion in debt and extended its deadline for a negotiated settlement to July 31.

Per previous proposals, payments would not begin being made on the currently-defaulted bonds until 2025. This article, published by the Council on Foreign Relations, offers the most comprehensive details, including charts that break down Argentina's $323 billion of debt, all of which is at dangerous risk levels.

At a time when the country's GDP is predicted to decline by 10 percent, the severity of the financial crisis cannot be understated, though mainstream television media in America has nearly completely neglected to report on the issue. Argentina has suffered through decades of boom and bust over the past 45 years, 20 of which showed GDP in decline.

It's not a question of when Argentina defaults on its debts, it's a question of how severe the defaults will be, how they will affect government pensions, and the ability of the government to maintain its status as a going concern. With a population estimated at 45 million, Argentina's problems are quickly becoming everybody's, as tens and perhaps hundreds of billions are in the process of being eviscerated.

With the government of President Alberto Fernandez content to play kick the can by extending the negotiation deadline for a fifth time, the dithering is taking its toll on investors. While a formal default has only been declared on portions of Argentina's debt, triggering the awarding of a credit default swap (CDS) recently, these things have a nasty way of snowballing into global crises, as was the case with Mexico in 1982, the Asian Crisis in 1997, and when Russia devalued the ruble in 1998.

Having to deal with some of the most severe lockdowns in the world due to the COVID-19 panic, Argentina is ill-prepared to deal with a financial hardship of this magnitude. The situation could spiral out of control at any time, when one side or the other finally throws in the towel and walks away. Consider Argentina's plight a fluid situation with more headlines and fireworks likely over coming months.

At the Close, Friday, June 26, 2020:
Dow: 25,015.55, -730.05 (-2.84%)
NASDAQ: 9,757.22, -259.78 (-2.59%)
S&P 500: 3,009.05, -74.71 (-2.42%)
NYSE: 11,604.43, -260.68 (-2.20%)

For the Week:
Dow: -855.91 (-3.31%)
NASDAQ: -188.90 (-1.90%)
S&P 500: -88.69 (-2.86%)
NYSE: -375.19 (-3.14%)

Peak Prosperity's Adam Taggert and friends discuss threats to the stock market, highlighted by their charting of the recent Island Reversal:

Friday, June 26, 2020

COVID Scamdemic: Texas, Florida, California COVID Case Increase The Result of 70% More Testing

Is COVID-19 spreading across the country, or are the numbers reported higher due to increased testing?

That seemed to be the simplest way to detect medical/media/government complicity in what's become known as a plandemic or scamdemic designed to scare people into submissive behaviors such as wearing masks, social distancing, staying home and closing businesses.

Mainstream media is blaring that COVID-19 is spreading rapidly across the country, with "hot spots" in Texas, Florida, and California, coincidentally, the three most populous states in the country.

The figures obtained came from a well-established site known as the Covid Tracking Project at the Atlantic Their data and state-by-state histories of testing revealed some very telling numbers.

Wanting to be as up-to-date as possible, we checked the seven days just past, and started with Texas.

Texas tested 251,599 from Friday, June 19, through Thursday, June 25, an average of 35,943 per day.

Wanting to be fair and unbiased, we would have tested for the same dates in May (19th through 25th), but instead opted for testing done on a Friday through Thursday (same days of the week as the current data) prior to Memorial Day weekend, so we went with May 15-21.

For the seven days in May that we tracked, Texas performed 152,868 tests, an average of 21,838 per day


June 19-25: Tests: 251,599; Average/day: 35,943
May 15-21: Tests: 152,868; Average/day: 21,838


June 19-25: Tests: 209,332; Average/day: 29,905
May 15-21: Tests: 165,649; Average per day: 23,664


June 19-25: Tests: 619,815; Average/day: 88,545
May 15-21: Tests: 316,476; Average/day: 45,211

Well, it doesn't take Elon Musk (a rocket scientist, and, notably, father of the external combustion engine - that's a joke, son) to see that a lot more testing has been done recently, and that would - all things remaining somewhat equal - result in a higher number of positives.

According to the media at ABC, NBC, CBS, FOX, and CNN, whooopie! We've got ourselves a big story here.

Totaling it all up, the three most populous states in the America performed 445,753 more tests in the seven days just past than they did in the seven days prior to Memorial Day weekend. That's an increase in tests performed of 70.20%. In California, where the bulk of the testing was performed, it was nearly double, with 95.85% more tests performed in the last week than in the sample from May.

More testing, more positives, RUN FOR YOUR LIVES!

Additionally, most of the testing sites are in and around big cities, where the virus spreads most readily. The same can be said of the phony racial angle. Most minorities live in and around big cities. Same for Biden beating Trump in the latest polls.

Money Daily didn't cherry pick the days. Using the best and simplest methodology available, it's conclusive: you're being scammed by the medical profession, the government, and the media. Makes one wonder what else they're lying about.

Welcome to the land of the fleece and the home of the naive.

Have a nice weekend.

At the Close, Thursday, June 25, 2020:
Dow: 25,745.60, +299.66 (+1.18%)
NASDAQ: 10,017.00, +107.84 (+1.09%)
S&P 500: 3,083.76, +33.43 (+1.10%)
NYSE: 11,865.11, +138.58 (+1.18%)

Thursday, June 25, 2020

Wealth As a Relative Term With Blinders (and Masks) Off

Stocks took a pretty good beating on Wednesday, tough news for the longs who have feasted on Fed funny money over the past three months, and much longer, if you include all of the gains made via QE from 2009-2019.

While this may come as a shock to some readers, Money Daily's editorial slant is slightly unenthusiastic when it comes to owning stocks and/or having a 401k or other retirement plan invested manly in equities.

The rationale comes from decades of experience watching stocks go up and down and up and down, sometimes staying at lower levels for long, painful periods of time. Not that owning stocks is a bad thing, it's just that stocks are only one asset class - of many - and proper balance comes from diversifying among a multitude of assets, such as fixed income, real estate, precious metals, commodities, collectibles, art, one's own business, and hard assets such as income-producing machinery, vehicles, food-producing land, water, alternative energy, computers and peripherals, furniture, and other mundane items like cooking and baking essentials, hardware and household items.

Taken as a whole, Americans are over-invested n stocks. The rich like them because they have enough money to afford occasional losses. Ordinary, less-wealthy types can't take on losses readily without bursting their retirement dreams, which, if you're retired or know anybody who is, isn't all golf and boating.

That said, here's part of the Motley Fool's take on retirement savings:
Many workers assume that Social Security will suffice in retirement because their living expenses will go down once they stop working. The reality, however, is that things like housing and transportation tend to only drop modestly, if at all, during retirement. The reason? While many seniors enter retirement with their mortgages already paid off, as homes age, they tend to require more repairs and maintenance, the cost of which can be enough to offset an absent mortgage payment. The same holds true for owning a car -- though retirees don't have commuting costs to contend with, they still have to worry about insurance and auto maintenance, which can be far more expensive than filling up a vehicle's tank twice a week.

The statement above, of course, supports the Fool's claim that Social Security isn't enough to cover living expenses after one has stopped working. It's rubbish if one happens to be inventive, resilient, independent-thinking, and self-sufficient.

The idea that repairs and maintenance of a home are somehow equal to a mortgage payment requires some extensive mental gymnastics. Besides, repairs and maintenance were always a part of the deal even before the mortgage was paid off. No home is perfectly maintenance-free. The same goes for the car assumptions they make. If you're not driving much, your maintenance costs will decline in a somewhat inverse proportion. The Motley Fool likes to pimp stocks. They're not very good at turning screws or fastening bolts and rationalize that you aren't either.

Their contention that Social Security won't cover living expenses in retirement is bollocks. In 2020, even taking early retirement at age 62, the maximum benefit is $2,265, and goes all the way up to $3,790 if one delays collecting until age 70.

Now, anybody who can't make ends meet on $3,790 a month has some serious spending issues. Even taking in less than the maximum, say, $1300-1600, isn't bad if you've got your mortgage paid off, a functioning automobile, good health (that's very important) and low to no debt. What else is there? Sounds like a lot of ham and cheese sandwiches, and steaks, and cold beer.

Unless you're an absolute Amazonian compulsive shopper (they're out there), not being able to get by on anything between $1200 and $2200 a month seems a little preposterous.

So, let's blow the lid off retirement plans, IRAs, and all the other stock-first plans that often aren't invested in one's best interests, carry management fees, are taxable, and can't be touched until a certain age without triggering a penalty. There is such a thing as a retirement trap and many find themselves lodged firmly within its jowls, so, when stocks go down - and they need to go down quite a bit more before considered affordable as investments - there is a crowd that might be celebrating. 42% of people don't have a traditional retirement pension plan, so they might, besides being a little bit jealous of their neighbors, think cheaper stocks are just what America needs.

Consider that couple down he road who worked hard all of their lives and now have a little $1.5 million nest egg, and that's not including Social Security.

If they both retire at 65 and live to be 90, they can withdraw $5,000 a month if the plan is to spend it all while still drawing breaths. That's not bad. Their only concern should be health issues, so they'd be best-suited to squirrel away the bulk of their wealth into a living trust or other protective vehicle, to avoid having it all taken away by by the blood-curdling costs of a nursing home.

Or, they could buy a boat or two, a few nice cars, some luxurious furniture and carpeting, some cool art, gold, silver, maybe a fully-functioning woodworking pole barn, and live it up.

The point is, keeping all of your currency inside the rigid and rigged control mechanism known as the stock market is probably not the wisest choice.

On that note, the current condition, be it mostly or altogether contrived, has everybody worried about dying before their time from the dreaded coronavirus. Note that rioting, looting and protesting seem to have died down quite a bit. Nothing on the nightly propaganda network shows about any protests, burning, drama-queening, queer-baiting, LBGVTQSWYRetc., statuary defacing, looting, wilding (old-school reference), soy-latte slurping, or general urban mayhem were to be seen the past few days.

Can we just get this all over with now? Take off your masks. The plandemic is a massive hoax. All the talk of a second viral wave is just dancing numbers. Black lives matter as much as all others. Joe Biden? Get real.

Re-elect Trump even though he's not perfect (who is?). But, he's light years ahead of Joe Biden and the bone-headed Democrats. Let's not forgive nor forget the damage done by slow-walking Republicans. They're as much a part of the problem and offer no viable solutions to anything.

Re-elect Trump and hope that the Dems hold the House and take the Senate. Nothing better for Americans than a split federal government. While they're flailing about, bickering and keeping the slimy, asshat media busy, we can get back to work and play and have some fun again.

Stop the BS. Take off your masks. Remove the blinders the media and government has forced upon you and start living like a human being again.

Adjunctive to stocks sliding, the price of oil was lower on the day, seen at $37.57 a barrel for WTI crude Thursday morning. It's a step in the right direction.

Treasury yields fell across the complex. The 10-year note checked in at 0.69%. On-month bills netted out to 0.11% while the 30-year dripped to 1.44%.

Gold and silver got their usual spanking for being too pricey so close to futures expirations. Gold, getting a little too close to $1800 an ounce, had to be taken down, but it's only a matter of time before both metals make sustained advances. One might say they already have in a very real, physical sense, considering the high premiums being taken by dealers and eBay sellers.

Wealth is all so very relative. The couple with $1.5 million in stock might seem rich today, but, in other circumstances, as we saw during the lockdowns, the guy with a couple ounces of gold, a fully-stocked liquor cabinet, a pantry loaded with canned goods (and toilet paper ;-) may be far better off than his neighbors.

In a blind society, the one-eyed man is king.

At the Close, Wednesday, June 24, 2020:
Dow: 25,445.94, -710.16 (-2.72%)
NASDAQ: 9,909.17, -222.20 (-2.19%)
S&P 500: 3,050.33, -80.96 (-2.59%)
NYSE: 11,726.54, -351.21 (-2.91%)

Wednesday, June 24, 2020

Who Is and Who Isn't Prepared for an Unknowable Future


They're out there. They're ready. And they're probably not going to share.

The world has changed in recent months. In case you've been living in a cave (probably a good case to hide out, away from the coronavirus and street protests) for the past four to six months you're likely noticed that everyday life isn't so everyday anymore. People wear masks, some even while driving in their cars with the windows rolled up. You may notice people keeping their distance from you, and from everybody else.

Then there are those pesky protesters. First, they were all about social injustice. Then, they looted stores and burned buildings. After that, they began knocking over statues of people they think were bad eggs. People who had slaves. People who didn't. People who were just evil enough, supposedly, to be immortalized a la statuary, are being histrionically defamed.

The protesters defaced the Lincoln Memorial. Don't ask why, because Abraham Lincoln, America's 16th president, is largely credited with having freed the slaves on the new continent. He purportedly saved the nation. Well, no good deed goes unpunished in this current craziness over race, injustice, inequality.

Statues of confederate heroes, Robert E. Lee, and others, have been toppled or removed, but the madness hasn't stopped there. Calls for removal or actual toppling of statues of George Washington (founder of our nation, first president and a slave owner), Thomas Jefferson (one of the principal authors of the US constitution, third president, slave owner), and even Teddy Roosevelt (Rough Rider, 26th president, not a slave owner) have been in the news.

It just so happens that Washington, Jefferson, Lincoln, and Roosevelt are the four faces carved into Mount Rushmore in South Dakota, prompting the governor, Kristi Noem, to stand up and vow to protect the world famous monument, saying, "not on my watch," as a message to would-be defacers and defilers. Those fighting words probably have some ANTIFA people triggered.

Anyhow, life in 2020 is different than it was just six months ago and we're not even half way through the year yet. How well one has prepared for these changes is largely a function of how well aware one is of one's current environs, how much trust one has in fellow humans, the police, and the government, and how seriously one is about preserving one's well-being.

Some people - like the fabled preppers - were well ahead of the curve, having staked out some rural location years ago and built upon it, cleared it, farmed it, and now live on it in peace with nature and neighbors at least half a mile away. They've got their guns and ammo, chickens and cattle, greens and beans, solar power, and just about everything they need to hunker down for months, if not years, without interaction with the electrical grid or commercial America if need be.

Those are - all of a sudden - the enlightened, who will remain far from the fray in the cities and be relied upon for rebuilding what's left after the dust settles, should conditions worsen. They won't catch the COVID, nor will they engage with radical protesters. They're likely to stay on their farms and enclaves for a long, long time.

There are those of us who too a look at the coronavirus as it spread from China, through Asia, into Europe and eventually to North America and thought that it might be time to stock up on food, make sure our gas generators were working and made plans to isolate. They turned out to be prescient, if not a little overzealous. But, they were right. Just about everywhere in the United States was under some form of lockdown or stay-at-home guideline in April, May, June.

The bulk of the population was completely caught off guard by the virus and the lockdowns and then the protests. Among the most unfortunate were those who made few plans and found themselves in food lines or at a WalMart wondering where all the toilet paper had gone. Those people were unprepared. Some may now have learned a little bit of a lesson and gotten their pantries stocked, maybe bought a gun and some ammo, and think they're ready for whatever might come next.

Most of the unprepared did not take any action. They went to the food banks, cashed their $1200 checks and spent a month to six weeks bingeing on Netflix. Those living in cities were thoroughly surprised by the large scale protests. Some of them probably were participants. If a second wave of the virus turns out to be more real than merely fudged statistics, they're toast. Burnt toast. They'll find themselves back at the food banks, broke, in fear for their lives, and eventually likely culled from the herd by either the virus or roving, menacing street gangs.

In the early days of the pandemic, it was probably good enough to buy a few month's worth of canned goods and shelter in place. As life becomes more about survival than prosperity, as people become more desperate, more violent, more destitute, it's not going to be good enough. Millions have lost jobs. The enhanced unemployment benefits are going to run out at the end of July. More than four million people have skipped making mortgage payments. Delinquencies on student loans, car loans, and credit cards are on the rise. The economy, if it recovers at all - and despite the recent happy face Wall Street rally - will do so very slowly. the new normal is going to persist and many, many, millions of people are still unprepared.

You might have a 401k, a paid off mortgage on a home in a nice neighborhood, a work-from-home job, and a fully-stocked pantry, but will it be enough? Did you start a garden? Are you dependent on the grid for power? Do you know what you will do if intruders storm your palace?

These are hard questions, questions people don't like to ask themselves, and thus, many don't. About 60% of the adult population thinks everything is going to be back to normal in six months to a year. If they're right, they may make it to the proverbial other side. If they're wrong, they'll wonder why they didn't take the Boy Scout motto - Be Prepared - more seriously.

At the Close, Tuesday, June 23, 2020:
Dow: 26,156.10, +131.14 (+0.50%)
NASDAQ: 10,131.37, +74.89 (+0.74%)
S&P 500: 3,131.29, +13.43 (+0.43%)
NYSE: 12,077.75, +48.83 (+0.41%)

Tuesday, June 23, 2020

Why An Hourly Wage Is Such a Bad Idea

Let's talk about money, your work experience, and taxes, just what you want to think about this morning, right?

It is an important topic, however, just because so many people avoid thinking about their work and its relation to taxation and general well-being.

Right from jump street, if you're working for an hourly wage, everybody's getting cheated. You, your employer, even the government which takes part of your pay before you even see it is getting a raw deal, though it could be argued that the government, which has little to no "skin in the game" when it comes to your income, your employment, and your work habits, has nothing to lose and so much to gain.

By taking a job or a position in exchange for so form of compensation based on time, you've rendered yourself about as useful or resourceful as a drone. You show up, you punch the clock, you perform your duties, you go home. Nothing more, nothing less. It's a dreadful condition, draining the life force out of you on a regularly scheduled basis. Making matters even worse, your boss probably thinks you aren't working hard enough and the government takes a percentage of everything - before you even see it - and wants more.

The concept of hourly wages is a relatively recent development in the great pantheon of civilization and labor. Prior to 1900, workers were paid by the day, week, or month, or by the task, which, being that much of the labor of the era was performed on farms, often included lodging and/or meals. This made sense because the world was a hard-scrabble place, weather took its toll on the amount and quality of work performed over days and even weeks, and it was generally well-known that workers wore down after six to eight hours on a particular job and the quality might suffer as the day wore away at their muscles and bones.

It wasn't until the industrial revolution and the great immigration from Europe to America that hourly wages became established. Employers and unions established scales of wages and requirements for work-weeks (a typical week of work was from 50 to 60 hours). In the early days of industrialization, unions became necessary because naturally, employers wanted to pay as little as possible, but workers needed to earn a decent living, provide for their families, and maybe have a little left over for savings.

It wasn't until 1938 - in the throes of the Great Depression - that minimum wage laws were established, at the time, a necessary evil, because not just workers, but employers as well, were suffering from the maladies of slack demand and massive deflation. During that developmental period and since then, the hourly wage became the standard compensation for menial tasks and the government didn't miss the opportunity to get its unfair share, beginning in the early 1940s, when they imposed payroll deductions as a means to fund the war effort incurred during world War II.

When the war was over, the feds didn't stop there, they just kept taking part of everybody's pay, increasing their percentage over the years. States jumped on that bandwagon as well, many imposing their own income taxes. Many still believe that income tax or any tax on wages is unconstitutional. They're actually right, and why the IRS calls income tax "voluntary," but try not paying your share and see what happens. There's nothing voluntary about wage taxes and deductions from your paycheck. It's theft on a grand scale.

It's a crying shame that somebody making $15 per hour only gets to take home about $12 of that hourly rate after the feds take their withholding amount, Social Security (FICA) and Medicaid "contribution" and the state piles in for another piece of your pie. People making more are penalized even further. That's the government side of the equation. Making it all the more unbearable, the various governments waste what they take from you and have to borrow even more and still can't manage to balance their budget. It's like throwing money down a black hole, this one lined with $26 trillion in federal debt which will never be repaid.

Getting back to the hourly wage and why it makes everybody a crook, you're probably not happy about the government taking 12-20% or more right out of your paycheck. You may decide to work 12-20% less or slow your productivity because of that unfair practice. That, in effect, steals from your employer, who isn't at fault for the government's intrusion into an agreement made between you and your boss' company, but it is he who pays for lost productivity, slack standards, theft, and the other unintended consequences of hourly wages.

Because, like you, the employer feels threatened by both sides - workers and the government - he cuts hours, or lays off unproductive employees, putting more strain on those that remain. He or she might also makes use of accountants and any other tricks available to limit his contributions to the government. It's the employer who writes the checks after all, and it is the employer who must remit to the government. Many have tried to cheat the government. Many have failed. Many are out of business, but the point is that the hourly wage and payroll deductions have spawned all sorts of bad behavior by employees and employers alike. More often than not, it's payments made to the "silent partners" - governments - that bankrupt businesses and put people out of work through no faults of their own.

The other major problem with a hourly wage it that it stifles productivity and efficiency. Maybe you can produce six widgets an hour, but everybody else on your shift can only produce four. If you're all making the same wage, there's absolutely no upside for you to work more efficiently than your peers unless you believe you'll get a raise, which, in a union setting, would be impossible. Even then, if you were to get a raise for your more efficient use of time, when your fellow workers find out, they'll castigate you and tell you you're making their lives more difficult. It's a no win condition.

If you get paid $15 an hour to do a job in five hours, but you could do it in four, why would you? The hourly wage not only does not encourage efficiency, it retards it. Or, would you rather make $60 instead of $75 for the same job?

The hourly wage is one of the worst inventions ever created in terms of labor effectiveness and efficiency. It stifles creativity, encourages bad behavior and spawns more government rules, regulations, and taxes. It reduces an erstwhile valuable human being to little more than a punch-press machine. It's degrading and demoralizing and nearly universal. Anything that becomes that widespread without competition - like a monopoly - should be done away with, the sooner the better.

As much as we'd all like to believe that everybody is created equal, it just isn't the case. In the eyes of the law, maybe. Hours and days are not created equally either. It's a proven fact that less work gets done after two o'clock than before noon; Fridays are radically different from Mondays.

Maybe some good will come from the lockdowns and stay-at-home impositions caused by the coronavirus. If anything, it's given people the opportunity to work from home, unsupervised, and maybe given everybody a chance to ponder the value of work versus an hourly wage. Hopefully, this time will encourage people to do their own thing, to start a home-based business, or at least look into alternatives to the time-worn nine-to-five practice.

The main beneficiaries of standardized hourly wages seem to be governments and their tax regimes. Might a return to the sanity of daily or weekly wages, piece work, or by-the-job work become reasonable alternatives?

We can only hope.

The Markets:

Gold futures soared on Monday, peaking at $1765 before being knocked down to just under $1755 an ounce at the New York close. Silver reached out above $18 an ounce prior to a late-morning smackdown, closing at the regrettable - an utterly unrealistic - price of $17.68.

While goldbugs continue to cry about manipulation, it seems obvious that any continuing control over precious metals markets is about keeping the gold to silver ratio near the historical absurdity of 100 and the forces in opposition to real money at the futures windows. After all, silver is more plentiful, more affordable to everybody and much more divisible than gold. Remember, prior to the Crime of 1873, silver was money, but the banking elite of the day wanted to establish a gold standard, and did, impoverishing many independent businesspeople and farmers in the process.

Now that the entire planet is on a fiat standard, which is no standard at all, it's time for silver to take its rightful place as the money of gentlemen and of the world. It can start with a readjustment to a reasonable gold:silver ratio of 20, eventually to 16 or 12. If gold is to persist at $1750 or higher, silver should be at least $85 an ounce. Market forces are at work. Prices for single ounce coins and bars on eBay are routinely over $30, and dealers are charging $23 and upwards for the same, if they can get their hands on it.

With eBay charging a ten percent fee on all bullion sales, the actual price of physical silver in one ounce increments is realistically approaching $32 to $35 per ounce. That's Troy ounces, and Troy approves (joke).

Silver may be kept down in the spot and futures markets, to the detriment of dealers and paper-pushers worldwide. In the meantime, the actual, true, honest, real physical market is exploding and will continue to until such a time that silver holders will be satisfactorily compensated.

Fight the Fed. Buy silver.

Bonds: eh, who needs them? The Fed wants to control the curve to keep short term rates near zero forever. Let them. It can only serve to hasten the return to real money.

Oil prices continue to be inflated, serving only the needs of drillers, shippers, and distillers. When the price of WTI crude falls back to realistic levels around $24-30 a barrel and states begin reducing their onerous gasoline taxes, the economy can begin recovering. Until then, we're stuck in an artificial stagflationary environment.

Stocks gained. They always do. Shares of public companies have never been as expensive.

At the Close, Monday, June 22, 2020:
Dow: 26,024.96, +153.50 (+0.59%)
NASDAQ: 10,056.47, +110.35 (+1.11%)
S&P 500: 3,117.86, +20.12 (+0.65%)
NYSE: 12,028.91, +48.79 (+0.41%)

Sunday, June 21, 2020

WEEKEND WRAP: Fake COVID Data, Faulty HCQ Studies, Bailouts for Zombies, Secret Handshakes, Excessive Lying and Bunk

The level of fraud in the scientific community is absolutely out of control. It's even beyond that of the government and media, though the media probably holds the title of most disingenuous as it lies or distorts on practically everything.

On Friday, yet another clinical trial of hydroxychloroquine was halted, this time by the National Institutes of Health.

Citing that the drug has no ill effects on hospitalized patients - in opposition to previously unfounded claims that HCQ was dangerous - a data and safety monitoring board (DSMB) said the drug offered no benefit to hospitalized patients.

It's too bad that the mainstream medical authorities have to be so obviously stupid. HCQ is used as a preventative medicine. It helps the immune system fight off coronavirus, especially when used in a regular regimen with zinc and Azithromycin when asymptomatic or in early stages of infection as this study and many others have clearly shown.

Instead, the NIH, CDC, WHO and other "official" medical bodies refuse to release the proof of the effectiveness of hydroxychloroquine as what doctors call a prophylactic remedy, insisting that COVID-19 is a deadly disease and that billions must be spent in search of a vaccine, when they know a vaccine will likely never be developed.

These people, who first told the world that wearing a mask was a waste of time, then promoted the use of masks when it suited their purposes, should all be met with swift justice because it is they, not the virus, who are causing countless deaths that could have been saved if proper preventive measures had been taken. They, and the media which continues to promote COVID-19, lockdowns, quarantines, social distancing, absurdities like not allowing fans into sporting events, keeping restaurant customers six feet apart and other ridiculous notions should be tried for operating a criminal conspiracy.

Even this post, because it violates the dictatorial policy of Google, Twitter, or Facebook may be deemed conspiracy theory or in violation of their standards may be labeled with a warning or removed from public view.

The virus is a total scam. The rising cries of a coming "second wave" are nothing more than another attempt to scare people into rash behaviors using slanted statistics while playing on emotions. Places like Georgia, Texas, and Arizona have been cited as possible new hotspots for the virus, but the truth of the matter is that more testing has produced more cases, therefore increasing the daily bogus coronavirus counts. Additionally, all of the various tests have proven to show an abundance of false positives. Hospitalization and death statistics have been overstated since the beginning of the pandemic.

In other words, almost all of the data and scare-mongering from the media is bunk. Complete rubbish. Take off your masks and start living like a human being again. The chances of catching the virus are slim. It has mutated numerous times and most strains circulating are severe or deadly only to people over the age of 60 who have pre-existing health conditions or are obese, suffer from diabetes or heart disease. The general population is in no more danger from COVID-19 than from the common flu.

Get over it. Move on. Tell anybody who disagrees to take their opinions elsewhere. As it stands, there's no baseball this summer and there may not be football this fall. All this pandemic nonsense is about as important and vital as the BLM/Antifa protests. All of it needs to stop and the media is largely to blame for promoting false narratives.

The absurdities were on display at yesterday's Belmont Stakes, where no spectators were allowed into the sprawling Belmont Park facility and everybody on the grounds - except the horses - were required to wear masks. Even jockeys had to wear masks during the races. Please, somebody explain how a rider traveling at 25 to 40 miles per hour is going to catch the virus. It's as bad as the idiots who wear their masks while driving in their cars with the windows rolled up. Stupid. Banal. Idiotic. Is the world really populated by that many morons? If so, maybe the virus should relieve us of 30-40% of the population. More room for everybody. Happy days!

It's just all so annoying and stupid. This post was originally going to be about gold and silver, but the news of yet another HCQ trial being shut down changed those plans.

Go and check your local pharmacy or drug store or vitamin center. They're out of ZINC. Yeah, ZINC. Apparently, some people aren't buying the "we're all gonna die" narrative being shoved down the throats of the unsuspecting public. As the thrust of Money Daily posts over the past few days and weeks have been stressing, the media and government are doing you no good. You need to extricate yourself and your family from the clutches of creeping socialism and outright tyranny.

Let's get away from those who wish only to control everything and move forward to better lives. There is so much the word has to offer, having it ruined by a small minority of psychopathic monsters is a sin and an outrage.

Moving on to the markets and financial world from the week just past, stocks seem to have hit a stall space. The major indices, while all advancing for the week, have not recovered fully from the downdraft of Thursday, June 11. This week's gains were made mainly on Monday and Tuesday. Things slowed down in midweek and by Friday the bloom was off the rose once again.

Not to worry. There's a huge chance that the news will be cocked forward to produce a running start for the major averages and bourses around the world Monday morning. It's just how the Fed and the algorithm-pumping mechanisms operate these days. There's no market. There's no need to study charts or engage in fundamental analysis. Everything is fake, crooked, corrupted.

There is somewhat of a silver lining approaching for people who don't appreciate ever-rising stock prices when companies are showing dwindling profits or actually losing money, however. In a few weeks, publicly-traded companies will be releasing their second quarter financial reports and many of them figure to be absolute dumpster-diving material.

There's been a chart circulating recently showing the number of "zombie" corporations steadily increasing to a point at which nearly one in five US companies are insolvent. A zombie company is loosely defined as a business that has to borrow to survive and doesn’t make enough profit to cover the cost of its debt service. Simply put, these are companies being kept afloat by banks, or the Fed, or both. If it were possible to actually make sense of the books of large commercial banks like Wells Fargo (WFC), Bank of America (BAC) and Citibank (C) it's probable that the banks themselves would be zombies, underwater and headed to bankruptcy if not for the largesse afford them by the Federal Reserve.

The outcome from keeping zombie companies afloat is lower, slower growth in the overall economy. The Fed is actually exacerbating the effects of ultra-low interest rates and keeping insolvent companies alive with the most recent emergency measures that have the Federal Reserve buying debt from ETFs and corporate paper of individual (healthy and failing) companies. The Fed is also buying up municipal debt and may be positioning itself to fund states and cities that have deep budget deficits and buying individual stocks. Yes, the Fed may soon be buying stocks. And who said the markets weren't manipulated?

The bottom line is that we have a central bank producing counterfeit currency to buy assets offered by insolvent companies. Making matters worse, is that Treasury Secretary Steven Mnuchin and National Economic Council Director Larry Kudlow believe the companies that have received bailouts or funding from the Cares Act should not be disclosed to the public. So, on top of it all, the underhanded workings of the government, the Fed and big business should be kept secret. Nice. Not.

Treasuries basically spent the week flopping around like a landed fish. The yield spread for the entire curve, from 1-month to 30 years ended at 1.31% on Friday, June 12. As of this past Friday (June 19) the spread was 1.34%. Some steepening, but not notable. The 10-year note ended the week one basis point lower than the previous Friday, at 0.70%.

The July futures contract for WTI crude oil closed at a three-month high Friday, at $39.75 a barrel. Like the stock market, oil prices have engaged in a V-shaped rebound, the bottom coming in mid-April when oil hit $11.57 a barrel. While there has been some demand recovery, there's still a worldwide overhang of supply. The price of oil, with almost a direct pathway to gas prices, is another manufactured number. Most US shale producers can't survive below $50 a barrel, much less $40. Thanks to renewables like solar, wind, and hydro-electric, the oil business is dying a slow death. There's abundant resources available, but inroads have been made by so-called "green energy", and efficiencies in newer vehicles are crimping the use of oil and distillates. In an economy on a slowing glide path, there's no good reason for oil prices to rise other than to support the ailing old companies that rely on pumping and consumer use of the greasy stuff.

In the precious metals space, both gold and silver were dumped in the futures market on Monday and then rallied over the course of the week. Silver, despite a generally positive end to the week, closed at the lowest week-ending price ($17.52) since May 11. Since the March 19 bottoming at $12 an ounce, the trend has been higher, though it's been a slow grind despite high demand, shortages, huge premiums, and shipping delays.

Gold was flattened to $1710.45 on Monday, but rebounded to the high of the week at the close of business in New York Friday, at $1734.75. Like silver, gold has been rangebound since mid-April, suggesting a breakout on the horizon, though it could go either way.

Here are the latest free market prices for select items on eBay (prices include shipping, which is often free):

Item: Low / High / Average / Median
1 oz silver coin: 26.50 / 39.90 / 31.52 / 31.12
1 oz silver bar: 24.75 / 46.00 / 31.35 / 28.70
1 oz gold coin: 1,803.85 / 1,963.52 / 1,875.30 / 1,865.36
1 oz gold bar: 1,780.00 / 1,852.38 / 1,833.92 / 1,840.45

Finally, Fearless Rick nailed the trifecta in the Belmont Stakes, making a public pick prior to the race for everyone. Such generosity! What a guy!

At the close, Friday, June 19, 2020:
Dow: 25,871.46, -208.64 (-0.80%)
NASDAQ: 9,946.12, +3.07 (+0.03%)
S&P 500: 3,097.74, -17.60 (-0.56%)
NYSE: 11,980.12, -92.48 (-0.77%)

For the Week:
Dow: +265.92 (+1.04%)
NASDAQ: +357.31 (+3.73%)
S&P 500: +56.43 (+1.86%)
NYSE: +112.95 (+0.95%)

Friday, June 19, 2020

The Fifth Rail of Your Own Protest Movement and Freedom Is Solar Power

Thursday's post, How to Become Your Own Protest Movement, received very favorable responses and readership, as four ways to escape the tyranny of government were presented as Planting a Garden, Starting Your Own Business, Homeschooling, and Investing in Gold, Silver and Cash.

The cursory overview supplied plenty to expand upon, but with those four key components, overlooked was a key component to freedom, Becoming Your Own Energy Producer.

A brief overview of yesterday's fake, controlled, contrived, Fed-and-algo-induced markets will come at the end of this post, but let's take a look at the obvious energy source for independent thinkers, solar.

Solar power has been with us a long time. In 1979, President Jimmy Carter had 32 solar panels installed on the roof of the White House. They were used to supply hot water for the first family and White House cafeteria.

In 1986, President Reagan, not a fan of solar power, had them removed. But, in 2002, the Bush administration installed solar water heaters on the Cabana’s roof to heat the White House pool and more solar photovoltaic panels were also installed on the White House roof in 2014 and they remain in use today.

Over forty years have passed and solar technology has exceeded all expectations, to a point at which it is now on a par - or in some cases cheaper - than energy produced by traditional coal or natural gas power plants.

Single-family use of solar panels has been on the rise for years, and prices for photovoltaic panels are now approaching $1 per watt, which is pretty cheap, or for a 100-watt panel, about $100. A single 100-watt panel can produce nearly a kilowatt (1000 watts) of clean power per day, and many panels now work well even on cloudy days.

Solar panels will even produce a small amount of electricity on clear nights with a full or nearly full moon. There are even solar panels designed to be efficient at generating electricity from moonlight.

There are countless studies on solar and it's efficiency, all of them showing vast improvement from the early pioneering days of the 1970s.

Connecting to the power grid is also optional, though many advanced users are now powering their homes almost completely with solar and the amazing power of lithium-ion or lithium-polymer battery banks which can store the power produced by the panels and convert it from DC to AC.

Of course, as more people convert to at least partial solar power, governments and power companies have fought the trend with various tax bills, permitting, and penalties for people who generate their own power and, in 2016, congress extended the tax credit for solar installations, but the credit is reduced to 26% (from 30%) in 2020, and to 22% in 2021. After that, the credit will be 10%.

In addition to providing cheap, renewable power, solar panels and an operating inverter/battery system can increase the value of your home.

This topic cannot be sufficiently explained in one article. There are many varied uses and types of solar power available to consumers. Those will be covered in subsequent posts, but adding energy independence to your cache of freedom materials is a sure-fire way to thwart the unequal system of governance and economy the US and other countries have promoted.

Instead of everybody relying on one big power producer, solar offers a distributed system whereby individuals, families and businesses can produce their own power at very reasonable costs. The fluctuations of a voltage regulator attached to your own solar panels serves as a near-constant reminder that you are freeing yourself from the corrupt, slavish system.

As far as stocks are concerned, they were nearly flat on Thursday, but Friday being a quad-witching day, there's likely to be a pretty good lift via the algorithms and some Fed pumping.

Oil, which continues to stubbornly increase in price despite constant nibbling away of demand is currently testing $40 for WTI crude, a ridiculous number that should have everybody thinking electric cars powered by home solar panels. The price of oil will continue to rise as countries and industries dependent on pumping it from the ground refuse to face reality and cut production, limiting supply. The oil market is probably more crooked than stock markets and has little to do with actual supply (there's a huge glut) and demand (it continues to decline).

Oil should be $20 a barrel or less in the US, and gas at the pump should be approaching $1.25 a gallon. Instead, both prices continue to rise as oil companies and state and federal tax revenues are choking to death with lower prices. Expect major disturbances and disruptions in supply and price over the coming months and years as the world transitions away from oil.

Gold and silver continue rangebound as the manipulators suppress the price of precious metals over fears that they will replace their unbacked currencies.

Change must happen. Those who oppose change will be effected with severe consequences.

At the Close, Thursday, June 18, 2020:
Dow: 26,080.10, -39.50 (-0.15%)
NASDAQ: 9,943.05, +32.52 (+0.33%)
S&P 500: 3,115.34, +1.85 (+0.06%)
NYSE: 12,072.59, -13.91 (-0.12%)

Thursday, June 18, 2020

How to Become Your Own Protest Movement

Albert Einstein once described insanity as "...doing the same thing over and over and expecting different results."

That would be applicable to describe voting in America. Every two years Americans have the opportunity to replace every inefficient member of congress in the House of Representatives. Instead, the voters in 435 congressional districts largely re-elect the same people who have done nothing for them - in some cases - for decades.

For the Senate, the term is six years. Incumbents often win re-election and since there are no term limits, many make careers out of their government "service," becoming inordinately wealthy (as do many House members) in the process.

Americans elect a president every four years, choosing between the choices made largely by Democrat and Republican party insiders. They come and go. Most of them are not effective leaders. The current one, Donald J. Trump, may have been different, but it seems that he too has been co-opted by the deep state that controls all of the federal government, and thus, most of the day-to-day lives of Americans.

The same applies to the governors of the fifty states, legislatures of same, county executives, mayors of cities, all the way down to your local code enforcement officers, police, and school teachers.

What congress and the president and every other elected official in the states and counties does matters. What matters more is what they don't do, and that is representing their constituents. Instead, members of the House and Senate are bought and paid for by lobbyists, industry insiders, political donors, corporate interests, and special interests. They haven't done much good for the American people in decades. Polls routinely show approval of congress in the teens. The teens! Less than one in five people of voting age approve of what congress does, so, the question one must ask is, why do we go along with their legislation? Why do we agree to their schemes, plans, rules and regulations like the hated Affordable Care Act, or the president's trade policies, wage rules, income taxes, pat-downs at airports, and all the rest?

Why? Because most Americans are either too brainwashed, too busy, or too self-absorbed to do any critical thinking of their own. The national public school system has been breeding ignorance, incompetence, and lack of responsibility for decades. Standards have been lowered so that students pass to the next level without any learning and certainly without learning how to engage in critical thinking. Everybody just goes along to get along.

Thus, America has become a nation of zombies, or sheep, led along by the nose to do what the elite in government expect. It has to change, because, as Einstein posited years ago, it's insanity. And, it's destroying the country and the society.

A movement is needed to change the structure and thrust of never-ending government. It does not have to be an organized effort like Black Lives Matter, or some pink initiative, or even have a Twitter hashtag. There are specific things anybody can do, on their own, to thwart the unrelenting intrusion of government into our lives and become your own protest movement.

Here, in no particular order, are just a few:

1. Plant a garden. Growing your own food not only saves you money and is healthier for you, it is liberating in a very real, earthy sense. Getting closer to nature, seeing seeds or small sprouts grow into thriving plants producing rich, delicious, nutritious tomatoes, peppers, cucumbers, squash, corn, and anything else you might desire is a rewarding, inspiring experience. Nothing tastes better than food you raised yourself. Besides being almost free, most of it is better than what you can purchase (at ever higher prices) from your local grocery.

Use heirloom seeds or seedlings whenever possible. Hybrids should be avoided because they are mostly GMO, provide little in the way of nutrition and don't taste as good as fruits and vegetables from heirloom sources. Other things you can do are raise chickens (farm fresh eggs are much better for you) or rabbits, or, for the truly adventurous, cattle or hogs. At the very least, buy produce direct from local farmers or farm markets.

2. Start your own business. Just because the government wants you to be a wage slave and work according to a set schedule for hourly wages that are inordinately insufficient and overtaxed doesn't mean you have to. Working for oneself is a challenging endeavor, but it doesn't have to be large scale. Start small. If you have to, keep your regular job and do your own thing on your own time. Do something you like. Make things or create services that people can use. In the beginning, you can sell at a small profit just to get the ball rolling.

There's nothing as thrilling or personally uplifting as getting paid for something you made on your own. Opportunities for small businesses are everywhere. Go to any department or dollar store and see the cheap junk made in China that people are buying. You'll find many items you can make and sell yourself. If you have a specific skill, all the better. Even mowing your neighbor's lawns or doing house-cleaning puts you in the status of a business owner. And, when you get paid, the money is all yours. You can choose whether or to to pay taxes and remit your "contributions" to the broken social security and medical systems the government routinely extracts from your paycheck.

Besides the obvious benefit of making your own way on your own terms, working your own hours, there are tax benefits galore for home businesses. You can write off expenses and reduce your overall tax burden. If you operate at a loss, it reduces the amount of tax you pay. If a local official tells you you need a license, file a lawsuit against them for restraint of trade. The lessons you'll learn about the court system will be invaluable.

3. Homeschool. Get your kids out of the public idiot factories. Public schools used to be pretty good, back in the 50s and 60s, maybe, in some districts, even into the 70s. Those days are long gone. The public schools of today are nothing more than indoctrination centers, gulags for adolescents. Children are forced to play by the rules, trained not to question authority, and expected to accept doctrinaire faux science as truth, without questioning. Kids are ridiculed for being smart, for being different, and the best students are routinely slowed down to match the median or common denominator. The goal of public education is to create generations of mindless drones who are easily coerced to do anything demanded by those in positions of power. Reject it. Take your kids out of the public schools and educate them yourselves or with your neighbors. Not only will your kids learn more, faster, but your own education will be enhanced. The internet is overflowing with ideas, lesson plans, and source materials for homeschoolers.

There's no reason to keep your children in public schools, especially now that they're mostly closed and operating remotely. Nobody needs a degree or certificate to get along in this country or this world. What's needed is education and skills. You can teach them as well as any self-serving, overpaid public school teacher. And your kids can learn better, learn to ask probing questions, learn how to think critically.

4. Escape the Currency Cabal. The currency (Most people call our Federal Reserve Notes - those paper things with pictures of presidents on them - money, but it's not. It's currency.) we use in America is not even constitutionally-sanctioned. According to the US constitution, only gold and silver are money in America. Being that it's currently impractical to abandon the accepted Federal Reserve Notes currency completely, at least educate yourself on the workings of money and currency. A good place to start is at the website of Mike Maloney, goldsilver.com. There's a wealth of information there.

If you don't own any gold or silver, get some. You don't have to spend a fortune. For less than $50 you can hold in your hands real money in the form of silver coins or bars, or what's referred to as "junk silver", coins that were in circulation prior to 1965 that contain 90% silver. You can buy gold and/or silver (gold is much more expensive, and silver offers better investment potential) from dealers across the country or right in your town or city. The best marketplace online is at eBay. There, you will find everything from one ounce silver coins and bars to massive bars of gold. It's almost a guarantee that once you hold real gold or silver in your hands, you'll want more of it and less of the fake, fiat currency that is widely in use today and is bound to buy less tomorrow than it is today.

It also wouldn't be a bad idea to horde some cash for emergencies or "out of the system" purchases. Governments hate actual, physical cash. They can't track it or you. Cash, gold, silver and the secret weapon, barter, renders their desire for control over you useless.

These are probably the top four ways to escape the clutches of over-reaching government control. There are many more. Since the financial system is hopelessly broken and controlled by computer algorithms, big banks and the Federal Reserve, it's almost pointless to focus on those markets. Instead, Money Daily hopes to delve into more ways in which regular, honest Americans can become their own protest movement and really make changes for a better America and a better world.

At the Close, Wednesday, June 17, 2020:
Dow: 26,119.61, -170.37 (-0.65%)
NASDAQ: 9,910.53, +14.66 (+0.15%)
S&P 500: 3,113.49, -11.25 (-0.36%)
NYSE: 12,086.49, -74.99 (-0.62%)

Wednesday, June 17, 2020

Stocks Gain On Sensational Retail Report; NASDAQ Re-Approaching Record Highs

Stocks gained across the board on Tuesday, after May retail sales figures were up an eye-popping 17.7% as stores reopened across the country post-lockdowns from the coronavirus scare.

The number was more than double what many analysts had expected and prompted a wave of new buying in stocks of all varieties. The Dow gained more than 500 points. The S&P powered up by almost 60 points.

Despite the gaudy month-over-month numbers, gross receipts were 6.1% below a year earlier due mainly to uneven store re-openings, some states keeping stay-at-home restrictions in place longer than others.

With gains on both Monday and Tuesday, stocks have recovered most of the losses suffer last Thursday, June 11. The NASDAQ is about 175 points away from its all-time high, made on June 10. The intraday high was 10,086.89. At the close, the record was set at 10,020.35.

Of particular note is Friday's quad-witching day, which should introduce more volatility to the mix. It seems apparent, however, that bulls have regained the advantage and stocks appear set on a path upward, despite valuations in the stratosphere.

Bonds took a hit as yields on the long end of the treasury complex rose. The 30-year exploded nine basis points higher, from a yield of 1.45% on Monday to 1.54% Tuesday. The 10-year note was yielding 0.75%.

Precious metals were higher on the futures market but investors are becoming impatient with the constant niggling in the paper markets. Considering the level of disruption over the past four months, both gold and silver appear largely undervalued. Prices remain elevated on fair, open markets such as eBay. Dealers are still charging high premiums over spot and many are sold out of popular items.

It was recently reported that gold-backed exchange traded funds (ETFs) added 623 tonnes of the metal worth $34 billion to their stockpile from January to May, exceeding in five months every full-year increase on record. That's an impressive figure, as the amount of gold held in storage by ETFs reflects a growing demand for the precious metal.

While the ETFs are required to hold gold in storage at a percentage of their actual outstanding stock, shares of ETFs are not redeemable in gold and serve as a buffer against physical price increases. Touted as a safe way to invest in gold, they serve to track price increases on the paper (futures and spot) markets. The SPDR Gold Shares (GLD) ETF is up from 142 to 162 this year, roughly the same percentage in gold futures.

As pure derivatives, the gold and silver ETFs cause more confusion and actually dilute the pool of gold buyers. People investing in gold or silver ETFs are actually serving to keep a lid on prices by not engaging in active physical purchase and storage of their own gold.

The ETFs are yet another reason why gold and silver are orders of magnitude lower than where many believe they should be. Speculative in nature, they can be driven in any direction by well-timed buys, sells or shorts.

Oil prices have hit a rock at about $38 per barrel. That could change Wednesday when a monthly report from the Organization of the Petroleum Exporting Countries (OPEC) is released.

At the Close, Tuesday, June 16, 2020:
Dow: 26,289.98, +526.82 (+2.04%)
NASDAQ: 9,895.87, +169.84 (+1.75%)
S&P 500: 3,124.74, +58.15 (+1.90%)
NYSE: 12,161.47, +218.57 (+1.83%)

Tuesday, June 16, 2020

Stocks Stutter, Rise On Fake Fed News; Federal Debt Surges Past $26 Trillion; Argentina Default Triggers CDS

Wall Street got a bit of a shock Monday morning as stocks sold off first in the futures market and transitioned into a gap lower at the opening bell. What looked like a continuation of Thursday's selloff - interrupted by the dead cat bounce Friday - turned out to be a short-lived event.

With the Dow down below 25,000, losing more than 700 points just minutes into the session, buyers began to emerge, pushing stocks higher by 2:00 pm ET, the major indices had made up considerable ground. The NASDAQ was already positive when the Fed issued a press release, rehashing some old news to make it look new to the algos.

The press released looked like the Fed was launching another credit facility for corporations when in fact this facility (SMCCF) had been in the pipeline since March. They announced they'd begin buying individual corporate bonds, so that when companies go looking for a lender - for whatever purpose - they need look no further than the Federal Reserve, now not only the buyer and lender of last resort, but of first resort as well.

Per the Fed's press release:

The Federal Reserve Board on Monday announced updates to the Secondary Market Corporate Credit Facility (SMCCF), which will begin buying a broad and diversified portfolio of corporate bonds to support market liquidity and the availability of credit for large employers.

As detailed in a revised term sheet and updated FAQs, the SMCCF will purchase corporate bonds to create a corporate bond portfolio that is based on a broad, diversified market index of U.S. corporate bonds. This index is made up of all the bonds in the secondary market that have been issued by U.S. companies that satisfy the facility's minimum rating, maximum maturity, and other criteria. This indexing approach will complement the facility's current purchases of exchange-traded funds.

The Primary Market and Secondary Market Corporate Credit Facilities were established with the approval of the Treasury Secretary and with $75 billion in equity provided by the Treasury Department from the CARES Act.

That sent all indices into positive territory, and everything was again alright with the world as stocks sported gains to start the week.

Whether the "recovery" looks like a V or no V, the US national debt vaulted past $26 Trillion over the weekend without much fanfare (in fact, none). Some thought it would make it by the 4th of July. It came in 45 lengths ahead of predictions, like Secretariat winning the 1973 Belmont Stakes.

By the end of June the federal government will have added more than three trillion dollars ($3 trillion) to the national debt, an astonishing pace. At the current run rate of a trillion every two months, by the end of 2020, the debt would rise to $29 trillion, and to $35 trillion by December 2021. What's either frightening or amusing about the growth rate of the national debt is that it is more likely to accelerate than back off as the dollar heads for a fiscal cliff. Combined federal, state, and local government expenditures currently account for nearly half of America's GDP, and, since nearly half of that is borrowed, it means a good quarter of the GDP is an accounting fiction. Government produces exactly nothing of value. They spend. Total combined spending by government will exceed $10 trillion for the fiscal year ending on September 30.

If one were to take from the GDP calculation all government spending that was done on borrowed money, GDP wouldn't be over $20 trillion as the official version purports. Instead, it would be bumping up against $15 trillion. If one took out all the purchases made on credit cards or by mortgages, it would be even lower. The fact is that the GDP calculation is a convenient reference for Wall Street and government, but it does not really reflect the actual condition of the economy. What's happening is that as expenditures are growing, tax revenues are falling, and borrowing must continue to rise to fill the gap.

It's about as an unsustainable condition as one could imagine. With any luck (and even that's in doubt), the entire system might make it through to November, just in time to implode after the elections. That's hardly a certainty. The US and global economic systems are now so fragile that about a third of the entire global GDP is borrowed. Eventually, half of GDP will be borrowed, then all of it, at which time the system will have completely broken down. Companies which must borrow just to meet payroll cannot last. Governments which borrow to meet spending demands cannot last. Consumers with low to no income and piles of debt will default. It's beginning to happen and will accelerate in the third and fourth quarters of this year.

Everything is in play. Jobs, retirement funds, even Social Security, a ponzi scheme from the start that may not make it through the end of this decade.

Not to be outdone, Argentina extended the deadline for negotiations for a fourth time, to June 19, on $65 billion in sovereign debt.

They missed a $500 million interest payment in May, prompting the lenders to meet with Argentine officials to discuss a solution. It also triggered a credit default swap (CDS) event. Lenders of Argentina's debt include PIMCO, BlackRock, and Franklin Templeton. Because CDS are private contracts, it's not known whether any of them hold the swaps, which acts as insurance against default.

One thing is for certain. Somebody's out $1.5 billion and some other entities made a killing on the trade. Problem arise in credit default swaps are when the company insuring against the loss doesn't have the funds to cover the bet when it goes south. That's what happened with AIG in the GFC back in 2008. If Argentina doesn't solve this issue soon (it may already be too late) other swaps are sure to be triggered, more people will lose money and the derivative market may begin to look like a pock-marked battlefield.

Could Argentina be the canary in the coal mine that sets off a wave of sovereign defaults? Possibly, though such things tend to take years to develop and there are many attempts at remediation in the interim. Sovereign defaults are at the end of the list of things about which central banks need to worry. For now, they've got global stock markets that will melt down without their tacit support, growing civil unrest, and COVID-19 with which to contend.

Their plate seems rather full for the moment.

At the Close, Monday, June 15, 2020:
Dow: 25,763.16, +157.62 (+0.62%)
NASDAQ: 9,726.02, +137.21 (+1.43%)
S&P 500: 3,066.59, +25.28 (+0.83%)
NYSE: 11,942.91, +75.74 (+0.64%)

Sunday, June 14, 2020

Markets Skid, Ending Three-Week Win Streak As Rally Falters; Gold, Silver Continue Abusing Futures Pricing; Treasuries Rally

Stocks broke off a streak of three straight winning weeks courtesy of a trend-reversing, cascading selloff Thursday that erased all or most of June's gains.

The downdraft followed two straight days of minor losses and may have put a punctuation mark on the market's 11-week rally. The NASDAQ, which made a fresh all-time closing high on Monday (9,924.75) and crested over 10,000 on Wednesday, took a 517-point collapse on Wednesday. Like the Dow, which lost over 1800 points, the loss was the fourth-highest one-day point decline in market history. For both indices, the three higher point losses all occurred this past March.

Friday was snapback day, though the gains were paltry compared to the prior day's losses. Stocks gained back less than a third of what was surrendered on Thursday.

The late-week action prompted market observers to question the solidity of the recent rally, which, in V-shaped manner, took the markets straight off their March lows and out of bear market territory. Stocks had gained even as entire states were in lockdowns and the COVID-19 virus raged across America. Stocks continued to rise in the face of nationwide protests against police violence in the aftermath of the death of George Floyd at the hands of Minneapolis police. Many of the protests turned violent, as disruptive elements rioted and looted stores.

Fueled by emergency lending by the Fed, stocks seemed to be out of touch with mainstream economics, a condition not unusual for Wall Street types. Thursday's turnabout was broadly-based and unsparing of any sector though banking and tech stocks were leaders to the downside.

Coincidentally, protesting fell off as well, probably due to uprising fatigue. After two weeks of marching around in hot weather, the movement became somewhat pointless and many lost interest in reform toward better policing, though success was claimed in some areas, such as Minneapolis, where the city council decided to defund and disband the police, and New York, where measures were take by legislators to ratchet down the heavy-handed tactics of its force.

In Louisville, Kentucky, the city council voted to ban no-knock warrants. The resolution was passed in reaction to the death of Breonna Taylor, who was killed in a March no-knock raid at the wrong address.

One city in which protests have not tailed off is Atlanta, the scene of widespread rioting and looting early on, where chief of police, Erika Shields, has resigned on Sunday after officers fired upon and killed 27-year-old Rayshard Brooks Friday night.

And, in Seattle, the madness reached a climax on Monday as officials decided not to defend a police precinct, resulting in protesters, led by Black Lives Matter (BLM) taking over a six-block urban area and renaming it the Capitol Hill Autonomous Zone (CHAZ).

All of this is a backdrop to pent-up emotions and outrage that were magnified during the coronavirus lockdowns. Some people, took issue with Wall Street's rapid rally, citing it as an affront to societal mores and economic inequality. By the looks of where markets were heading on Thursday, the impact of the lockdowns and protests finally have reached lower Manhattan.

Treasuries staged a solid rally at the long end of the curve through Thursday, with the 10-year note yield falling from 0.91% to 0.66% and from 1.69% to 1.41% on the 30-year. On Friday, bond prices fell, with the 10-year closing out at 0.71%; the 30-year bond finished at 1.45%.

Precious metals rose early in the week, but were tamped down as the week drew to a close. Gold reached $1742.15 before ending the week still elevated at $1733.50. Spot silver was as high as $17.87 an ounce, closing at $17.62 on Friday. Spot and futures prices continue to trend toward irrelevance as premium prices for physical metal and shortages continue into a third month. Many dealers show popular items out of stock or with significant delivery delays, a condition that has persisted for retailers since the onset of the coronavirus.

eBay continues to light the way for purveyors and buyers alike, with calculable prices (at premiums over spot) and rapid, reliable deliveries. Here are the most recent prices on select items from ebay sellers (prices include shipping):

Item: Low / High / Average / Median
1 oz silver coin: 25.50 / 36.20 / 31.00 / 29.90
1 oz silver bar: 19.95 / 35.20 / 29.32 / 29.88
1 oz gold coin: 1,837.00 / 1,900.52 / 1,857.86 / 1,855.40
1 oz gold bar: 1,806.00 / 1,880.00 / 1,840.52 / 1,832.63

As far as stocks are concerned, after the FOMC meeting concluded Wednesday and the Fed committed to keep the federal funds rate at or near the zero-bound at least until the end of 2022, investors got a little jittery over their engineered V-shaped rally, the overall stability of the global economy, and valuations heading into the end of the second quarter and some supposedly horrifying earnings figures coming the second week of July.

The coming week may be epochal or apocalyptic as Friday offers a quad witching day as stock index futures, stock index options, stock options, and single stock futures expire simultaneously. There should be some volatility showing up at the convergence of day-trading, options players and real-time economics all roll together.

While Thursday's massive decline in stocks sent shock waves through the markets, Friday's returns were uninspired and had the look of a an exhausted rally on its final legs. Trading was sluggish at best and flatlined around 2:00 pm ET only to be saved by late-day short covering and the usual hijinks by backroom operators (NY Fed).

If stocks fail to close higher next week - as this week marked the end of a three-week uptrend - damage could become more or less permanent. While many placed hope in the Fed's power to purchase as many types and varieties of bonds that confidence was shattered on Thursday and should lead the way back to some fundamental rethinking of market dynamics.

Nothing goes up or down in a straight line, but this week should provide some clues as to the ultimate short-and-long term market direction.

At the Close, Friday, June 12, 2020:
Dow: 25,605.54, +477.37 (+1.90%)
NASDAQ: 9,588.81, +96.08 (+1.01%)
S&P 500: 3,041.31, +39.21 (+1.31%)
NYSE: 11,867.17, +208.00 (+1.78%)

For the Week:
Dow: -1505.44 (-5.55%)
NASDAQ: -225.27 (-2.30%)
S&P 500: -152.62 (-4.78%)
NYSE: -774.27 (-6.12%)

Friday, June 12, 2020

So Much for That V-Shaped Recovery as Dow Sheds 1861 Points, NASDAQ Drops 527

That rally - the one that started on right away on March 24 with a 2100-point gain, the day after the Dow bottomed out at 18,591.93 - is over. Smart traders made money. Anybody who was fretting about their retirement account and didn't exit, well, there's still time. The market giveth and taketh away. In this case, thanks to emergency measures by the Fed, the market gave almost everybody who didn't get out a gold opportunity to make for the hills.

If you're still in, you're either a day-trading maniac or just plain stuck on stupid. There are other asset classes. There's always cash. This second leg down is likely to be much more severe than the first because it will take months instead of days to wipe out trillions in invest dollars. Rest assured, at the end of the second leg, everybody's a loser.

Putting it all into perspective, after the major indices fell into bear market territory - defined as down more than 20% - the duration of the bear market was record for brevity: five weeks. Not that those five weeks in the doldrums will go down in the history books as a traditional bear market; they'll likely be remembered as the start of the Greatest Depression, spawn of the coronavirus, oil shock, and global plebeian protests because the stock market decline began again in earnest on Thursday, June 11.

The loss on the Dow was nearly seven percent, ranking it just outside the Top 20 in percentage terms, but number four in regards to points lost. It ranks behind three other losses, all from this year, which is about all one needs to know about stocks in the year 2020. The NASDAQ loss of 527.62 was also the fourth-highest, point-wise. Similarly, the three greatest point losses in NASDAQ history also occurred just this past March.

No, there will not be any v-shaped recovery as the market charts suggested. That was all a fantasy, spun out of whole cloth from the Federal Reserve. After all, how could stocks rally when unemployment was somewher in the neighborhood of 15%, people around the world were dying from a pandemic, whole nations and most states in the US were shut down for anywhere from a month to ten weeks, corporate earnings were in the toilet and second quarter results were still a month down the road?

The fairy tale rally never made any sense and never will except in regards to some very rich people making even more money without doing a damn thing. Rest assured, most of them were selling today or have either significantly trimmed their positions or added hedges, by which they'll enrich themselves even further on another downdraft.

There is likely to be a snapback on Friday. No telling which way it will eventually eventually turn, but recent market action offers a strong indication that a 1200-point swing to the upside on the Dow might be key to understanding the psychology of crazy. Anything less than that would leave the Dow just below its 200-day moving average.

Be mindful that despite the Dow's 9,000-point gain (yes, that's right, 9,000 points!) over the past 12 weeks, the current chart is one of a primary BULL market according to Dow Theory. The Industrials exceeded the December 2018 lows to the downside, and then erupted to the upside, cancelling out the bear reversal. Dow Transports confirmed the move, doing the same.

Nobody is betting on conformity with current market conditions. The Fed's emergency rescue facilities have only added to the overall distortion from QE, ZIRP, and other experiments in currency counterfeiting. Hanging one's hat on theories dating back to the early 20th century might engender more anguish than reward.

Some will call Thursday's pullback "healthy", but those are probably the perma-bulls in the room. Anybody who can say with a straight face that the US or global economy is healthy ought to be selling used cars rather than stocks.

WTI crude fell more than $3 on the day, from a range around $39 to $36. Gold and silver were unceremoniously smashed lower on futures markets, but, as has been a repeating theme, will likely bounce back quickly as premiums and shortages persist.

The long end of the treasury complex continued to rally, dropping yield in the 10-year note and 30-year bond from 0.91% and 1.68% last Friday to 0.66% and 1.41%, respectively.

Stay liquid.

At the Close, Thursday, June 11, 2020:
Dow: 25,128.17, -1,861.82 (-6.90%)
NASDAQ: 9,492.73, -527.62 (-5.27%)
S&P 500: 3,002.10, -188.04 (-5.89%)
NYSE: 11,659.17, -790.05 (-6.35%)

Thursday, June 11, 2020

Fed To Keep Rates At ZERO Through 2022; Are Gold and Silver Investors Batty?; Implications of Global Madness

If Forex is in your wheelhouse, you've no doubt noticed the recent decline in the US dollar against other major currencies. The Dollar Index has been pretty shaky as of late, but the current trend in the aftermath of the worst of the coronavirus pandemic is lower, with no bottom in sight.

After sinking to 94.89 on the 3rd of March, the dollar leapt back to an interim high of 102.82 on March 20th. Wednesday's quote was 95.96, a decline of nearly seven precent, most of that happening within the last three weeks.

That's not surprising, given that American cities have been beset upon by hordes of protesters, complete with rioters, looters, cop killings, tear gassings, rubber bullet maimings, autonomous zones (Seattle's Capitol Hill is one, recently claimed and occupied by protesters as police vacated the 3rd Precinct) and general lawlessness, making dollar holdings somewhat of a risky bet in the near term and, as dollar dominance recedes, maybe for much longer.

At the conclusion of the Fed's Tuesday and Wednesday's FOMC policy meeting, Chairman Jerome Powell made a definitive statement on interest rates, saying that the overnight federal funds rate would remain at the zero-bound at least until 2022. That kind of central bank sentiment doesn't exactly inspire confidence in the world's reserve currency. It indicates nothing less than a failure of financial system underpinning, a condition that first appeared in 2007, was not adequately addressed and has now become a systemic crisis without hope of positive resolution.

While the Fed still has the monetary muscle to backstop financial assets it does so with counterfeit, a fictional fiat currency without backing that eventually will be worthless. History has shown this to always be the case. Fiat currencies die and a new financial system is erected. Normally, the new system is backed by gold or silver, or a combination of the two. This time is no different than any other. The Federal Reserve and other central banks can continue their charade for only so long. Eventually, income disparity results in runaway inflation and widespread poverty, prompting clamor from the masses, which we are witnessing on a global scale today as an epochal societal revolution.

Such incalculable convulsions encourage escape from the clutches of unfair finances promulgated by central banks. People seek refuge from currencies that are losing value rapidly. Housing, health care, and eventually, food become unaffordable to the vast swath of middle and lower classes. Alternatives are sought. Gold and silver are the most readily available to the public. Silver becomes particularly of interest due to its lower price points. The availability of metallic money becomes a point of contention as people with limited means crowd into the space, which is exactly what's happened since the onset of the coronavirus.

A 10 troy ounce gold bar at Apmex.com is offered for $18,255.90. At Scottsdale Mint, the popular one ounce silver bar dubbed "The One" starts at $25.05 and goes down in price to $23.42 depending on quantity and method of payment. Of course, given that one would be willing to pay a price that carries a premium of seven dollars over spot, one would be out of luck, as "The One" is currently out of stock.

These are just a few examples of what happens when a confluence of events (pandemic, endless fiat currency creation, summer-long protests, high unemployment, rampant inflation) strikes the minds of people with money and assets. They either go with the flow and stay in stocks or look to gold and/or silver for some safety. With bonds yielding little to nothing - sometimes less than that via negative rates - and default risk rising (hello, Argentina!), precious metals offer a reasonable alternative.

Futures and spot prices for the precious metals might as well be cast upon stones for what they fail to deliver in terms of price discovery. Being holdovers from the failing fiat regime, they are being left behind as physical holdings dominate the marketplace. Prices are exploding on eBay and at dealers, as shown in the examples above. Money Daily tracks prices on eBay for one ounce gold and silver coins and bars weekly in it's Weekend Wrap every Sunday.

Other ways to deploy currency are in art, collectibles (comic book prices are through the roof), vintage automobiles, commodity futures, real estate, ad other asset classes, but none of those share the characteristics of precious metals as real money, except possibly cryptocurrencies like Bitcoin.

Wall Street, the Federal Reserve, and the federal government are hanging onto their prized positions of monetary and political authority by their teeth. It's only a matter of time before all of it fails. The nationwide protests are proof that the federal government is losing control of the country in manifest ways. Unrelenting gains in precious metal prices - and the attendant, repeated attempts to contain those gains in the futures markets - is evidence of the Fed's desperation, just as Wall Street's recent snapback rally is a mirage based on easily available fiat currency and nothing else.

It's all tumbling down and there's nothing that can stop it. The demise of the dollar has been an ongoing orgy of dislocation for decades. Trillions of dollars added to the Fed's balance sheet, euros at the ECB, yen at the Bank of Japan, yuan at at PBOC are mere stop-gap measures which do not address the underlying solvency issues. If the stock market crash in March wasn't enough to scare people out of stocks and fiat, the coming wave will surely devastate those who failed to heed the warning. Via the Fed's emergency measures, Wall Street has given investors a golden opportunity to diversify out of stocks. Those who fail to take the opportunity will suffer a heavy economic blow.

At the Close, Wednesday, June 10, 2020:
Dow: 26,989.99, -282.31 (-1.04%)
NASDAQ: 10,020.35, +66.59 (+0.67%)
S&P 500: 3,190.14, -17.04 (-0.53%)
NYSE: 12,449.22, -170.30 (-1.35%)