As quaint notions as voting and elections may be, the idea that ordinary people are electing leaders may be as far from reality as a distant asteroid is from crashing into planet Earth. Truthfully, Americans are voting for people who will manage the government, another anachronistic relic of the past that has, in many ways, outlived its purpose.
It's been many decades since government was actually a function "of the people, by the people, for the people" and while it is true that more people will likely vote in this election than in any other in the nation's history, the results will neither lead to an enlightenment nor to a radical shift of long-standing values.
Partisanship aside, President Trump, who won the 2016 election as an outsider, is now the status quo candidate, whereas Joe Biden - who has spent 47 years in public office - is appealing as the agent of change. The transmogrification is unique to this episode of presidential politics.
While there is a case to be made that President Trump is a once in a generation leader, the same cannot be said about other high muckety-mucks like House Speaker, Nancy Pelosi, Senate leader, Mitch McConnell, and other high profile contestants for public office. These are not leaders in the traditional sense. They are negotiators, players, figureheads of a government transfixed upon retaining power. Both sides of the aisle share equally in the quest to maintain their status over the general population.
What this concentration of power (and money) by mostly septuagenarians and octogenarians is doing to the United States is dragging it all slowly into an abyss of greed, corruption, and reliance upon broken or outdated systems by which the country will gradually fall from its mantle of world power.
This is manifested by the concentration of wealth by so-called "one percenters," the multimillionaires and billionaires spawned out of Wall Street's public corporations, by the inability of congress to pass legislation that improves the lives of its citizens such as infrastructure spending, a health care bill that is affordable and detached from deep-pocketed vested interests, the recent faux negotiations over a second major stimulus bill, and, generally, a congress that has spent the better part of the past four years trying to undo the results of the 2016 presidential election, which put into the White House an outsider, Donald Trump, who vowed to "drain the swamp."
Rather than appear to be an endorsement of President Trump, this article aims to reveal some of the issues facing the United States as elections loom and the specter of the coronavirus still overhangs via the media. For all his faults (and there are many, just as everyone is far from perfect), President Trump has tried to lead, but the choices he was presented with, in terms of choosing qualified people to man his administration, came mostly from the same swamp he pledged to drain. So entrenched is government, politics, academia, and big business at the top levels, it was nearly impossible for the president to find quality and qualified individuals who weren't already compromised by money, fealty, or long-standing connections.
The rot at or near the top of the political system, the business structures, the medical, educational, and financial systems is deeply entrenched. Individuals and institutions strain to retain their cherished positions of power, making real change impossible. Electing Joe Biden will likely make matters worse; re-electing president Trump is at least an attempt to step away from the institutionalized behaviors, crony capitalism, and corruption that has plagued the country for at least the past twenty years and to some degree, much, much longer.
By clinging to antiquated functions like the borrow and spend policies that have produced massive, unpayable debt of more than $27 trillion such as the Federal Reserve and its unconstitutional currency, political favors arranged by lobbyists for the good of themselves and their business interests, congressional legislation that is so dense to be not understandable, and reliance upon measurements such as GDP, the stock market, and corporate profits to gauge the health of the economy, the United States is being left behind on innovation that is transforming entire industries and nations open to adoption of new ideas.
As the US dollar becomes less relevant around the world, the United States faces a crisis at the very root of its existence. While the dollar may retain value against other currencies like the euro and the yen, it is losing ground to China's renminbi, to crypto-currencies like Bitcoin, to gold and silver. Debt-based currencies, as are most in the developed world, eventually fail. The euro, yen, pound sterling, and the dollar are vestiges of the past, doomed to lose purchasing power as the giant debt balloon central banks have created eventually overwhelms everything and then explodes. Not only the United States, but the entirety of the developed world, using fiat currencies, are at a tipping point.
Recently, the IMF, itself a vestigial construct of American hegemony and supremacy of the dollar, called for a "new Bretton Woods," - referencing the 1944 agreement that established the U.S. dollar as the world reserve currency in the aftermath of World War II - as the debt-based economies continue to crumble. The IMF and World Bank are pushing on a string, hoping to keep the failing fiat currency systems intact for a while longer, all the while piling up odious debt upon odious debt as the real solutions - gold-backed or digital currency (Bitcoin) stare them in the face and continue at an accelerating pace to be adopted by the general public and increasingly, the business community.
Governments around the world have long ago acceded their power to the central banks. Without their currency creation machines they would lose all power and ability to govern. This is being manifested daily by millions sinking into poverty, growing protests, demands for fairness for the middle and lower classes, and the ascendancy of alternative currencies and the growth of countries like China, Indonesia, Russia, and other developing nations that are developing and adapting to new paradigms in finance, industry, and culture, leaving the mostly Euro-centric nations in their dust.
One glaring example of how the staid and stodgy functions of central banks and their shareholders - the multi-national untouchable, too-big-to-fail banks and financial institutions - extend their reach and hold onto their failing, unfair systems is presented below, outlining how the banks and government are able to change the rules and move the goalposts to their own ends, none of which will eventually aid in transitioning to a more sustainable and prosperous society.
New Revelations About Banks' Bottom Lines and Credit Loss Reserves
The following is from Discover Financial Services' (DFS) third quarter earnings report (emphasis Money Daily):
Adoption of Accounting Standard for Measurement of Credit Losses
The company’s results for the third quarter of 2020 reflect the January 1, 2020 adoption of Accounting Standards Update No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments for the Company (the "ASU"). For purposes of calculating the company’s regulatory capital, the company has elected to defer recognition of the estimated impact of the ASU on regulatory capital for two years in accordance with the interim final rule adopted by federal bank regulatory agencies on March 27, 2020. Pursuant to the interim final rule, the estimated impact of the ASU on regulatory capital will be phased in over a three year period beginning in 2022.
In other words, Discover isn't going to be reporting adequate credit loss reserves until, at the earliest, the second quarter of 2022. This is a complete scam of the financial system, similar to the March 2009 ruling by the FASB that allowed banks to mark assets to whatever benchmarks they desired, eliminating the mark-to-market standard that had kept banks somewhat sane for decades.
The accounting change in 2009 is roughly comparable to valuing your 2002 Honda Civic at $24,000 on your balance sheet, rather than close to the Kelly Blue Book value of $1200. What the one crucial change did for banks was allow them to shore up their balance sheets by pricing assets that were basically toxic soup at par or close to it, even if they were non-performing loans.
Now, the Fed has allowed the banks and financial institutions to take the next step forward into the world of bizarre finance, by allowing them to underreport credit loan loss reserves. Prior to March 27, 2020 - again, coincident with the market bottom - banks and financial firms which deal with credit cards, personal loans, mortgages and all manner of consumer loans were supposed to make reasonable assumptions about future credit losses (i.e., delinquencies and defaults) and report them as such. Now, they don't have to make any assumptions, just defer the expected losses to some later date.
By not reporting expected losses as they are building (these companies know this; they monitor delinquencies with an eagle's eye), they're allowed to boost share price by giving the impression that they are profitable and growing, when, in fact, the opposite is occurring. Most of these firms, like Bank of America, JP Morgan Chase, Citigroup, Wells Fargo, Capital One, and Discover, took fairly large provision for credit losses in the first and second quarters. Discover, for instance, took a $2.046 billion provision in the second quarter, but only provisioned $750 million in the third, all the while allowing personal loan and credit card users the luxury of deferring their payments for as many as six months in some cases, just as people were beginning to feel the effects of the wearing off of the first stimulus without a second round approved by congress.
Discover may have sealed its own fate by believing congress had its back and would pass another bailout or relief bill, as the company cancelled its deferral program, leaving customers with the untidy prospect of making a payment and strapping their cash or falling into delinquency. With millions out of work and hundreds of thousands of small businesses closed for good, the chances are many chose the latter course of action, leaving Discover with unpaid credit cards, mortgages, car loans, personal loans, and student loans, and a massive loss that they didn't have to report.
In their third quarter report, Discover's net income of $771 million would have been a loss had they reported true credit loss provisions. They plugged in the $750 million number for credit losses to make it just better than year ago results of a net profit of $770 million. How convenient. The other financial firms did exactly the same thing, making the third quarter results look surprisingly robust.
The media roundly criticized President Trump for downplaying the threat of COVID-19, but are completely silent when it comes to huge financial firms fudging the numbers to meet or exceed analyst expectations, which is a nice way of saying "committing widespread fraud at the behest of the Federal Reserve."
There's no proof that the banks under-reported their credit loss provisions, only the evidence that every one of them provisioned much less in the third quarter than in the second quarter of 2020, as if the economy had rebounded and everybody was paying their bills. Anybody paying attention would have known that the "V-shaped recovery" narrative being pushed by Wall Street and the White House was a complete fraud, about as good as the "Russia, Russia, Russia" hoax deployed by the Democrats on President Trump over the past four years. Good for goose, good for gander.
An October 24 article by MarketWatch, titled Big U.S. banks’ day of reckoning is delayed, illustrates the extent to which the ten biggest banks in America managed to use accounting trickery to beat analyst estimates, in some cases, blowing them completely away. For instance, Goldman Sachs (GS) was supposed to return earnings per share of $5.28. They reported $9.68 for the quarter. Capital One (COF) buried their estimated eps of $2.08 with a stunning $5.06 per share performance. For Capital One, whose revenue is derived overwhelmingly from credit card income, this was a coup, as their third quarter oan loss provision was a mere $331 million, when they were estimated to provision $2.16 billion.
Capital One's amazing quarter can be attributed to only one thing: excessively creative accounting, which, although it's extremely sleazy and misleading, is all perfectly legal. This puts the onus on stock pickers and self-driven investors who either don't bother or can't properly read or interpret quarterly reports. They see blowout numbers and dive right in, like unseasoned RobinHood traders. Down the road, Capital One's deceit and eventual collapse will rival that of Countrywide in the sub-prime era. Sometime in the next two years, when people ask Capital One "what's in your wallet?" the answer will be "Nothing. Nothing but bad loans."
And the Fed will swoop in to buy them all, at par, to save yet another insolvent institution.
As the week progressed and the electioneering became more bizarre by the day through revelations of possible corruption and criminality on the part of Democrat candidate Joe Biden and his family, stocks continued to sink. Making matters even more alarming to the pubic and Wall Street was the mainstream media blackout of the Hunter Biden laptop containing damning evidence. Outright censorship of the New York Post's stories - where the news was originally broken - by Twitter and feigned ignorance by the television networks, New York Times and the Washington Post served only to increase the public's distrust of the media and expose its obvious political bias.
Stocks had their worst week since March, but it could have been much worse. Friday's late-day rally saved the Dow Industrials and the S&P 500 from falling below their 200-day moving averages. As it was, all the major exchanges fell 5 1/2 to 6 1/2 percent for the week and on the cusp of a correction, which, in all likelihood will be achieved on Monday or Tuesday as Americans continue to the polls.
Friday's late afternoon rally lifted the Dow more than 360 points, the S&P by nearly 38 points, the NASDAQ 102 points, and the NYSE Composite 132 points. All together, the lift of one percent or more left the averages just above correction levels.
At Friday's close, the Dow was down 10.3% from its February high; the NASDAQ 9.5% lower from its September 2nd record close, the S&P 500 down 8.7% from its record close of September 2nd, the NYSE down 12.1% from its February all-time high. Thus, the push at the end of the day saved the bacon of the most prominent indices. While the Dow and NYSE Composite are technically in correction, the supine financial media uses the most recent highs of September 2nd instead of the pre-COVID February highs, thus avoiding use of the nasty term "correction."
On an intraday basis, all of the averages are firmly at or beyond correction levels. It's just more or the conditioning and institutionlized fraud that keeps the public sadly misinformed.
Treasury yields saw some movement during the week but ended higher by Friday as the massive movement of money out of fixed income that began in earnest at the start of October offered no indication of waning, with both the 10-year note and 30-year bond finishing at high points, 0.88% and 1.65%, respectively.
Oil was taken to the woodshed and severely beaten, closing at $35.79 per barrel, down from $39.85 the prior week, the price decline reflective of increasing COVID-related quarantines and lockdowns in parts of Europe, notably France, and slack demand overall. This was the weakest price for WTI crude since June 1, a five-month low.
Gold ended another down week at $1881.00, a decline of $11.90, from $1902.90 the week prior and the second time since reaching its peak (2058.90, August 6) three months ago. Silver was also punished for being real money, ending the week at $23.63, also well off it's August 10 high of $29.23. While the paper prices for the metals continues to be put under pressure by the bullion banks and other nefarious sources, premiums remain elevated, as shown below.
While stocks and bonds fell, oil was crushed, and precious metals took a hit, the big winner of the week was Bitcoin, which trades continuously, not taking the weekend off, like other asset classes. From Sunday of last week (10/25) to its present price, the world's most recognizable cryptocurrency added 700 points, to 13,748.393. The week was an extension of the rally which began September 23, when the value was 10,225.86. That's a gain of 25.6% while the established financial order was largely falling apart.
Here are the weekly prices for common gold and silver items on eBay (numismatics excluded, shipping, often free, included):
Item: Low / High / Average / Median
1 oz silver coin: 29.00 / 46.46 / 38.05 / 38.40
1 oz silver bar: 28.00 / 56.20 / 37.49 / 35.25
1 oz gold coin: 1,975.00 / 2,037.31 / 2,006.59 / 2,010.00
1 oz gold bar: 1,965.00 / 2,001.79 / 1,982.16 / 1,981.34
Finally, here are Max Keiser and Stacy Herbert explaining how Jamie Dimon was wrong and they were right about Bitcoin. The second part of the video is an interview with entrepreneur, Dan Collins, who recently returned to the United States after 20 years in China, who envisions that country as the dominant new world power.
At the Close, Friday, October 30, 2020:
Dow: 26,501.60, -157.51 (-0.59%)
NASDAQ: 10,911.59, -274.00 (-2.45%)
S&P 500: 3,269.96, -40.15 (-1.21%)
NYSE: 12,429.28, -73.01 (-0.58%)
For the Week:
Dow: -1833.97 (-6.47%)
NASDAQ: -636.69 (-5.51%)
S&P 500: -195.43 (-5.64%)
NYSE: -770.58 (-5.84%)
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