That's it. There have been breakthroughs, "imminent agreement", setbacks, and false starts since congress and the administration began working on a second round of CV-19 in July, or June, or May, or whatever date one wishes to throw out there.
It's not happening. Congress spent the week preening and posturing, as they normally do, right up until the deadline for passing a continuing resolution to keep the farce going came, Friday night, when the House and Senate agreed to fund the government through Sunday. President Trump signed the measure on Saturday.
Well, it's Sunday morning, so, we will all soon find out whether the assemblage of 535 self-absorbed narcissists can make themselves look good by passing some kind of "relief" for American people.
Whatever comes out of congress today, or even Monday or sometime in the future (really, at this point, who knows?) will be a watered-down version of the first big stimulus, the CARES Act, the $3 trillion package approved by congress last Spring. The current proposals are for a bill that would be less than a third of that in size, about $900 billion. If and when such a bill is passed, Americans earning less than $75,000 would receive $600 to $700 each. Couples earning under $150,000 would ostensibly be eligible for one-time checks of $1200-1400, essentially half of the first go-round, so, yes, it's OK to call your congressperson Scrooge, because he/she/it is. They are collectively screwing everybody. Merry Christmas.
About the best thing that can be said about congress in this winter of discontent, is that they've failed miserably. All they've done for the past year is watched the economy and the country sink into a desperate state of affairs, promising to help and supplying false hope. There isn't one person in ten that believes the country would be better of without them at this point.
Dismissing the obvious self-hate that Americans may have for electing this current selection of cretins, the world kept turning and economics didn't take the week off.
Stocks had themselves another week of gains, following the prior week's losses, with all of the indices reporting new record highs, though, with the exception of the NASDAQ, which gained more than three percent for the week, gains were modest. Techs led. Financials were mostly flat, if anybody cares.
Oil prices continued to rise as if there was an imminent economic miracle about to happen, which might be the common thinking in the futures market, now that vaccines for the dreadful non-virus are slowing making their ways to the mainstream of both media and blood vessels. The price of a barrel of WTI crude oil rose every day since closing at $46.57 last Friday (12/11), closing out the week at a ten-month high of $49.08.
That the meteoric rise in the price of oil coincides with the coming Christmas and New Year holidays is no accident. Oil companies have been doing this "expected demand" ritual for years. Oil and gas prices are always highest when the most people are driving, so, even though Americans are being told to stay home, stay safe, don't spread the virus during the holidays, Big Oil can't help themselves from fleecing the public anyhow.
The odd thing about gas prices, is that they go up right away when oil prices rise, even though the gas in their underground tanks was purchases at a lower price, but, they don't come down right away when oil goes down, because they claim they are then selling gas that they purchased at a higher price. It's a classic heads-I-win-tails-you-lose con that's been victimizing the public for decades. Has congress ever done anything about obvious price-fixing? Please stop laughing.
Bond yield were on the rise again last week, with the 10-year and 30-year yields gaining five and seven basis points, to 0.95% and 1.70%, respectively. Shorted-dated maturities remained tethered to the zero-bound, with anything having a duration of one-year or less flat-lining at .08 to .09.
For it's part in the ongoing failure of everything "federal," the Federal Reserve held the last of its FOMC meetings for the year, wrapping up on Wednesday by reiterating its commitment to inflation above two percent and QE infinity in the form of $40 billion a month in mortgage-backed securities and $80 billion a month in treasury purchases.
While it's arguable that the assembled economists at the Fed know exactly what they're doing, there's compelling evidence to the contrary, or at least threat they know what they're doing is wrong, but that doesn't seem to be enough to stop them from doing it. The American experiment was never supposed ot end in collapse, but the Fed seems intent on engineering a giant crack up boom and bust, just as Ludwig von Mises and the rest of the non-Keynesian, Austrian economists postulated. The American experiment may be going down in flames, but the Fed's fiat experiment, closing in on 50 years from the August 1971 closing of the gold window by then-President Richard M. Nixon, is cratering into a black hole, never to return. The dollar has been losing value so fast over the last 12 months, international companies are having a difficult time squaring their books.
Though it's true that all fiat currencies are collapsing at the same time, the dollar has clearly taken the lead, losing significant ground to the euro, yen, and pound. So desperate are the managers of the currency that Treasury labeled Switzerland and Vietnam as currency manipulators, adding that India, Thailand, and Taiwan may also be attempting to devalue their currencies against the dollar. Such risible claims will do nothing to slow the descent of the world's reserve currency - and eventually all other fiat currencies - to its intrinsic value of zero, as short-term bills are already indicating.
Which brings us finally to real money. As more and more individuals and corporates hasten dollar flight, nobody dared miss the incredible rise of Bitcoin over the past week, as it careened through its old high, past $20,000, to as high as $23,711.43, the more than $4,000 gain all happening in the blink of an eye, in less than two days, from early Wednesday morning until midday Thursday. Hedge funds and other investment houses have recently begun singing the praises of crypto=currencies, many of them piling into such as investments in a post-dollar environment.
While Bitcoin was making all the headlines, gold and silver crept higher in one of the best weeks for precious metals in recent days. Gold gained $43 per ounce over the past seven days ending Friday, from $1843.60 to $1886.80 at the close in New York on 12/18. Silver rocketed from $24.09 an ounce to $26.00 over the same expanse. Gains in the metals were not without notice on public exchanges, as premiums remain elevated, as they have been for the better part of a year.
Below are the most recent prices for commonly-traded gold and silver items on eBay (numismatics excluded, shipping - often free, included):
Item: Low / High / Average / Median
1 oz silver coin: 28.00 / 39.99 / 35.19 / 35.58
1 oz silver bar: 29.85 / 37.02 / 34.00 / 34.45
1 oz gold coin: 1,900.00 / 2,075.33 / 2,010.88 / 2,025.49
1 oz gold bar: 1,899.00 / 2,289.95 / 2,001.29 / 1,982.69
Dollar flight is certainly not lost on gold and silver investors. Gains in the precious metals space prompted prices for gold coins and bars to price above $2,000 on average for the first time on a month. Silver average and median prices rose less, signaling that shortages experienced earlier in the year have been resolved. Most online dealers are currently reported most commonly-purchased items in stock, which was not the case in Spring and Summer 2020.
With spot prices for both gold and silver nestled just below their late summer highs the belief that a new surge of buying may be on the horizon has been making the rounds. Given the gains in cryptos and the length of the consolidation phase for the metals, it would make sense for gold and silver to surge to new highs in coming weeks and months, though it is well-known that January and February routinely mark lows for the year in both metals, so another pullback could occur before any meaningful advance takes place.
Finally, this being the final WEEKEND WRAP before Christmas, it's important to be reminded to stand ready for the future, which is always uncertain. In a month's time, Americans may finally see resolution to the ongoing presidential contest, but also, quarterly and 2020 annual reports will be flowing to Wall Street investors. As murky as it may be, one should have a view of the immediate future as well as the longer term. Massive changes are happening in economies and societies around the world, changes that are likely to have profound impact upon how people behave overall, but, importantly, how financial transactions - everything from buying groceries to financing roads and bridges - are conducted.
A new paradigm is emerging and it increasingly appears to be one that will not retain many of the rudimentary characteristics of the old one.
Happy Holidays!
At the Close, Friday, December 18, 2020:e
Dow: 30,179.05, -124.32 (-0.41%)
NASDAQ: 12,755.64, -9.11 (-0.07%)
S&P 500: 3,709.41, -13.07 (-0.35%)
NYSE: 14,467.82, -48.91 (-0.34%)
For the Week:
Dow: +132.68 (+0.44%)
NASDAQ: +377.77 (+3.05%)
S&P 500: +45.95 (+1.25%)
NYSE: +112.53 (+0.78%)
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