If you don't agree with this, you can just stop reading now. There's no intention to make this blog a sounding board for the status quo, the "conspiracy theory" finger pointers or the President Elect Biden crowd. That's all going down within weeks. In case January 20 comes along and somehow, the most criminal lying traitor to the constitution ever to run for president is inaugurated, everything changes. Nothing goes back to normal. Democracy is dead. Those and other, more serious, severe realities will unfold if the stolen election is allowed to stand.
For purposes of this blog and posts over the coming days and weeks, the next 12 months of living on planet Earth, especially in the USA, Canada and Europe, must be based upon the re-election of Donald J. Trump as the reality. Otherwise, every financial and economic action of consequence will be distorted, but, it is on good information that many Senators and members of the House of Representatives will challenge the electoral slates presented to them by Vice-President Mike Pence on January 6, and a positive resolution for the patriots that have stood up and will not stand down is expected.
With that said, a hop-scotch through the end-of-year market activity, followed by some food for thought going forward can commence.
As the year 2020 came to a close, just about everybody was doing the social distancing and mask-wearing that is either mandated or become social convention. That will wear out in 2021. People have had enough, but, with widespread cancellation of New Year celebrations, it appears that the media/government/medicine deep state cabal still has a pretty good grip on the general population through COVID-19 propaganda.
Stocks just kind of meandered to new highs without much fanfare or catalyst. Indeed, it was almost as though stocks were just supposed to go higher all by themselves, whether the companies behind the securities were faring well or ill. It didn't matter the last few weeks of 2020 and obviously wasn't much of a concern from mid-March forward as the general economy cratered under the weight of lockdowns and civil unrest, stay-at-home orders, and fake science.
For whatever its worth, here's how the various major indices and other assets did in 2020:
Index: Close 12/31/19 / Close 12/31/20 / Gain (Loss) / % Gain (Loss)
Dow: 28,538.44 / 30,606.48 / 2,068.04 / +7.25%
NASDAQ: 8,972.60 / 12,888.28 / 3,915.68 / +43.64%
S&P 500: 3,230.78 / 3,756.07 / 525.29 / +16.26%
NYSE: 13,913.03 / 14,524.80 / 611.77 / +4.40%
Commodities:
Item: Close 12/31/19 / Close 12/31/20 / Gain (Loss) / % Gain (Loss)
Gold: 1517.25 / 1895.10 / 377.85 / +24.90%
Silver: 18.01 / 26.46 / 8.45 / +46.92%
Copper: 6,076 / 7,749 / 1,673 / +27.53%
Nickel: 13,736 / 16,540 / 2,804 / +20.41%
Zinc: 2,283 / 2,729 / 446 / +19.54%
WTI Crude Oil: 63.05 / 48.42 / (14.63) / (23.21%)
Corn: 3.88 / 4.86 / 0.98 / +25.26%
Soybeans: 9.31 / 13.14 / 3.83 / +41.14%
Wheat: 188.50 / 213.50 / 15 / +13.26%
Crypto:
Item: Close 12/31/19 / Close 12/31/20 / Gain (Loss) / % Gain (Loss)
Bitcoin: 7,360.97 / 29,004.26 / 21,643.29 / 394.03%
Etherium: 135.39 / 737.85 / 602.46 / 544.98%
Treasuries:
Item: Close 12/31/19 / Close 12/31/20 / Gain (Loss) / % Gain (Loss)
3-month yield: 1.55 / 0.09 / (1.46) / (94.20%)
10-year yield: 1.92 / 0.93 / (1.01) / (51.56%)
30-year yield 2.39 / 1.65 / (0.74) / (30.96%)
Finally, here are recent prices for commonly-purchased gold and silver items on eBay (numismatics excluded, shipping - often free - included):
Item: Low / High / Average / Median
1 oz silver coin: 31.13 / 42.50 / 35.72 / 34.98
1 oz silver bar: 29.99 / 40.00 / 35.32 / 36.00
1 oz gold coin: 1,975.00 / 2,196.96 / 2,034.16 / 2,012.32
1 oz gold bar: 1,862.00 / 2,071.30 / 1,994.66 / 1,998.54
The dollar index fell from 96.84 to 89.93 over the course of the year 2020, a decline of 7.14% against a trade-weighted basket of six currencies: euro, Swiss Franc, Japanese Yen, Canadian dollar, British pound, and Swedish Krona. Meanwhile, those currencies are have been or are devaluing against each other as they are all fiats, backed by nothing more than promises, as is the US dollar, the world's reserve currency.
So, with all this knowledge in hand on prices, generally rising, other than the obvious declines in treasury yields, what does this portend for 2021 (we knew you'd ask)?
It's important to value everything in something, usually currencies. Valuing oil in terms of gold or corn in terms of zinc may be instructive, but most people are going to view the economic world through a prism of currency, and that usually means the US dollar.
With almost everything higher against the US dollar, is that due to a decline in the dollar itself or are these items (gold, silver, oil) actually more valuable to hold as savings that are not currencies? In a nutshell, an ounce of gold, or silver, or a bushel of corn or some shares of stock did not suddenly become more valuable. What's changed is the purchasing power of the US dollar, and, to varying degrees, that of other currencies. Because faith in fiat currencies and the governments which back them is waning, how people value their cash is eroding, forcing many to flee to hard assets, especially in the case of precious metals and cryptocurrencies, the latter being a special case in that they are babes in the woods. Bitcoin was only birthed in 2009, but, having all of the characteristics of a store of value and a currency, these marvels of block-chain technology have caught on with a fury.
As adoption of cryptocurrencies goes mainstream, holders of Bitcoin (known as HODLers, for Hold On for Dear Life) are creating a virtuous cycle, pushing out the bad money ($$) with good (BTC), replacing central bank debt-based currency with distributed peer-based currency that cannot be inflated away with the striking of a keyboard. Other hard assets such as gold, silver, oil, agricultural land and crops, machinery, equipment, art, collectibles, and business assets found new life and new investors in 2020, a trend that has been growing since the Great Financial Crisis (GFC) of 2007-09.
Now, as hard assets threaten to become a crowded trade due to inflation (too much money in circulation), the trend only seems to be accelerating. The advance of copper, zinc, other metals, and agricultural commodities (corn, soybeans, wheat, etc.) are notably pointing toward a massive bull run off of historic lows. The more the Fed and their central bank cohorts continue injecting fresh currency into the system, the more a dozen eggs, a pound of butter, a liter of cola is going to cost. Food is the last thing to experience inflationary pressure because input costs are not uniformly passed along to consumers, and because it is the final hurdle between civil society and disruptive anarchy. A nation's stomachs must be at least partially full to keep the populace from protesting, revolting, rising up and overthrowing the governing class. We're not quite there yet, but, especially if food prices continue rising, social unrest could begin to spread coast to coast and everywhere in between.
This digression into lawlessness can be stopped, but only by consensus of the disenfranchised, which currently are those citizens who voted for Donald J. Trump in the presidential race and feel cheated. Unless and until those people are satisfied, there isn't going to be any kind of peace and harmony in America. That is why making predictions on the future of trading, holding, buying, and selling of assets of all classes so difficult and confounding. The immediate future is not just cloudy, it is downright dense, like a steel wall nobody can break through, see through, or climb over.
Also weighing heavily on future outcomes is the continuation of the COVID conspiracy. The longer the public is led along by fake science and locked down by oppressive governments at the state and local levels, the worse becomes the anger, frustration and outrage, which leads nowhere good.
When these two important elements are finally resolved, then decisions based on real world circumstances can be made.
Outside of anything else, non-dollar assets appear to be on a trajectory straight up, as dollar hegemony has been declining for years, is accelerating, and is unlikely to halt or reverse. The global fiat currency system has been shattered and there's no coming back from currency collapse and solvency crises. The era of centralization and globalization is dying, kicking a screaming all the way towards a new paradigm of decentralized finance and localized commerce. That is an undeniable trend.
Finally, as we enter a new year full of hope, think about this:
Central banks (FED, ECB, BOJ, PBOC, BOE, etc.) create currency with a few keystrokes on a computer. It's the essence of counterfeiting.
With that counterfeit, what are they buying? Corporate debt, mortgages, government debt (treasuries), gold, other assets, maybe even Bitcoin or other cryptocurrencies.
How is this even possible? It is because there isn't much attention paid to, nor knowledge of the global currency creation system.
Central banks are buying up the greatest assets of the world with currency that has no basis, no backing, other than the outstanding debt by which it was sprung into existence. It's like playing a game of monopoly where the bank not only gets to play, but is able to give itself - and only itself - as much money as it needs to win, i.e., controlling the best assets on the board and making everybody else pay rent until they're broke and eliminated from the game.
There are ways out of this mess, but they all involve some degree of pain and destruction. Alternative currencies are one good answer. Owning assets paid for with currencies outside the control of the central banks crimps their monopolistic tendencies, thus the meteoric rise of Bitcoin over the past six months.
Lastly, in case you're interested in what was formerly called a conspiracy theory but is now a conspiracy fact, follow the link for a FREE PDF of COVID-19: The Great Reset authored by World Economic Forum (WEF) founder and director, Klaus Schwaub, and Thierry Malleret.
2020 is finally WRAPPED. Happy New Year!
At the Close, Thursday, December 31, 2020:
Dow: 30,606.48, +196.92 (+0.65%)
NASDAQ: 12,888.28, +18.28 (+0.14%)
S&P 500: 3,756.07, +24.03 (+0.64%)
NYSE: 14,524.80, +47.33 (+0.33%)
For the Week:
Dow: +406.61 (+1.35%)
NASDAQ: +83.65 (+0.65%)
S&P 500: +53.01 (+1.43%)
NYSE: +143.20 (+1.99%)
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