WEEKEND WRAP: Rough Week All Around; Stocks, Bonds, Bitcoin, Gold, Silver All Lower

It was another tough week for equities. The NASDAQ and S&P suffered through a second straight week of losses, while the Dow had held up well until Friday's 469-point washout.

As counties and states come out of pandemic-inspired economic restrictions and other madness and the general economy begins to mend, stocks may be involved in a little buy the rumor, sell the news kind of action. Wall Street made hay throughout the COVID crisis, and now the sharpies may be taking profits before what promises to be an uneven recovery period.

Two months into 2021, the major indices have come off their recent highs and are close to flat for the year. The Dow is up just one percent, the NASDAQ has put on a gain of just over two percent, while the S&P is in between those two. The big winner is the NYSE Composite, comprised, in the main, of small caps, up 3.34% on the year.

For investors with short attention spans or investment horizons, the period between February and May could prove to be unsettling. March and April are often months in which rallies die or bull markets turn to bears. There's not a lot of reason for concern presently, though the $1.9 trillion stimulus bill passed by the House on Friday is likely to undergo some revisions in the Senate and passage is not, at this time, guaranteed. The pols have set a deadline for mid-March, when extended unemployment benefits run out. Getting the bill to Biden's desk - where he is sure to sign it - is the top priority for the Democrats and Republicans in the Senate may want to inflict some political pain after the second failed impeachment of Donald J. Trump. A staged floor fight may be on the agenda as the Republicans want to look like they're fiscally responsible participants and they'll be joined by a few Democrats in making some changes to the legislation.

In the end, the bill will pass through with the payments of $1400 to individuals mostly intact, but some other non-COVID-related items stripped out. It will be another huge waste of time and taxpayer money, but in the end most of it will be borrowed, boosting the federal budget deficit well past the $2 trillion mark. Already, the cumulative FY21 deficit through January 2021 (four months) is $736 billion, putting the current spendthrifts in Washington, DC are on pace to shatter last year's $3.13 trillion deficit.

By the time congress passes the current handout proposal before them, the federal debt will have surpassed the $28 trillion mark which is currently just $36 billion short of that number. With a run rate of about $3.67 billion per day, the national debt should be pretty close, if not beyond $28 trillion, by this time next week.

The latter part of the week saw round two of the attempted short squeeze by the group known as WallStreetBets over at reddit.com, as some unwary hedge funds layered back into short positions and put options against GameStop (GME) while the redditers waited for the ambush.

While this second go wasn't nearly as successful as the first round in late January, GameStop stock did see its share of wild-riding activity. On Wednesday, when the assault began, the price rose from the low to mid-40s earlier to nearly 100 by the close of trading. On Thursday, the shorts were sweating, as the stock opened at 150 per share and rose as high as 177, before coming in somewhat to 109. Friday, which was also options expiration day, the price went as high as 143 and as low as 87 and change, finally ending the week at 101.74.

Individual results surely vary, but it's a safe bet to say some shorts got smoked and some "amateur" traders from the reddit crowd gained a few shekels in the process. The organized efforts have now gone mainstream and are probably going to remain a feature of Us markets for the foreseeable future. Hedge fund managers beware: the proletariat are on the march for your money.

Equity investors were hardly alone in their sorrow. They were joined by all manner of plungers including those in Bitcoin and other cryptocurrencies and especially in precious metals, as gold and silver were hammered lower on the criminal COMEX.

Bitcoin suffered some serious losses after hitting an all-time high of $58,367 last Sunday morning (Feb. 27). It dropped as low as $43,365 just minutes prior to this posting. The world's leading crypto was down 24% on the week, presenting a buying opportunity for those intrepid enough to believe in a future devoid of central banks.

Etherium also took some blows by sellers. It reached an all-time apex on February at $2041 and currently is holding ground around the $1320 to $1375 level.

Yields on treasuries threatened to run off the page, with the 10-year note hitting 1.54% on Thursday before settling out at 1.44% Friday, sitll a full 10 basis points above the previous week's close. The 30-year was under stress as well with the yield topping out at 2.33% on Thursday. Friday's miracle bond rally send the yield back down to 2.17, which was still three basis points better than the prior week's close.

This is a very jittery market in fixed income and those with money on the line are extremely risk averse, so more volatility should scare yields higher and prices lower unless the Fed and the federal government can convince the world that price inflation is not an issue. Good luck with that, Jerome and Janet.

Crude oil (and other commodities) seemed to be the only place to hide, though it wasn't pretty. WTI crude opened the week at $61.67 per barrel and closed out on Friday at $61.66, but not before reaching a 52-week high of $63.53 on the 25th.

Precious metals were summarily dismissed on the COMEX and by the LBMA price fix in London. Goldbugs received no mercy at the hands of the control freak bullion banks. Gold was as high as $1809.95 on Monday, but spent the remainder of the week dropping off the charts, finally diving to $1734.40, its lowest level since last June.

In the face of a reddit.com-inspired raid on short sellers, silver was similarly battered, topping out around $28.15 on Monday, only to slide down to $26.68 the troy ounce at the New York close on Friday. The constant badgering and rampant mauling of gold and silver prices by the four large bullion banks has become a bone of contention for many in the precious metals space, but more optimistic souls continue to buy the dips and hope for a better future.

While the effect on the gold price at retail was obvious, with premiums still significant but prices lower all around, smaller silver retail buyers were still hungry for metal, which has been in short supply recently, though the shortages seem to be abating with the silver short raid a few weeks in the rear view. Nonetheless, one ounce prices for immediate delivery on eBay and elsewhere continue to ratchet higher. Silver seems to have separated the price of 1000-ounce bars, the province of COMEX and the LBMA, from single ounces and bars and coins up to 10 troy ounces. There appears to be a quite healthy appetite for the money of gentlemen.

Here are the most recent sales on eBay of common gold and silver one ounce items (numismatics excluded, shipping, often free, included):

Item: Low / High / Average / Median
1 oz silver coin: 38.00 / 68.95 / 47.88 / 43.79
1 oz silver bar: 39.00 / 64.90 / 44.95 / 40.75
1 oz gold coin: 1,849.00 / 1,995.22 / 1,909.88 / 1,886.01
1 oz gold bar: 1,846.45 / 1,873.83 / 1,859.07 / 1,856.91

Results of this week's survey puts the Single Ounce Silver Market Price Benchmark (SOSMPB) at $44.34, 40 cents higher than last week's price ($43.94) and the fourth consecutive weekly gain for Money Daily's proprietary silver gauge.

Upcoming this week are some interesting names reporting fourth quarter 2020 and full year results, leading off with Warren Buffett's Berkshire Hathaway (BRK.A), which actually reported on Saturday (Feb. 27). The results are likely to give the indices a boost come Monday, as the holding company delivered outstanding numbers.

Earnings per share (EPS) were $23,015, up 28.5% year-over-year (YOY). EPS beat the consensus estimate of $16,177.03 by 42.3%. Net investment gains were $30.8 billion, up by 24.6% YOY. Buffett also released his annual letter to shareholders [PDF].

After the close on Monday, high-flying Zoom Video Communications (ZM) reports what figure to be exceptional numbers. The mood may not be as bright on Tuesday when retailers Nordstrom (JWN), Target (TGT), Abercrombie & Fitch (ANF), and Kohl's (KSS) release. Keep an eye out after the bell for emerging discount grocer, Grocery Outlet (GO), which has beaten EPS estimates handily in each of the past four quarters.

Wednesday gives us Dollar Tree (DLTR) before the open and American Eagle Outfitters (AEO) after the close. Thursday's releases include grocery chain Kroger's (KR), BJ's Wholesale (BJ), and Costco (COST). Big Lots (BIG) and Ruth's Hospitality (RUTH), operator's of the famous Ruth's Chris Steak Houses close out the releases Friday, prior to the opening bell.

Also, of great interest at the end of the coming week is the Labor Department's release of February Non-farm Payroll. The current estimate is for 110,000 new jobs created during the month, following some months of disappointment. January saw a mere 49,000 jobs created nationwide, taking some shine off the recovery bloom.

That's a wrap.

At the Close, Friday, February 26, 2021:
Dow: 30,932.37, -469.64 (-1.50%)
NASDAQ: 13,192.35, +72.92 (+0.56%)
S&P 500: 3,811.15, -18.19 (-0.48%)
NYSE: 15,010.47, -196.20 (-1.29%)

For the Week:
Dow: -561.95 (-1.78%)
NASDAQ: -682.12 (-4.92%)
S&P 500: -95.56 (-2.45%)
NYSE: -352.23 (-2.29%)

Sorry, Internet Outage Kept Us Offline Thursday, Feb. 25

Another day, another internet outage.

While running the underground fiber (100+ MBS), the ditch witch ripped up our old AT&T cable and poof! No internet.

The good news is that Moeny Daily is now running at super fast speed.

Will this enhance our writing? Probably not, but one never knows.

The NASDAQ suffered a serious blow on Thrusday. Will be looking into it.

See you Sunday for the WEEKEND WRAP.

They're Ba--aack! WallStreetBets Crew Sends GameStop Stock Soaring, Shorts Running for Cover

Wednesday turned out to be quite the fascinating day from a stock market and global finance perspective. While Fed chairman, Jerome Powell, was wrapping up his testimony to congress, promising more stimulative measures if needed to revive the economy, the Federal Reserve Systems' global payment network was on the fritz, as the system that allows wire money transfers crashed with intermittent disruptions for two to three hours, according to various reports.

The outage to FedACH and FedWire impacted banks, brokers, and mortgage lenders' ability to transfer funds in large and small amounts and also individuals and small corporations which employ the service to move payroll, deposits, and other sensitive financing.

Service was restored mid-afternoon, Powell went back to wherever he goes after speaking publicly and stocks were up across all indices in the US. All seemed to be going smoothly until shares of GameStop (GSE) began stretching out gains made earlier in the day around 2:00 pm ET.

After closing 44.97 on Tuesday, GameStop was already sporting a three to four-point gain when it began picking up momentum. BY 3:00 pm, it was at 53, hitting 67 a half hour later. Volume was spiking as was trading on related options, especially those with a nearby strike date of Friday, February 26. Trading in GME was halted twice in the final hour of trading, but the price continued upwards into the close.

By the 4:00 pm final bell rang, GameStop was in reddit wonderland, sporting a 91.70 handle, even as reddit.com was coincidentally knocked briefly offline. After hours, GME was up as high as 200 per share, backing off to around 150 overnight and into the pre-market.

Here's a note, posted early Thursday morning on the r/wallstreetbets forum at reddit.com explaining the situation to the incels.

If GameStop hits 800 before 2/26 we will trigger the Mother of All Short Squeezes, read up. from r/wallstreetbets

What is amazing about this second attack against the short-sellers of GME is not that the redditers have re-assessed their position, but that shorts have piled back into GameStop with many betting that the stock would retreat further. Could these hedge fund types have been so short-sighted to not realize the reddit crowd would be watching and waiting, especially after how they were shafted in the first attack?

The answer is yes. While the identities of the shorts, call sellers, and put buyers are as yet unknown, the level of activity in GME call options was extreme over the past two weeks. Wallstreetbets minions were watching, and it appears they have the hedgies trapped into losing positions again.

If the redditers are successful, it will mark an important pivot point for markets globally, signaling that the ordinary controllers of stock, bond, options, and futures markets are in the throes of a violent economic uprising, spurred by inequality and fomented over social media.

As the silver market - another touchstone of r/wallstreetbets - continues to evidence stress and a severe supply shortage, the entire financial system could be on the brink of collapse, thanks largely to some creative organizing and strategizing by any number of smart disrupters on reddit and elsewhere.

While the focus of the financial news punditry will be on GameStop for much of the next two days, the treasury and bond markets are where the real action lays. On Wednesday, the 10-year note spiked again, shooting past a 1.40% yield and closing out at 1.389%. Yield on the 30-year bond closed up three basis points to 2.24%, the highest yield in more than a year.

Also higher is crude oil, with WTI pricing above $63 a barrel. While a good number of Keynesian-style economists view higher oil prices as a sign of recovery, they fail to realize that it translates directly into higher prices for automotive fuel, which acts as a tax on everybody, hitting those at the lower economic levels the hardest. Unless the price of crude is corralled soon, gas at $3 and $4 a gallon could be just over the horizon, a level that would put a serious damper on the general economy while adding to inflationary pressures, which themselves are already showing signs of bubbling over into hyperinflation.

The next few days will be exciting, challenging, potentially life-changing, but the next six months will tell the global fortune for years ahead.

At the Close, Wednesday, February 24, 2021:
Dow: 31,961.86, +424.51 (+1.35%)
NASDAQ: 13,597.97, +132.77 (+0.99%)
S&P 500: 3,925.43, +44.06 (+1.14%)
NYSE: 15,539.42, +180.28 (+1.17%)

Why Nobody Needs To Worry About Stocks Right Now

On Tuesday, the S&P 500 broke a five-day losing streak, gaining just under five points as the widely-watched index bounced right off its 50-day moving average.

Not so fortunate was the NASDAQ, which ended in the red for the fifth time in the past six sessions. It finished the day resting right on its 50-day moving average.

The distinct impression is that there's either something magical or important about those 50-day moving averages, an astute observation as most trades these days are of the programmatic, algorithm-blessed, computer-driven, non-human kind, keyed to respond to headlines and trend lines, like the moving averages.

When these trend lines are violated or even touched down upon, the algos are instructed to buy, hitting just about anything vulnerable. Just in case there's insufficient thrust to move the index or group of stocks off the point, there are always humans, such as the PPT, to pick up the baton of endless stock wins and boost prices higher.

Obviously, such chicanery has been going on for some time now and it's been especially poignant since stocks got slammed at the outset of the coronavirus last year.

We've recently celebrated the one-year anniversary of the beginning of the 2020 crash. On February 20, 2020, the S&P dropped a massive 113 points. It kept falling, almost daily, until reaching the bottom at 2,237.40 on March 23rd.

Since then, the S&P has put on quite the show, closing on Friday, February 12 of this year at 3,934.83, a near doubling off the lows and an overall gain of 1697 points.

The NASDAQ was a little less spectacular at the start of its decline, but it made up for any lack of bedazzlement on the upside. On February 20, 2020, the NAZ shed 67 points to end the day at 9,750.97. But, the following session, it took a 74-point hit, closing out the week at 9,576.59. The following Monday, February 24, the index gulped down a 355-point loss, finishing at 9,221.28.

Losses continued to pile up on the NASDAQ until finally hitting bottom on March 23rd when it closed at 6,860.67.

Over the ensuing 11 months, the NASDAQ did actually double in price, topping out at 14,095.47 on February 12, less than two weeks ago.

Now, before bemoaning the recent declines, bear in mind that investors have been making hay just holding onto stocks for the past year. The NASDAQ ended Tuesday's session at 13,465.20, a 630-point decline from the all-time high. Boo-hoo. The mighty NASDAQ has shed almost five percent. The decline on the S&P has been even less enthralling, down an entire 53 points from less than two weeks ago. The end at 3,881.37 Tuesday marks a loss of less than two percent.

It would be justifiable to suggest that investors are far from worried. After all, they have their man, Jerome Powell, at the Fed, and their lady, former Fed Chair, Janet Yellen, at Treasury, ready to jawbone to the extreme should any doubt enter the minds of shaky-handed newbies in the investment community.

Powell appeared, virtually, before the Senate Banking Committee on Tuesday, telling Senators, “The economy is a long way from our employment and inflation goals,” while reaffirming the Fed's commitment to easy money policies for the remainder of 2021 and likely beyond. According to the Chairman, the economic recovery is only just beginning.

As for Yellen over at Treasury, she doesn't have to say much, as everybody knows she'd like the $1.9 trillion Biden/congress COVID relief bill to be even larger. From her perspective, the $1400 per individual in the bill would be better if it had an extra zero attached to its end. For all her love of easy money, assigning a dovish posture to Janet Yellen would be a mistake. She's more an accommodative hawk, carrying a bazooka loaded with canisters of $100 bills, ready to fire off in any direction.

With these two backing stocks over anything else, Wall Street is probably more juiced for a "buy the dip" moment than worried about further declines.

Until somebody issues some dire, unmistakable warning or rings a bell for the top, stocks should continue an easy glide path into the stratosphere.

At the Close, Tuesday, February 23, 2021:
Dow: 31,537.35, +15.66 (+0.05%)
NASDAQ: 13,465.20, -67.85 (-0.50%)
S&P 500: 3,881.37, +4.87 (+0.13%)
NYSE: 15,359.13, +18.66 (+0.12%)

The Folly of the Dollar Index, GDP Fakery, Pandemic Confusion

folderol
[?fäld?räl, ?fôld??rôl]
NOUN
falderal (noun)
trivial or nonsensical fuss.
dated
a showy but useless item.

There's a lot of this folderol afoot. Much of it has been with us for quite some time. Some of it is recycled. Some is new.

Let's start with the dollar index or the Dixie (^DXY) as it is commonly known to the slithering creatures who “manage money.”

It's a joke. The dollar index is a construct made popular by some delusional specialists in the business of fractional reserve currency debasement. What they call "money" is not really that. It's currency at best, and, whether it's denominated in US$, yen, euro, yuan, pounds or loonies, it's value is approaching toilet paper status.

Anybody over the age of 50 recognize the traits of a depreciating currency, as they've lived with it continuously since birth. What used to buy a bag of apples in 1975, buys one, maybe two, today. The apples aren't bigger or better. They've pretty much stayed the same. What's changed is the purchasing power of the currency.

A 15 ounce box of Oreo cookies was 55 cents in 1974. You can buy a plastic package of Oreos for about $4.00 nowadays, but the net weight is probably some weird number like 13.2 ounces. You pay more, you get less.

What the dollar index does is compare the US dollar to a basket of other fiat currencies, i.e., backed by nothing, printed to infinity, eventual value approaching zero. It rises and falls in line with the varied perceptions of the rest of the gang, which are:

Euro (EUR), 57.6% weight

Japanese yen (JPY) 13.6% weight

Pound sterling (GBP), 11.9% weight

Canadian dollar (CAD), 9.1% weight

Swedish krona (SEK), 4.2% weight

Swiss franc (CHF) 3.6% weight

No, I didn't see gold or silver in there either, which is the point. Comparing the US$ to the yen or the pound, or comparing the loonie to the krona is like comparing rotting apples to rotting peaches, or rotting onions. There's a lot of rot and stench, but little value. Leave them be for a while and they'll be worth nothing other than more scrap for the landfill or the compost heap.

What the dollar and the rest of the fiat gang needs to be compared to is gold or silver or oil or apples or some other commodity that has been around long enough that it has some recognized value. Gold is a good choice. In 1971, the last time the US$ was tied to it, gold was $35 an ounce. It's been bouncing around $1800 lately and was over $2000 recently.

The gold Eagles your grandfather held in 1971 or thereabout were nice items. Today, they're priceless. You could have bought 10 one-ounce gold coins with $350 in 1971. That same money will get you a little less than 2/10ths of an ounce, if you're lucky. The gold didn't change. The dollar did. It lost value, about 98% of it. So, if somebody asks your opinion of gold and the US dollar, throw them a buck and tell them that's your "two cents."

If the dollar index isn't a bad enough measure of value, consider the government's use of GDP to measure economic activity. According to what the great minds in government and finance tell us, GDP measures the monetary value of all finished goods and services made within a country during a calendar year. Everything. New cars. Dental work. Your kid's lawn mowing. All of it. And that's all well and good, but it's fake as all get out because it's measured in dollars, and they're worth less and less every year.

So, if economic output (GDP) was $1.073 trillion in 1970, and a shade over $21 trillion in 2019 - before the pandemic - it sure looks like the United States has grown by leaps and bounds. There should be 800-story buildings, trains that travel at the speed of light, and everybody should be rich.

We're not.

The economy has improved somewhat, maybe, over the past 50 years, but is it 20 times better now than it was then?

Doubtful. We don't even have discos any more. In some ways, the country has gotten worse. Look at roads, bridges, the power grid. Most of that stuff hasn't been updated since the 1950s or even before. Infrastructure has stagnated. The rest is just inflation, or, devaluation of the dollar.

It's a nice day when the government announces some quarter of GDP was up three percent. However, failing to tell you that inflation was five percent exposes the fakery in their numbers. The country has been going backwards for at least the past 20 years, probably longer. Sure, we have the internet, smart phones, better automobiles. But, we're still building houses out of wood, concrete, and recently, plastic, and prices for those have gone through the roof (pun intended). The median price of an existing home was $303,900 in January, 2021. In 1971, the same house would have set one back about $26,000.

We've come a long way, baby.

And then there's our current curse, the COVID-19 pandemic, which, if chart-reading hasn't gone out of fashion, appears to have run its course. Date from the Covid Tracking Project shows testing, cases, hospitalizations, and deaths all plummeting, by anywhere from 30 to 70 percent.

For instance, the number of cases reported for a day fell from a peak of 295,121 on January 8 to 52,530. A majority of states are reporting less than 1000 new cases a day. Many, like Arkansas, Wyoming, Idaho, Iowa, Nevada, and New Mexico are well under 500 with deaths and hospitalizations falling in similar fashion.

This thing is over. People are done with it. We have vaccines. We've socially-distanced. We've worn masks. Sometimes two of them at once. We've isolated, lock-downed, sacrificed for the greater good, skipped work, kept kids at home, got jabbed with vaccines, there’s herd immunity, and we're done.

Wait, wait, wait a minute. Dr. Fauci tells us we're not going to be “out of the woods” until fall.

What is this guy smoking? This delusional, self appointed demigod of disease says that even people who have been vaccinated have to continue wearing masks and social distancing. What? Why then even bother with the vaccine? On the other hand - or side of his mouth - Fauci says that teachers don't have to be vaccinated to go back to work safely.

Yes. No. He's not confused. He's a fraud. He should take a permanent lid with the fake president. We're done with idiots.

Apparently, we're done with tech stocks, too. Look at that drop on the NASDAQ. Probably more where that came from.

At the Close, Monday, February 22, 2021:
Dow: 31,521.69, +27.37 (+0.09%)
NASDAQ: 13,533.05, -341.42 (-2.46%)
S&P 500: 3,876.50, -30.21 (-0.77%)
NYSE: 15,340.47, -22.22 (-0.14%)

WEEKEND WRAP: As Bond Market Implodes The World Is Turning To Asia and Bitcoin

The treasury market was a primary focus as the week commenced, particularly on the long-dated maturities, which had been selling off over recent weeks. With the 10-year note hitting a yield of 1.34% by Friday and the 30-year bond yielding 2.14%, alarm bells were going off in fixed-income markets.

For the most prescient insight, Doug Noland's weekly Credit Bubble Bulletin was titled, appropriately, "Wrecking Ball" and contained a mountain of pertinent information and explained some of the underlying causes for what looks to be the beginning of a long-awaited bond market bust. Credit has eluded the grim reaper since the 1980s, but it appears that the reckoning has finally arrived.

Noland begins his narrative with an overview of the GameStop hearings in congress, pointing out how the cretins on Maxine Waters' House Financial Services Committee were more interested in scoring points on the predatory hedge funds and preening for the cameras than exploring the root causes and effects of the wild ride in a few selected companies.

Noland notes:

Listening Thursday to the House Financial Services Committee’s “GameStop” hearing, it was clear Washington has little appreciation for the seriousness of structural deficiencies revealed by recent market mayhem. The focus was more on blasting predatory Wall Street and the hedge funds, while looking into the cameras to defend the defenseless small investor. The broader point of a historic mania and potentially catastrophic infrastructure shortcomings was completely neglected. Millions of unusually synchronized buy orders almost led to a cascading market accident. It seems rather obvious at this point that existing market infrastructure will buckle under tens of millions of synchronized sell orders.

A dissertation on the Texas power grid catastrophe follows, with Noland pointing out that the Lone Star state's grid issues occur on a decade by decade calendar, like clockwork, with similar, though less extreme, episodes in 1989 and 2011, all due to Texans' desire for cheap energy while ignoring the need for winter weatherization.

Getting closer to the point, Noland reports how Fed officials harp on recent interest rate spikes as "transitory" and consider the rout in bonds not much of a problem. Such Fed-speak recollects Ben Bernanke's fateful pronouncement that "subprime is contained" back in March of 2007.

Noland points out other warning signs, such as the Producer Price Index (PPI) jump in January of 1.3%, the biggest gain since December 2009, the median price of an existing home sold in January at $303,900, a 14.1% increase from January 2020, the highest January price that the Realtors have ever recorded, and the Fed's incredibly loose monetary policy fueling further inflationary pressure, noting that they're still implementing QE in the amount of $120 billion a month when they normally would be tightening.

Further, Noland contends, "The point is the Fed is locked into the loosest and most asymmetric monetary policy imaginable. Slash rates to zero and inject Trillions of liquidity in days and weeks, while the return to any semblance of policy normalcy unfolds over quarters and years." He goes on to say, "I do not recall a period when the domestic environment was as ripe for inflationary pressures to gather momentum." Additionally, he points to global inflationary pressures in all fiat currencies with 10-year bond yields in developed and emerging markets rising dramatically.

Noland's weekly commentary is highly recommended. His research and expertise spans decades.

All of which leads directly to speculation in stocks, commodities, and cryptocurrencies, leaving the badly-damaged Euro-centric Western banking-dominated COMEX and LBMA spot prices for gold and silver struggling to maintain dollar (US$) hegemony in a world that is rapidly moving on toward Asian pre-eminence.

The thrust in Asia, particularly acute in China, is toward modernization and growth through infrastructure buildout. The US is lagging far behind in technology - importing most of it - and infrastructure, which has been stalled out since the 50s and 60s. US dominance over South America, and Europe's domination of the Middle East and Northern Africa have sent hordes of refugees from South to North, from the countries controlled and maligned to the global hegemons.

With the advent of cryptocurrencies - Bitcoin for the most part - and the mobilization of Chinese industrialization to South Asia, the Middle East, Africa and South America, the United States and Europe are being left in a void, the proximate causes being the hubris of supposed central banking infallibility, decades of stealth expansionism and colonization, and the short-sightedness of politicians who have failed to address the two main issues facing their economies and societies since the origin of the fiat epoch in 1970, infrastructure and immigration. Their answer has been and will continue to be bigger and more destructive deficits, lumping trillions more onto the national debt.

Europe will implode as the European Union disintegrates. With the UK leading the charge via Brexit, other countries will soon follow. Greece, Italy, Spain, and Portugal are well on their way out, which would leave a very fractured alliance between Germany and France to fight over the bones and scrap. While politicians struggle to retain power, the citizens will struggle to survive. The ultimate solution is a complete dumping of the central banking fiat regime in favor of honest money, be it backed by gold or silver or a form of cryptocurrency, though it's obvious that the "leaders" and managers of these countries are well behind the curve, late to the emerging party.

In a few words, Europe and the United States are losing. China, Russia, and the so-called "undeveloped" countries are winning. Sooner or later, the privilege of printing dollars and euros in exchange for valuable goods and services will be denied. The process is already underway. It's manifested by inflation.

What's even more confounding for the Fed and their central bank cohorts is squaring higher yields in long-dated maturities while the short end threatens to fall below zero. While it's exactly their intention, the steepening of the yield curve beyond two years is frighteningly inflationary, a veritable crack-up boom in von Mises' terms, almost an exact opposite of an inverted curve which signals deflation and recession. This is inflation on steroids: the hyper variety. This set-up is very inconvenient for proponents of stability and measured growth.

Bitcoin and Etherium spent most of the week sprinting forward. Bitcoin topped out at $57,800, posting a 21.5% gain for the WEEK. Ether cascaded beyond $2000, a new all-time high, before settling back in the low-to-mid $1900s. It's rise for the week was a paltry 7.6%.

Gold and silver continued to be suppressed by the COMEX futures traders and LBMA. Silver ended the week at a laughable $27.24 per troy ounce, while gold priced out Friday at an absurd $1784.05. Meanwhile, Money Daily's Single Ounce Silver Market Price Benchmark (SOSMPB) was pegged at $43.94, up 95 cents from last week ($42.99).

According to prices for both gold and silver via the LBMA's daily spot "fix" and the phony COMEX futures markets, the world is to believe that these two monetary metals are stable at low levels while everything else is inflated away. By most accounts, both should be multiples higher. A fair price for gold could easily be upwards of $8,000, with silver tagging along at a 12:1 or 16:1 ratio, or somewhere in the neighborhood of $500-$675 an ounce.

A recent shortage of silver at dealers may prove to be short-lived as the threat to the futures market was unexpectedly short-circuited by the r/wallstreetbets crowd, which has splintered into at least two opposing groups consisting of die-hard silver longs and stackers and those who believe the "silver raid" was never actually sponsored by the redditers. If silver dealers are able to restock quickly, both the COMEX and market prices could fall under short-term pressure, making for one huge buying opportunity similar to last March's smackdown to under $12/ounce.

For gold bugs, buying bars at under $1800 an ounce is like living the dream in technicolor.

Most recent prices of common 1 ounce gold and silver items sold on eBay (numismatics excluded, shipping - often free - included) follow:

Item: Low / High / Average / Median
1 oz silver coin: 38.00 / 54.95 / 44.64 / 42.30
1 oz silver bar: 38.49 / 52.15 / 44.33 / 44.48
1 oz gold coin: 1,909.99 / 2,160.00 / 1,984.99 / 1,979.50
1 oz gold bar: 1,895.00 / 2,105.99 / 1,925.64 / 1,906.11

Prior data here.

Stocks spent the week gyrating around break-even, with the NASDAQ losing a percent. With the main indices floated near all-time highs, there's no indication that stocks are going to be pressured, though a pull-back or correction would be considered a healthy episode. Wall Street and the Fed simply will not have it, however. They're mortally bound to higher stock prices and suppression of everything that doesn't support the "recovery" narrative, be it gold, silver, shrink-flation, international news, vaccination horror stories, or traditional values.

The thrust is higher and higher as inflation (which the Fed still insists is too low) rages. Hyperinflation is proceeding at breakneck speed. By fall, food prices could be 20-30% higher than a year ago. Energy is already beyond the norm, with oil surpassing pre-pandemic levels. A barrel of WTI crude settled out Friday at 59.01 after reaching a fresh 52-week high of $61.14 on Wednesday, Feb. 17. A year ago, the price of crude was under $50 a barrel and falling. In February alone, WTI crude is up 13% as of Friday's close.

Comparisons to year-ago levels are going to become more and more stretched. WTI crude fell from the 40s into the 20s and teens from March through May of 2020 as the coronavirus and lockdowns spread worldwide. With global recovery eyed, there's no doubt a huge difference in price everywhere from the wellhead to the gas pump. Without sounding like punidtry, energy costs fuel inflation. Higher prices for pumped oil will pump prices everywhere else.

A slew of companies will be reporting Q4 2020 and full year earnings in the coming week. Monday, after the closing bell, Marathon Oil (MRO) and ZoomInfo (ZI) announce. Tuesday, before the open, Home Depot (HD) and Macy's (M); after the close, Square (SQ), Intuit (INTU, Toll Brothers (TOL). Wednesday, Overstock (OSTK), Lowe's (LOW), TJX Companies (TJX), and Casper (CSPR) report pre-open. After market's close, Nvidia (NVDA) reports. On Thursday, before the open, Moderna (MRNA), Domino's (DPZ), Best Buy (BBY), Wayfair (W). After the close, Salesforce (CRM), Etsy (ETSY), Beyond Meat (BYND), Workday (WDAY), Airbnb (ABNB). The week's reports closes out Friday morning with reports from Draft Kings (DKNG), Foot Locker (FL), and Cinemark Holdings (CMK).

Finally, it appears that capitulation by commercial banks, leading to destruction of central banks, is afoot. Reports by Morgan Stanley and JP Morgan each signal that cryptocurrencies have made the leap from speculation to an acceptable asset class. With listed companies - Microstrategy and Tesla, led by visionary CEOs Michael Saylor and Elon Musk, respectively - now lining their treasuries with Bitcoin and banks (the nation's oldest bank, BNY Mellon announced that it would engage in crypto investments for high net worth individuals) now admitting the error of their prior denunciations, it's surely off to the races for crypto. All manner of cliche can be used to describe the current mania. The horse has left the barn. The ship has sailed. The train has left the station. The bloom is off the rose.

Simply put, all the fears of owning Bitcoin have been negated by the powers which opposed it. Now that institutional money is interested and flowing into the cryptocurrency universe the Fed or the federal government would be derelict in banning, barring or limiting holders of crypto or of the exchanges like coinbase. It’s bad enough that the IRS targets gains in cryptocurrencies as regular income. That designation may be rescinded soon enough. Any further interloping by government entities would not only raise the ire of millions of individual “hodlers”, but now would endanger the welfare of publicly-listed companies and the mega-banks. Government regulation of Bitcoin and other cryptos has been permanently and irrevocably neutered.

The bottom line is that if you don't hold any Bitcoin, you'd better get some, and soon. Price is not relevant. Look at it like seeing Amazon's (AMZN) stock in a rear-view mirror. It matters little if you bought in at $50 in 2003 or $500 in 2016 now that it's well over $3000 a share. While those who bought into Bitcoin early are reaping massive returns, even those who bought at $16,000 as recently as this past November have already tripled their stakes, in just three months!

Even more to the point is that Bitcoin is the anti-dollar, the new paradigm and the pathway to freedom from debt slavery and depreciating fiat currencies. There's every indication that the US$ and the euro will both soon fail and devalue massively as the rest of the world refuses to subsidize the United States and Europe, being non-productive members of the global community. At the very least, if not bitcoin, some (rather large) percentage of a portfolio should be dedicated to gold or silver, preferably both.

Here's Max Keiser and Stacy Herbert gloating a bit and explaining why:

At the Close, Friday, February 19, 2021:
Dow: 31,494.32, +0.98 (+0.00%)
NASDAQ: 13,874.46, +9.11 (+0.07%)
S&P 500: 3,906.71, -7.26 (-0.19%)
NYSE: 15,362.69, +72.05 (+0.47%)

For the Week:
Dow: +35.92 (+0.11%)
NASDAQ: -221.01 (-1.17%)
S&P 500: -28.12 (-0.71%)
NYSE: -6.91 (-0.04%)

The Rich Are Different And Maybe Not Better; You Can Be Good And Rich

The week is nearly at an end, and it wasn't a very exciting one, at least not as entertaining as the reddit rabble taking on the elitist Hedge Fund horde. It's too bad, because those peons were getting the better of the rich guys for a change.

What's concerning to all parties is how some really shrewd Wall Street types made bank on the backs of both parties, buying up puts, calls, stock on margin and reaping profits at the top and on the way down. There are players and then there are predators, which is why it's a good idea to keep your investment moves to yourself.

It's probably not a good idea to boast about how many monster boxes of silver eagles you purchased during the silver raid for two reasons: First, they probably haven't been delivered yet, so your enterprising Postal employee or FedEx or UPS delivery driver might get ideas, or somebody may be casing your place now that they know you'll have plenty of shiny; and, second, if you let people know you have valuables, you'll always and forever be concerned about protecting them, and that can be costly, to your wallet and your mental health.

The aforementioned are probably good reasons why people opt for stocks or bonds or storage of precious metals or anything they don't have to keep themselves, but, in a SHTF or TEOTWAWKI scenario, not having access to your personal wealth is a definite downer. If the exchanges shut down or the power goes out, cash and trinkets (ideally made from gold or silver) will be all that matters. How many shares of Apple you own will be largely immaterial. Rich people suffer just like poor ones, and, to boot, they're usually wildly unprepared to take care of themselves.

So, remember, the rich are different. They have servants, armed guards, gardeners, and chefs who will likely turn on them in moments of extreme stress. They're also incapable of planting seeds, slicing anything heartier than brie, scrambling eggs, or hammering nails. Forget about the tricky stuff like bandaging wounds, stopping leaks, or generally weathering the storm, so to speak. In emergencies, the last person you want around is a rich one. The lifeboat scenes from the movie "Titanic" come to mind.

A good number of rich people, because they are rich and you are not, think they are better than you. Honestly, they're probably not. You probably have more useful skills than most rich folks unless they're the self-made kind of business owner who isn't really, really rich, but has a net worth somewhere between $1 and $10 million. There are plenty of those types around.

It's how they made their money that matters when it comes to measuring the utility of rich people.

Rich people who came from modest backgrounds and made it by the sweat of their brow, being very good at something, are generally the most dependable types. Those who got rich quick playing stocks, or worse, playing stocks with other people's money, i.e., hedge fund managers, are further down the moral line, and, at the bottom are those who were born rich.

Inheritors of wealth are probably the most worthless in a pinch. They're used to just paying for anything they need. Ask them to grill a burger or two and they'll either pay somebody to do it or order out or eat something else. Really, that's how useless they are.

So, be kind to your rich friends. They're going to need your help if they become not-so-rich. And, if they remain rich, they can hire you to do things they won’t or can’t do themselves, which is just about everything. Further, they have to worry about not being rich, which stands in opposition to the desire of most people: to be rich, so you may be able to offer them comfort and consolation just by showing them that not being rich isn’t so bad.

Don't belittle yourself because you don't own much in the way of stocks or a big house or a shiny new car. You have skills and you have the opportunity to make of yourself whatever you like. It's been said that getting rich isn't that hard, but staying rich is the real trick. Maybe the definition of what rich is should be examined. Having a good moral background, trustworthy friends, and an optimistic attitude are usually worth more than all the stocks, bonds, gold, and silver in the world.

While it is a worthwhile aspiration to have some of those things, not having much is not a curse nor is having excess amounts a blessing. By no means should acquiring wealth be an all-encompassing endeavor.

Think about it. Which would you rather have around: a fellow who could build a house or one who could buy a house?

Back in the 1960s, a radio station in upstate New York, WSAY, used to have a slogan. They said, "Be Big. Be A Builder." It was always an interesting line, but one which carried a strong message.

Whether it's personal wealth, education, community, a collection, or a shelving unit for your bedroom, just keep on building. The riches will follow.

At the Close, Thursday, February 18, 2021:
Dow: 31,493.34, -119.68 (-0.38%)
NASDAQ: 13,865.36, -100.14 (-0.72%)
S&P 500: 3,913.97, -17.36 (-0.44%)
NYSE: 15,290.64, -111.95 (-0.73%)

Initial Claims Continue at High Levels; Rush Limbaugh Passes

News out of the employment sector was not particularly pleasant Thursday morning.

The Labor Department reported 861,000 initial unemployment claims last week, against 773,000 expected and an upwardly revised 848,000 during the previous week

Continuing claims for the week ended February 6 stood at 4.494 million.

Following a session which saw some of the most pronounced declines win weeks - only to miraculously finish nearly unchanged - futures are pointing to a negative open in the major indices.

On Wednesday, the Dow was down nearly 200 points in early going, the NASDAQ dipped more than 240 points before rallying to erase 2/3rds of the losses.

Yield on the 10-year note fell back to 1.26 during the session, but finished off just one basis point, at 1.29%, a position of considerable anxiety for equity traders.

Approaching the opening bell, European stocks were lower, oil higher.

America and the world lost a bit of its treasure last night, as Rush Limbaugh passed away. He was 70.

At the Close, Wednesday, February 17, 2021:
Dow: 31,613.02, +90.27 (+0.29%)
NASDAQ: 13,965.50, -82.00, (-0.58%)
S&P 500: 3,931.33, -1.26 (-0.03%)
NYSE: 15,402.59, -20.43 (-0.13%)

Silver, 10-Year Note Harbingers Of Systemwide Financial Stress

Every time I plant a seed, they say 'kill it before it grows'

-- Bob Marley and the Wailers, "I Shot the Sheriff”

Thank goodness for three-day weekends... and four-day work weeks.

Money doesn't take any days off. While humans rest, or work, or recreate, money (or, currency, as it should be called in the age of fiat) continues to flow. From one hand to another. From one account to others. From the few to the many, from the many to the few. Like rust, it never sleeps.

And so it is that on Friday, February 12, Bitcoin was priced at about $47,500 and on Tuesday it popped briefly above $50,000 for the first time ever, and this morning roared past $51,000. Money never rests and money going into bitcoin has turned from a trickle to a steady stream and will soon become a torrent. Considering that bitcoin has tripled since November, $100,000 is not some far away, distant price. It is likely to exceed that number before September, possibly before June.

In a similar vein, the rush into silver wasn't just about some kooky Reddit group going by the name r/wallstreetbets. Silver has been sought by investors and industrial users for thousands of years. Not since 2009, as with bitcoin, and not since 1913, as is the case with Federal Reserve Notes, those greenish printed pieces of paper we carry around in our wallets.

No, silver has a certain millennial quality to it. Silver coins are possibly the oldest mass-produced form of coinage. Silver has been used as a coinage metal since the times of the Greeks; their silver drachmas were popular trade coins. The ancient Persians used silver coins between 612-330 BC. Silver has been money, real money, for nearly 3000 years.

But, some may point out, if silver is so valuable, why is the price of it so low? It's hovering around $27 an ounce on the COMEX. While that may be true, why then are all dealers worldwide virtually out of stock? Why is the US Mint out of stock? All of their silver pieces are either on an out of stock, or pre-order basis with weeks to wait for delivery.

The only place that silver can be purchased for immediate delivery is on eBay, and on Sunday, Money Daily pegged the Single Ounce Silver Market Price Benchmark (SOSMPB) at $42.99, which was up from $41.22 the prior Sunday, and that's probably already too low.

Dealers will need weeks to replenish their stock, if they are able to do so. There's huge demand and supply has been crimped as was the case last March, when silver dumped below $12 an ounce on the COMEX and the rush to buy was unprecedented... until now. The longer the crowd at the COMEX keeps a lid on the price for their 5,000 ounce contracts paper silver, the longer the delays on shipping from dealers, and the higher the price in the retail market for 1, 5, and 10-ounce products.

I shot the sherrif, but I say it was in self defense.

-- ibid.

Which gets to the point of the 10-year note, which rocketed Tuesday, from a yield of 1.20% to 1.30%. That's huge. That's an eight percent move in one day in one of the largest, most steady markets in the world. The US treasury market is upwards of an $18 trillion market and it affects everything from credit card interest rates to mortgages to the price of corn... and wheat... and silver and gold and the purchasing power of those FRNs in your pocket. By comparison, bitcoin is still under a $1 trillion market cap.

Silver's market cap is around $5 trillion. Gold's is $12 to $15 trillion, so it's easy to see why the central banks are trying so hard to keep the "official" prices of gold, silver, platinum and crude oil down via the futures markets. Because if they go up too much, the US dollar - and with it the yen, yuan, euro, pound and every other fiat currency in the world (all of them) - all go to fiat money hell. They become worthless.

The huge move in the 10-year note has a purpose. It's to deflect interest away from silver and gold and the plight of the dollar. Already this morning it's 1.314%, reflecting the unusually large level of distress in the financial system. It's very much worth keeping a tight eye upon, because if it goes much higher, stocks will be under pressure. The situation is such that there are so many different stress points presently, any one of them could cause massive dislocations, a bank failure here or there, derivative unwinding, severe damage to your retirement fund, and other nasty stuff that could make a trip to the grocery store resemble a trip to Wall Street, complete with beggars, liars, thieves, and snake oil salesmen.

The last time the Fed tried to raise interest rates was from December of 2016 through nearly the end of 2018, by raising the federal funds rate from 0.50% to 2.50%, via a series of well-timed, well-publicized 25 basis point hikes. What happened to stocks?

Initially, stocks shrugged off the rate increases. But, as the Fed persisted, by January, 2018, stocks began to slip, and then, in October, and again in December, 2018, stocks fell out of bed, to the point at which the Fed had to reverse course and start lowering rates again.

That was then, and that was the overnight lending rate between banks, not the 10-year note, which is the world benchmark for anything that matters. If the overnight rate at 2.50% caused a run on stocks, how high does the 10-year have to climb before investors take flight from equities to fixed income? Three percent? Five? It could go there, but tighter money works against everything the Fed has been working towards: loose monetary policy, free cash flow to Wall Street, enormous government debt. Reversing course here is a pathway to nightmare scenarios, especially for the government, who will be servicing the monstrous $27.8 trillion debt at higher and higher rates in such an outcome. It's devastatingly deadly.

Don't take our word for it. Listen to Ed Steer discuss the silver squeeze and its implictions. He's an expert and it's a safe bet he didn't shoot the sheriff, or the deputy.

Every day the bucket goes to the well. One day, the bottom will fall out.

-- ibid.

At the Close, Tuesday, February 16, 2021:
Dow: 31,522.75, +64.35 (+0.20%)
NASDAQ: 14,047.50, -47.97 (-0.34%)
S&P 500: 3,932.59, -2.24 (-0.06%)
NYSE: 15,423.02, +53.42 (+0.35%)

WEEKEND WRAP: Roles For Silver, Bitcoin, and Gold Have In A Global Currency Reset; Silver Market Price: $42.99

On Saturday, the Senate voted to acquit former President Trump on the sole article of impeachment in their show trial, allowing both houses of congress and the Biden administration to move forward with their objective goal of spending another $1.9 trillion that they don't have on another COVID-19 relief bill.

Stocks spent the week more or less in a holding pattern, making a move higher on Monday, but flattening out as the week progressed, especially Tuesday through Thursday. With the political focus now shifting to the relief bill in congress, stocks should rise and fall with the narrative from Capitol Hill. If the legislation appears likely to sail through congress intact, expect stocks to continue the corona rally that began in late March of last year. Any delays or roadblocks to full passage of the bill will be seen as negative for stocks and the economy overall.

Along with Republican defectors in the Senate, Democrats holding a majority in both houses should be able to breeze the bill through and onto Biden's desk in short order. While news outlets are calling for passage of the bill by March, judging by how expediently the Senate whipped through the sham impeachment, there is little doubt that a boost to the economy is an urgent priority for the free-spenders in congress.

Despite all the rhetoric addressed toward the "green" economy, the price of oil continued to mark higher during the week. WTI crude, closing out at $59.73 Friday on the NYMEX, is at its highest price since the last peak at the end of 2019. In the week ending December 23, 2019, WTI priced at $61.72. A move beyond the mid-60s would put the current price at levels not seen since 2018, when Oil reach the mid-70s.

What's driving the price of crude is the slowing of COVID-19 cases, hospitalizations, and deaths, a narrative which is going to become pre-eminent as Spring arrives, with mass vaccination emerging as the hero. As usual, the mainstream media will shield the public from the ultimate truths regarding the entirety of the corona-crisis, but the effect will be a return to more normal lifestyles, with mask mandates and lockdowns out of the picture. The new powers-that-be need a robust recovery to cement their mental hold on the unsuspecting American public and nothing could be more poignant than an end to the scourge of the pandemic, for which Dr. Fauci and no doubt many legislators in Washington, DC and beyond will claim credit.

Whatever the scenario, putting the coronavirus episode behind will be a great relief to the general public, which only wishes to get on with living without overhearing government restrictions and dictates. Such an outcome would increase demand for oil and derivatives, especially heating oil and gas at the pump.

Bitcoin is on the verge of surpassing $50,000 as of this writing, topping out at $49,700 - a new all-time high - overnight Sunday. There's a very real possibility that $50,000 bitcoin could be a reality at the opening of US markets on Monday.

Treasuries continued to be under pressure, as the yield on the 10-year note exceeded a one-year high again, posting 1.20% on Friday. In affirmation, the 30-year bond yield rose to 2.01%, also a one-year high. Putting those numbers into perspective, all maturities have negative real yields, meaning holders are losing money against inflation. A five-year note loses 1.85% of value, while the 10-year is marginally better, losing only 1.01 in real, inflation-adjusted terms. the 30-year, at current valuation, loses only 0.16% annually.

Regardless on risk profile, investors must take note of this trend, which has been gathering momentum over the past year. As inflation expectations rise, and real price inflation in goods and services materializes, fixed income vehicles will struggle to keep pace via higher yields. With the treasury complex at the base, investors will be less inclined to hold these money-losing assets, leading to a vicious cycle of escalating rates and advancing inflation.

A meltdown in the bond market is an event multiple times more significant than a stock market rout and should be at the top of every astute investor's watch list. Money has been fleeing fixed income in search of higher returns, but that condition becomes exacerbated when price inflation becomes endemic. With the Federal Reserve turning its money-printing marathon into a sprint, the likelihood of a bust in treasuries poses a serious present danger to overall financial stability.

Precious metals continued to be supressed to a maximum degree, though signs of breakage in COMEX silver are beginning to emerge. Gold bounced higher midweek, jumping from the close on Friday, 2/5, of $1810.80, as high as $1843.40 before closing the week at $1,822.43, a far cry from the all-time high of $2063.68 this past August.

Silver took an alternate path, rising from $26.90 to $27.36 over the course of the week, most of the gains occurring on Monday and Friday, while slumping midweek. This particular pattern between gold and silver is remarkable, given the events for the prior two weeks. It suggests that not only has the COMEX and spot price regimes decoupled from the market price, but also from silver's counterpart in the gold COMEX complex.

If so, this could be a startling development, signaling a return of silver to a more reasonable and historically-relevant price in relation to gold. With the current gold:silver ratio at 66.66, it is still a good distance away from historical measures of 16:1, 12:1, or even the global mining ratio, currently estimated by First Majestic CEO Keith Neumeyer at 8:1. Movements in the GSR (gold:silver ratio) are often tiny and barely perceptible, but they may have larger impacts on the general economy than given credit.

Here are the most recent prices for common gold and silver items sold on eBay (numismatics excluded, shipping - often free - included):

Item: Low / High / Average / Median
1 oz silver coin: 36.32 / 53.90 / 42.40 / 41.48
1 oz silver bar: 38.14 / 55.00 / 44.21 / 43.85
1 oz gold coin: 1,945.23 / 2,050.00 / 2,002.22 / 2,006.29
1 oz gold bar: 1,945.23 / 2,304.95 / 1,997.00 / 1,948.36

According to established methodology, these figures put the new Single Ounce Silver Market Price Benchmark (SOSMPB) at $42.99, another increase, surging past last week's benchmark of $41.22.

What the eBay sales are broadcasting is that demand for all manner of gold and silver is reaching manic levels. Contributing to the runaway price of silver are the restrictions on volume purchases and shipping delays at online retailers. Many are still nearly out of stock, and certainly out of stock on the most popular items.

Further indication of the disconnect from COMEX spot price and real world market pricing is the silver dollar offerings from the US Mint, wherein ALL of their one ounce inventory is either unavailable, limited, or pre-order. The takeaway is that even at inflated prices - the lowest-cost one-ounce silver dollar is $67.00 (the currently unavailable West Point Silver Eagle) - Eagles and other silver dollar products from the mint are not to be had.

On eBay, sellers are bound by common practice to deliver within reasonable time frames, unencumbered by mass pricing which restricts dealer inventories and induces shipping delays. With that in mind, it is not inconceivable to believe that some dealers will begin adding premia to market prices for immediate delivery, should demand persist and supply remain slow-paced. If demand for 1,000-ounce silver bars, which are commonly used by COMEX, the LBMA, and industrial users increases substantially, one would normally expect a massive spike on the COMEX, though the rigging in that market has become so extreme as to necessitate purposeful mispricing, i.e., lying.

According to the Silver Institute, global demand is set for an eight-year high of 1.025 billion ounces in 2021.Given that this estimate is extremely conservative, $100 an ounce market price for finished one-ounce silver products by year's end is surely not out of the question.

All of the week-long activity in global markets leads to an unmistakable conclusion: that the world currency markets are closing fast on a global resturcturing, one that may already be underway and being taken advantage of by the best clandestine minds and investment houses, making the following quotation particularly prescient.

Gold is the world’s only monetary asset that has no counter-party risk, and is the only cross-nation, cross-language, cross-ethnicity, cross-religion and cross-culture globally recognized monetary asset.

-- Song Xin, Party Secretary and President of the China Gold Association, "Gold will Support Renminbi as it Moves to Join World," 2014. (Link is in Mandarin.)

It's easy to extrapolate the above statement to include silver and Bitcoin, making a triumvirate of monetary assets available to everybody on the planet as global fiat currencies such as the $US, euro, yen, pound, yuan, and franc continue to lose purchasing power at accelerating rates.

At the Close, Friday, Febraury 12, 2021:
Dow: 31,458.40, +27.70 (+0.09%)
NASDAQ: 14,095.47, +69.70 (+0.50%)
S&P 500: 3,934.83, +18.45 (+0.47%)
NYSE: 15,369.60, +72.52 (+0.47%)

For the Week:
Dow: +310.16 (+1.00%)
NASDAQ: +239.18 (+1.73%)
S&P 500: +48.00 (+1.23%)
NYSE: +72.52 (+0.47%)

Where We Go From Here

Life goes on.

Despite media-driven horrors of the mildest pandemic in recorded history and the absurdly restrictive commands of droning government officials, most people of the world have trudged along through 2020 and into the new year without too much difficulty.

A couple rounds of money from the government, along with rent and mortgage moratoria have helped ease the pain of job loss, sickness, loneliness, and the dehumanizing effects of social distancing, stay-at-home orders, and mask mandates.

Reported cases of COVID-19 are on the decline, as are hospitalizations and deaths. The official narrative is changing. Life is beginning to gradually return to normal. Within a few months time there may actually be fans in stadiums across America enjoying Major League Baseball (we are hopeful).

We've all gone through a rough patch. Its time to stand up, take stock, become resilient and self-reliant and look at ways to make change and ensure that something like the events of 2020 never happen again.

All America - or, for that matter, any country - needs to prosper are a stable economy, an honest media, and political leaders whose primary responsibility is to the welfare of the people. Regrettably, we presently have none of those and that needs to change, the sooner the better.

Restoring the economy will require a return to honest money, away from the fiat regime of the Federal Reserve and towards acceptance of bitcoin, gold, and especially silver as legal tender. According to the US constitution, a dollar equals 371.25 grains of pure silver, or 77.344 percent of a troy ounce. This will take time, effort, and probably a great deal of pain and suffering for the elitist establishment.

Fixing the media will require repudiation of mainstream narratives and a trend toward alternative news and opinion sources. This is already well underway, thanks, in large part, to the numbing, dumb-downing of televised network news and the advance of internet resources. What's needed is a backwards morphing of internet alternative media into radio and broadcast television.

Generating trust in political structures is by far the biggest challenge. America's leaders have failed, spectacularly. By and large, the interests of elected officials and the minions of the bureacracies they command have worked against the public for decades and must be repaired, replaced, and repealed.

Political institutions are badly broken. The 2020 US elections are the laughingstock of the world. Somehow, power was attained by people who conspired to rig the election of a fake president and to thwart the will of the people. Barring wholesale insurrection, the most efficient way to change the power structure in Washington, DC and in state capitols, county seats, and city offices is to ignore or undermine their commands, dictates, regulations, mandates and directives, first by the people, secondarily by those in unelected public service positions.

It will take time to undo the damage done by the corrupt politicians. Voting them out of office is not a viable option unless the voting system is dramatically changed. The major parties have a stranglehold on the process. Disregarding their elections will prove to be a more valuable tool towards dethroning the usurpers. Withdrawing consent by not participating, and promoting the fact that theirs are not mandated positions will prove a powerful weapon against tyranny.

Additionally, the tortuous ideas, memes, and concepts generated by a very small but vocal minority of racist, sexist, anti-American rhetoric needs to be put back in its place, on the fringes of society, not at the vanguard.

Together, Americans are strong. There are 330 million of us and only a few hundred of the oppressors in our nation's capitol. Remember that the next time some government goon tries to infringe upon your freedom, your inalienable rights, your liberty.

We can take back the country, but we must be vigilant and unbending in our resolve.

Not to get too far off track, but here's Vladimir Putin, sounding very much like a 70s-era moderate Democrat, humanist, and environmentalist, politely pooping all over the "Great Reset" agenda promoted by the World Economic Forum (WEF).

At the Close, Thursday, February 11, 2021:
Dow: 31,430.70, -7.10 (-0.02%)
NASDAQ: 14,025.77, +53.24 (+0.38%)
S&P 500: 3,916.38, +6.50 (+0.17%)
NYSE: 15,297.09, +23.19 (+0.15%)

Slacker Nation: 793,000 File Initial Unemployment Claims; 20 Million Jobless; 150 Million Idle Americans

Here's the trouble with getting a job: You might lose it.

That's the reality 793,000 people reportedly ran into last week, as Americans continue to seek money from the government rather than work in either the private or public sectors.

And, that's the seasonally-adjusted number. The non-adjusted figure came in higher, at 813,145. What's troubling about these initial claims is that it appears some people were accepting unemployment back in March, at the beginning of the COVID crisis, went back to work, but have fallen out of employment again.

What else can explain the roughly 40-50 million initial claims filed from the end of March 2020 to the present, a run approaching a full calendar year. The number of people filing initial claims was as high as seven million, which occurred in March, at the onset of the pandemic. New weekly claims didn't fall below one million until August, and they've remained high - between 700,000 and 950,000 - ever since.

Averaged out, it's close to a million initial filings every week for about 46 weeks, so, overall, 46 million people filed since COVID-19 came along, which is stunning, as the US labor market is somewhere in the neighborhood of 145 million. Rouhgly a third of the entire labor market filed for unemployment in the past year. That's downright scary.

The latest press release from the Department of Labor [PDF] is a treasure trove of information, for whatever useful or useless purpose one may reference the data.

Another shocking number is the continuing claims figure, which jumped by 2,596,539 from the prior week, to 20,435,018. That's 20 million people aimlessly wandering around, not working, doing whatever unproductive people do.

Add to these figures, about 73 million kids under the age of 18, 13 million on welfare, another 45 million retirees, and you have over 150 million people in the US not doing much of anything, many of them receiving government checks on a regular basis. That's in a population of 330 million, so close to half of the country is not gainfully employed.

One may argue that the kids and the retired folks shouldn't be working anyway, but back in the formative years of the United States - well before child labor laws - it wasn't unusual for 10 and 12-year-olds to work, at least doing chores of the family farm. And retirement at any age didn't really become the norm until passage of the Social Security Act of 1935. As we used to say in the newspaper business: "we don't have a retirement plan; you're expected to work until you keel over at your desk."

So, one might add up all the reasons why the United States isn't quite as high and mighty as it once may have been, but anyone can point to the fact that much of the country's population doesn't do much, and, those in government jobs (20.2 million, approximately 14.5 percent of the workforce) may actually be doing work that contributes negatively to the growth of the nation, it's easy to see that America has become a nation of slackers.

Carry on... whatever it is that you're doing, or not doing.

At the Close, Wednesday, February 10, 2021:
Dow: 31,437.80, +61.97 (+0.20%)
NASDAQ: 13,972.53, -35.17 (+0.25%)
S&P 500: 3,909.88, -1.35 (-0.03%)
NYSE: 15,273.90, +29.50 (+0.19%)

Bonds. No Bonds.

Could it be over?

Could the fiat currency system be finally at an end?

Even if the fiat currency does survive until August, the 50th anniversary of President Richard M. Nixon's repudiation of the Bretton Woods agreement that US dollars could be redeemed in gold is tragically ironic for central bankers.

But, probably not. The majority of people still want to be paid in $US dollars, at least in the United States. And what may be the only thing standing in the way of a complete currency revaluation, or reset, is normalcy bias, the acceptance of what is commonplace today.

For now.

The future is usually murky, but it can be predictable, as in the case of the longevity of your run-of-the-mill fiat currency, which is about 37.5 years. The fiat $US dollar will turn 50 in August, along with every other currency it trades against. All of them. At some point, nobody will want to hold $US dollars or hold assets in $US dollars, or euros, pounds, looneys, yen, yuan, francs. It is at that point that the currency becomes not only worthless, but a burden upon the citizenry of the nation so cursed as to have, as a national basis, the devalued, debased currency, or, in a global meltdown, currencies.

It is at that point that the currency or currencies collapses and ceases, for all intents and purposes, to exist. We are not there yet.

But, we're getting closer.

The change will be sudden.

The charges of the world, the lackeys of the central banking cartel and government wonks will come up with some solution suitable to themselves, primarily, but their days are over. The world does not belong to Janet Yellen, Jerome Powell, Jamie Dimon, Christine Lagarde, Joe Biden. The true thought leaders in economics are Max Keiser, Mike Maloney, James Rickards, Willem Middelkoop, Michael Saylor, Elon Musk, the people working behind the scenes at PayPal, Stripe, and their ilk. Their day is arriving, if not now, then very shortly.

It's likely that the old guard will announce some new scheme incorporating the dollar, the yuan, yen, oil, gold, the World Bank's SDRs (Special Drawing Rights) wrapped into a cryptocurrency-like apparatus, to which many people of the world will respond, "sorry, we're going with gold, silver, and bitcoin." Many will have no choice, or believe they have no choice but to accept the government-sponsored currency. Having no choice and believing one has no choice are one and the same thing. Those people will be poor forever. Those enlightened to a new currency revolution will have choices and better lives.

Then, life will become so much more interesting, engaging, appealing. When people shake off the yoke of financial repression and control and begin to make strides for self-determination in economic fortune, then the world will turn in many positive ways.

The only alternatives to a debasing dollar for anybody trying to preserve asset value or purchasing power are precious metals and cryptocurrencies. Those have been explosive market segments of late, though the metals have been severely suppressed by global interests while Bitcoin remains unassailable, seemingly immune to the vicious verbal attacks from the likes of Janet Yellen and Christine Lagarde.

Which brings us to bonds, and why you should hold NONE in your portfolio. ZERO.

It's simple, really. Bonds are what finance everything in the fiat realm, from corporate stock buybacks to mortgages, car loans and money for the government. The Federal government is overspending at an astonishing pace. Last year's federal deficit was $3.1 trillion. This year's will be larger. Joe Biden and his Democrat pals in congress are hell-bent on spending $1.9 trillion that they don't have on a COVID relief package. The federal deficit is already $3.1 trillion, according to the US debt clock, but that may not be accurate. It’s probably closer to $700 billion, but we’re not even half way through the current fiscal year, which started October 1, 2020, and ends on September 30, 2021.

What is accurate is that the federal debt (government) grows by $2.7 million every minute. That's $162 million an hour, $3.888 billion a day. The total federal debt is currently $27.894 trillion. Another $106 billion in debt will move it past $28 trillion. That will occur in 27 days, or right around March 9 or 10, or right about the time congress approves another $1.9 trillion in a “relief” package, so, there's a very real chance that before the April 15 income tax filing deadline, the federal government's debt will be over $30 trillion.

Were American citizens to pay back that debt via taxes, it would amount to roughly $85,000 per person. If the government balanced its books and incurred no more debt, first, the economy would collapse, that's a given, but, in such an event, if every citizen paid back an additional $5,000 in taxes earmarked for the debt, it would take 17 years to pay it all off. Obviously, none of this is ever going to happen. It's as close to an impossibility as the moon crashing into the earth. There's probably a better probability of an asteroid hitting Washington, DC directly (wishful thinking).

Therefore, why would anybody hold a bond of any kind, when the return on even the safest, most reliable, is two percent (2.0%) and inflation is close to eight percent (8.0%) if not beyond that. A bond with a 2.0% yield would lose 6.0% in purchasing power every year and even more if inflation heats up further (it will). Over the course of 30 years, your total return becomes a worthless footnote in the pantheon of failed economic ideas.

Meanwhile, stocks are growing at 10-20-30% or more every year. Bitcoin tripled in the past three months. Silver is going to skyrocket over $100 within two years (market price already benchmarked at $41.22). Gold should be closer to $10,000 than $2,000 an ounce.

The only reason to hold a bond of any kind is if you want or need to lose purchasing power, and there's very few people who are so desirous. They are also likely to be delerious.

So, bonds? No. No bonds.

The federal debt is never going to be repaid. That's obvious. Likewise, many student loans are going to be either forgiven or left unpaid, defaulted upon. Mortgages, equity loans and lines of credit, credit cards, car loans, personal loans, payday loans and anything that has the word "loan" attached to it are going to go unpaid. Many people will go bust. The federal government is broke. Most banks are, if not already bankrupt, illiquid and close to insolvent.

The coming financial crisis is going to be like nothing anyone has ever seen before. There is going to be suffering on a scale unknown in human history. It's baked in, given the reckless policies of the federal government and the central bank, the Federal Reserve over the past 50 years. It's been a long time coming - since 1971, when the world abandoned what was left of the gold standard - but it's arriving sooner than most people can imagine.

Already there are signs of desperation. Covid (scam). Vaccines (extra scam). Lockdowns (unconstitutional). Lines at food banks. Fake president. Censorship. Currency direct from government to citizens for doing nothing. It cannot last much longer or the world will become enslaved to debt and central banks for generations.

The fiat era is nearly over, and as soon as the bond bust is realized, it will be apparent to just about everybody. The 10-year note currently yields about 1.15%. Figure the 10-year note at 1.65% to be the breaking point. That would put the 30-year at about 2.40-2.60%. When the 10-year note yields 1.25%, look out. If it continues past 1.40%, the end is near. After that, if you don't own bitcoin, gold, silver, real estate or some hard assets, you will be toast.

A currency revolution is the only answer. The revolutionary currency will be not one created by the people who promoted the crisis in the first place - the usual government and financial suspects - but a currency or currencies outside the banking system: crypto, gold, silver, barter.

The revolution has already begun. Join it.

On the cusp of a central banking beakdown, here's Max Keiser and Stacy Herbert nailing it as usual, along with a segment with Mike Maloney, who calls out the Fed for counterfeiting (which, in fact, is at the heart of central bank monetary policy).

At the Close, Tuesday, February 10, 2021:
Dow: 31,375.83, -9.97 (-0.03%)
NASDAQ: 14,007.70, +20.06 (+0.14%)
S&P 500: 3,911.23, -4.36 (-0.11%)
NYSE: 15,244.40, +17.80 (+0.12%)

Dow, NASDAQ, S&P 500, NYSE, Bitcoin All Rally To New All-Time Highs

Tom Brady showed the world a champion's mantle on Sunday, as he led the Tampa Bay Buccaneers to a 31-9 victory over the highly-overrated Kansas City Chiefs in Super Bowl LV (55).

In celebration of Brady's magnificence, stocks rallied Monday to new all-time highs.

While it might be suspected that stocks responding to the NFL's season-ending championship is just a wee bit of hyperbole, but any explanation for the rise in the price of stock indices must be taken with sufficient grains of salt.

Stocks are rising because the US dollar is nearly worthless. The Federal Reserve has conjured up so much fresh capital over the past year that it must seek a home in assets. The dollar's preferred place of residence these days is in stocks, and to a large extent, real estate, especially of the residential kind.

According to the Fed's own data, M1 money supply* increased by 66.5% in the 12 Months from December 2019 to December. 2020, and most of it was borrowed, or, in Fed-speak: borrowings from the discount window's primary, secondary, and seasonal credit programs and other borrowings from emergency lending facilities.

Non-seasonally-adjusted money in circulation (M1) rose from $4.04 trillion in December 2019 to $6.76 trillion in December 2020.

Why the big increase? Simple, because it was declining, and the Fed can't have a decline in he amount of currency out there lest it risk a stock market crash, defaltion, and additional purchasing power for the world's reserve currency. Rather, the Fed is hell-bent and committed to ever-rising levels of its currency in the world, all of it debt-based. Every dollar borrowed by the government, business, and individuals is owed to the Fed, and they want more. Certainly they are not done.

The catalyst for the most recent surge in money (currency) supply was, of course, the coronavirus crisis, which shuttered businesses, disrupted supply chains, shunted consumer spending and generally caused the economy to generally slow down. From December 2019 to February 2020, M1 shrank by more than $100 billion, making the timing of COVID-19 somewhat miraculous. The panic allowed to Fed to open the currency spigot full bore, spilling out all manner of lending facilities, thus creating a boom in stocks.

Everybody knows what happened. After stocks crashed in March, the money flow was so grandiose that the Dow gained (through Monday) 70% off the lows, the S&P, 75%, and the NASDAQ rocketed higher by 104%, and the Fed is not nearly through, continuing to borrow - adding to the balance sheet - $120 billion a month, of which $80 billion is in treasuries and $40 in mortgage-backed securities. They've committed to those levels of borrowing for the rest of the year, and, another thing everybody knows, they can't ever stop, or the economy would slow down and eventually collapse.

So, stocks are up not because companies are doing well (some are, many more aren't), but because there's too much currency chasing a limited amount of assets. Speaking of limited supply, median new home sales hit another new record in January of $330,225, up 10% from the same time a year ago. Nothing says stupid like buying a new home built with $6 2x4s and $40/sheet OSB (plywood).

Other things are going up in price as well, like Bitcoin, which advanced from $39,155 at 7:30 Monday morning to $48,200 by 2:00 am Tuesday all because it was revealed that Elon Musk's company, Tesla (TSLA), bought 1.5 billion worth of the world's leading cryptocurrency.

But, that's another story for another day. Let's just say it's more about value than price right now.

* M1 consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (3) other checkable deposits (OCDs), consisting of negotiable order of withdrawal, or NOW, and automatic transfer service, or ATS, accounts at depository institutions, credit union share draft accounts, and demand deposits at thrift institutions. Seasonally adjusted M1 is constructed by summing currency, demand deposits, and OCDs, each seasonally adjusted separately.

At the Close, Monday, February 8, 2021:
Dow: 31,385.76, +237.52 (+0.76%)
NASDAQ: 13,987.64, +131.34 (+0.95%)
S&P 500: 3,915.59, +28.76 (+0.74%)
NYSE: 15,226.61, +157.01 (+1.04%)

WEEKEND WRAP: Reddit's #Silver Squeeze Silver Rush Strikes at the Heart of Gold and Central Banking

Before venturing into the main thrust of this edition of the WEEKEND WRAP, a rief recap of other financial developments over the course of the past week:

Equities, following the worst-performing week since October, staged a massive comeback, with the NASDAQ and S&P 500 closing on Friday at record highs and the Dow and NYSE Composite finishing within one percent of all-time levels.

Lagging the insatiable desire for paper holdings was the Dow Jones Industrial Average, which added a stunning 1,165 points on the week, but was up a mere 3.89%, a pittance compared to the six percent gain on the NASDAQ, which was rocketed higher by 785 points.

It was the best week of the new year, by far, suggesting that stock markets are either overheating or preparing to blast off into unknown territory once again. Considering that the US congress is knee-deep in negotiations over a $1.9 trillion stimulus package that includes payments of $1400 to millions of individuals, Wall Street's rampage to higher ground seems to be etched in stone, for now.

Despite the general slowdown from COVID-19 restrictions in a handful of states, companies - particularly those in the tech arena - posted solid, if not outstanding, fourth quarter and year-end reports. With the coronavirus crisis abating - cases are down more than 40% in some states - stocks are likely to maintain strong momentum while the market fosters more madcap episodes like those seen in GameStop (GME), AMC Entertainment (AMC), and others.

Speculation largely drives stock prices higher, and speculation with free money from the Fed (banks, brokerages) and the federal government (individuals) should keep the rally alive and well through Winter and into Spring, which is a mere six weeks hence.

Fixed income markets were less enthusiastic. The Treasury complex saw a steepening fo the yield curve, as yield on short-dated maturities collapsed and the long end sold off, producing yields on the 10-year note, 20-year, and 30-year bonds at 12-month highs.

Yields on 1-month, 2-month, and 3-month bills fell to 0.02%, 0.03%, and 0.03%, respectively, while the benchmark 10-year note yielded 1.19% at week's end. The 20-year yield was 1.79%, while the 30-year yielded 1.97%, both the highest since 2/20/2020. The 10-year was at it's highest yield since February 27, 2020, an indication that the wholesale global debt binge is well underway.

From an investor's perspective, oil had another banner week, with WTI crude rising to $57.07 in the current futures contract. However, oil futures are in backwardation, with subsequent futures contracts bid at lower prices than the up front contract. For instance, the July '21 contract is priced at $55.69 and so forth. This is almost certainly a condition caused by the recent spate of chilling and stormy weather cascading across large swaths of the continental United States, spiking demand for heating fuel.

While cold weather brings out the highest prices for fuel oil, it is essentially a short-term dynamic as expressed by the futures trading. Gas at the pump barely budged over the course of the week, particularly in the southern states, where demand is still sluggish and supply is steady.

Here's an excellent short video explaining the conditions of contango and backwardation.

Cryptocurrencies were solid, with Bitcoin getting a major boost on Friday into Saturday morning, with price topping out at $41,000 at around 11:00 am ET before taking a dip down to $38,000. As of this writing, it's recovered to the mid-$39,000 level.

Etherium made a new all-time high at $1,720 on Saturday and has since leveled off in the $1,600 range.

At last, the crux of last week's trading highlights, with the focus on the Reddit group r/wallstreetbets and its foray into the silver market.

When the redditers at r/wallstreetbets launched their assault on the silver market (remember, this is a group seven million strong, with untold number of followers), the price of silver on the COMEX was $25.26 per troy ounce. That was at the close on Wednesday, January 27. The following day, the rush was on, sending silver to $26.52 and following through with another huge gain to $27.71 on Friday. Over the two days, silver had advanced $2.45 (+9.7%).

On Monday, February 1, the COMEX price was bid as high as $29.38, with the ask at $30.38, the spread widened due to liquidity issues and also to discourage buyers. Though the efforts of the redditers was focused on ETFs, SLV and PSLV, and in the physical market, COMEX and the LBMA could hardly ignore the flows of physical metal leaving shelves of online dealers and local coin shops, but, by the end of Monday's trading in New York, they had managed to keep the price at a somwhat unreasonable (to them) $28.99.

Overnight, in the thinly traded Asian markets, the riggers went to work in earnest, pushing the price below $28 by the time trading opened Tuesday in Europe and then, the Americas. Their payback was vicious and unmistakable, crushing the price to $26.73 at the close in New York. A small bounce to $26.91, with the spread down to $0.50 from $1.00, ended trading Wednesday, but again on Thursday, they took a knife to silver, sending it to the low of the week, $26.53. Friday's bounce back to $26.90 by the close left COMEX silver down 81 cents for the week.

Gold was likewise shunted, though the affect was less profound initially. As of Monday morning, gold was priced at $1874.00. On Monday, it was struck down to $1860.00, even as silver was higher, but the riggers at the COMEX were just getting started. By Tuesday, gold was down to $1837.90, then $1833.85 Wednesday, and finally, the crushing blow to $1794.00 on Thursday. A bit of a reprive was granted on Friday, leaving gold priced at $1810.80 for the weekend.

Through the entire episode - resembling a skirmish in a larger war - both parties may have been satisfied with the immediate results but left with lingering longer term doubts. For the Reddit Rebels, the price of physical silver had gone out of control from the COMEX. Dealers were left with empty shelves and severe shipping delays on the few products they could source. Unsure about future supply, online dealers had shed the cloak of the COMEX and left prices at levels not seen since 2011, when silver and gold had reached record highs and nearly broken the COMEX/LBMA cabal.

For the bullion banks, the COMEX, LBMA, and central bankers from the Federal Reserve to the ECB, BOJ, and the Bank of England they should have realized that the horde of commoners had nearly overwhelmed their long-standing position on the high ground of institutionalized fiat currency. Talk of hearings into the operations of the Reddit Rebels (not the COMEX, hedge funds, or brokerages) were bandied about the halls of congress.

Newwly confirmed Treasury Secretary, Janet Yellen, convened a meeting with the heads of the Securities and Exchange Commission (SEC), the Federal Reserve, the Federal Reserve Bank of New York and the Commodity Futures Trading Commission (CFTC) on Thursday, coming to a conclusion that the stock market hasd shown resilience through the GameStop frenzy and calling on the CFTC and SEC to examine the events more closely and establish a timeline for how the market mayhem unfolded.

Yellen sought and received permission from ethics lawyers before calling the meeting, along with clearance to engage on wide-ranging issues in the financial services industry.

Yellen's decision to seek the waiver followed a report by Reuters that because of speaking fees she was paid by a key player in the GameStop saga, hedge fund Citadel LLC, she would need permission to deal with matters involving the firm. That's how badly shaken was the financial services industry. Even their top regulators and overseers have been involved in deals with market participants. Yellen received hundreds of thousands of dollars in speaking fees from various firms and groups in the industry after her stint as head of the Federal Reserve (February 3, 2014 – February 3, 2018) and prior to her appointment as Treasury Secretary by illegitimate president Joe Biden.

Yellen was nominated to chair the Federal Reserve by former president Barack Hussein Obama and confirmed by the Senate in 2014 and confirmed again for Treasury Secretary just weeks ago. President Donald J. Trump removed Yellen in 2018, replacing her with Jerome Powell, the current Chairman.

Thus, Washington's elites have been shaken to their core by the commoners. The COMEX and LBMA will continue to conspire against the hopes for honest money. By keeping prices at elevated levels, precious metals dealers have registered their resistance to the onerous control that has plagued the market for decades. The redditers have neither conceded nor surrendered. The war will rage on from here, pitting hedge funds, the financial services industry, and regulators against the commons.

A full discussion on the workings and intermingling of central banks, industrial banks, commercial banks, miners, smelters, brokers, and dealers in the metals markets would take more time and space than afforded here. Interested readers can familiarize themselves with such intricate relationships by perusing this explanatory article at Bullion Star, "Bullion Banking Mechanics"

According to Blanchard and Company, a large retailer in rare coins, the six "clearing banks" that handle gold bullion transactions are: "Barclays Bank PLC, ScotiaMocatta, Deutsche Bank AG, HSBC Bank, JPMorgan Chase Bank and UBS AG."

In this extensive analysis on bullion banking mechanics by Bullion Star, many more - as many as 35 - banks are cited as "bullion banks" that handle gold, and likely, silver. Almost all of thse banking interests are members of the London Bullion Market Association (LBMA).

In a notable development, Canadian Bank of Nova Scotia (Scotiabank) decided last year to exit the metals market. Their announced departure was to be completed sometime in early 2021.

Back in 2017, Scotiabank tried to sell ScotiaMocatta, the world’s oldest gold trader owned by Scotiabank.

Unable to finalize the sale, however, Scotiabank ended up keeping its precious metals trading business but downsized it at the beginning of 2018. ScotiaMocatta’s history goes all the way back to 1600s when Moses Mocatta partnered with the East India Co. to ship gold to India. The operations were set up in London in 1684. In 1997, Scotiabank acquired Mocatta Bullion by purchasing it from Standard Chartered.

At the end of all the mayhem lies gold, central banks, and debt-based fiat currencies which dominate life in the 21st century. What the redditers have accomplished, first, through their dealings in the stock market, and, secondly, via their assault on the price of silver, is open wounds into the central banking facade of infallability.

The physical (market) price of silver has now decoupled from the spot price established by the LBMA and traded upon the COMEX. Gold is also moving towards a similar disconnect or decoupling. What have commonly been referred to as "premiums" over spot, have, thanks to r/wallstreetbets, are now so far apart as to engender the need for dual prices, one for the 5,000-ounce contracts traded on the COMEX (spot) and one for physical, finished products (market).

The war, and the story of the century, will continue.

As has become customary every Sunday, here are the most recent prices for common gold and silver one-ounce coins and bars sold on eBay (numismatics excluded, shipping - often free - included):

Item: Low / High / Average / Median
1 oz silver coin: 33.00 / 53.49 / 41.76 / 40.48
1 oz silver bar: 30.00 / 54.95 / 42.15 / 40.50
1 oz gold coin: 1,906.00 / 2,033.34 / 1,990.27 / 2,000.44
1 oz gold bar: 1,897.00 / 1,992.98 / 1,956.07 / 1,955.63

Last week, Money Daily unveiled a benchmark market pricing mechanism for physical silver, based on our weekly surveys and strict methodology. See the current Single Ounce Silver Market Price Benchmark (SOSMPB), set this Sunday morning at $41.22.

There was no shortage of market commentary from the usual (and unusual) sources; so many of them in fact, that only links can be provided in this space.

Here's two by Jake Ducey, from I Love Prosperity, the first with noted analyst, Alidair Macleod of goldmoney.com:
https://www.youtube.com/watch?v=sQwQoMnCq8c

The second with David Morgan from themorganreport.com
https://www.youtube.com/watch?v=qT1QIsULi6U

Here's Max Keiser and Stacey Herbert explaining how Fed policies contribute to the racial wealth gap:
https://www.youtube.com/watch?v=L9iSeJa996I

Best-selling author of the Big Reset Willem Middelkoop tells Daniela Cambone how the silver squeeze may affect the gold market and central banking:
https://www.youtube.com/watch?v=qeY1n67LUOg&feature=push-fr&attr_tag=5DPdjODOrXZa21UD%3A6

At last, we defer to the genius of Ted Butler in a deep dive into the silver market, via an interview with Pallisades Radio (47 minutes):

There are many more opinion pieces and videos out there. Readers are advised to do their own due diligence.

At the Close, Friday, February 5, 2021:
Dow: 31,148.24, +92.38 (+0.30%)
NASDAQ: 13,856.30, +78.55 (+0.57%)
S&P 500: 3,886.83, +15.09 (+0.39%)
NYSE: 15,069.60, +94.17 (+0.63%)

For the Week:
Dow: +1165.62 (+3.89%)
NASDAQ: +785.60 (+6.01%)
S&P 500: +172.59 (+4.65%)
NYSE: +672.40 (+4.67%)