It's that last point, inflation, that concerns people the most. Supply chain issues are cited as the proximate cause of price hikes for various goods and services, but that's mostly a cover story for the one-blind-eye corporatism that has overwhelmed world markets. In the United States, consumer goods are rising because everything consumed is imported, mostly from China, and shipping transit rates have exploded. Container ships coming West to East across the Pacific Ocean are full and return empty. That's not a supply chain issue. That's the end result of strip-mining American manufacturing down to the last screw and bolt and sending all to China.
China, in textbook communist manner, owns all the means of production. Owning little to none, the United States has been reduced to a colony of spenders and hoarders, useless eaters and takers. Multi-national companies, most listed on US exchanges, benefit greatly at the expense of consumers and small business. Since Donald Trump was taken off the world stage, China became free to raise prices, control movement, dictate consumer taste, and distort markets at will. The US government will do nothing to stop it. Skeptics attest that the government quietly is encouraging China's behavior to usher in an era of dependency and the ascent of the nanny state to extreme levels.
It took forty years or more, depending on your historical perspective, but America's industrial base has been completely demolished and now the hollowing out of the middle class is well underway, all thanks to inefficiencies or purposeful disinterest by the federal government. The declining condition in America is likely to worsen. There are widespread reports of businesses unable to fill open job positions due to the unwarranted continuation of extended unemployment benefits, rent and mortgage mortariums and other medical-related regulations, rules, or mandates. If anything, slack in the labor market on the job-seeker side should improve wages, leading to more inflation.
Otherwise, everything is just peachy.
Treasury yields bumped up a little bit over the course of the week but remained in the Fed's comfort zone. The 10-year note was up seven basis points, from 1.58% to 1.65%. Yield on the 30-year bond crept up five basis points, from 2.25% to 2.30%. These rates are leaning toward the recent high end from March, when the 10-year topped out at 1.74% and the 30-year was 2.45%. It was at that level that the Fed and investors became uncomfortable at the same time and rates were systematically screwed back down. Even at this week's levels, yields are a far cry from the start of the year, when the 10-year was 0.93% and the 30-year, 1.66%.
Not to get too math-frenzied, those increased yields represent 77% and 39% increases over four months. That's not normal, but, then again, what is normal now?
Cryptocurrencies continue to make mainstream inroads. JP Morgan's CEO, Jamie Dimon, announced that his firm would enable its high-end clients to toy around in the crypto sandbox with a managed investment vehicle while the European Investment Bank (EIB) plans to issue a two-year 100-million euro digital bond on the Ethereum blockchain network, with the sale to be led by Goldman Sachs, Banco Santander, and Societe Generale, according to analysts. Everybody with fiat-based assets wants entry to the blockchain environment, apparently.
These headlines and others sent Ethereum soaring to record highs and stopped dead the decline in Bitcoin, which dropped to $47,000 last Sunday but has since recovered to as high as $58,550 and currently is in a range between $56,000 and $57,000. Ethereum was the darling of the crypto universe, gaining over 30% on the week to just short of $3,000. It has outperformed Bitcoin over the past year, by leaps and bounds, even taking some market share from the granddaddy of cryptocurrencies.
Oil prices went haywire during the week, ascending rapidly from just under $62 a barrel for West Texas Intermediate (WTI) all the way to 65.01 on Thursday. Friday's across-the-board selloff came just in time to take the closing New York price down to a more reasonable $63.58. Gas prices didn't really respond as the national average stayed just below $2.90 a gallon with highest prices on the West coast and the lower end in the Southeast. For now, at least, prices at the pump have leveled off after the national average had risen pretty quickly in two main moves, from $1.74 to $2.24 last Spring and Summer, and the latest, protracted advance from $2.09 to $2.89 from mid-November to the present.
Much like the absurd lumber market, which has been entirely manipulated by major producers, oil prices are not quite reflective of true supply and demand forces. There's still a glut of crude and economies are not moving forward or re-opening as quickly as the rising price of crude and distillates would suggest.
Despite Thursday's obvious naked shorting on the NYMEX which took gold and silver off of their week's highs, precious metals survived another period of price dislocation by the LBMA and futures market riggers. Silver rocketed from $25.57 the ounce to $26.67 by Tuesday, then was guided lower the remainder of the week to finish Friday at $25.92. Gold's smallish gains were tempered by Thursday's $25 takedown on the NYMEX, leaving the futures price to finish the week at $1769.10, resulting in a net decline of $11 for the week.
An attempt to garnish some favor with silver stackers and the reddit.com horde at r/WallStreetSilver by Sprott Money's Craig Hemke may have re-energized the forces opposed to "paper silver" prices or turn out to be a real dud. Proof will come Sunday night into Monday morning when the futures markets open in Asia, then Europe and then to the Americas. Hemke called for a massive silver raid on May 1, urging people to purchase 100 ounces of silver on that day, which, obviously known to Hemke, was a Saturday, when futures markets were closed, thus rendering any market reaction a delayed reaction or moot point.
Having never stopped their relentless retail silver squeeze, the reddit "apes" were having fun with it, though some regard Hemke as a representative of the establishment Sprott Physical Silver Trust (PSLV) and potentially part of the problem in keeping a lid on the silver price.
However, the ongoing retail buying spree has had and is having some effect on the EFTs, SLV and PSLV, which were negatively affected by February's first silver strike by the redditers and have since been offloading inventory according to this insightful article by Austrolib of The End Game Investor at Seeking Alpha. Keeping an eye peeled on silver and gold this week should be top of mind for anti-fiat proponents.
Here are the most recent prices for common 1 ounce gold and silver items sold on eBay (numismatics excluded, shipping - often free - included):
Item: Low / High / Average / Median
1 oz silver coin: 38.00 / 58.00 / 43.87 / 42.48
1 oz silver bar: 35.00 / 49.97 / 40.91 / 40.22
1 oz gold coin: 1,895.49 / 1,993.00 / 1,929.80 / 1,917.59
1 oz gold bar: 1,818.25 / 1,970.00 / 1,871.06 / 1,869.27
The weekly eBay survey shows both gold and silver to be stubbornly holding onto premia, with Money Daily's Single Ounce Silver Market Price Benchmark (SOSMPB) advancing 33 cents to $41.87 over the week. Coins remain preferable to bars in both metals, with roughly a three percent (3%) premium for coins over bars at median prices.
While this week may be regarded as hum-drum or otherwise subdued, movements in precious metals and cryptocurrencies suggest that a storm is brewing and nothing will be able to stop its advance over time. Changes, especially radical currency reassignment, take time, measured in years and decades rather than moments and hours. It's worthwhile to disregard market noise in these situations, focusing on longer-term conditions. Being prepared for chaotic events in political, societal, and economic arenas is not for the feint-hearted mor pound-foolish. It requires vigilance and steadfast nerves as the daily drone of mass media often paints a picture that is far removed from actual on-the-ground reality.
Changes are happening all around us. Perception, being able to discern the real from the imagined, underpins the acquisition of useful knowledge.
Many more big cap companies report first quarter earnings this coming week, but after that the earnings deluge will begin to wind down. Money Daily purposely did not report on the Fed's FOMC meeting in this edition of the WEEKEND WRAP as it was a major nothing-burger and completely inconsequential.
A bit of housekeeping to close out the WRAP: This coming week may be the end of regular Money Daily posts on Google's Blogger platform. The posts have been simultaneously published there and on the home site at dtmagazine.com. It seems as though Google's bots are interpreting some traffic on the home site as "invalid." As is usual with the behemoth, no explanation has been forthcoming and Fearless Rick has been getting a little tired of the regularity of Google's one-sided authoritarianism. The plan, so far, is to post a title and a link to the actual post here on blogger, but publish only on the hoe site and possibly on Substack, which appears to be more "author-friendly."
Money Daily and Downtown Magazine create this work. Google and Blogger are nothing more than platforms and facilitators. They don't own our work, nor should we be subject to censorship, be it overtly or otherwise. Enough is enough.
At the Close, Friday, April 30, 2021:
Dow: 33,874.85, -185.51 (-0.54%)
NASDAQ: 13,962.68, -119.86 (-0.85%)
S&P 500: 4,181.17, -30.30 (-0.72%)
NYSE: 16,219.33, -156.67 (-0.96%)
For the Week:
Dow: -168.64 (-0.50%)
NASDAQ: -54.13 (-0.39%)
S&P 500: +1.00 (+0.02%)
NYSE: +13.13 (+0.08%)
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