Stocks Bounce, Gold, Silver Gain, Bitcoin Volatile; Asset Classes Lesson One: Determining Asset Classes

Some of the prime axioms of the investing world include:

"If you don't hold it, you don't own it." -- applies to gold, silver, or physical assets

"Renting is throwing money away." - applies to housing, real estate

"A penny saved is a penny earned." - Ben Franklin

By the way, on that last famous quote by one of America's great Founding Fathers, Ben Franklin also said, "An investment in knowledge pays the best interest," which is a timeless thought.

There are more, as illustrated here, and here, the point being that while there may possibly not be any endless truths, there are some adages that pass the test of time with flying colors.

Why is this important? Could it possibly be because living today is measured in nanoseconds, the value of human life has been so greatly diminished, currency masquerades as money, or everything seems to be measured in terms of wealth? Probably all of those and more.

Young and old alike have lost respect for things that matter most. Good manners, pfft. Morals, see ya. Concepts like integrity, honesty, reliability, respect, and dignity seem to have vanished from our modern lexicon. Coolness is valued over intelligence. What we own, owns us. Our media has failed us. Government has betrayed us. Institutions of higher eduction have impoverished us.

As the world slides ever closer to totalitarian tyranny with every passing day, there are resistors and skeptics, those who seek to avoid the path of hate and derision, of a world ruled by the loudest voice, the most devious mind. Some people - and there are a lot of them - just want to be left alone. They don't want everything they do, or say, or touch, to be a political statement. They wish to live on equal terms with their neighbors, in peace, harmony, and shared values. Call them old-fashioned or stuck in the mud. They just happen to like things the way they used to be, and one can hardly blame them.

Whether those who resist will be dragged into the present or the uncertain future remains a speculation. What matters is how well one is able to navigate today, tomorrow and beyond in a world that seems to be spinning out of control, and to do that, one has to have priorities, assets that will retain value, and investments which will grow, provide income and stability.

In this series of articles over the coming days and weeks, Money Daily seeks to explore and examine the various asset classes, identify some new ones, and suggest which will work best in the so-called "New Normal." As a basic premise, the idea that owning stocks or bonds or real estate or any single asset class is thrown out the window. A mix of not just stocks, which Wall Street insists is the only game in town, but of a variety of asset classes is the key to survival and prosperity, as it has likely been for eons.

Let's start with a look at what are the major asset classes, just by enumerating them, bearing in mind that not all assets are financial assets, but all assets have value, and owning a rich mix of asset classes is key to wealth, happiness, and hopefully, prosperity. (Bear in mind that your financial advisor or "investment professional" isn't going to cover even half of this list, which is entirely the product of years of research, study, and investing by Money Daily publisher and editor, Rick Gagliano.)

In no particular order, asset classes are as follows:

Cash (currency in circulation)

Cash equivalents

Precious metals

Alternate currencies (cryptos, such as Bitcoin)

Stocks (equities)

Bonds (fixed income)

Derivatives: Futures, Options, Mutual Funds, ETFs, etc.

Commodities

Real Estate

Income-producing machinery

Business investments

Art

Collectibles and Rarities

Transportation

Energy

Security

Time

Food

Water

Community

Goods and Services for Barter

Household necessities

Intellectual property

Marketable, Tradable skills

...and a few more that are either not yet definable or discovered.

This is by no means a complete list, though it is fairly exhaustive. There's more to the world of which we know and don't know to discover. The best assets may not even be on anyone's list as they've yet to be discovered. Keeping an open mind that's attuned to discovery and innovation is a paramount tenet of any investor's skill set.

Let us leave it right there for now. More details will follow in upcoming chapters.

Here's a couple more quotes for the day:

Rich people have small TVs and big libraries, and poor people have small libraries and big TVs. -- Zig Ziglar (If you don't know who Zig Ziglar was, you've missed out on much. Here's a taste...)

Never spend your money before you have it. -- Thomas Jefferson (It is not surprising that Jefferson was greatly opposed to the concept of a central bank.)

• • • • • • • •

Tuesday's trading day might best be defined as cautiously speculative. Monday's selloff in stocks and precious metals was met with pre-market confidence in futures which carried over into the equity cash session. Stocks were up sharply at the open, stayed afloat, but lost ground early, especially after a group of "moderate" Republicans and Democrats released the contents of a fresh COVID stimulus bill that was poorly crafted, politically inspired, pandering to special interests and out of touch with economic realities.

The Dow, which had rallied more than 400 points in early trading, eventually gave back more than half of those gains by the closing bell. The promise of close to a trillion dollars ($908 billion), sponsored by Joe Manchin (D-WV), Mark Warner (D-VA), as well as Bill Cassidy (R-LA), Mitt Romney (R-UT) and Susan Collins (R-ME), and Lisa Murkowski (R-AK) missed the mark badly in Wall Street terms.

The bulk of the money went to mostly non-Covid-related issues. $160 billion was earmarked for aid to state and local governments, $82 billion for education funding, $45 billion for transportation agencies (AMTRAK). A $300 weekly unemployment boost was included, but the bill left out another round of checks to Americans, an enormous failing.

Treasury yields exploded higher as money fled fixed income. Yields on the 10-year note and 30-year bond rose eight basis points, to 0.92% and 1.66%, respectively.

Gold and silver rallied sharply and held onto gains after weeks of relentless price-crushing attacks in futures markets. Bitcoin and other cryptocurrencies gyrated wildly, but continued a sustained long-term rally.

Fake News Viewing note: Vaccine pusher, Bill Gates, is scheduled to appear on NBC's "Today" show, 7:00 am ET.

At the Close, Tuesday, December 1, 2020:
Dow: 29,823.92, +185.32 (+0.63%)
NASDAQ: 12,355.11, +156.41 (+1.28%)
S&P 500: 3,662.45, +40.82 (+1.13%)
NYSE: 14,146.64, +140.14 (+1.00%)

How Long Can This Continue? America, Europe On Brink of Disaster

It's December 1st, roughly 10 months since the dreaded China virus began to spread throughout Wuhan province in China, eventually making its way around the world.

America and Europe have been dealing with the virus since March, and so far, there hasn't been any progress, except for globalists who seek to destroy Western economies. They've actually done quite well, forcing lockdowns on citizens and mask-wearing by hundreds of millions deluded by false claims and over-the-top media coverage and government interventions.

CV-19, which has been proven to be about as deadly as the ordinary seasonal flu - and maybe even less so - has been employed to bludgeon small business and individuals into submission, bankruptcy, even death. The media lies are one-sided and cover up the truth: PCR Tests Are Proven to Result in False Positives 97% of the Time.

In the United States, evidence of fraud continues to proliferate, even as social media censors the news, and the mainstream media continues its false narrative of "President-Elect" Biden and Trump's team losing every case in every court. At some point, it becomes obvious that not only was a massive fraud perpetrated against the American public, but state legislatures, secretaries of state, and governors are actively covering it up, sending electors for Biden to Washington, DC, to be certified within days.

The entire populations of Europe and the United States are at a breaking point and little is being done to prevent further crushing of local economies and elevation to the highest elected position in the country of a known influence-peddler, grifter, thief, via a stolen election.

But, stocks keep racing higher, gold and silver beaten down on a regular, daily basis.

Morgan Stanley issues upgrades and downgrades to bank stocks.

The world is perilously close to a breaking point. It's difficult to comprehend how quickly individual rights have been stripped away and how close most of the developed world is to totalitarian overthrow.

Big government is in bed with big media, big business, big pharma. Do they not realize that by purposely draining all resources from the public they will eventually find nothing left to feed upon?

There's probably less than two to three months before the entire planet is in the throes of an economic and social catastrophe that will make the Great Depression seem quaint and mild by comparison.

At the Close, Monday, November 30, 2020:
Dow: 29,638.64, -271.73 (-0.91%)
NASDAQ: 12,198.74, -7.11 (-0.06%)
S&P 500: 3,621.63, -16.72 (-0.46%)
NYSE: 14,006.46, -192.03 (-1.35%)

WEEKEND WRAP: Stocks, Gold, Silver, Bitcoin, Oil Prices, Elections Show Globalists In Complete Control

If the week just past taught us anything, it is that Americans have no control over their own lives, or, at least they're not supposed to, according to the assembled DC bureaucrats, mindful media and the medical establishment.

Dr. Anthony Fauci, point man for the CV-19 propaganda campaign, warned Americans about traveling over the Thanksgiving holiday, and fretted - along with anchors and reporters on mainstream media TV outlets - that people ignoring his warnings were likely to make the entire holiday season - Christmas and New Year's - worse in terms of his fake CV-19 "scamdemic."

Stocks had another solid week, with the Dow Industrials, S&P 500, NASDAQ, and NYSE Composite all making new all-time highs, even if interrupted by time off for the "little people," but oil prices were up more than 10 percent, raising gas at the pump, and anything that might offer relief from the tyranny of fiat money, specifically, gold, silver, Bitcoin and other cryptocurrencies, were beaten down like disobedient dogs.

On top of all that, the media continued to shield the public from the truth about the 2020 elections. They were rigged for Joe Biden, as any thinking person who bothers to do a little research can easily ascertain. Making worse in that regard is the corruption of judges at state and federal district levels, who have uniformly ruled in favor of the election cheating perpetrators, denying justice for the people of various states.

Basically, this was a week in which the elitists flexed their muscles a little and showed the world who's really in charge. It's sickening because the world is witnessing the end of democracy as a principal form of governance, as it's being replaced by totalitarian political control which answers only to itself.

Such is the state of the world as 2020 - one of the most regrettably ugly years in the pantheon of human history - lurches into its final month.

Breaking into the details for the week, the recent raises in treasury yields on the long end were tamped down a bit on Friday after rising earlier. At Friday's close of business, the 10-year note yielded 0.84%, the 30-year, 1.57, up one and four basis points, respectively. The short end remained at the zero-bound.

WTI crude oil rose from $42.42 to $45.52 over the course of the week. The rise in oil prices synchronizes nicely with colder weather and holiday travel. Since October 30, the price has risen from 35.79 to it's current level, a gain of 27.2%, which is simply stunning, considering the timing and exigent circumstances from CV-19 with closures, lockdowns and travel warnings.

Cryptocurrency was the most damaged asset class, with Bitcoin getting pounded on fears of government regulation or, more likely, distribution by "whales" cashing in on the recent rise which had the coin less than $10 short of its 2017 all-time high. From early Wednesday morning through early Friday, the price of Bitcoin in US$ fell from 19,500 to a low of 16,490, suffering a 15.4% drop.

Gold and silver, as mentioned above, were simply destroyed as futures traders took down the precious metals as though they were indeed ancient relics of a world forgotten. Gold's decline from $1,872.40 an ounce to its close on Friday at a disturbing $1,783.10 was a 4.8% slap. Showing the ultimate central bank disdain for the metal of gentlemen, silver fell from $24.36 to $22.68 on the week, a drop of 6.9%, leaving the gold:silver ratio at 78.62.

Prices for the metals are well below their summer highs. Gold has zoomed past $2,000 an ounce while silver was testing 8-year highs just short of $30 per ounce.

As is customary, 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: 28.90 / 49.00 / 36.62 / 36.10
1 oz silver bar: 29.18 / 49.95 / 37.16 / 36.95
1 oz gold coin: 1,853.00 / 1,993.68 / 1,905.17 / 1,897.62
1 oz gold bar: 1,853.00 / 1,900.98 / 1,883.39 / 1,890.24

Happy Holidays!

At the Close, Friday, November 27, 2020:
Dow: 29,910.37, +37.90 (+0.13%)
NASDAQ: 12,205.85, +111.44 (+0.92%)
S&P 500: 3,638.35, +8.70 (+0.24%)
NYSE: 14,198.50, +6.91 (+0.05%)

For the Week:
Dow: +646.81 (+2.29%)
NASDAQ: +350.88 (+2.96%)
S&P 500: +80.81 (+2.27%)
NYSE: +371.60 (+2.59%)

While You Weren't Watching: Negative Yielding Bonds At Record; Bitcoin's Demise; Silver, Gold Gashed

Focused on the glorious Dow 30,000 meme the past few days, along with post-election foibles and coronavirus circumstances, little notice was paid to a number of developments that may eventually have more to do with a "Great Reset" economy than the rise and fall of old standard stocks and bonds.

Since nobody bothers to keep score on the amount of negative interest rate debt in play throughout the world, Barclay's and Bloomberg try to keep abreast. Via coindesk, a premier purveyor of all news concerning cryptocurrencies, noted on November 16, the amount of negative-yielding debt set a new record, at $17.05 trillion (in US$).

Rising dramatically from around $6 trillion to the prior high mark of $17.04 trillion in 2019, low issuance of new negative debt and the retiring of some older maturities had brought the amount of below-zero interest-bearing debt to less than $8 trillion earlier this year. The global pandemic thrust upon the world stage changed all that as governments scrambled to shore up damaged economies and the amount of new negative-interest debt instruments soared.

Massive emergency funding in the negative space seemed a perfect set-up for investments without counterparty risk, such as gold, silver, and cryptocurrencies like Bitcoin. That theorm held sway early in the pandemic phase, with gold notching a record high, silver and Bitcoin up sharply. Until recently, these alternate investment currencies had held up relatively well, especially Bitcoin, which rocketed within a few dollars of its all-time peak (2017), sailing past the $19,000 mark on Tuesday of this week and hitting a three-year high at 19,488.81 on Wednesday.

It was there that Bitcoin met with distressing news to holders and speculators, as Treasury Secretary Steven Mnuchin was reported to be considering plans to introduce fresh rules for "self-custody wallets" by the end of his term. Bitcoin bottomed out at $16,270.37 on Thursday, Thanksgiving Day in the United States, but began rallying late Thursday into Friday.

Current speculation sees the impact of the Treasury's rumored regulation overblown and credits the decline more to simple overbought conditions. Bitcoin has rallied sharply, nearly doubling in just October and November. A move beyond $20,000 is still seen as a probability by the end of 2020. Considering the volatility of the crypto space, a record high seems a given and further gains are forecast for 2021 and beyond as fiat currencies continue to deprecate and lose purchasing power while Bitcoin and other major cryptos gain new users and advanced spending capabilities.

Despite efforts by governments (Bitcoin is banned in six countries) to regulate the holding and taxation of cryptocurrencies as investments, the Bitcoin bandwagon appears only to be slowed temporarily by efforts to contain its growth.

Precious metals have painted a similar, if not as spectacular a story. Gold, which had rallied from a low of $1167.10 in the summer of 2018 to an intraday high of $2089.20 in August, 2020, was never able to hold that level, falling below $2000 an ounce later that month, commencing a slow decline that has accelerated in recent days.

The world's recognized greatest store of value was punched down nearly $100 just three weeks ago and knocked lower the past two weeks to just above $1800 per ounce. Silver suffered a similar fate, testing $30 an ounce in August, only to be beaten down to current levels around $23 an ounce.

Cries of foul have been loudly sounded by the goldbug community, since manipulation of the precious metals market has been proven by the criminal convictions against JP Morgan and fines paid by other banks, particularly HSBC and Citigroup, and seems not to have deterred the practices of spoofing and naked shorting in the futures markets to facilitate price suppression.

Until real price discovery is attained via a smashing of the closed loop LMBA and standing for physical delivery on the COMEX, gold and silver will continue to frustrate honest investors, subject to the worst criminal behavior that serves only the interests of the central bank counterfeiters who are openly strip-mining the great economies of the world.

As Captain Bligh in the film Mutiny on the Bounty may have accurately surmised, "The beatings will continue until morale improves."

At the Close, Wednesday, November 25, 2020:
Dow: 29,872.47, -173.77 (-0.58%)
NASDAQ: 12,094.40, +57.62 (+0.48%)
S&P 500: 3,629.65, -5.76 (-0.16%)
NYSE: 14,191.58, -57.92 (-0.41%)

Dow Pops, Closes At Record Over 30,000; When Will It Hit 40,000? A History Lesson

Dow Jones Industrial Average (Select dates, Closing prices)
March 29, 1999: 10,006.78
February 3, 2017: 20,071.46
November 24, 2020: 30,046.24

On Tuesday, the Dow Jones Industrials closed over 30,000 for the first time ever. From the numbers above, it's easy to see how fast the 30 select stocks (the makeup of which changes fairly frequently these days) comprising the Average has galloped from one giant number to the next.

On May 26, 1896, two financial reporters, Charles Dow and Edward Jones, first published their average.

It consisted of 12 companies:

American Cotton Oil

American Sugar

American Tobacco

Chicago Gas

Distilling & Cattle Feeding

General Electric

Laclede Gas

National Lead

North American

Tennessee Coal & Iron

U.S. Leather

United States Rubber

...all of which, with the notable exception of General Electric (GE, consequently, not part of the current roster) have been gobbled up, picked apart, merged, liquidated or somehow morphed into some other corporate entity.

So, it took nearly 103 years for the Average to go from the first published value of the Dow Jones, 40.94, which was calculated by taking the average market price for the 12 companies, to 10,000, obviously changing the formula along the way.

Just as a side note, if one were to use the same formula as the originators, simply taking the average price of each of the now 30 component stocks, the number would be - just guessing - somewhere around 120, but that would hardly get anyone excited. Does anybody really want a hat that reads "Dow 100?" Probably not.

Perhaps it's worth taking note of the original calculation of a simple average, but the genius of simplicity is a discussion for another time. Today, we're focused on how fast we can reach the next big number, 40,000.

After bouncing above and below that 10,000 mark for a short time, and, notably dipping below it in 2000 on a number of occasions and then for an extended period of time before and after the tragic events of 9/11/2001, falling as low as 7,286.27 on October 9, 2002, the Dow recovered and was off to the races, well, kind of...

until the sub-prime crisis crashed it all the way down to 6,547.05 on March 9, 2009, the day otherwise known as the "Haines Bottom" after CNBC anchor, Mark Haines (RIP), correctly called the stock market bottom on that very day prior to the open (see video below).

So, then, finally, the Dow was off to the races, crossing again over 10,000 to the upside on October 14, 2009, to eventually reach the legendary level of 20,000 in 2017. Thus, depending on perspective, the Dow took either 19 years (1999-2017) to go from 10 to 20,000, or eight (2009-2017). Either way, it was done in fairly short order, doubling in value.

The next step, from 20,000 to 30,000, took less than four years (3 years, nine months, and 21 days) to complete. While the value of the Average only increased by 50% instead of the 100% in the previous epoch, the move is no less impressive. Mathemeticians may note that at the current trajectory, 40,000 should be within striking distance in about 2 years and 8 months, or roughly speaking, July 17, 2023.

A calculation done on the internet returned a result of 58 years, with this note:

The next number for given series 103,19,4 is 58
General polynomial is 34.5x2-187.5x+256

...whatever that means.

So, for the true pessimists out there, according to at least one website’s calculator, the Average won't hit 40,000 until 2078. The best guess is that it will hit the magic 40,000 mark (and there will be hats available, promise) somewhere between 2023 and 2078. Understand that it is a smaller and smaller percentage gain every 10,000 points. The value of the Dow Average will only gain by 33.3% on a move from 30,000 to 40,000, so doing it in under three years is actually not improbable.

Just to amplify the idea that nothing in the financial world goes up or down in straight lines, as we saw with the bumpy road between 1999 and 2009 (aka, the lost decade), a couple of points:

The bottom in 2009 was actually lower than the one in 2002.

It took 27 years for the Average to recover from the October, 1929 crash, from a high of 381.17 to a low of 41.22 in 1932, and back to a yearly high of 404.39 in 1956.

Back in the world of the real or imagined (take your pick), presumptive president, Joe Biden, has apparently chosen former Chair of the Federal Reserve, Janet Yellen, as his presumptive Secretary of the Treasury. Yellen, an uber-dove on monetary policy, is likely to empty the treasury with the same abandon she promoted easy money when Fed Chair. The skies will open up and twenties will fall from the heavens.

Oil prices have skyrocketed above $45 per barrel for WTI crude, the highest price since early March of this year. It's probably nothing more than the idea that, opposed to the whole lockdown COVID preaching, many families are traveling over the Thanksgiving holiday, so the oil companies want to get an extra piece of pie. It could be more than that, but it's a good bet that oil prices will fluctuate between $40 and $48 until Christmas and then stabilize near or below that range in 2021.

With stocks booming, a little money leaked out of treasuries, with the 10-year note and 30-year bond yields both higher, by two and four basis points, respectively.

Markets are closed on Thursday, and a half-day session (close at 1:00 pm ET) is scheduled for Friday, so Wednesday is the last full trading day of the week, November closing out the month on Monday. With that, the Labor Department moved it's reading on initial unemployment claims to today, noting 778,000 new unemployment claims in the most recent week.

Happy Thanksgiving!

At the Close, Tuesday, November 24, 2020:
Dow: 30,046.24, +454.97 (+1.54%)
NASDAQ: 12,036.79, +156.15 (+1.31%)
S&P 500: 3,635.41, +57.82 (+1.62%)
NYSE: 14,249.50, +251.26 (+1.79%)