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%)