Bitcoin Vaults Over $100,000; Dow, S&P, NASDAQ Close at Record Highs; Bubble Economy Built by Welfare, Pensions, Social Security, and Credit Cards

OK, this is a bubble.

There's no need to belabor the point. Everything about the stock markets says, "bubble." Not that anybody cares; we're all going to be rich because the U.S. economy - um, sorry, the stock market and the economy are two different things - is humming right along.

The U.S. economy is built on welfare payments, pension account payouts, Social Security benefits and other government handouts and entitlements to rich and poor alike. Money - actually currency - spent using credit cards accounts for another huge chunk of GDP, along with those never-ending monthly payments to CapitalOne, Bank of America, Visa, Mastercard, and other credit purveyors.

All of this spending makes up U.S. GDP, which is a horrible measure of the health of an economy because it includes all manner of expenditures by government which actually doesn't produce much of anything other than more debt.

In any case, the U.S. debt to GDP calculation shows the ratio going over 100% in 2020 (plandemic), hitting 124% that year and remaining above 100% since. In other words, Total federal debt exceeds annual GDP, generally understood by economists to be a sign of an ailing economy (not one that's running on all cylinders, stocks making record highs).

Not convinced? How about this:

In 2024, an average of almost 68 million Americans per month will receive a Social Security benefit, totaling about $1.5 trillion in benefits paid during the year.

That's a direct quote from the Social Security Administration in their fact sheet [PDF].

Still not convinced?

In fiscal year 2023, Total Welfare Expenditures by the federal government were $1.1 Trillion, including Medicaid payments, accounting for 18% of federal outlays. Without Medicaid, the total was $485 billion, with the single largest program, SNAP (food stamps), accounting for $135 billion, up from $64 billion just five years earlier (fiscal year 2019). Hmmm, no wonder poor people are so fat.

Credit card spending (transactions for goods and services) was just short of $5 trillion in 2022. Ten years prior, 2012, the toal was just above $2 trillion. Credit card spending has more than doubled in just the last 10 years. If the economy is doing so well, why is everybody borrowing to pay for things?

Without welfare and pension benefits and items bought with credit cards, what would Walmart's profits look like? Apple's? How many new iPhones would have been purchased? Home Depot?

It's not worth debating. The U.S. economy is a mirage.

Bitcoin, the invisible currency of which less than two percent of wallet addresses hold more than 90% of all total BTC currently in circulation, has gone ballistic, up more than $4,000 in the last 24 hours (4.11%) and up 132.58% year-to-date. Somebody's getting rich. Probably not you.

Bitcoin's up. Stocks are up. Gold and silver had their runs earlier in the year. Since the election (November 5) they're both down nearly three percent. Why? Because this is a bubble economy.

It's like being a bartender at a house of pleasure. Enjoy it while it lasts.

At the Close, Wednesday, December 4, 2024:
Dow: 45,014.04, +308.51 (+0.69%)
NASDAQ: 19,735.12, +254.21 (+1.30%)
S&P 500: 6,086.49, +36.61 (+0.61%)
NYSE Composite: 20,188.60, +2.79 (+0.01%)

How High is Up? Stocks at Record Levels and Going Higher; Wells Fargo Says S&P Will Hit 7,007 in 2025

It's net even Christmas yet, but investors are gifting themselves to all-time highs on the major indices.

On Tuesday, the NASDAQ and S&P both closed at record highs, the Dow took a breather, but stock market analysts are predicting 2025 to be another banner year. Both Deutsche Bank and Yardeni Research have called for the S&P 500 to finish 2025 at 7,000, but the braintrust over at Wells Fargo (yep, those people famous for opening fake bank accounts), led by Christopher Harvey and his team, issued a 2025 year-end target of 7,007, marking his territory as the highest prediction to date. In pissing contest terms, Harvey is top dog.

Time will tell, but there's little doubt that the ongoing stock bubble players don't seem to notice any impediment against soaring into the stratosphere. Who knew making money could be so easy?

For those keeping score, the Shiller PE finished yesterday at the second-highest level ever, 38.61, just ahead of the October 2021 level of 38.58, now chasing the record from November 1999, 44.19.

Color us skeptical.

It used to be common knowledge that when everybody is bullish, it's a good time to be bearish. On that note, exactly why is Warren Buffett hoarding cash? His Berkshire Hathaway holding company is sitting on a dollar stack of $325 billion, enough to buy outright 476 individual companies in the S&P 500. Maybe he's waiting for prices to fall so he can buy them all, except, probably the Magnificent 7 tech giants, Alphabet, Amazon, Apple, Nvidia, et.al.

Has the old man lost his touch? Is he living in the past, when prudence was virtuous and speculation was an art perfected only by the best and brightest, not everyday momentum traders or yield-chasers suffering from FOMO (Fear Of Missing Out)?

Well, it's the holiday season, after all, so why throw cold water on the Christmas parade? After all, in a little more than a month, Joe Biden and all the lefties will begin to fade into the woodwork, Donald Trump will lead the grand MAGA movement, everybody will benefit, and America will re-emerge as the greatest place on earth.

Actually, there is some believability to that argument and over here at Money Daily we're all for it.

It just sounds too good to be true, if only because stocks are already well extended. Nobody ever suggested, “buy high, sell higher.”

Maybe Moe, Larry and Curly can provide some clues.

At the Close, Tuesday, December 3, 2024:
Dow: 44,705.53, -76.47 (-0.17%)
NASDAQ: 19,480.91, +76.96 (+0.40%)
S&P 500: 6,049.88, +2.73 (+0.05%)
NYSE Composite: 20,185.81, -27.41 (-0.14%)

What's the Big Deal About BRICS-Pay and Trump Tariffs? Some Background on De-Dollarization and Currency Debasement

Loads of ink and countless electronic bytes of data were spent Monday deciphering the impact of President-Elect Trump's post on his social media platform, TruthSocial.

"We require a commitment from these Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty U.S. Dollar or, they will face 100% Tariffs, and should expect to say goodbye to selling into the wonderful U.S. Economy."

Yahoo! Finance reports the proximate cause for Trump's post is the formation of a payment system known as BRICS Pay, according to Douglas Holtz-Eakin, president of the American Action Forum.

BRICS Pay is a new attempt by the BRICS group of countries to use digital payment and QR code technology to provide an alternative to dollar-dominated networks — specifically the Society for Worldwide Interbank Financial Telecommunication (SWIFT), which Russia was barred from upon its invasion of Ukraine in February, 2022.

Since then, war has raged, NATO nations having supplied Ukraine with all manner of weaponry, to little avail. Russia continues to take territory and advance through the country. The US, UK, and EU have applied various sanctions to Russia and other countries, also with little effect. Russia's economy, in fact, is growing at a faster rate than most Western nations, especially European ones, France, Italy, and Germany, which are falling or have already entered into recession.

The BRICS-pay website is indeed registered in Russia, but is likely more for demonstration purposes and trolling of U.S. interests. What concerns Trump, and, more importantly, the Federal Reserve, is that BRICS nations have been bypassing use of the U.S. dollar in international trade and transactions, using local, national currencies for settlement. Also, use of the Chinese yuan has been advanced, as has gold, as a settlement mechanism.

At the last two most recent BRICS summits, in Kazan, Russia this year and South Africa in 2023, there were more than a few discussions about the establishment of a BRICS currency, ostensibly to compete with the dollar and euro in international trade, though nothing concrete has been established. The discussions among finance ministers of BRICS nations and affiliates continue and there have been tests done using blockchain technology, most specifically the recent MBridge tests that were suddenly halted and de-platformed by the Bank of International Settlements (BIS), reported by Vince Lanci of GoldFix in late October.

Whatever Trump, in association with the Federal Reserve, plans to do to counter the ultimate establishment of competing reserve currencies in the wider world and especially in the so-called, "Global South", those efforts are likely to be in vain unless the U.S. reverses course on its continuing hectoring of countries which refuse to be bullied by U.S. hegemony and insistence on use of the dollar in trade settlement.

The dollar has lost more than 97% of its purchasing power since inception of the Federal Reserve and is unlikely to change direction. The vaunted U.S. dollar is a dying currency, just as others, the yen, euro, franc, and pound, which are backed by nothing more than faith. Eventually, a shift will be made to better, more stable forms of payment that are not debt-based, likely to be backed by gold, silver and/or other commodities.

Since the U.S. weaponization of the dollar, the world has moved away, an oft-heard phrase by countries trading with the United States is "getting nothing for something." Abandonment of the U.S. dollar as a means of exchange follows along with its being a poor, negligible store of value.

An article on Sputnik teases, Trump's Threat of 100% Tariffs Targeting BRICS Would Blow Up in America's Face.

Americans have reason to be concerned. After the most recent bout of inflation - caused by the Fed's relentless currency creation out of thin air - prices for even everyday items have risen to levels that are unobtainable for average citizens. Losing reserve currency status, which is well underway, would render the dollar completely worthless. Change is necessary.

At the Close, Monday, December 2, 2024:
Dow: 44,782.00, -128.65 (-0.29%)
NASDAQ: 19,403.95, +185.78 (+0.97%)
S&P 500: 6,047.15, +14.77 (+0.24%)
NYSE: 20,213.22, -58.82 (-0.29%)

WEEKEND WRAP: Stocks Rally Higher; Oil Continues Slump; Gas Prices Under $3.00 in Majority of U.S. States; Shiller PE: 38.54

Market participants didn't let the short week deter them from continuing to snatch up stocks, especially those on the Dow, which outpaced the S&P and NASDAQ for the week, with the S&P 500, NYSE Composite, and Dow Industrials closing out November at record highs. The NASDAQ closed just 80 points below its own record closing price (19,298.76, November 11, 2024).

Stocks

Adding Nvidia (NVDA) to the Dow Jones Industrials may be considered market rigging or just plain genius, as the chip-maker supplanted flagging Intel (INTC) in the index, the real money this week was made on the other stock that was swapped in on November 8, Sherwin-Williams (SHW), which replaced chemical giant Dow, and was among the week's leaders among Dow components, up two-and-a-half percent while Nvidia shed more than two percent.

The Dow's move was helped along by Amazon (AMZN), up five percent, and by Boeing (BA), which was up nearly two percent on Friday's short session and up more than four percent on the week.

On a month-by-month basis, November was the best of 2024 for the Dow and S&P 500. It looks like a safe bet that the S&P 500 can finish the year up more than 20 percent, which would be the first time since 1998-99 that the index rose 20% or more in consecutive years.

With just a month left for trading in 2024, investors have been rewarded for their persistence overall. Year-to-date, all the major indices are sporting very healthy gains:

NASDAQ	19,218.17	+4,452.23	+30.15%
S&P 500	6,032.38	+1,289.55	+27.19%
NYSE Composite	20,272.04	+3,430.42	+20.37%
Dow Industrials	44,910.65	+7,195.61	+19.08%

There are just 21 trading days remaining to the year. With Christmas Day falling on a Wednesday, the last full week will be split down the middle. Market-moving events include November Non-Farm Payroll data this Friday (December 6), and the FOMC meeting which concludes Wednesday, December 18.

Barring any unforeseen disruptions, 2024 will go down as one of the better years of the 21st century for stock performance, right up there with 2003, 2009, 2013, 2019, and 2021, each of which saw the S&P 500 rise by more than 25%.

Treasury Yield Curve Rates

Date	1 Mo	2 Mo	3 Mo	4 Mo	6 Mo	1 Yr
10/25/2024	4.89	4.79	4.73	4.68	4.51	4.29
11/01/2024	4.75	4.74	4.61	4.53	4.42	4.28
11/08/2024	4.70	4.69	4.63	4.53	4.42	4.32
11/15/2024	4.70	4.67	4.60	4.52	4.44	4.34
11/22/2024	4.72	4.67	4.63	4.53	4.46	4.42
11/29/2024	4.76	4.69	4.58	4.52	4.42	4.30

Date	2 Yr	3 Yr	5 Yr	7 Yr	10 Yr	20 Yr	30 Yr
10/25/2024	4.11	4.05	4.07	4.15	4.25	4.58	4.51
11/01/2024	4.21	4.18	4.22	4.30	4.37	4.68	4.57
11/08/2024	4.26	4.18	4.20	4.25	4.30	4.58	4.47
11/15/2024	4.31	4.27	4.30	4.36	4.43	4.70	4.60
11/22/2024	4.37	4.32	4.30	4.35	4.41	4.67	4.60
11/29/2024	4.13	4.10	4.05	4.10	4.18	4.45	4.36

There was huge movement in longer-dated maturities this week, a signal that the market believes the Fed will not pause in December or thereafter, but will continue to cut the federal funds target rate until it falls below all rates on the yield curve and remains higher than inflation, as measured by annualized CPI, the latest, 2.6%.

This implies an ultimate yield on the overnight federal funds of 3.25% to 3.50%, possibly 3.00% to 3.25%, but likely not any lower than that, as the Fed wishes to avoid another damaging bout of inflation, which they believe to have somewhat under control.

Currently holding at 4.50-4.75%, the market is anticipating 0.25% cuts at upcoming FOMC meetings, December 17-18, January 28-29, March 18-19, May 6-7, and June 17-18. Five cuts, amounting to 1.25%, gets the target rate down to 3.25-3.50%, at which point they would hold, likely for a long time unless some extraneous event upsets the apple cart.

Confident that the fiscal side of the equation at the Treasury Department will exhibit more conservative policies than what has been maintained over the Biden-Yellen years, the Fed can be fairly certain that government spending will be massively curtailed if President Trump and his able henchmen at the Department of Government Efficiency (DOGE), Elon Musk and Vivek Ramaswamy, gets his way.

The promise of reduced government spending and borrowing to finance deficits should open up lending markets to the private side. The other benefit of lower rates would be the effect on interest payments by the federal government, which, at over $1 trillion annually, is entirely unsustainable and threatens to bankrupt the nation.

Speculators may see the Fed cutting even deeper, especially in the case of general disinflation or outright deflation, which would be even more stimulative and cut government interest payments even further.

From what's happened in just the last month, with notes and bonds getting to oversold positions before large buyers stepped in this week, continued cuts appears to be the plan being executed. Lest people forget, there's a new sheriff in town, due to put on the badge come January 20, 2025, and his deputies are armed and looking to round up suspects and criminals.

The 2s-10s spread remains in normalized (dis-inverted) territory at +5, and, while full spectrum, 30days-30years, took a big step backwards from -12 to -40, that condition is likely to be temporary if the Fed cuts in December and beyond. The flattening - prior to steepening - of the yield curve continues apace.

Spreads:

2s-10s
9/15/2023: -69
9/22/2023: -66
9/29/2023: -44
10/06/2023: -30
10/13/2023: -41
10/20/2023: -14
10/27/2023: -15
11/03/2023: -26
11/10/2023: -43
11/17/2023: -44
11/24/2023: -45
12/01/2023: -34
12/08/2023: -48
12/15/2023: -53
12/22/2023: -41
12/29/2023: -35
1/5/2024: -35
1/12/2024: -18
1/19/2024: -24
1/26/2024: -19
2/2/2024: -33
2/9: -31
2/16: -34
2/23: -41
3/1: -35
3/8: -39
3/15: -41
3/22: -37
3/28: -39
4/5: -34
4/12: -38
4/19: -35
4/26: -29
5/3: -31
5/10: -37
5/17: -39
5/24: -47
5/31: -38
6/7: -44
6/14: -47
6/21: -45
6/28: -35
7/5: -32
7/12: -27
7/19: -24
7/26: -16
8/2: -08
8/9: -11
8/16: -17
8/23: -09
8/30: 00
9/6: +06
9/13: +09
9/20: +18
9/27: +20
10/4: +5
10/11: +13
10/18: +13
10/25: +14
11/1: +16
11/8: +5
11/15: +12
11/22: +4
11/29: +5

Full Spectrum (30-days - 30-years)
9/15/2023: -109
9/22/2023: -99
9/29/2023: -82
10/06/2023: -64
10/13/2023: -82
10/20/2023: -47
10/27/2023: -54
11/03/2023: -76
11/10/2023: -80
11/17/2023: -93
11/24/2023: -95
12/01/2023: -105
12/08/2023: -123
12/15/2023: -154
12/22/2023: -149
12/29/2023: -157
1/5/2024: -133
1/12/2024: -135
1/19/2024: -118
1/26/2024: -116
2/2/2024: -127
2/9: -117
2/16: -103
2/23: -112
3/1: -121
3/8: -125
3/15: -109
3/22: -112
3/28: -115
4/5: -93
4/12: -87
4/19: -77
4/26: -70
5/3: -85
5/10: -87
5/17: -94
5/24: -99
5/31: -83
6/7: -92
6/14: -113
6/21: -103
6/28: -96
7/5: -101
7/12: -108
7/19: -103
7/26: -104
8/2: -143
8/9: -131
8/16: -138
8/23: -141
8/30: -121
9/6: -125
9/13: -117
9/20: -80
9/27: -80
10/4: -75
10/11: -58
10/18: -54
10/25: -38
11/1: -18
11/8: -23
11/15: -10
11/22: -12
11/29: -40

Oil/Gas

WTI crude oil took it on the nose again this week, closing at $68.15 on Friday, down sharply from $71.81 last Friday. Oil's price reflects the hastily-called Israeli cease fire in the Middle East and the lack of any real nuclear threat coming out of the Ukraine-Russia conflict. Mostly, it's been saber-rattling by the NATO crowd and stoicism by Putin and Russia.

Gasbuddy.com reports the national average for a gallon of unleaded regular gas at the pump at $3.03 a gallon, down another penny from the prior week.

California continues to be the price leader, at $4.37 a gallon, down four cents from the prior week.

Pennsylvania prices continue to head lower, at $3.22, with the Keystone State holding the high price in the Northeast, though it is at or near the lowest level in three years. New York was static, at $3.13. Connecticut ($3.07) and Massachusetts ($3.02) were slightly higher, while Maryland slipped another six cents to $3.06 per gallon, the second straight weekly decline of six cents. Prices in the Midwest continue to wane, though Illinois was up a nickel ($3.20).

Fuel prices in Oklahoma ($2.39) continue to be by far the lowest in the nation, down another seven cents on the week. Following are Texas ($2.52), down nine cents, Mississippi ($2.55), Arkansas ($2.58), Louisiana ($2.61), and Tennessee ($2.68). Florida ($3.10) remains the outlier, with all other Southeastern states well below $3.00, including Georgia ($2.88) and North Carolina ($2.83).

Sub-$3.00 gas can now be found in some locations in at least 35 U.S. states, mostly in the Southeast and Midwest, but now spreading west, with Montana, Utah and Wyoming joining the sub-$3.00 party and a few Northeast states, Delaware the latest to drop below $3.00.

Western states are still the highest overall. Arizona ($3.19) steadied on the week, with Oregon at $3.51, Nevada at $3.64, and Washington at $3.98, leaving only California above $4.00. Utah ($2.97) and Idaho ($3.01) have both come down to levels seen 12 months ago.

Bitcoin

This week: $97,184.05
Last week: $97,283.64
2 weeks ago: $90,205.13
6 months ago: $67,737.81
One year ago: $39,463.38
Five years ago: $7,521.31

Bitcoin remains atop the asset leaderboard, up a stunning 120% year-to-date and more than 40% since the November 5 U.S. elections, topping out at $98,367 this week.

Precious Metals

Gold:Silver Ratio: 85.97; last week: 86.13

Per COMEX continuous contracts:

Gold price 11/1: $2,745.90
Gold price 11/8: $2,691.70
Gold price 11/15: $2,567.40
Gold price 11/22: $2,743.20
Gold price 11/29: $2,673.90

Silver price 11/1: $32.58
Silver price 11/8: $31.42
Silver price 11/15: $30.33
Silver price 11/22: $31.85
Silver price 11/29: $31.10

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

Item/Price	Low	High	Average	Median
1 oz silver coin:	37.00	45.00	40.59	40.00
1 oz silver bar:	33.26	47.91	40.67	40.50
1 oz gold coin:	2,742.87	2,844.21	2,801.07	2,816.94
1 oz gold bar:	2,750.70	2,842.06	2,770.03	2,760.64

The Single Ounce Silver Market Price Benchmark (SOSMPB) was up nearly a dollar this week, to $40.44, an increase of 94 cents over the November 22 price of $39.50 per troy ounce.

Not much to comment upon concerning gold and silver prices. While the COMEX and LBMA are up to their usual tricks and the past few weeks have seen prices retreat and now level off, retail buyers seem more than content to pay high premia for finished goods. Chinese New Year and wedding season in India are likely to boost demand. Central banks may have slowed their purchasing slightly, though that appears to be only a temporary condition.

WEEKEND WRAP

There are changes afoot. With the political situation remaining up in the air until Trump's inauguration, there are likely to be any number of fits and starts in verious sectors and asset classes. With certain funds having already closed their books for 2024, and, with year-end squaring up proceeding, stocks are just as likely to waver as to move higher.

The Shiller PE ratio stands at 38.54, just shy of the second-highest ever, 38.58, from October 2021.

At the Close, Friday, November 29, 2024:
Dow: 44,910.65, +188.59 (+0.42%)
NASDAQ: 19,218.17, +157.69 (+0.83%)
S&P 500: 6,032.38, +33.64 (+0.56%)
NYSE Composite: 20,272.04, +62.22 (+0.31%)

For the Week:
Dow: +614.14 (+1.39%)
NASDAQ: +214.52 (+1.13%)
S&P 500: +63.04 (+1.06%)
NYSE Composite: +148.59 (+0.74%)
Dow Transports: _251.76 (+1.45%)

Dow Looking at Best Monthly Performance of 2024 as November Trading Closes Out on Black Friday

Heading into Black Friday's short session (markets close at 1:00 pm ET), the Dow Jones Industrial Average was on track for its best monthly performance of the year, up 7.08% since October 31, rising from 41,763.46 to Wednesday's close at 44,722.06.

Dow stocks, widely believed to be among the best companies in America, have returned more than 18% this year, but are still playing catch-up against the S&P 500 and NASDAQ, which are up 26.48% and 29.08%, respectively.

Many of the 30 companies that make up the Dow return dividends, though yields are generally well below the 10-year note, which has fluctuated between 3.63% and 4.70%, and has been heading lower through November, currently yielding 4.25%. For example, Goldman Sachs (GS) dividend yield is 1.98%; McDonald's (MCD), 2.40%; IBM (IBM), 2.94%, and Home Depot, 2.11%. American Express (AXP), which is up more than 60% this year, carries a dividend of $2.80, delivering a paltry 0.92% yield.

So, if investors aren't looking for high dividend yield, what the current run-up in Dow stocks suggests is that investors are seeking to reduce risk to some degree, switching out holdings of high-flying tech stocks to more steady performers on the Dow, taking outsized profits before year-end.

The so-called "flight to quality" may indicate some of the bigger funds are expecting a downturn in stocks subject to speculation that may have gotten ahead of themselves. Price/earnings ratios on Dow stocks are generally lower than those of companies like Nvidia (NVDA), Alphabet, parent of Google (GOOG), or Tesla (TSLA).

This late-stage trend bears watching into 2025 and the many changes in economic structure and government policies that are expected.

As the markets await the opening bell for the final trading day of the month, futures are pointing to a somewhat moderate opening, with S&P and NASDAQ futures nearly flat and Dow futures up 58 points at 9:00 am ET.

With U.S. markets closed Thursday for the Thanksgiving holiday, gold and silver were priced higher on the COMEX when it reopened in the evening, sending gold to highs of $2,685 and silver as high as $31.34.

WTI crude continues to test resistance around $70, hitting a low of $68.24 early Friday morning.

At the Close, Wednesday, November 27, 2024:
Dow: 44,722.06, -138.25 (-0.31%)
NASDAQ: 19,060.48, -115.10 (-0.60%)
S&P 500: 5,998.74, -22.89 (-0.38%)
NYSE Composite: 20,209.82, -9.64 (-0.05%)