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9 Signs That Some Of America’s Long-Term Trends Are Starting To Become Very Serious Short-Term Problems

This article was originally published by Michael Snyder at The Economic Collapse Blog.

Ignoring long-term problems can work for a while, but eventually, they catch up with you.  Over the years, I have written many articles about alarming long-term trends in our society that desperately needed to be addressed.  Of course, the vast majority of those long-term trends never got much attention, because our political system tends to reward politicians that focus on short-term issues.  As a result, many of the long-term trends that I have written about previously have now gotten to a point where they have started to become very serious short-term problems.  In this article, I would like to share 9 examples of this with you.

#1 I have been warning about exploding debt levels for as long as I have been writing about the economy.  Most people know that the U.S. national debt has now crossed the 28 trillion dollar threshold, but hardly anyone is talking about the explosion of corporate debt that we have been witnessing in recent months.  According to the Federal Reserve, total corporate debt in the United States is now up to a whopping 11.2 trillion dollars

Before the pandemic, U.S. companies were borrowing heavily at low interest rates. When Covid-19 lockdowns triggered a recession, they didn’t pull back. They borrowed even more and soon paid even less.

After a brief spike, interest rates on corporate debt plummeted to their lowest level on record, bringing a surge in new bonds. Nonfinancial companies issued $1.7 trillion of bonds in the U.S. last year, nearly $600 billion more than the previous high, according to Dealogic. By the end of March, their total debt stood at $11.2 trillion, according to the Federal Reserve, about half the size of the U.S. economy.

#2 Needless to say, this level of corporate debt is not even close to sustainable, and we are starting to see a lot of prominent names go bankrupt.  In fact, one of the largest mall owners in the entire country officially filed for bankruptcy on Sunday

Washington Prime Group, a major mall owner of more than 100 locations across the United States, filed for bankruptcy, citing pandemic-related shutdowns.

The Columbus, Ohio-based company filed for Chapter 11 late Sunday, saying Covid-19 “created significant challenges” and that the move is “necessary.” Washington Prime secured $100 million in new funding to support its day-to-day operations so it can “continue in the ordinary course without interruption.”

#3 The standard of living in the United States has been going down for a very long time.  Here in 2021, inflation is growing at a much faster rate than wages are, and this is squeezing middle class families like never before.  One of the ways that families are dealing with this is by putting off major purchases, and that is one of the reasons why the average age of the vehicles on our roads has now reached an all-time record high

The average age of vehicles on U.S. roadways rose to a record 12.1 years last year, as lofty prices and improved quality prompt owners to hold on to their cars longer.

It was the first time the average vehicle age rose above 12 years, according to data released Monday by research firm IHS Markit. While the average vehicle age has risen steadily over the last 15 years, the trend accelerated during the coronavirus pandemic partly because of a drop in new-car sales, IHS said.

#4 America’s growing homelessness crisis has accelerated greatly during the pandemic, and the big cities in California are being hit the hardest.  At this point, it is really difficult to navigate through the streets of San Francisco without stumbling over a tent or stepping in human excrement

For a city as opulent as San Francisco, it’s long been jarring to see the extreme poverty of those experiencing homelessness on its streets. If you walk around downtown, tents, makeshift cardboard beds and human excrement can be seen littering the sidewalks. Impoverished people lie on the ground as a blur of highly paid professionals whiz by.

#5 The homelessness crisis is also one of the factors that is fueling the dramatic rise in crime rates that we have been seeing all over the nation.  Once upon a time, millions of eager tourists would flock to Venice Beach, but now the phrase “like hell went to hell” is being used to describe conditions at that once pristine tourist trap…

Year-to-date numbers show that robberies have nearly tripled since the same period last year. Homeless-related robberies are up 260 percent; homeless-related assaults with a deadly weapon is up 118 percent; property crimes and area burglaries are up 85 percent; and grand theft auto is up 74 percent.

According to Embrich, felony arrests are up 68 percent, while misdemeanor arrests have grown by 355 percent. But arrests aren’t enough: Suspects are often released back onto the streets within hours.

#6 The police are the ones that are supposed to protect us from crime and restore order when things get out of control, but now they are leaving public service in record numbers.  After being endlessly demonized by leftist activists and the mainstream media, police officers are either retiring or resigning at a staggering rate….

Police retirements have risen by 45 percent in the past year, with officers opting out of forces across the country amid Black Lives Matter demonstrations that fueled anti-cop rhetoric.

The alarming statistic was revealed by the Police Executive Research Forum on Sunday, with the organization also revealing that resignations rose by 18 percent during the same twelve month period.

#7 Have you noticed that many of our cities are becoming disgustingly filthy?  When I was growing up, I often heard the phrase “cleanliness is next to godliness”, but you never hear anyone use it anymore.  These days, filth and grime are everywhere, and that has resulted in widespread infestations.  Many of our cities now have massive problems with rats and bed bugs, but Chicago is the worst of them all

The Windy City is known for quite a few things: hot dogs, deep dish, baseball. But here’s one thing you probably don’t associate with Chicago: bed bugs. Turns out these tiny hitchhiking pests are quite fond of our city, according to the latest numbers available through Atlanta-based Orkin, a company that specializes in pest control services.

In fact, Chicago ranked no. 1 on the 2021 list, according to Orkin, reclaiming the top spot for the first time since 2017, when it slipped to no. 3, just behind Baltimore and Washington. For the sixth year in a row, Orkin also ranked Chicago the “rattiest” city in America.

#8 I have been writing about the drought in the western half of the country for years, but here in 2021 it is the worst we have ever seen.  As I write this article, an astounding 88 percent of the West is officially in a state of drought…

Lakes at historically low levels, unusually early forest fires, restrictions on water use and now a potentially record heat wave: even before summer’s start the US West is suffering the effects of chronic drought made worse by climate change.

Eighty-eight percent of the West was in a state of drought this week, including the entire states of California, Oregon, Utah and Nevada, according to official data.

#9 When drought gets bad enough, it leads to water shortages, and we will want to watch developments in California very closely.  Water supplies have gotten very tight throughout the state, and officials in Santa Clara County just officially declared “a water shortage emergency”

Santa Clara County is in extreme drought. We can’t afford to wait to act as our water supplies are being threatened locally and across California. We are in an emergency and Valley Water must do everything we can to protect our groundwater resources and ensure we can provide safe, clean water to Santa Clara County residents and businesses.

To better deal with these threats and the emergency they are causing, today my fellow Board Members and I unanimously declared a water shortage emergency condition in Santa Clara County. This declaration, which is among the strongest actions we can take under law, allows Valley Water to work with our retailers, cities and the county to implement regulations and restrictions on the delivery and consumption of water. We also are urging the County of Santa Clara to proclaim a local emergency and join us in underscoring the seriousness of the threats posed by the extreme drought.

Over the past few years, America has been hit by crisis after crisis, and many are yearning for a return to the good old days.  Unfortunately, that simply is not going to happen.

The United States is never going to be like it once was.  Too many things have changed, and our culture has been radically transformed over the past several decades.

Many of the items that I have shared in this article are simply symptoms of much broader cultural problems.  We are a deeply, deeply sick society, and it is getting worse with each passing day.

***Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.***

About the Author: My name is Michael Snyder and my brand new book entitled “Lost Prophecies Of The Future Of America” is now available on Amazon.com.  In addition to my new book, I have written four others that are available on Amazon.com including The Beginning Of The EndGet Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned)  By purchasing the books you help to support the work that my wife and I are doing, and by giving it to others you help to multiply the impact that we are having on people all over the globe.  I have published thousands of articles on The Economic Collapse BlogEnd Of The American Dream, and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial, or health decisions.  I encourage you to follow me on social media on FacebookTwitter, and Parler, and anyway that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with as many people as we possibly can.

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Bidenomics: Inflation rises 4.2%, fastest pace since 2008

Inflation rose more than expected in April, with prices rising at the fastest rate in more than 12 years as the federal government continues to pump trillions of dollars into the economy to spur recovery after the pandemic.

The Labor Department reported Wednesday that the Consumer Price Index, a measure of prices paid for goods and services, including housing and energy costs, rose 4.2% from where it was a year ago. Economists had predicted only a 3.6% increase. Inflation rose by 0.8% in April vs. the expected 0.2% increase.

Because food and energy prices can change quickly with supply or demand shocks, a more stable measure of inflation is core CPI, which excludes those prices. Core CPI increased 3% over the last year and 0.9% in April. The estimated increases were 2.3% and 0.3% respectively.

An inflation increase of 4.2% is the fastest increase in inflation since 2008.

More from CNBC:

Energy prices overall jumped 25% from a year earlier, including a 49.6% increase for gasoline and 37.3% for fuel oil. That came even though most energy categories saw a decline in April.

Prices at the pump, which fell 1.4% in April, have resumed their climb in May, with the national average eclipsing $3 a gallon for the first time since November 2014, according to AAA. Further rises are likely from Friday’s cyberattack that shut down Colonial Pipeline’s main transmission line from Houston to New Jersey.

Used car and truck prices, which are seen as a key inflation indicator, surged 21%, including a 10% increase in April alone. Shelter, another key CPI component, was up 2.1% year over year and 0.4% for the month.

World events have also caused prices to rise, including production issues with semiconductors found in electronics products, the Suez Canal blockage in March, and increased demand for building materials like lumber after severe weather in Texas and elsewhere in the U.S.

The staggering rise in prices comes on the heels of a disappointing jobs report for April, when only 266,000 new jobs were created instead of an expected 1 million jobs and the unemployment rate rose from 6% to 6.1%.

Some economists had warned that President Joe Biden’s $1.9 trillion American Rescue Plan might inject too much money into the economy, leading to depreciating value of the dollar. Lawrence Summers, an economic adviser to President Barack Obama, wrote an op-ed for the Washington Post raising concerns that Biden’s stimulus might cause “inflationary pressures of a kind we have not seen in a generation, with consequences for the value of the dollar and financial stability.”

Olivier Blanchard, former chief economist at the IMF, likewise warned that Biden’s coronavirus relief package could “overheat the economy so badly as to be counterproductive.”

The specter of a stagnant economy with rising inflation haunts these economists’ nightmares. The 1970s and early ’80s were notorious for a phenomena known as “stagflation” — where prices and unemployment were rising together. In 1975, inflation reached a peak of 10.1% before falling to 5.9% the next year. By 1981, inflation had risen again to 9.6%.

A sharp increase in inflation could spur the Federal Reserve to raise interest rates in an attempt to discourage consumer spending and encourage savings, which would lower prices but contract the economy. Rising interest rates increase the cost of credit cards, loans, and mortgages, but also improve the earnings on savings accounts and certificates of deposits (CDs).

Since the 2008 financial crisis, the Federal Reserve has set a target interest rate near zero instead of its traditional target of 2% annual inflation to encourage consumer spending and investments and boost recovery. Federal Reserve officials have gone on the record saying there are no plans to raise interest rates until the inflation rate averages around 2% for an extended period.

For now, policymakers are unconcerned with April’s increase in inflation, claiming the numbers are higher because inflation reached significant lows at the onset of the COVID-19 pandemic and the shutdown of the U.S. economy. They indicate it is possible that inflation will be distorted for a few months because of the pandemic response.

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GOLD FINALLY BOTTOMED: WHERE WERE YOU?

This article was contributed by The Wealth Research Group. 

It literally takes five minutes to fact-check that gold and CPI (Consumer Price Index) or the PCE (Personal Consumption Expenditures) don’t correlate with each other. Said differently, gold and inflation aren’t two peas in a pod.

Gold tracks real interest rates, of which inflation stats are 50% of the equation, with bond yields being the second half. The way to calculate real rates is by deducting inflation from the 10-yr Treasury yield. When the subtraction comes out negative, gold’s relevance is, by far, higher than at any other time, since it becomes disadvantageous to hold cash.

In the chart below, you’ll see nearly eighteen years of the 10-Year Treasury yield, adjusted for inflation:

The first thing you’ll notice is that it is currently negative. The last time it was such, gold peaked at over $1,900 in September 2011 and again at $2,069 on August 6th, 2020.

In other words, there is compelling reasoning behind the thesis that August’s rally to an all-time high above the elusive $2,000 was it, that it was the peak, and that we’ve entered a bear market again.

On the other hand, if we compare this period to 2008 and 2009, we can see that back then, the dollar went into the crisis already weak, after it was beaten down by the Japanese Yen and the Euro in the early 2000s.

So, when comparing the two periods, the first decade of this millennia saw a weak U.S. economy, compared with other nations, whereas the coronavirus crisis happened in the midst of an American boom period.

If anything, the 2020 pandemic resembled more of the 1990’s boom, which changed with 9/11 and the Twin Towers tragedy.

Incidentally, there was a regime change from Democrats to Republicans, from peacetime to war, from free markets to more government intervention, but Greenspan’s ZIRP policy caught America unprepared.

To summarize, the dollar was really strong, going into the Dotcom bubble, just as it was, going into March 2020. The market crash might have helped bring a regime change in both cases and, in both cases, the dollar got weak right after.

The demographics in the 2000s did not support a housing boom, so the artificially low rates only served to entice the wrong people to originate a mortgage, forcing banks to take on risks they otherwise would not have, had the FED kept rates normal.

Today, it seems like the housing market is strong and has legs to run, creating velocity of money again.


Courtesy: Zerohedge.com

As you can see, every once in a while, the bond market begins to tell itself a story of epic inflation, due to the easy-money policies, excessive deficits, and a myriad of additional factors, which it convinces itself are sure to bring an inflationary spiral.

Q1 of this year was horrible for bond prices since yields rose ferociously.

The 10-yr bond, which is the barometer of the asset universe, has soared by 85%, from just over 0.9% to 1.7% today.

Those who lent funds to Washington in early January have lost 53%!


Now, it is up to you to decide, whether you are about to allow the same people who have poisoned the well, basically since 1971, to brainwash the masses into thinking the world is coming to an end for the gazillionth time, scaring their followers out of owning stocks or getting into real estate, falsely chasing returns by piling endlessly into cyclical commodities, or if you are instead going to stay leveled, putting a portion of your savings into precious metals – not instead of investing, but on top of it!

Not Biden, nor Jerome Powell, and not even your favorite guru that you believe has the pulse and beat on the markets, can change one iota from this truth: equities and real estate are wealth generators.

As long as entrepreneurship and brainpower aren’t banned in this country, building, running and owning businesses and real estate in the booming areas, will always find a path to outperform any and all governmental stupidity or inefficiency.

Gold has bottomed, massive inflation is nowhere in sight and you must act.

 

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The “Wait and See” Economy’s Moment of Truth

This article was originally published by Charles Hugh Smith at Of Two Minds Blog.

The “wait and see” economy is about to face its moment of truth, and one truth is the $1.8 trillion being passed out like candy is already spent.

The defining phrase of the U.S. economy for the past year is “wait and see”: every enterprise impacted by the pandemic that didn’t close immediately has been in “wait and see” mode, clinging on to the hope that once the pandemic ends then everything will roar back to life, bigger and better than before.

With the promise of herd immunity fast approaching, the moment of truth for “wait and see” is also fast approaching. The conventional view is that the trillions of dollars in stimulus kept business as usual alive and ready to soar back to the good old days. The almost $2 trillion injection of financial smack currently in progress will ignite the afterburners and the economy will rocket higher than anyone can imagine.

The problem with this rosy view is the economy was on fumes before the pandemic, as Gordon Long and I highlighted in our 53-minute presentation, The Coming Deflationary Tsunami. Interest rates had been falling for 40 years and there was little leeway for more of the magic of falling rates. The spending of the upper-middle class had already rolled over as the awareness that the longest expansion in U.S. history was faltering seeped into financial decisions–and no wonder, since every trick in the book had been required to keep it alive: zero interest rates, quantitative easing galore, tax cuts, massive deficit spending and speculative bubbles in every asset class.

Then there was the spot of bother in the repo markets. Something had broken in the financial plumbing (a massive break in the sewers?) and the Federal Reserve rushed freshly printed billions to stop the sewage from seeping into the precarious economy.

Though nobody dared discuss it, the economy was creaking under the burden of overcapacity in just about everything: too many cafes, too many channels of this and that, too many office towers built for get-rich-quick techies planning to sell out to Big Tech and retire at 25, too many resorts, and so on.

One driver of the overcapacity was the rise of Zombie Corporations–companies that only remain among the living if they can borrow even more money at lower rates to fill the holes in their balance sheets and cash flow. The Fed’s implicit goal was to never let a single Zombie die because that might send the wrong signal, i.e. that creative destruction was allowed. Creative destruction is no longer allowed by the Fed, never ever ever. So the economic landscape is cluttered with Fed zombies.

Also ignored was the inconvenient fact that wages for the bottom 95% have stagnated for decades and so where was all this money being blown coming from? From debt, of course, and the phantom wealth generated by speculative bubbles.

Then there are the demographic headwinds illuminated by Chris Hamilton, most recently in The Narrative Of Inflation Amid Depopulation. The working-age population has leveled off, along with the expansion of employment, while the number of those with claims on future earnings– the elderly and those “permanently out of the workforce”–are rising.

As Chris points out, speculative asset bubbles are just peachy for those who already own the assets–the top 10% who own close to 90% of financial assets–but of little value to the bottom 90% who get a pathetic 3% of all capital income.

Those greatly enriched by the Fed’s bubble-blowing are mostly older, those who can’t afford homes and other inflated assets are mostly younger, burdened with stagnant wages, student loan debts, and an economy that’s rigged to favor the few at the expense of the many.

A great many young people are delaying or foregoing marriage and having children because they don’t have the means and security do so. So who’s going to be paying all the taxes needed to fund the enormous retirement and healthcare costs of 70 million retirees? No problem, we’ll just borrow another couple trillion a year forever. (Free fish for everyone forever!)

Nice, but the rest of the world has opted out of buying into our funny-money fantasies. So the Fed will have to buy all the trillions in bonds being issued, and that unleashes second-order effects that have the potential to go non-linear, i.e. actually have negative consequences in the real world.

Then there are the private changes in behaviors and risk assessment that add up to tidal changes in the economy. People are reassessing their exposure to risk, and letting go of activities and expenses they once took for granted. Maybe the $300 trips to the ballpark are no longer worth it; maybe the costs of eating out are recognized as unaffordable.

The majority of residents in over-touristed locales no longer want tourism at the same scale. Residents discovered that once the tourists were gone, life was good, even if the tourist-dependent businesses closed and unemployment rose.

Everyone is holding their breath waiting to surface, but many of the enterprises that have clung on in “wait and see” mode will find that things have changed, and time cannot be reversed to summer 2019. All those holding defaulted loans based on a full return to summer 2019 are also holding their breath, hoping that the back rent will be paid in full, the overdue mortgages paid in full, and so on.

The reality is overcapacity, over-indebtedness, and stagnant earnings are all deflationary. The “wait and see” economy is about to face its moment of truth, and one truth is the $1.8 trillion being passed out like candy is already spent–as is the economy and the Fed’s bag of tricks.

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The Fed Enabling Biden and Congress’ Destructive Agenda

This article was originally published by Ron Paul at The Ron Paul Institute for Peace and Prosperity. 

According to the Congressional Budget Office (CBO), 2021 will be the second year in a row in which the federal debt exceeds Gross Domestic Product (GDP). CBO also projected that this year’s federal deficit will be 2.3 trillion dollars, which is 900 billion dollars less than last year. However, CBO’s projections do not include the 1.9 trillion dollars “stimulus” bill Congress is likely to pass.

The CBO’s report was largely ignored by Congress and the media. One reason the report did not get the attention it deserves is Federal Reserve Chairman Jerome Powell’s continued commitment to making sure Fed policies enable Congress to spend as much as Congress deems necessary to address the economic fallout from the coronavirus panic.

As financial analyst Peter Schiff points out, the Fed’s commitment to ensuring the government can run up massive debt means the Fed will not allow interest rates to increase to anywhere near what they would be in a free market. This is because increasing interest rates would cause the federal government’s debt payments to rise to unsustainable levels. Yet, the Fed cannot admit it is going to keep rates near, or even below, zero indefinitely without unsettling the markets. So, the Fed continues to promise interest rate hikes in the future and the markets pretend to believe the Fed. When (or if) the lockdowns end, the Fed will find a new crisis justifying “temporarily” keeping interest rates low.

The Federal Reserve has not just endorsed massive federal spending, Fed Chairman Powell has also endorsed masks, vaccines, and social distancing to defeat the coronavirus and restore the economy. It is disappointing, but not surprising, to see the Fed go full Fauci.

The overreaction to coronavirus is a cause of the explosion in federal spending and the debt we have witnessed over the last year. However, federal spending already greatly increased from January 2017 until the lockdowns. This spending growth occurred under a Republican president, a Republican Senate, and, from 2017 to 2019, a Republican House. One bright spot in Democratic control of the presidency and both houses of Congress is more Republicans will fight excessive spending and claim to be “deficit hawks.”

Republican hypocrisy in claiming to care about spending and debt only when a Democrat sits in the Oval Office is one reason why Democrats can so easily disregard debt. Another reason is the left’s embrace of Modern Monetary Theory. Modern Monetary Theory is the latest version of the fairy tale that politicians need not worry about debt and deficits as long as the central bank can monetize the federal debt.

Unless the government changes course, America will experience a crisis greater than the Great Depression. The crisis will include a final rejection of the dollar’s world reserve currency status. There will also be much-increased price inflation. At that point, Congress will have no choice but to limit spending, although it will try to hide cuts in popular entitlement programs by “adjusting” government measures of inflation. Congress could then blame the Fed for the reduction in the value of government benefits.

Those who know the truth have two responsibilities. First, ensure they and their families are protected when the crash comes. Second, redouble efforts to spread the ideas of liberty and grow the liberty movement so politicians are pressured to cut spending and debt and to end the Fed.

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MY NEXT MOVES: TECHMAGEDDON/GOLD HORRORS!

This article was contributed by Portfolio Wealth Global.

By now, it’s clear that the world is aware of the changing dynamics in growth prospects for the global economy. After twelve years (2009-2021), where the world’s largest economy was growing very slowly, the millennials and Gen Z demographics are now generating organic growth in the economy. Lowering rates artificially isn’t needed anymore to overcome the demographics cliff.

These age groups, now comprising over one-third of the country’s inhabitants, are searching for better jobs, newer homes, a wife/husband, having children, and moving into adulthood.

They’re going to be responsible for generating higher income tax receipts, servicing the interest payments on the national debt, creating real jobs and incorporating new businesses, and shaping the future of America.

TECH WRECK: THE TRUTH

  1. Dominance: Despite calls for the end of the tech sector, as the leading one, before all others, we don’t think that big tech is going to struggle or languish.

We do think emerging tech (the hype bubble that was rampant and prevalent for years) is over!

Investors are waking up to the fact that real growth is happening, so there’s no need to grasp for straws and pay earnings multiples that make no real-world sense for the few businesses that are “going to change the world.”

  1. Interest Rates: Don’t kid yourself that something like the 1970s is coming.

Rates might continue to go up, but nothing like what the inflationists keep harping on.

As opposed to that period, when America was the creditor for the rest of the world, today it’s the empire of debt. Any rise in Treasury yields is a severe drag on Washington’s ability to balance the books.

The CBO (Congressional Budget Office) calculated a record-breaking $9.7tn to the deficit until 2030, if rates just creep up by 1.00%.

The bonds bull market, which began in 1982 and lasted nearly 40 years, is over.

Courtesy: Zerohedge.com

I’ve been active this past week, adding to existing positions, entering new ones, and planning my entrance into a number of core positions!

The first part of the “buy low, sell higher” sentence mandates, by definition, that one acts when the panic spreads.

PORTFOLIO UPDATES: MARCH 2021

A. Adding cash – I literally built a cash position, equivalent to 30% of the overall portfolio.

In two to three years, you’ll look back at March 2021 and ask yourself why you didn’t buy more.

B. Solar Energy – My two favorite companies, SolarEdge (SEDG) and Enphase (ENPH) have finally come down a lot.

They’ve been on our Watch Lists for years and I’ve been buying.

C. Expensive Tech – I want to take advantage of the balloon deflating and enter into positions, which were so illogically priced thus far that it made no sense.

Therefore, in accordance with our Watch Lists, I entered into positions in BigEcommerce (BIGC), Collective Growth (CGRO), Corsair Gaming (CRSR) and Protalix (PLX).

Each holding represents 1% to 1.5% of the portfolio.

D. Major New Positions – In the next four weeks, we will be revealing two of the highest-conviction speculative holdings in our company’s history.

In order to sell higher, one is forced, by mandate, to buy cheap.

Remember this is the Bible of real investors.

With gold, the bottom is probably within reach. The panic that tightening is coming has been fully discussed by the FED; it’s not planned!

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BITCOIN, GOLD, STOCKS AND TECH: 2021 SYNOPSIS!

This article was contributed by Portfolio Wealth Global. 

In 2020, prices of virtually all asset classes that we follow have gone up. We published five Watch Lists (1, 2, 3, tech, and 5), were bullish on gold, silver, and Bitcoin – which just hit a new all-time high of $27,000 – and bearish on the U.S. dollar, which is suffering from its worst year in a long time.

Due to money printing and lackluster global trade, the demand for dollars is weak. If global trade is slowing down, there’s not much need to buy dollars and, of course, if tourism is restricted, that is also a major headwind for dollar demand.

Courtesy: Zerohedge.com

In the meantime, if you’re a millennial or a Gen Z and are tying the knot or looking to own your home – since the government is willing to finance something in the order of 90% of it for 30 years at the lowest interest rate in history – you’re looking for any way imaginable to qualify and apply for a mortgage.

There’s literally no better deal in the history of deals than getting a mortgage for a home right now, which is the reason Portfolio Wealth Global believes that real estate prices, housing construction and the entire industry (as a whole) will continue to prosper, boom and employ Americans for years to come.

This year, the 30yr fixed mortgage hit sixteen weekly new lows, an annual record for the number of times it has done so in a single calendar year!

Next up Bitcoin; personally, I’d be cautious with Bitcoin. Portfolio Wealth Global first covered Bitcoin at well below $700, and over the years there have been opportunities to own it below $1,000 and $5,000, but its recent run is a testament to how fast sentiment changes with it.

We’re definitely cautious.

What about stocks? Are they in a bubble? Our answer may surprise you, but we’re bullish.

We’re actually about to release our sixth Watch List and do not believe there are many reasons to see a flat year in 2021.

Valuations are rich in some sectors and with certain names, but the world is dramatically changing and investors are betting heavily on the future. In other words, if you were waiting all of these years for the reset, you’re living through it.

It may not be just what you imagined, but these are pretty much the early stages of it.

Courtesy: Zerohedge.com

What about gold? Real rates bottomed right around the election and the vaccine announcement, and are headed in the direction of -1% and lower, which will send gold, in all likelihood, above $2,000/ounce in short order.

There are also clear signs of inflation, both with agricultural commodities, as well as with oil.

This is what the markets view as real-world inflation and our analysis is that 2021 will be better for silver than it will for gold. Both will do well (we forecast new all-time highs for gold), but with the right backdrop, silver could hit even $35 and $40!

Courtesy: Zerohedge.com

Clearly, the agricultural commodities have FINALLY bottomed after more than a decade and are on the rise.

If this trend is real, it will be impactful. Food and energy (oil is on the rise as well) are both items that people immediately sense in their pockets and connect with inflation.

Our conclusion is simple: it’s a recovery year, and people who are feeling the beginning of the end will rejoice and make decisions that will generate money velocity.

The post BITCOIN, GOLD, STOCKS AND TECH: 2021 SYNOPSIS! first appeared on SHTF Plan – When It Hits The Fan, Don’t Say We Didn’t Warn You.

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CAN SILVER HIT $50/Ounce, SHOCKING EVERYONE?

This article was contributed by Future Money Trends. 

Silver’s price is tied with inflation much more than gold’s is. In the 1970s, as inflation raged in the United States, silver rose to $50/ounce, having started the decade at under $2. It was a sensational decade for the white metal.

However, in the 1980s and 1990s, as deflationary forces brought interest rates down rapidly, the metal’s price languished. Today, its price is HALF of what it was in 1980!

Obviously, investing in silver is NOT similar to investing in gold, which does enjoy a long-term appreciation under both deflationary and inflationary environments.

The question, then, is whether or not there’s a potentially interesting trade setting up in silver now that it has doubled from its March lows.

The answer depends on inflationary pressures and inflationary expectations.

  1. We are seeing that the dollar is dramatically weakening, which is the first sign that silver is likely to enjoy the momentum.

Here’s the dollar chart as it stands today:

Courtesy: Zerohedge.com

It doesn’t feel like the trend is swinging, either. This seems to be a long-term structural decline. Even the price of oil is back over $50/barrel.

  1. Silver’s price has already tested $30 this year and has shown that in the first stages of a recovery, however weak it may be, it can surge by triple-digits.

In 2009, for instance, it appreciated from $9 to $49 in two short years.

Again, this is a trade that could be capitalized upon, not a buy-and-hold idea.

  1. The price of silver has directly correlated with the price of oil over the years. With oil surging, this could be a critical bullish catalyst for silver.

In the end, silver is an ideal way of betting on inflation.

The Federal Reserve has done the heavy lifting for us. It arbitrarily mandated 2% inflation as some magical number. This means that the street will be bracing for inflation if the FED measures it as such.

Therefore, the smartest move is to watch that 2% gauge from Powell and his buddies.

Courtesy: Zerohedge.com

In our world, we’re reaching a point that we call the DEBT LIMIT, which is the moment when deflating the currency supply by simply adding more debt is not productive.

This moment will change how investors view inflation.

Be prepared for it and study the topic thoroughly in the meantime.

The post CAN SILVER HIT /Ounce, SHOCKING EVERYONE? first appeared on SHTF Plan – When It Hits The Fan, Don't Say We Didn't Warn You.

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PAIN COMETH!

This article was contributed by Portfolio Wealth Global.

No, we don’t think hyperinflation is coming!

How can inflation bazooka higher, when half of young adults live with their parents in 2020 and 38% of Americans are consumed with thoughts about how to make ends meet?

This doesn’t mean that gold and silver can’t or won’t rally in 2021 (inflation has been below 2% for over a decade), since gold responds to real yields, which are measured by 10-yr yield, subtracted by CPI. So even with CPI at current levels (disinflation), as long as rates go down, that negative real yield helps gold.

Silver is an even stranger cat since it responds best to dollar weakness and, boy, do we have plenty of that…

Why are we focusing on pain, though, if vaccines are approved and if the beginning of the end for this unique period is ahead of us? Well, the price that most small businesses paid to indirectly help, by supposedly slowing the spread of the virus to the people at risk of dying of Covid-19 has been huge.

One day you woke up and the government told you that your baby – your source of income, your pride and joy, the business you took time, effort, thought, sweat, and sacrifice to bring to the marketplace – had to remain closed.

Small businesses received minimal assistance and we’ll only learn just how horrible the situation is in 2021.

This is because the dust will settle, restrictions will ease and we’ll see who is left standing.

Courtesy: Zerohedge.com

Bond investors, as you can see, bet on technology advancements and on disinflation. No one buys a negative-yielding bond for the income, of course. The only way to profit from this – and there’s a large incentive to capture gains – is to sell the bond for more than you paid for it.

Appreciation occurs when yields fall. The price of the underlying asset (the bond) shoots up.

Obviously, QE does not create inflation, as was previously assumed, since we’ve had over a decade of it and the FED keeps missing its target. The FED has little control over inflation, but we, the people, do.

What are the implications of so many Americans in this poverty-stricken position?

  1. With 36% of voters believing in fraud and with roughly 80% of Republicans believing foul play, any hardship will serve as a catalyst for more division.
  2. Government will play an even bigger role in the lives of most Americans, who stand to become even more dependent upon it.

It’s time to address this issue, once and for all.

Courtesy: Zerohedge.com

We do not see how the unsustainable bullish stance in the stock market, coupled with the genuine distress of most Americans, continues to remain decoupled for another year.

The fundamental problems in the U.S. economy are bigger than what a central bank can address and, frankly, they’re not only more serious than what the government has to offer to “solve” them, but they’re being addressed with all of the wrong tools.

Nanny state capitalism is not a plan; Americans need to be inspired to get up and figure it out!

Pain cometh in 2021.

The post PAIN COMETH! first appeared on SHTF Plan – When It Hits The Fan, Don't Say We Didn't Warn You.

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CAN SILVER HIT $50/Ounce, SHOCKING EVERYONE?

This article was contributed by Future Money Trends. 

Silver’s price is tied with inflation much more than gold’s is. In the 1970s, as inflation raged in the United States, silver rose to $50/ounce, having started the decade at under $2. It was a sensational decade for the white metal.

However, in the 1980s and 1990s, as deflationary forces brought interest rates down rapidly, the metal’s price languished. Today, its price is HALF of what it was in 1980!

Obviously, investing in silver is NOT similar to investing in gold, which does enjoy a long-term appreciation under both deflationary and inflationary environments.

The question, then, is whether or not there’s a potentially interesting trade setting up in silver now that it has doubled from its March lows.

The answer depends on inflationary pressures and inflationary expectations.

  1. We are seeing that the dollar is dramatically weakening, which is the first sign that silver is likely to enjoy momentum.

Here’s the dollar chart as it stands today:

Courtesy: Zerohedge.com

It doesn’t feel like the trend is swinging, either. This seems to be a long-term structural decline. Even the price of oil is back over $50/barrel.

  1. Silver’s price has already tested $30 this year and has shown that in the first stages of a recovery, however weak it may be, it can surge by triple-digits.

In 2009, for instance, it appreciated from $9 to $49 in two short years.

Again, this is a trade that could be capitalized upon, not a buy-and-hold idea.

  1. The price of silver has directly correlated with the price of oil over the years. With oil surging, this could be a critical bullish catalyst for silver.

In the end, silver is an ideal way of betting on inflation.

The Federal Reserve has done the heavy lifting for us. It arbitrarily mandated 2% inflation as some magical number. This means that the street will be bracing for inflation if the FED measures it as such.

Therefore, the smartest move is to watch that 2% gauge from Powell and his buddies.

Courtesy: Zerohedge.com

In our world, we’re reaching a point that we call the DEBT LIMIT, which is the moment when deflating the currency supply by simply adding more debt is not productive.

This moment will change how investors view inflation.

Be prepared for it and study the topic thoroughly in the meantime.

The post CAN SILVER HIT /Ounce, SHOCKING EVERYONE? first appeared on SHTF Plan – When It Hits The Fan, Don't Say We Didn't Warn You.

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RENDEZVOUS w/DESTINY: Silver $52 – PIPES BURSTING!

This article was contributed by Lior Gantz of the Wealth Research Group. 

I showed you the THREE BIG TRUTHS of the coming decade. Ignoring these trends will result in poverty, while adapting to them and ADOPTING THEM will lead TO RICHES.

The second truth is that rates will REMAIN NEAR ZERO for years, perhaps for good (until the dollar is replaced or joined by another reserve currency).

If that’s the case, NEGATIVE RATES are nearly guaranteed. Think of it in this light: if rates are zero and inflation isn’t, then real rates are negative BY DEFINITION.

Too many currency units in circulation have led the large institutional funds to embark upon adventures that they wouldn’t otherwise choose to engage in; they’re borrowing because it’s there for the taking.

There’s just NO WAY to generate a fixed-income stream the same way that it WAS POSSIBLE in the 1980s and 1990s, when nominal rates were high and inflation was quite moderate, NOT TO MENTION that debt/GDP ratios weren’t alarming, as they are today.

Courtesy: Zerohedge.com

The chart above shows the STRENGTH of the TREND. Inflation is rising, since Covid-19 isn’t nearly as bad as those early epidemiologists SCREAMED it WOULD BE.

Therefore, not only is the rebound quick to happen, BUT SINCE industries weren’t in a TOUGH SPOT going into this mess, there’s a real chance that dominant companies will BOUNCE BACK faster than we might expect.

In fact, that’s what the MARKETS ENVISION, since they treat the world’s MEGA-CAP companies, such as Apple Inc., Facebook, Google, Amazon and Microsoft, as more than regular businesses. They ascribe a MASSIVE PREMIUM to them, since they’re also stores of value, AAA bonds and gold, all in ONE CLICK of the mouse.

They dominate their industries, almost like monopolies do, but it’s not like that at all; customers have plenty of OTHER CHOICES, but they love the products and the services they get from them.

Other companies CAN BE DISRUPTED, overtaken or somehow seem vulnerable, but these ones are DEEMED INVINCIBLE.

This notion is translated into HISTORICALLY-HIGH levels of concentration of size, as you can see below:

Courtesy: Zerohedge.com, BearTrapsReport

The market now has days where the OVERWHELMING MAJORITY of stocks are down, deep IN THE RED and yet it closes up. This is possible only because the WEIGHT of the index is towards market capitalization.

This demonstrates the importance of owning the indices, since history proves that the LION’S SHARE of ultimate return originates from only a handful of stocks.

Two years ago was the last time I WALKED THE STREETS of Manhattan and visited the Federal Reserve’s building, as well as Wall Street, home to the New York Stock Exchange.

On this exchange, more than 3,000 public companies are listed. Today, with markets at ALL-TIME HIGHS, fewer than 50 of these stocks are trading at 52-week highs! On the NASDAQ, where about 3,500 tech and other types of companies are listed, fewer than 150 stocks are trading at 52-week highs!

I can see the WRITING ON THE WALL and it tells me we’re either ON THE PRECIPICE of a severe correction or, if the economy generally improves, on the cusp of a SPECTACULAR RALLY to even loftier valuations.

While it is impossible to predict which is next, we can HEDGE PROPERLY, by both diversifying into companies that are STILL CHEAP, while at the same time having exposure to the index, but also allocating funds into precious metals, real estate and PRIVATE DEBT.

Diversification is paramount!

The post RENDEZVOUS w/DESTINY: Silver – PIPES BURSTING! first appeared on SHTF Plan – When It Hits The Fan, Don't Say We Didn't Warn You.

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PULVERIZED: Cash Malfunctioned – BRACE FOR IMPACT!

This article was contributed by James Davis of Future Money Trends. 

Governments and central banks are making A JOKE out of cash. Most people are living paycheck to paycheck or, AT BEST, have savings equal to 90–180 days of expenses, so to them, CASH IS KING because they have none, but if you’re an investor, cash IS DEAD.

Governments and central banks are SCREAMING AT the markets to steer clear of cash; the entire system is designed to signal that fiat currencies are not PURCHASING POWER preservers, but simply government-mandated mediums of exchange.

Nothing shows the NEGATIVE IMPACT of the debt bubble on the real economy more than the chart of Berkshire Hathaway’s stock price compared to gold’s spot price.

Berkshire Hathaway owns insurance, railroads, banks, low-tech, and furniture, among other holdings and it has nothing to do WITH GROWTH companies, save for owning a large stake in Apple Inc., but that hardly counts since it began positioning in it just a couple of years ago.

Main Street, the real economy, has BEEN PULVERIZED as well by the slashing of interest rates and the fueling of the bubble economy.

Courtesy: U.S. Global Investors

Buffett is operating UNDER THE ASSUMPTION that current conditions can’t last forever, which they can’t, but they can LAST FOR DECADES, and they are. No one could have imagined interest rates staying so low for so long.

Just 12 years ago, had anyone gone ON RECORD laying out how the global economy would be in 2020, not ONE IN A MILLION would have been able to come even remotely close to envisioning this scenario.

This is why beating the S&P 500 is SO DIFFICULT.

Most investors just can’t BRING THEMSELVES to believe that owning equities through thick and thin works, but reality keeps proving otherwise.

Emotional reactions to PRESENT EVENTS are so strong that panic and greed fight each other, and it’s not an EASY BATTLE to win.

This is why I “live” markets; I hold onto no particular opinions if they’re outdated, and my biggest fear is that I don’t breathe the SAME AIR the markets do. My message is that one must be constantly evolving in order to STAY ENGAGED.

Courtesy: Zerohedge.com

Who could PREDICT IN ADVANCE that governments would be able to print trillions in new currency units without causing COMPLETE DISTRUST in the system?

Predicting is impossible, while quickly reacting to realities is ARTWORK.

The powers that be have put so much money in the hands of the average person that the recession was VERY QUICK and the whole debate now surrounds what it will do next. If the stimulus packages keep coming then we’ll have one outcome, while if the government sets the THROTTLE ON IDLE, the next year will be hard to stomach.

Predicting is impossible, while REACTING QUICKLY is the science of proper diversification.

 

Courtesy: Zerohedge.com

As you can see above, there’s AN ENORMOUS trend in play, with tech being the GREAT BENEFACTOR of the past decade in terms of market returns.

Can the winds of change reverse this and bring a decade of VALUE INVESTING back when P/E ratios matter?

There’s no way of knowing, but what is clear is that stocks, as represented by the S&P 500, are mostly down in 2020, save for the BIG FIVE.

This is a STOCK PICKER’S heaven, so we issued our THIRD WATCH LIST.

On top of that, we’ve found an incredible opportunity in a sector that has MASSIVE UPSIDE and can serve as a diversifier, while gold remains our top focus.

We’ll be PUBLISHING CRITICAL DATA on it this week, so stay tuned!

The post PULVERIZED: Cash Malfunctioned – BRACE FOR IMPACT! first appeared on SHTF Plan – When It Hits The Fan, Don't Say We Didn't Warn You.

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GOLD HAS PEAKED: BRACE FOR IT!

This article was contributed by James Davis of Future Money Trends. 

No one wants TO HEAR THIS right now with these historic gains we’ve been experiencing and booking, but let’s FACE FACTS: gold and silver are ready for a breather. If Warren Buffett’s crew has BEGUN TO THINK mining is a good business, you know that the last of the buyers has COME TO THE TABLE.

I want to show you a chart of the amount of shorting that’s happening with the dollar so you can see what I mean. When kids are enjoying vanilla ice cream, no parent wants to take that cone away and tell the child that too much ice cream can cause tooth pains and weight problems, but I have to be the RESPONSIBLE ADULT.

When mainstream media outlets are interviewing gold fund managers and predicting MUCH HIGHER prices and these video clips go viral and get WIDESPREAD ACCEPTANCE, we need to watch out and be suspicious of euphoria.

Courtesy: Zerohedge.com

Shorting the dollar is as popular as it was in the 2011 MANIA PHASE for silver, as you can see. So, is this the TOP FOR GOLD?

The answer is NO.

If you look at the chart, you’ll also see that in the decade of the 2010s, the LONG DOLLAR trade was much higher than it was at any point in the decade of the 2000s.

Having said that, the trend looks MUCH MORE like 2004’s breakout in gold and silver than it does 2011’s.

If that’s the case, it would take a few months to build a base in the $1,850/ounce range for gold and the $26/ounce range for silver.

If our assessment is correct, the next move for the metals will be THE MOST DRAMATIC yet, which means that silver can even DOUBLE and get to $50/ounce – and even rise above that.

Courtesy: Zerohedge.com

As you can see, for the first time since 2008, the world favors the euro over the dollar.

This isn’t a trend that reverses and turns on a dime, but rather tends to be long and strong.

It’s clear that what the FED was “selling” the world in the past decade – the false promise that it would raise rates, it would normalize them, and it wouldn’t go down the path of the European Union and the Japanese – has BLOWN UP in their faces.

Investors no longer believe that the Federal Reserve will normalize. It’s not that they’ve LOST FAITH in what the bank says because the situation is pretty much the same as it’s been for years: investors still “BUY” what the FED says it will do, even though they’ve been proven to be incapable of delivering.

Right now, the FED is saying that it won’t be raising rates for years, it has no intention of normalizing, and it’s looking to let inflation overshoot. This kind of talk is driving the RUSH TO THE EXITS on the dollar.

Has gold peaked, then? YES, but only for the next few months, after which it will GO ABOVE $3,000. Has silver peaked? PROBABLY, but only for the next few months because if our analysis is right, silver is headed towards NEW ALL-TIME HIGHS.

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Has the Fed Let the Inflation Genie Out of the Bottle?

The dramatic ascent of precious metals markets this summer reflects what could be just the start of a longer-term decline and fall in the Federal Reserve note’s value and status.

With gold prices surpassing $2,000 per ounce recently, the monetary metal has now made new all-time highs versus all the world’s major fiat currencies. Gold is, as former Federal Reserve chairman Alan Greenspan has acknowledged, the “ultimate money.”

The Fed, by contrast, is the ultimate inflator.

Fed officials won’t tolerate deflation (an increase in the purchasing power of the currency) – or even “no-flation” (in the form of a stable-value Federal Reserve note).

In defiance of their statutory mandate to pursue “price stability,” Fed officials are waging a deliberate campaign to generate higher rates of price inflation.

According to a CNBC report, “In the next few months, the Federal Reserve will be solidifying a policy outline that would commit it to low rates for years as it pursues an agenda of higher inflation… in which inflation above the central bank’s usual 2 percent target would be tolerated and even desired.”

Meanwhile, the Fed continues to suppress interest rates across the yield curve. On Tuesday, the yield on the 10-year Treasury note fell to a record-low 0.52 percent.

A falling dollar (the U.S. Dollar Index in July suffered its biggest one-month decline since 2010) coupled with spiking precious metals prices and rising inflation expectations would normally send investors fleeing from bonds, forcing their yields up.

But these are not normal times.

“Not only have Treasury yields been historically low, they have been unusually stable,” notes Barron’s. “That would be consistent with ‘yield curve control,’ a method of pegging long-term borrowing costs. This has been among the policies under discussion by the Fed…”

It appears that a “yield curve control” policy is already being implemented behind the scenes as part of the Fed’s bond-buying operations.

The Fed is now the largest single institutional holder of U.S. Treasuries. Through the powers of self-dealing and an unlimited printing press, the Fed can manipulate the bond market like a puppeteer.

But for how long can the central planners artificially sustain a bull market in bonds that is becoming increasingly divorced from market realities? At some point, interest rates will hit a final bottom.

Conventional wisdom used to be that 0 percent was the absolute floor. But in recent years, we’ve seen trillions of dollars’ worth of European cash and debt instruments carry negative yields.

There need not necessarily be any “zero lower bound” on rates on any part of the yield curve. However, even if U.S. rates never turn negative in nominal terms, they can go deeply negative in real terms – with no lower bound.

“There is nothing more bullish for gold and silver prices than steeply negative real interest rates.”

To illustrate, if benchmark bond yields hover around 0.5 percent, that nominally positive yield is actually negative (-1.5 percent) assuming a 2 percent inflation rate.

Fed policymakers can effectively cut rates by raising inflation.

And by the way, there is nothing more bullish for gold and silver prices than steeply negative real interest rates on fiat currencies.

Maintaining negative real interest rates – as opposed to negative nominal rates – is the path the Fed is on… not the path Europe took.

Europe’s negative interest rate policies are now widely viewed as having failed to achieve central bankers’ objectives of stimulating borrowing and economic activity.

Negative nominal rates sent the signal that an economic freeze was in place, so people continued to hunker down financially.

But pushing inflation rates higher gives the illusion of growth.

Though the real economy may be shrinking in the aftermath of coronavirus lockdowns, a stock market pumped up by Fed liquidity injections does stimulate paper wealth creation. In theory, that paper wealth might trickle down into actual consumer demand and job creation.

In reality, the Fed is transferring wealth to Wall Street and pain to Main Street.

Financial wealth will to some extent find its way into the real economy – in the form of higher price inflation. That’s what soaring precious metals markets seem to be telegraphing.

The Fed’s inflation-raising scheme is in many ways far more dangerous than negative interest rate policy.

Central bankers can manipulate interest rates with precision if they are careful. But they should not be so arrogant as to believe they can successfully manipulate inflation rates up to particular targets and keep them there.

Once the inflation genie is let out of the bottle – once consumers, businesses, and investors begin to act on expectations of higher rates of price increases – inflationary psychology can snowball faster than the Fed can issue policy statements.

Inflationary episodes like we saw the late 1970s – and like we’ve been seeing over the past four months – are characterized by extreme volatility amid dollar insecurity.

Holders of Federal Reserve note dollars and dollar-denominated real negative-yielding IOUs are like sheep lining up to get slaughtered through purchasing power losses.

Those who want to survive the coming inflation must seek the protection of sound assets, including sound money – gold and silver.

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TOUCHED A RAW NERVE: Silver Roaring – $20 BECOMES REALITY!!

This article was contributed by James Davis at Future Money Trends. 

I’m probably going to shock you, but I am currently CAUTIOUS WITH precious metals.

Gold and silver have been GENERATING SPECTACULAR returns for us in 2020, especially if you caught the bottom with silver since we’re up more than 50% since.

Gold stocks and silver stocks have been CHEWING THROUGH WALLS and delivering massive gains as well.

Right now, though, gold is swimming in the HIGH SEAS. It’s playing with price targets that are FOREIGN TO IT. Goldman Sachs sees it hitting $2,000, Bank of America sees $3,000, and Rob McEwen predicts $5,000.

Silver is SO, SO CLOSE to hitting $20/ounce and it’s up nearly 60% since April!

We should begin to entertain the thought that precious metals are going to face TREMENDOUS RESISTANCE in the days and weeks ahead, perhaps the most excruciating seller momentum ever as short-term traders TAKE PROFITS on both the physical metals and the stocks.

Courtesy: Zerohedge.com

This is SUPERIORITY!

In 1980, Paul Volcker, then FED Chairman, gave fiat currencies air by raising rates to over 15%. Doing so stopped the INFLATIONARY MADNESS of the 1970s, but it also birthed the beginning of the end for America’s middle class and savers.

He basically CREATED THE TOP for government interest rates.

Look at the chart above and you’ll notice how he stopped gold from entering a point where it would have covered more than the ENTIRE CURRENCY SUPPLY.

At $850/ounce, gold had backed the dollar again by free-market forces in 1980.

Nixon essentially freed it up in 1971 to CALL BULLSHIT on the $35:1 conversion, and in nine years, it achieved that goal.

Had this happened once more in 2020, the price would be north of $20,000/ounce.

In other words, today’s gold price of $1,820 is EQUIVALENT TO gold’s price in the mid-1970s when it traded for $60.

We need to put things INTO CONTEXT, and today, gold covers only 5% of the dollars in existence, which means that $850 in 1980 is like $36,000 today!

Courtesy: Zerohedge.com

Goldman Sachs has put S&P 500 earnings for the full year at $115, which means that at 3,200 points, the P/E ratio is currently 27.8.

In this environment, VALUATIONS of the classical kind are less meaningful than in previous times since so much liquidity is pumped into the currency system that stocks serve as an INCOME HEDGE to governments and corporate bonds.

The S&P 500 dividend yield is 1.93%, which is 300% MORE THAN the yield of the benchmark 10-year Treasury bond.

A pension fund, university endowment fund, sovereign wealth fund, insurance company, and wealthy institution will CHOOSE STOCKS over bonds in this world.

Stocks are now bond replacements, which is the reason investors are willing to pay ADDITIONAL PREMIUMS for them, but there’s a limit to that.

Courtesy: Zerohedge.com

We’re entering a DEEP RECESSION. In it, many Americans will be suffering.

Don’t wait for Trump, Biden, or anyone else to dig you out of the situation you find yourself in.

Create your own destiny; this is a time for CALIBRATING CAREER CHOICES.

Struggling industries, such as travel, leisure, hospitality, restaurants, retail stores, banking, insurance, energy, and commercial real estate are SPEWING LAVA with opportunities to fill roles of leadership and innovation.

Capitalize on the leadership gap and assume your position in history!

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Will the Federal Reserve Cause the Next Riots?

This article was originally published by Ron Paul at The Ron Paul Institute for Peace and Prosperity

Federal Reserve Chair Jerome Powell and San Francisco Fed President Mary Daly both recently denied that the Federal Reserve’s policies create economic inequality. Unfortunately for Powell, Daly, and other Fed promoters, a cursory look at the Fed’s operations shows that the central bank is the leading cause of economic inequality.

The Federal Reserve manipulates the money supply by buying and selling government securities. This means that when the Fed decides to pump money into the economy, it does so by putting it in the pockets of wealthy, and oftentimes politically-connected, investors who are able to spend the new money before the Fed’s actions result in widespread inflation. Wealthy individuals also tend to be among the first to invest in the bubbles that form when the Fed distorts interest rates, which are the price of money. These investors may lose some money when the bubble bursts, but these losses are usually outweighed by their gains, so they end up profiting from the Fed-created boom-bubble-bust cycle.

In contrast, middle-class Americans lose jobs as well as savings, houses, and other assets when bubbles burst. They will also not benefit as much as the rich and well-connected from government bailouts and stimulus schemes. Middle- and working-class Americans also suffer from a steady erosion of their standard of living because of the Fed’s devaluation of the currency. This is the reason why so many Americans rely on credit cards to cover routine expenses. The Federal Reserve is thus the reason why total US credit card debt is almost one trillion dollars.

Big-spending politicians are also beneficiaries of the fiat money system. The Fed’s purchases of US debt enable Congress to massively increase welfare and warfare spending without increasing taxes to politically unacceptable levels. The people pay for the welfare-warfare state via the Fed’s hidden and regressive inflation tax.

Low interest rates also benefit politicians by keeping the federal government’s interest payments low. This is an unstated reason why the Fed will keep interest rates near zero or even lower interest rates below zero.

In response to the government-caused economic collapse, the Federal Reserve increased the money supply by about a trillion dollars from mid-April to early June. In contrast, it took the Fed all of 2019 to grow the money supply by 921 billion dollars. Even before the lockdown, the Fed was massively intervening in the economy in a futile attempt to prevent an economic crisis.

A coming crisis will likely be triggered by a collapse in the dollar’s value and a rejection of the dollar’s world reserve currency status. The economic collapse will be worse than the Great Depression. This will result in widespread violence along with government crackdowns on liberties, accelerating the US slide into authoritarianism. The only way to avoid this is for Congress to make drastic cuts in spending — starting with defunding the military-industrial complex — and to audit then end the Fed.

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Central Banks Commodities control experts Forecasting Government Intelwars interest rates Janet Yellen Jerome Powell LIES Media monetary supply public The Fed The Federal Reserve the masses Trading

PLANETARY COMBUSTION: Market Spooked – GOLD TENACIOUS!

This article was contributed by Lior Gantz with the Wealth Research Group. 

There’s no reason to ARGE OVER THIS with your coworkers, family members, and neighbors if they are STILL ASLEEP because the sheep masses won’t GET IT: the media is snowballing the GOOD NEWS into a second wave!

You have to be TOTALLY NAÏVE to not connect the dots. Literally, they’re reporting that A MASSIVE AMOUNT of people are infected (which we knew all along), but the death rate is PLUMMETING.

In other words, we should be celebrating that the LETHALITY LEVELS are much lower than these experts led everyone to believe in February, March, and April, but we’re considering imposing NEW RESTRICTIONS instead.

This whole thing is such a tragedy.

Courtesy: Zerohedge.com

Without a doubt, investors FEAR the RESUMPTION of either RESTRICTIVE AREAS or other measures since they’re voting with their wallets – or speculative brokerage accounts, I should say.

The first thing that’s tragic is that CHINA tried to cover it up. So much of this chain reaction could have been STOPPED EARLIER if other government trusted the reports that came from Asia, but they didn’t.

Lack of trust, especially on a global scale in the information age, is such a UNIQUE OCCURRENCE.

The second tragedy is that we’re teaching THE WHOLE WORLD wrong habits about economics.

Can you imagine how many business owners and employees now think that FAILING IS IMPOSSIBLE? The system being above the rules of economics is what they may be SEDUCED TO BELIEVE.

The voices of reason, those of people that have been around the block and have lived to tell about it, are PILING UP, though, and they’re saying the same thing: WEAK DOLLAR.

This is what Goldman Sachs has just published to its 8-figure clients:

Courtesy: Zerohedge.com

It’s very interesting because we have written DOZENS OF LETTERS explaining this very topic. Gold is not an INFLATION HEDGE, but a SURPRISE INFLATION hedge.

In other words, investors don’t buy gold when inflation is JUST AS THEY EXPECTED, but rather when it is out of control from its trend.

What has the world BEEN TOLD for nearly a decade by the most powerful central bank? “We don’t understand inflation; it is STUBBORNLY BELOW our 2% target and we can’t figure this thing out.”

I want to stress this because it will be the DRIVING FORCE behind the insane BULL MARKET evolving in precious metals right now.

They’ve domesticated the animal to believe 2% inflation is an INSURMOUNTABLE WALL. When that is breached, even though it’s VERY LOW in absolute terms, the reaction will be like HYPERINFLATION HAS ARRIVED!

This chart explains it best:

Courtesy: Zerohedge.com

There’s no doubt that the FED is not in control of what’s happening, especially now that the government is actually COMING OUT with fiscal programs all the time. The FED is now one of two actors instead of being the only one, like in the Obama years.

My point is that during the times of Ben Bernanke and Janet Yellen, it was mostly those two that were PULLING THE STRINGS and they had more control over interest rates, money supply, and policy, but Trump is different.

Trump is an ALPHA MALE and he’s not about to let Jerome Powell take the country where he wants it to go.

Therefore, you’ve got more than one chef in the kitchen.

Gold is SO CLOSE to $1,800 that I can TASTE IT in my month. Trade accordingly!

 

EXCLUSIVE REPORTS, Featured In This Article and in Others, Which Are Considered ESSENTIAL READING:
1. Gold Investing – DOWNLOAD HERE!
2. Trump’s War with Mainstream Media – DOWNLOAD HERE!
3. Covid-19 Round2 Sell-Off Playbook – DOWNLOAD HERE!
4. Why The Dollar Is Dead – DOWNLOAD HERE!
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Coronavirus stimulus Donald Trump Economy economy crash government spending Headline News Helicopter money infrastructure Intelwars interest rates Kevin McCarthy money money for governments Nancy Pelosi restrictions stimulus phase 4 United States zero rates

Trump Calls For $2T Infrastructure Package In Phase 4 Stimulus

President Trump has called for $2 trillion in infrastructure spending in the upcoming “phase 4” coronavirus stimulus while Nancy Pelosi thinks it’ll give Americans even more helicopter money.

“With interest rates for the United States being at ZERO, this is the time to do our decades long-awaited Infrastructure Bill. It should be VERY BIG & BOLD, Two Trillion Dollars, and be focused solely on jobs and rebuilding the once great infrastructure of our Country! Phase 4,” Trump tweeted on Tuesday.

Pelosi said this is a chance to make sure more businesses go under too. According to Market Watch, the California Democrat said she would like to see the next bill feature more money for state and local governments, increased protections for workers, more assistance for hospitals and nursing homes and “more opportunity for family and medical leave.” So basically, more restrictions on businesses, many of which won’t even be around after the economy is back up and running anyway.

“The president said during the campaign — and since — infrastructure was a priority for him. So that’s why we believe that in terms of recovery, that’s probably the most bipartisan path that we can take,” Pelosi said on Monday in a conference call with reporters.

“Still, infrastructure will be an important policy area to watch over the next few months,” Beacon’s analysts said in a note. “With low borrowing rates and a greater tolerance for deficit spending, some sort of infrastructure legislation could be enticing to include in the continuing response to the coronavirus pandemic.”

One politician, House Minority Leader Kevin McCarthy, for his part, has at least questioned whether a fourth response bill is necessary. If the economy is allowed to resume some semblance of “normalcy” a phase 4 stimulus is unlikely to be necessary.  But it also looks like politicians will use this as an opportunity to turn the shutdown into something they can profit from and continually expand their power with.  The coronavirus is not our biggest problem.  We should be more concerned about corrupt power-hungry politicians.

 

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China Emergency Preparedness Equity experts fiat money Financial Crisis Forecasting Government hard work Headline News house of cards implosion Intelwars interest rates investors market collapse Market Crash pandemic stabilize Steve Mnuchin survival unprepared Washington

CLOSE THE MARKETS: Blinding Red – TESTING LIMITS!

This article was contributed by our friend Lior Gantz of the Wealth Research Group. 

This cannot be reflated THAT QUICKLY. What we’re seeing is the 2008 IMPLOSION with a 12-yr delay. Treasury Secretary Mnuchin has said that the markets will stay open, but it’s UP IN THE AIR right now.

Officially, this has killed retirement for tens of millions of people. We are going back in time, CONSERVATIVELY, by 6-7 years.

By the time this is over with, 10-15 years of EQUITY, hard work, sweat, imagination, and creativity, might go DOWN THE TOILETS.

The various segments of society are treating this much differently.

Business leaders are thinking in terms of SURVIVAL and their responsibility to thousands of families, who depend on salaries to STAY AFLOAT.

Investors are looking at their retirement cushions – which one month ago were at ALL-TIME HIGHS – dissipating like steam.

Courtesy: Zerohedge.com

Every single day, STOCKS are halted. The volatility is like nothing we’ve ever encountered.

The bullion dealers are limiting orders of gold and silver to only a few thousand dollars and the DELIVERY DELAYS are in the range of 6-8 weeks.

Yet, the number of casualties in America is fewer than the amount of people that attend a wedding.

The lesson here is that we are INCAPABLE of properly dealing with a pandemic.

We have, single-handedly, RUINED our lives. China was six weeks late in containing it, and from there we’ve been in a WORLD OF HURT.

I fully ANTICIPATE that the societal changes we’ll undergo will be UNIQUE.

We are living in a new world. This was CHECKMATE for the fiat monetary system. It proved itself to be a GIANT house of cards, built on bullshit economics.

This bubble is deflating so fast that Usain Bolt can’t keep up with it.

Courtesy: Zerohedge.com

From here on, no one will be impressed with how veterans SURVIVED the Dot.Com bubble bursting. The coronavirus of 2020 is going to be ENGRAINED in the psyche of the masses. It will leave a scar that will not heal or get better for decades.

In the case that this isn’t fixed soon, between 15 million and 30 million Americans will be out of a job.

The government will not only send checks to every American, but they will have to resort to NATIONALIZING industries and embarking on a TRILLION-DOLLAR infrastructure program.

We aren’t going back to normal by any stretch of the imagination.

In the history of the United States, authorities have closed the stock market in 1914 (WW1), in 1933 (bank holiday of the Great Depression), in 1963 (JFK) and on 9/11.

The VOLATILITY INDEX has now gone higher than in the Lehman Weekend!

This country must find the strength and inspiration to turn this around and UNITE, or risk falling apart on MULTIPLE LEVELS.

Courtesy: Zerohedge.com

At this moment in time, my two BIGGEST takeaways are that (1) there’s no way IN HELL that people ever trust their retirement funds to be there when they need them. (2) I believe that share BUYBACKS will become illegal and that CEOs, this time around, will be put to justice.

The court of public opinion is going to bury so many well-known people.

As much as this has been ALMOST SURREAL thus far, it’s really not over.

Check this out:

Courtesy: Zerohedge.com

This is our generation’s Pearl Harbor, our GREATEST test and, on a personal basis, it’s a time for self-reflection.

I’ve spent considerable time speaking with top-income earners in many industries. I’ve spoken with CEOs, venture capitalists, and WHALE INVESTORS.

I’m telling you that the sentiment is WORSE than in 2008. Many have thrown in the towel.

The markets are BEGGING to be closed. In fact, I’m BREAKING this news here first. As I see it, for the first time in the MODERN ERA, investors are PRICING a default by the TREASURY!

I’m going to repeat that: The world is beginning to consider that Washington is NOT STABLE.

On Sunday, I’m going to publish an EMERGENCY BRIEFING. Stay tuned!

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Coronavirus Federal Reserve Intelwars interest rates

Federal Reserve announces emergency action to prevent economic crash over coronavirus fears

The Federal Reserve announced Sunday that it will take emergency action to stave off an economic recession amid growing coronavirus panic.

The central bank took the dramatic step of lowering interest rates to near-zero — targeting 0% to .25% — to incentive borrowing and continued economic participation. Additionally, the bank announced $700 billion in quantitative easing.

More from CNBC:

The quantitative easing will take the form of $500 billion of Treasurys and $200 billion of agency-backed mortgage securities. The Fed said the purchases will begin Monday with a $40 billion installment.

The Fed cut rates from the previous target range of 1% to 1.25% and said it would remain there “until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.”

“The coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States,” the Fed said in a statement, the New York Times reported.

“The Federal Reserve is prepared to use its full range of tools to support the flow of credit to households and businesses,” the bank added. “The committee will continue to closely monitor market conditions and is prepared to adjust its plans as appropriate.”

The decision to lower interest rates and initiate quantitative easing was nearly unanimous, the Washington Post reported. Cleveland Fed President Loretta Mester preferred to keep interest rates slightly higher, but she was outvoted.

During President Donald Trump’s coronavirus briefing on Sunday, he stated that he is “very happy” the Fed took action.

Meanwhile, Treasury Secretary Steve Mnuchin said Sunday that he does not expect the U.S. economy to head into an official recession over coronavirus.

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CURRENT EVENTS Economy Federal Reserve Intelwars interest rates Jerome Powell

Federal Reserve: Enemy of Liberty and Prosperity

Lost in the media’s obsession with the impeachment circus was Federal Reserve Chairman Jerome Powell’s recent testimony on the state of the economy before the Joint Economic Committee. In his testimony, Chairman Powell warned that when the next recession inevitably occurs, the US Government’s over $23 trillion debt would prevent Congress from increasing spending to revive the economy.

Powell also said that the Fed’s current low interest rate policies would prevent the Fed from using its traditional methods of increasing the money supply and further lowering interest rates to jump-start economic growth in a recession. Hopefully, Powell is correct that when the next recession hits the Federal Reserve and Congress will be unable to “stimulate” the economy with cheap money and new spending.

Interest rates are the price of money and, as with all prices, government manipulation of interest rates distorts the signals regarding market conditions. Artificially low interest rates lead to malinvestment and the creation of bubbles. Recessions are a painful but necessary correction that allows the economy to cleanse itself of these distortions. When the Federal Reserve and Congress try to stimulate the economy, they introduce new distortions, making it impossible for the economy to heal itself. Fiscal and monetary stimulus may temporally create the illusions of prosperity, but in reality they merely create another bubble that will eventually burst starting the boom-and-bust cycle all over again. So, the best thing Congress and the Federal Reserve can do to help the economy recover from a recession is nothing.

Powell is the latest Federal Reserve Chair to warn of the dangers of government debt, which is ironic since the Federal Reserve is the great enabler of deficit spending. Government manipulation of the value of money allows politicians to hide the true costs of their warfare and welfare. This is why throughout history governments have sought the power to dictate what is and is not money and determine the value of the monetary unit. Today’s central bankers are the heirs of the medieval kings who shaved off the edges of gold coins, then ordered the people to pretend that shaved coins were just as valuable as unshaved coins.

Instead of shaving gold coins, today’s central bankers facilitate the growth of government by purchasing government securities in order to keep interest rates—and thus the government’s borrowing costs— low. The Federal Reserve’s interventions enable the expansion of government well beyond what would be politically palatable if politicians had to finance the entire welfare-warfare state through direct taxation or borrowing at market interest rates, which would increase interest rates for private sector borrowers, lower growth, and increase unemployment.

Since the creation of the Federal Reserve, the US dollar has lost over 96 percent of its value. The Federal Reserve-caused decline in purchasing power is a stealth tax. This inflation tax does not affect the financial elites—who receive new money created by the Federal Reserve before the Fed’s actions have diminished the dollar’s purchasing power—but has hurt middle-and-working class Americans whose purchasing power is continuously reduced by the Federal Reserve. The inflation tax is not just the most hidden, but the most regressive of taxes.

The Federal Reserve is responsible for the growth of government, the loss of liberty, the rise in income inequality, and the boom-and-bust economic cycle. All those who support liberty, peace, and prosperity should join the effort to audit and end the Fed.

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Budget Deficit Donald Trump Economy Federal Reserve fiscal stimulus Intelwars interest rates Recession

Donald Trump’s Bizarre Economic Balancing Act

President Donald Trump is trying to advance two conflicting narratives about the U.S. economy. A pair of tweets the president sent out within an hour of each other demonstrate the bizarre balancing act he’s trying to maintain.

 

On the one hand, Trump continues to insist that the U.S. economy is “sooo strong.” He often talks up the economy in hyperbolic terms. He’s gone as far as to call it “the greatest economy in the history of our country.”

On the other hand, the president continues to call for and get the kind of Keynesian monetary and fiscal stimulus that one would expect to see in the depths of a deep recession.

Monetary Stimulus

Trump has badgered Federal Reserve Chairman Jerome Powell for months, demanding interest rate cuts. Even after the Fed dropped rates 25 basis points in July, Trump took to Twitter to criticize the central bank, insisting it wasn’t going far enough.

“What the Market wanted to hear from Jay Powell and the Federal Reserve was that this was the beginning of a lengthy and aggressive rate-cutting cycle…”

Just a couple of days before disparaging the Fed chair’s golf game, Trump called for a 100 basis point interest rate cut.

To put Trump’s demand into perspective, a 100 basis point cut would take the interest rate down to 1 percent. That would equal the lowest level Alan Greenspan pushed interest rates down to in 2003 during the depths of the recession that followed the popping of the dot-com bubble and the 9/11 terror attacks.

In fact, the Trump economy has already benefited tremendously from easy monetary policy. Although theFederal Reserve began to normalize rates in December 2015 after holding them at zero for nearly a decade, it didn’t get very far. The central bank nudged rates up four times in 2018. But in December of that year, the stock market crashed and the Fed reversed course after its December hike. First, it gave us the “Powell Pause,” and then a rate cut in July. The Fed’s march toward “normal” got us to a paltry 2.5 percent.

That’s not normal.

In contrast, after Greenspan dropped rates to 1 percent during the post-dot-com bubble recession, the Fed pushed rates up to 5.25 percent before the ensuing housing bubble popped in 2007.

Spending Out the Wazoo

Fiscal stimulus in the form of government deficit spending has also helped prop up the economy. In a nutshell, the federal government has spent money out the wazoo since Trump took office.

To date, the federal government has spent over $3.7 trillion in fiscal 2019, according to the latest Treasury Department report. Year-over-year spending growth is at a nearly nine-year high. Uncle Sam spent $371 billion in July alone. That was 23 percent more than the government spent in July 2018.

With two months to go, the fiscal 2019 budget deficit has already topped the shortfall for all of 2018. And the 2018 deficit came in as the largest in six years. Ryan McMaken parsed out the numbers in a recent article on the Mises Wire. The last time the deficit was this high was in fiscal 2012 when the budget shortfall reached nearly $1.1 trillion. In 2009, at the height of the Great Recession-stimulus-panic, the deficit reached 1.4 trillion.

Deficits typically shrink significantly during a post-recession recovery and then spike during the subsequent downturn. As McMaken notes, after the 1990-91 recession, deficits generally got smaller, until growing again in the wake of the dot-com bust. Deficits then shrank during the short expansion from 2002 to 2007. During the first part of the post-Great Recession expansion, deficits shrank again. But since late 2015, deficits have only gotten larger, and are quickly heading toward some of the largest non-recession deficits we’ve ever seen.

In fact, the 2019 deficit will likely eclipse $1 trillion. This is a recession-like deficit even as the economy is supposedly booming.

What Does It All Mean?

In simple terms, the “great” Trump economy is being propped up by extraordinary stimulus – both monetary and fiscal. It’s the kind of stimulus you’d expect during a steep economic downturn. And the president wants more of it.

This reveals the incoherence of the president’s economic messaging. Why do you need extraordinary stimulus if you have the best economy in the history of forever? Why do you need interest rates set at the level they were during the recession that followed the popping dot-com bubble?

The reality is that the Federal Reserve’s easy-money policies have driven economic growth and asset prices since the 2008 Financial Crisis. It drove economic growth and the surge in the stock markets during the later years of the Obama administration and it continued to drive that growth after Trump took office.

Ironically, the president accurately called the stock market a “big, fat, ugly bubble” during the 2016 campaign. After he took up residence in the Oval Office, he branded the bubble with a big Trump “T” and adopted it as his own.

This explains why Trump is so desperate for more interest rate cuts. He knows the bubble economy can only keep limping along with more stimulus. And he needs the economy to keep limping along until after the 2020 election.

This also explains why Trump has suddenly started talking about tax cuts. And there is no mention of spending cuts. In fact, Pres. Trump recently signed a bipartisan budget deal that will increase discretionary spending from $1.32 trillion in the current fiscal year to $1.37 trillion in fiscal 2020 and then raises it again to $1.375 trillion the year after that. The deal will allow for an increase in both domestic and military spending.

Tax cuts with no spending cuts mean more deficit spending. This is pure Keynesian fiscal stimulus. Again – why is this necessary if the economy is “great?”

The fact is the economy isn’t great. It hasn’t been great for years. It’s a bubble-economy built on debt facilitated by easy-money central banking.

The U.S. economy is heading for a recession. The recent recession chatter isn’t some kind of evil media plot to make Trump look bad. A recession has been looming for a long time. Trump has managed to delay the inevitable thanks to tax cuts and recession-like deficit spending. Jerome Powell lent him a helping hand with a little monetary stimulus when the Fed did a 180 on interest rate normalization earlier this year and cut rates in July. But you can only kick the can down the road for so long until you run out of road.

The economics of the Fed-induced boom-bust cycle guarantee a recession. You can’t really blame Trump, but politics being what they are, he will get the game. At that’s mostly on him. After all, he took credit for the bubble. That means he gets the blame when it pops.

The president will undoubtedly continue to maintain this bizarre balancing act, but a fall isn’t far away.

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