A big data release today as we saw the first estimate for Q2 GDP, initial and continuing jobless claims, and the Fed’s balance sheet. On the GDP front, we witnessed an annualized contraction of -32.9% for Q2 of 2020. This is an historic contraction with nearly every facet of the economy experiencing a decline. One area of increase of course was federal government spending.
With respect to initial jobless claims, for the week ending 25 July, we witnesses the second consecutive week over week increase. This is the wrong direction, but unfortunately this is not shocking to The Kapital News. Another 1.434 million Americans filed for initial jobless benefits, which was an increase from the previous week of 1.422 million. Continuing claims also moved higher for the first time in several weeks, now resting at 17.018 million Americans. In aggregate, which takes into consideration the various emergency and pandemic related programs, for the week ending 11 July, there were 30.202 million Americans receiving some form of unemployment compensation. This was a decrease from the prior week ending 4 July of 31.804 million. This is moving in the right direction, however, this data lags a couple of weeks. And with the recent set-back(s) in re-openings, this number may very well increase in the coming weeks. There is also the effect of some of these programs potentially coming to an end if Congress does not extend them or create something new. And there remains some distortionary effects on the “true” jobs picture as PPP loans are still being utilized. So, once these loans expire, will these employers retain all of their employees or will the let some of them go (again)? Time will tell.
Lastly, the Federal Reserve’s balance sheet was reduced slightly from the prior week continuing its recent plateauing trend. However, as Jay Powell stated yesterday following the conclusion of the FOMC meeting, that the Fed will continue to do whatever it takes and will continue to buy US Treasuries and mortgaged-backed securities at its current rate. With recent announcements of extension of various emergency facilities and dollar swap lines, and expectations that Congress will soon be passing another $1 trillion plus spending bill, it is reasonable to assume that the Fed’s balance sheet will be moving higher over the coming months. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #GDP #Jobs #Gold #USA #Depression #Recession #Silver #Liberty #Inflation
Well no surprise, as was expected, the Federal Reserve decided to keep interest rates at record lows between 0.00-0.25 bps. The Fed has also decided to extend their dollar swap line program until at least March of 2021. This is in addition to the extension of their alphabet soup of emergency facilities that are now set to expire by the end of December 2020. When asked this afternoon by a reporter about when the Fed may begin increasing interest rates, Jay Powell, Chairman of the Federal Reserve, responded that he isn’t even thinking about thinking about raising interest rates. This has been a consistent answer as the Fed has cornered themselves by these various policies. If the Fed was unable to raise rates during 2018 and to “normalize” its balance sheet, (supposedly when the economy was strong), and the markets threw a tantrum and sold off some 20% in the Q4 of 2018, then how will the Fed be able to do it this time? Especially with their balance sheet nearly double where it was back in 2018. Recall that rates got to about 2.5% in 2018 and the economy and/or markets couldn’t tolerate it – hence the market sell-off. So presumably, if and when the Fed attempts to raise rates, we’ll be looking at 1 to 1.5%, maybe even less, that will have the same effect whereby the markets won’t be able to withstand such “high” rates. This is so laughable and yet so tragic at the same time. Be on the lookout for inflation, because it is coming – in fact, it’s already here.
In some other news, former VP Joe Biden is expected to announce his VP pick during the first week of August. This is one the biggest decisions that any Presidential contender has to make during their campaign and so we can expect quite a bit of news coverage on this topic. What we do know is that it will be a woman, as Biden has already made this commitment. Some of the top picks may be Senators Kamala Harris and Elizabeth Warren, along with former Obama Administration official and National Security Advisor, Susan Rice. This news event will take the campaign on both sides to the next level. There’s only a few months to go before election day and if 2020 continues in the same way, then that amounts to a lifetime between now and 3 November. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Gold #Debt #Bailouts #USA #BananaRepublic #EndTheFed #Depression #Recession #Silver #Protests #Liberty
A truly disgusting and disgraceful performance was on display today during the testimony of Attorney General William Barr before the House Judiciary Committee. This cuts down both political parties, but this afternoon it was the Democrats’ turn to make a mockery and a spectacle out of our system. On nearly every occasion that the AG was asked a question by a Democratic member of the committee, Mr. Barr was rudely and quickly interrupted when attempting to answer the question. The rehearsed line by the Dems was, “it’s my time,” or I’m reclaiming my time,” as they interrupted. Well isn’t it also AG Barr’s time too? In fact, isn’t the purpose of the hearing to hear what AG Barr has to say on a number of issues pertaining to the Department of Justice? Yes, of course! If the Dems just want to grandstand, then pick a news outlet, pick a reporter, pick your favorite social media outlet and grandstand. But when you have a member of the Administration before you, or anyone else for that matter, then be respectful and civil. And above all else, ask serious questions that keep people in positions of power in check and allow them to answer the questions. Our republic is based on an informed citizenry. When its citizens do not have the information, then how can we be expected to make the right decisions? We could go on about this, but we digress. This was an utter disgrace.
Of course another utter disgrace pertains to the conclusion of the FOMC meeting tomorrow where the Fed will likely keep rates at all-time lows and announce that they will continue to do “whatever it takes,” which has become their new de facto motto. In addition, the Fed announced that their alphabet soup of emergency facilities will be extended through the end of this year. The previous expiry was for the end of September, but as we stated during yesterday’s podcast, this is the “Week of More!” Therefore, we should not be surprised by this decision. We could continue on this as well, but we digress for now. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Gold #Debt #Bailouts #USA #BananaRepublic #EndTheFed #Protests #Revolution #Liberty #Silver #Recession #Depression #Inflation
Another busy week, which has been par for the course throughout 2020. In today’s podcast we recap some of the economic data that made its way across the newswires. We also discuss the many distortionary effects that exist within the markets and how these relationships are likely going to be breaking down in the near future. Some other stories that we touched upon were the torrential rains and flooding that is taking place in China, some parts of India, and Bangladesh. With respect to China, if a major dam gives way due to the flooding, then some 40 million Chinese will be directly affected – this will make for international news and a major humanitarian crisis.
Lastly, we conclude with an update to the Jeffrey Epstein and Ghislaine Maxwell court cases. The pair, allegedly along with many other powerful people from around the world were involved in decades long sex trafficking ring(s). Epstein committed “suicide” last year while in a maximum security prison and Maxwell was recently apprehended by the FBI. Her trial date is set for next summer (if she can make it that long). There are also reports that a judge on the case has ordered that some sealed court documents are to be unsealed as early as next week. In it, there are supposedly a list of names that details who was involved in the sex trafficking ring in one form or another. These are likely going to be well known names in politics, business, and entertainment, so do not be surprised when the names drop, and hopefully this information is released. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Gold #Debt #Recession #Silver #Depression #USA #Liberty #Justice #Truth #Peace #Revolution
Another Thursday is in the books and as such it’s a data dump of initial jobless claims and an update to the Federal Reserve’s balance sheet. Despite being several months into the COVID-19 pandemic and the Greatest Depression, we are still unfortunately witnessing over 1 million Americans filing for initial unemployment benefits for the week ending 18 July, as the number was 1.4 million – an increase from the prior week. This is not in agreement with any kind of V-shaped economic recovery. In fact, as we continue to see several states across the country close, re-close, or slow their re-openings, it is likely that the jobs report for the month of July will paint an ugly picture. While the White House may want to cheer the June jobs report, which they did, it may prove to be a premature victory lap, as the reality of the pandemic and depression starts to set in.
As we have noted in previous podcasts, the actions taken by governments and central banks can aid the liquidity issues (at least for awhile), but they cannot alleviate the coming insolvency crisis. The insolvency crisis is waiting in the wings and with it will be the loss of hundreds of thousands, if not millions of more jobs – many of which will be classified as permanent job losses. This was an inevitable outcome for living off of debt and thinking that it was all real and sustainable. Unfortunately, we’re repeating the mistakes of the past, which will only prove to make any economic recovery slower and more painful than what otherwise could have happened.
In other news, the Fed’s balance sheet increased “minimally” by $6 billion from the previous week. However, with Congress set to pass new legislation to extend unemployment benefits and spending to help states and local governments, amongst others, will send the Fed’s balance sheet north of $7 trillion and beyond in short order. In a tit-for-tat response to yesterday’s order from the US State Department ordering Chinese diplomats to close down their consulate in Houston, Texas, the Chinese have ordered US diplomats to leave a US consulate in China. This is the new cold war and tensions will likely remain high for the foreseeable future and this issue will also become center stage politically here in the US during the 2020 Presidential election. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Gold #Debt #Recession #USA #China #Depression #BananaRepublic #EndTheFed #Congress #Silver #Protests #Bailouts
We have previously discussed the dollar doom loop scenario, whereby a strengthening US dollar could cause a disastrous downward spiral around the globe, especially with respect to commodity dependent nations. However, there is also the possibility that this scenario does not unfold, and rather than having a “swan song” to new heights before its eventual collapse, the US dollar, just continues its descent. If this happens, this too can have devastating global effects, especially if this causes commodity prices to spike, among a whole host of other issues. In the midst of the Greatest Depression, higher prices are not a panacea, but will simply make the situation even worse. As higher prices will not be a result of an increase in demand, but rather the demise of the US dollar, rendering them near worthless. Looking into gold and silver as potential hedges against such scenarios may prove prudent as both have served as true money for millennia.
Is a new cold war brewing – this time between the US and China? Yes, most likely. Today the US government ordered the Chinese to leave their consulate in Houston, Texas. This is an escalation in recent tensions between the two nations as the pair goes back and forth on a number of geopolitical issues. Some of these pertain to the South China Sea, Hong Kong, Taiwan, trade and tariffs, human rights issues, and COVID-19, amongst others. It is unlikely that all of these disagreements will be solved in the near future. Therefore, expect a lot of uncertainty and volatility for the foreseeable future as both sides attempt to play the “strong-man.” Let us hope this does not turn into a hot war, but be prepared if it does happen. And should it happen, the economic fallout will be nothing short of catastrophic, not to mention the loss of life. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Gold #Silver #Debt #Bailouts #USA #China #BananaRepublic #Depression #Recession
While the price of gold has been moving up steadily over the past few years, silver on the other hand, has been more range bound. That is until recently. Today the price of silver moved up by several percentage points taking the metal to a spot price of over $22/oz – this is a level not seen since late 2013. So, the question becomes – is this a temporary spike in price or the beginning of what could prove to be a massive bull market? This of course remains unknown. However, with the current state of affairs from policymakers, politicians, and central bankers around the world, it would suggest that there are a lot of tailwinds behind gold and silver. The printing press is no panacea as the world is soon going to discover and the people are also going to become well aware that “free” money was never so expensive. Add to this the geopolitical uncertainties, the upcoming US Presidential election, more talks of government spending, higher inflation expectations, and a further deterioration in the overall economy, places the precious metals market in a ripe environment for perhaps the next several years as a means of diversifying, protecting, and adding to your wealth. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Debt #Recession #BananaRepublic #USA #EndTheFed #Depression #Inflation #Gold #Silver
More vaccine headlines because, well, it’s a day that ends in “d-a-y.” More “stimulus” on it’s way because, well, that’s what an out of control Congress and White House do – they beg, borrow, and spend money we do not have. Former Chairs of the Fed, Ben Bernanke and Janet Yellen testified before Congress last week on how to weather the COVID-19 storm and suggested to do, “whatever it takes” – because, well, that’s what central bankers operating in banana republic do – they print money like it’s going out of style – because it is. And lastly, the weakest links in the global economic chain are beginning to completely collapse.
We highlight the devastating economic and social destruction of Lebanon. Wrought with years of political corruption, fraud, abuse, and nepotism, coupled with flawed economic policies have brought the Middle Eastern state to its knees. Unfortunately, the policies and actions that have caused this collapse are all too familiar to billions of people around the world – whether 3rd world or highly industrialized. This is what ultimately led to the global protests prior to the pandemic, and given the economic, health, and social fallout due to the pandemic, the protests will become even larger and likely violent. Any chain is only as strong as its weakest link and if recent history is any guide, do not be surprised if over the course of the next 1-2 years, we see the collapse of not only smaller countries, such as Lebanon, but of larger economies around the globe. A global economy built upon and maintained by debt cannot stand the test of time nor forever defy the laws of economic gravity. A day of reckoning is upon us and the Greatest Depression is now well underway. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Debt #Bailouts #BananaRepublic #USA #EndTheFed #Gold #Silver #Protests #Depression #Recession #Inflation #Peace
It’s Thursday already and so we have another round of initial jobless claims, continuing claims, and Federal Reserve balance sheet data. Initial jobless claims came in at a seasonally adjusted 1.3 million for the week ending 11 July. This is history in the making as we are several months into the COVID-19 pandemic as well as the economic collapse that will turn into the Greatest Depression, and we’re still witnessing over 1 million Americans filing for unemployment insurance for the first time. The Federal Reserve’s balance sheet increased by over $30 billion ending a four-week string of declines. The balance is still hovering near that $7 trillion figure. With more spending set to be passed by Congress in the coming weeks, from anywhere between another $1-3 trillion in new spending, we imagine the Fed’s balance sheet to once again increase significantly. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Debt #Bailouts #Depression #Recession #EndTheFed #BananaRepublic #USA #Gold #Liberty #Revolution #Protests
Where to even begin? The excessive and abusive taxation across federal, state, and local jurisdictions. The theft of our savings and purchasing power through the effects of inflation. The two-tiered justice system.The endless wars and interference and meddling in other countries’ affairs. The trillions of dollars spent on social and corporate welfare programs. The poor state of our infrastructure and education systems. How much further must we go? Oh, yes, and how can we forget the protests and riots from coast to coast.
This has been years in the making and this country along with several others are taking to the streets to demand change. To hold their respective governments and officials accountable for years, if not generations’, worth of failed, flawed, fraudulent, and corrupt policies. The end game is near and unfortunately, millions, if not billions of people around the world are going to experience the severe consequences of these policies. And most don’t even know they’re coming. The sad thing is, at least here in the United States is that we have the answer, but choose to ignore it. The answer is a return to our constitutional republic and to free-market capitalism. If we restore ourselves to these principles and adhere to them, then we can turn this decline around and our best days may very well be ahead of us. But if we do not and continue with the same policy prescriptions, then our decline and demise is just around the corner. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Depression #Debt #Bailouts #EndTheFed #BananaRepublic #USA #Revolution #Liberty #Gold #Deficits #Protests #War #Peace #Truth #Recession #Jobs
