Tag: Depression

Ep. 621 – Weekly Wrap Up
The Kapital News
The Kapital News
Ep. 621 - Weekly Wrap Up
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Global markets continue to be rattled by the ongoing conflict between Russia and Ukraine. However, this is the easy scapegoat for what truly ails the markets – easy money. Governments and central banks injected trillions of dollars into the world economy. Their excuse then, and justification for such actions was the pandemic. Now as the pandemic is seemingly coming to an end, they have a boogeyman to blame for supply chain disruptions, higher prices, etc – Russia. It is almost too coincidental, don’t you think? Several major global stock markets have given back all of their pandemic gains. It only takes a few short months, sometimes even weeks, to erase a year or years of gains. This is a direct result of markets having been juiced by cheap money. It wasn’t real. It was a bubble. As such, it can collapse easily and that is what is unfolding now. However, governments, central bankers, and other policymakers are not going to take responsibility for their actions. Thus, they will look for any and all excuses possible. Now, it’s the pandemic and Russia. What will be next?

As is highlighted in today’s podcast, global trade is discussed and how countries the world over will likely engage in hoarding their goods that are typically exported. This past week, Hungary announced that they are stopping the exports of grain products. Russia and Ukraine account for nearly 25 percent of the world’s wheat production and 20 percent of global corn production. Also this week, President Putin of Russia, reached out to fertilizer companies, basically instructing them to slow or stop the export of fertilizers. Russia and Belarus, an ally of Russia, are two of the largest fertilizer producers in the world. If they were to stop exporting, global food prices, which are already at or near all-time highs, will get even higher. Revolutions are fought on empty stomachs. We witnessed the Arab Spring only a decade ago. Rising global food prices were a major factor in that movement. Now with even more debt, higher food prices, a pandemic, and energy prices at levels also not seen for several years, sets the stage for a lot to go wrong in short order. Such protests, riots, strikes, revolutions, should they occur, will only exacerbate the current situation. Further disruptions to supply chains, less production of goods, fewer exports due to restrictions and/or lack of production – all of which translates into higher prices for the basic necessities. Stay diversified, stay vigilant, and stay with The Kapital News. #Commodities #Gold #Silver #Recession #Peace #FoodPrices #Revolution #Protests #Russia #Ukraine #USA #Liberty #Stagflation #Inflation

Ep. 618 – The Fed’s Trapped, Here’s Why
The Kapital News
The Kapital News
Ep. 618 - The Fed's Trapped, Here's Why
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Tame inflation or keep the markets up – what to do, what to do? This is the position the Federal Reserve, along with some other major central banks, are contending with. It’s been an open secret for years that the Fed is beholden to the credit and stock market. However, the Fed now finds the economy in an inflationary environment. One way to combat inflation would be to raise interest rates significantly to match or exceed the current rate of inflation, which is at 7.5 percent. Doing so, however, will surely bring down the credit markets and with it the stock market. Yet, not contending with inflation, will only make the inflation that much worse and will last that much longer. Inflation is a regressive and hidden tax that impacts the most economically vulnerable among us the worst. This also ties into massive wealth inequality that is one for the record books. So coupled together with persistent and high inflation along with massive wealth inequality sets the stage for massive political instability, protests, and revolutions, which will be experienced the world over. This is not just a problem for the USA, but for the world. Stay diversified, stay vigilant, and stay with The Kapital News. #Inflation #Stagflation #Recession #Depression #Protests #Revolution #FoodPrices #InterestRates #Liberty #Freedom #Oil #Gold #Silver

Ep. 617 – Inflation Nation
The Kapital News
The Kapital News
Ep. 617 - Inflation Nation
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I step aside for a few months and all hell breaks loose – exactly how I told you it would. Inflation has proven not to be transitory and the solutions that exist to combat inflation are not popular and will bring the entire economy to a screeching halt. Those trillions upon trillions of dollars in fiscal and monetary stimulus came with a price tag – and everyone is now paying that price – inflation! Stay diversified, stay vigilant, and stay with The Kapital News. #Inflation #Stagflation #Recession #Depression #FoodPrices #Oil #Gold #Silver #Liberty #Freedom #Protests #Revolution

Ep. 587 – Is Social Unrest Contagious?
The Kapital News
The Kapital News
Ep. 587 - Is Social Unrest Contagious?
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More than several countries around the globe were protesting throughout 2019. In comes the pandemic and the subsequent lockdowns and the protests are tampered down. However, the reasons for the protests were never truly dealt with and due to the negative fallout from the pandemic, many of these issues have actually gotten worse. So here we are in 2021, and many of these protests are once again taking shape.

Whether it is income inequality, tax hikes or the mention of tax increases, a raise in bus or metro fares, a decrease in governmental benefits, or political abuses of power, one thing is certain, people around the world are sick and tired of being sick and tired. The cost of living is increasing by the day and more and more people are spending larger portions of their incomes on the basic necessities to live. This is why it becomes laughable if not disrespectful for those who argue about a deflationary environment. People around the world are not protesting and rioting because the cost of living is so affordable – they are protesting because they cannot afford to live!

Furthermore, these types of protests and movements can prove contagious as they may inspire other people around the world to take to the streets in their respective countries. Cost of living increases, tax hikes, and political corruption are not unique to only a few countries, but rather most, if not all of them. Depending on the outcomes, some may be resolved peacefully, while others may turn violent. In the latter scenario, the global economy should be watchful of further supply-chain disruptions. A country at war with itself will produce fewer items and thus less to be offered on the global stage. The global economy is continuing to contend with supply-chain issues, and social strife will only add to these pressures and bottlenecks, which ironically will only serve to further increase prices. There is no easy way out of this mess, but it is encouraging to see people stand up for themselves, their families, and their countries. Major changes are needed, and let us pray that they take the form of liberty and free-market capitalism. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Protests #FoodPrices #Inflation #USA #Colombia #Peace #Gold #Silver #Commodities #Jobs #Housing #Fraud #Bubbles #Zombies #EndTheFed #bananarepublic #FireCongress #Liberty #Leadership

Ep. 579 – Job Market Distortions + Higher Taxes
The Kapital News
The Kapital News
Ep. 579 - Job Market Distortions + Higher Taxes
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For the second consecutive week, initial jobless claims came in under 600k to stand at 547,000 for the week ending 17 April. While this figure is below that which was witnessed during the depths of GFC, we cannot forget the Pandemic Unemployment Assistance program that was created by the Federal government. This figure came in at 133,319, which means in aggregate, weekly claims were 680,000 – still higher than the GFC, yet trending lower, and that is good news. The prior week was revised higher by 10k to now stand at 586,000. In aggregate, across all forms of unemployment insurance, some 17.4 million Americans continue to claim benefits. This gives us a de facto unemployment rate of 12.5 percent, which is more than double the official unemployment rate of 6.0 percent.

The Federal Reserve’s balance sheet hit another all-time high and now stands at $7.82 trillion, which was a week-over-week increase of $27 billion. The Fed remains committed to their QE program of purchasing at least $120 billion of US Treasuries and mortgage-backed securities per month. This will take their balance sheet to at least $8.5 trillion by the end of the year, and The Kapital News is projecting that it will be closer to $10 trillion! For context, their balance sheet was just shy of $900 billion during the GFC. This is nearly a 10x increase in just a little over a decade! And do recall that when QE was announced that it was going to be temporary. This program is a couple of years away from applying for a driver’s license – so much for short-lived. It is important to note this because current Fed members are stating that inflation will only be transitory. The same people who said QE would be temporary are saying the same about inflation – see where we are going with this?

As The Kapital News has been mentioning since we have been online starting in 2019, is to get ready for tax hikes. We were running trillion dollar deficits prior to the pandemic, the subsequent lockdowns, and massive spending programs. It is basic math at the end of the day. We are all for cutting taxes, in fact, we want to see the income tax abolished, along with the Federal Reserve. However, if policymakers are going to cut taxes, then they need to cut spending as well. Only solving for half of the equation is asking for trouble – i.e. large deficits. These deficits bring about the hidden tax of inflation, and now because of the size of our deficits, tax increases are coming. It was only a matter of time, but now the Biden Administration is discussing raising taxes. Their first target is capital gains taxes in a show to target the rich, but make no mistake that they will also be broad-based when the dust settles. We are dealing with a $28.2 trillion national debt. We are on the path to spend nearly $8 trillion this year alone, which gives us a deficit of over $4 trillion! Our deficit alone is higher than all of the tax revenue that is brought in annually, which is currently around $3.5 trillion! How sustainable do you think this is? And unfortunately, there is not much to show for it. So it is another double whammy as usual as we have to contend with the inflation tax and an increase to direct taxation. It should also be stressed that confiscating the entire net worth of the country’s wealthiest individuals would only cover expenses for several months. Point being, we are in a lot of trouble and attempting to tax and spend our way out of it, is not the solution. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Inflation #Taxes #Debt #Spending #Gold #Silver #USA #Bailouts #Liberty #Leadership #Justice #Truth #EndTheFed #bananarepublic #FireCongress

Ep. 571 – Another 750,000 Jobs Bite The Dust
The Kapital News
The Kapital News
Ep. 571 - Another 750,000 Jobs Bite The Dust
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Were we not just informed last Friday with the release of a “stellar” jobs report that the economy and namely the jobs market recovery was well underway? Well then how can we have another 744,000 Americans filing initial jobless claims for the week ending 3 April? Furthermore, you have to understand that this figure only represents regular state unemployment benefits. However, due to the pandemic and the subsequent lockdowns and restrictions, federal government programs were established to assist those who would not traditionally qualify for state benefits. So, taking into consideration such a program, known as Pandemic Unemployment Assistance, or PUA, we see that nearly 152,000 Americans filed an initial claim for the week ending 3 April. This means in aggregate that nearly 900,000 Americans filed an initial claim last week! Talk about recovery, as this is now over one full year since such draconian measures have been implemented. Last week’s figure of 719,000 was revised upward to now stand at 728,000 for the week ending 27 March. In aggregate, across all unemployment programs, some 18.2 million Americans continue to file claims. This is little changed from the prior week, and gives us a de facto unemployment rate of 12.7 percent. This is more than double the official unemployment rate, which now rests at 6.0 percent.

In other news, the Federal Reserve’s balance sheet sits at $7.708 trillion, which is a week-over-week increase of $20 billion and is just shy of hitting a new all-time high. The Fed remains committed to their QE program of purchasing at least $120 billion per month of US Treasuries and mortgage-backed securities. They continue to purchase MBS despite the fact that housing prices are at all-time highs and continue to climb, even as lumber and other construction materials prices continue their ascent.

And lastly, major geopolitical risks are taking shape around the globe. Whether it is increasing tensions between Russia and Ukraine, China, Taiwan, and the Philippines, Northern Ireland rioting against Brexit, how the US is involved in all of these areas, or leaders in Italy and Turkey doing some name-calling, one thing is certain, the globe is on very unstable ground. With so much taking place, it increases the likelihood of mistakes being made or it creates the perfect environment for a false-flag attack, which will then be used as justification for conflict or even war. And oh yes, the Middle East and Africa remain hot spots for conflict as well. And if enough people in poorer and middle-income nations does not constitute enough financial strife, add Canada to the mix. A new survey released indicates that 53 percent of Canadians are on the verge of insolvency as they are only $200 away from not being able to pay their monthly bills and debt obligations. This figure includes the 30 percent of Canadians who are already insolvent. And despite all of this or perhaps because of it, real estate prices in Canada continue to skyrocket, with many homes selling well above their asking price, site unseen! But remember, our fearless leaders inform us that there is NO inflation. What a joke. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Debt #Inflation #Geopolitics #Protests #Peace #USA #Liberty #Leadership #EndTheFed #bananarepublic #FireCongress #China #Russia #Germany #Ukraine #Taiwan #Philippines #Italy #Turkey #Canada

Ep. 569 – US Taxpayers Bailout The World
The Kapital News
The Kapital News
Ep. 569 - US Taxpayers Bailout The World
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Whether it is the trillions upon trillions of dollars that are being spent by Uncle Sam and printed by the Federal Reserve, or the $650 billion that Treasury Secretary Janet Yellen, just gave to the IMF, one thing is certain, and that is the American taxpayer is paying the bill. Now the US taxpayer is not the only group that will be feeling the consequences of such reckless policy. Instead it will be millions, if not billions of people the world over. They will feel the effects via inflation. Many poorer and middle-income nations are already contending with the destructive nature of inflation. Most notably for these countries is the price of food, energy, medicines, and other living necessities. Such cost increases are in turn leading to political and social unrest. This trend is likely to continue. However, The Kapital News would like to note that there may be a delay as to when some of these protests and riots gather more steam and traction. This is potentially due to the $650 billion that was given to the IMF to assist such countries with their ailing and failing economies. They are on the verge of defaulting on their debts, which in turn would have caused further problems, thus creating a vicious-cycle for these countries, which would likely manifest itself with people protesting and rioting. The $650 billion, buys some time. Furthermore, with our reckless spending, is leading to record trade deficits. That is to say we are importing more than we are exporting at record levels. This signifies that our spending is leading to increasing production levels in other countries. If we were producing such goods, then we would not need to import them to such a degree. So understand simply, the US produces dollars, and the world is producing goods. How long will this continue?

The Kapital News has also been informing our audience of further fiscal policy measures amounting to trillions of dollars before 2021 even got started and prior to the election of now President, Joe Biden. It would not have made much of a difference as to whom is the President, as further spending was coming regardless. Nonetheless, the new infrastructure bill has gained some parliamentarian clearance to be passed, at least in part, via budget reconciliation. This is where a simple majority in the Senate, 51 votes, is enough to pass the legislation. In this instance, as was the case for the Nobody CARES Act 3.0 worth $1.9 trillion, VP Kamala Harris would be the tie-breaking vote, assuming this falls on party lines. This determination by the Senate parliamentarian does not mean that this bill will pass quickly. There are a few Senate Democrats who are not huge fans of the current bill, and they also come from more conservative states. Therefore, it is very likely that these Senators will leverage this to gain extra funds to their states in order to look the other way with their objections and then ultimately pass the bill. When it is all said and done, trillions more in spending will be appropriated throughout the remainder of 2021 and perhaps beyond.

A recent report released by Fitch Ratings, one of the major corporate credit rating agencies within the United States, is issuing a warning with respect to bankruptcies. The agency rightly claims that the level of bankruptcies that occurred throughout 2020 was well below what would have been expected and historically experienced in past recessions. They also correctly note that this anomaly occurred due to the unprecedented monetary and fiscal policy actions that were implemented. However, Fitch remarks that once these fiscal and monetary supports are removed, forbearances and moratoriums lifted or scaled back, that “bankruptcies will rise, potentially significantly.” Their projections are for both 2021 and 2022. This is a very damning report and rebuke of said monetary and fiscal policies. What this in effect means, is exactly what The Kapital News has been saying since last year, and that is all of the trillions in spending, borrowing, and printing will have been only to kick the can down the road. In other words, nothing structural has been resolved. You may be able to print dollars, but you cannot print solvency. Most of the damage is believed to be experienced by small and medium sized firms, which will further the consolidation process by larger corporations. One of the direct results of extraordinary and reckless fiscal and monetary decisions, has been the “zombification” of the economy. At recent count, nearly 25 percent or 1-in-4 businesses in the US are classified as zombies. This is the economy of the living dead, and if Fitch Ratings is correct, then some of these zombies may be going out of business for good. There are still a ton of risks and headwinds staring us in the face and coming down the pike. Money printers and stimulus checks will not solve these problems. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Bailouts #Inflation #Debt #USA #Liberty #Leadership #FoodPrices #Gold #Silver #Commodities #Oil #EndTheFed #bananarepublic #FireCongress #Protests #Bubbles #Fraud

Ep. 560 – Nature, Trillions, & Social Unrest
The Kapital News
The Kapital News
Ep. 560 - Nature, Trillions, & Social Unrest
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Volcanoes, floods, and printing presses, oh my! Just when you thought it was a relief to put 2020 in the rearview mirror, we now start to see that 2021 may end up in a similar fashion. Whether it is once in a millennia volcanic eruption (Iceland), or the worst flooding in 60 years (Australia), one thing is certain, nature is unpredictable and very powerful. It will not be a surprise to The Kapital News if nature should continue to throw us several curveballs throughout this year.

Onto the trillions! So you thought the Nobody CARES Act 3.0 that just passed with a price tag of $1.9 trillion was going to be the cherry on top, well guess again. The ink is barely dry on that spending bill and President Biden is allegedly about to propose further measures amounting to nearly $3 trillion. How many times have we said that they are just getting started? We know that we have lost count. It would be one thing to say that while it is reckless and irresponsible to spend like this, we could at least point to several major accomplishments that resulted from this spending – like infrastructure, better education results, improved health, less financial systemic risk, etc…However, we unfortunately cannot even do that. This continues to be one major bailout after the next with the taxpayer paying the bill. And the worst is yet to come in the form of higher inflation, lower living standards, and loss of opportunities. These trillions also have an impact on the housing market. The median US existing home price increased by 15.8 percent year-over-year and now stands at $313,000. People are simply being priced out of the market. The ensuing correction, just like its increase, will be epic.

Social unrest is unfortunately a near daily theme, but it is the reality of our time. The country of Turkey has been on our radar for months and has been discussed on occasion. Turkey is back in the news due to the recent firing of their central bank head. The nation is dealing with runaway inflation and recent actions undertaken by the central bank were attempting to contain it by increasing their benchmark interest rates. Apparently, President Erdogan was not too fond of this monetary maneuver and decided to oust the top banker. Markets did not like this action as Turkish stocks suffered their worst one day decline in eight years, as equities fell by nearly 10 percent. Furthermore, the Turkish Lira declined by over 9 percent. What makes Turkey an interesting situation is that they are a larger economy than say Lebanon or Venezuela, but that Turkey is also an important geopolitical player. Turkey is being wooed by both western and eastern nations, due to the size of their economy and geographical location. This is something to most definitely pay close attention to. As the economy weakens and is at the hands of a “strong man,” in President Erdogan, the environment is ripe for social unrest to occur. The weakest links of the global economy are breaking down and now those ripple effects are grabbing larger economies. This story and trend is likely to continue throughout this year and into 2022. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Inflation #Protests #FoodPrices #USA #Turkey #China #Brazil #Liberty #Gold #Silver #Commodities #Revolution #Leadership #EndTheFed #bananarepublic #FireCongress

Ep. 558 – Market Losses + Job Losses
The Kapital News
The Kapital News
Ep. 558 - Market Losses + Job Losses
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One day after the Federal Reserve gave the markets a pot of gold, it appears that it was just as quickly taken away. The major US indexes all closed in the red, with the tech heavy Nasdaq leading the way. This is also on the continuation of rising yields, with a focus on the US 10 year note, which hit levels above 1.7 percent during the trading session. With equity prices at or near all-time high valuations, rising yields and interest rates could pull the rug out from under this massive bubble. Recent history suggests that it can happen, as we witnessed such an episode in Q4 of 2018. This is why so much attention is being paid to rising global bond yields, and the rhetoric and actions of central bankers are being closely monitored. This in and of itself indicates how centrally planned the financial markets and economy have been – as the world, and trillions of dollars of financial assets await the words of only a handful of people. This is dangerous and will end in destruction.

Initial jobless claims for the week ending 13 March were 770,000, which remains over 100k higher than the figures we witnessed during the depths of the GFC. And this has been the case for one full year! The numbers from the prior week were revised upward by 13k and now stand at 725,000. In aggregate, there still remains 18.2 million Americans collecting some form of unemployment insurance. This gives us a de facto unemployment rate of 13 percent as opposed to the official rate at 6.2 per cent. And lastly, the Fed’s balance sheet has hit a new all-time high and now stands at $7.69 trillion. New highs are to be expected on a near weekly basis as the Fed remains committed to purchasing $120 billion per month of US Treasuries and mortgage-backed-securities. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Inflation #FoodPrices #Protests #USA #Liberty #Leadership #Gold #Silver #EndTheFed #bananarepublic #FireCongress

Ep. 557 – Fed Gives Markets A Pot Of Gold
The Kapital News
The Kapital News
Ep. 557 - Fed Gives Markets A Pot Of Gold
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The knee-jerk reaction to the conclusion of the press conference by Federal Reserve Chair, Jay Powell, was positive for the equity markets, as they closed in the green after trading in the red for much of the day. So for the time being, a pot of gold was given to the markets. Now one day does not make a trend and this could easily reverse. However, when the Fed is seemingly committed to keeping interest rates low until at least 2023 and probably longer if they can, they are sending conflicting signals. On the one hand, they want to note how resilient the economy is and how it is likely to grow at a solid rate this year; and yet on the other hand, despite record high equity and real estate markets, an economy they claim is resilient and growing, still somehow needs the Fed to keep interest rates at record lows for the next few years at least?! Something does not add up. This is no surprise, as the Fed is always talking out of both sides of its mouth. They are also well aware that markets nor the economy like higher interest rates and yields on notes and bonds. Recall what occurred during Q4 of 2018 as the Fed attempted to reduce their balance sheet and raise the Federal Funds Rate. All it took was a Funds Rate of 2.4 percent and a 10-year Treasury note slightly above 3 percent to bring equity markets down 20 percent. Now, with the economy weaker, and trillions of dollars more in debt, even lower rates and yields will prick this bubble. However, such increases are exactly what is needed to help rid the markets of malinvestments and zombie corporations. There is no easy way out of this quagmire.

Since the GFC and the implementation of QE, the global economy has been living through the largest economic experiment ever conducted and it also happens to be the biggest wealth transfer in human history as well. Policymakers and central bankers are aware of the fragility in the system. This is evidenced by their actions of attempting to keep interest rates low and to put downward pressure on yields, should they begin to rise. They know the patient, the economy, is weak. But they cannot state this obvious truth because it is they who would be to blame for the mismanagement of the economy and financial markets. So instead of leadership and accountability, we shall have cowardice and more of the same implementation of one asinine policy after the next. How will this end – in blood and tears. When will this end is up for debate. But if yields and interest rates continue to climb higher, and one nation after the next continues to protest and riot because of the now brutal intersection of economic, political, and societal problems, then the end of this economic charade may be fast approaching. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Inflation #Markets #EndTheFed #bananarepublic #FoodPrices #FireCongress #USA #Liberty #Leadership #Gold #Silver #Bonds #Debt #Commodities #Protests