Another week and another dreadful initial claims number. For the week ending 2 May 2020, another 3.169 million Americans have filed for unemployment insurance. This takes the previous seven weeks to a total of 33.5 million Americans. Furthermore, it must be understood that given some of the “stimulus” programs implemented by the government, that many American remain on payroll, while some of these very businesses may be shut down or limited in their capacity. So the numbers are somewhat skewed for this reason – meaning there are actually even more Americans not currently working. We must also take into consideration those who were unemployed prior to COVID19 and these health and economic restrictions. And then lastly, there are also those who are designated as “discouraged workers” who have given up looking for work altogether and if they have been discouraged for over one year, then the government does not even include them in the official unemployment statistics. So, for all intents and purposes as the jobs report comes out tomorrow, the headline, U-3, unemployment rate could well be near 20% +/- a couple points. This would take us well into depression level numbers, which have not been seen since the 1930’s when unemployment peaked around 24.9%. And despite these numbers, the stock market continues its rally. Do we even have a market? Or is this all now just a perpetual money-making machine? Remember, banana republics love the printing press.
On another historic note, the US national debt has eclipsed $25T and has a current national deficit of around $2.6T. Per various estimates, for the FY2020, the deficit is set to hit $4T, thus implying that the national debt will be around $27T by the end of September of 2020. And this number could also be well eclipsed if Washington, DC continues with further bailouts and “stimulus” packages. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Depression #Inflation #Deflation #Recession #USA #Gold
A brief discussion on some of this week’s events as well as some of the news from today. A general discussion of market performance, the first White House press briefing in a year, a follow up to the initial jobless claims figures, and some thoughts on global protests. Enjoy the weekend! Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Bailouts #Debt #Recession #USA #Oil #Gold #Depression #Protests
Remember the golden rule – those with the gold makes the rules. This of course is not the moral version of the true golden rule, but nevertheless, it’s one that the world has operated from for quite some time.
In today’s podcast we highlight the economic and financial news with initial jobless claims hitting 3.8 million in the prior week – taking the six week total to over 30 million Americans having filed for unemployment insurance. The Fed also updated their balance sheet and it’s week over week change was an additional $82B. This figure is well below that of the last several weeks as the Fed has added over $2T to its balance sheet over the past month.
The crux of today’s discussion is centered around the political blame game that is both coming and underway, especially as it relates to COVID19. We mention how this heated rhetoric may lead to conflict that may likely take the form of proxy war(s). A couple of strong candidates would be that of Iran and Venezuela. Over the last couple of days, news agencies have been noting how Venezuela has sent about $500 million worth of gold to Iran in exchange for Iran’s assistance with one of their refineries. Also, Venezuela has been asking the Bank of England, which stores some of Venezuela’s gold reserves, to sell some of their gold and give the proceeds to the United Nations. This would be to serve the purpose of assisting the UN so that in turn the UN may assist Venezuela combat COVID19 as well as their many economic woes. The Bank of England is refusing to comply with Venezuela’s request because the UK does not recognize the Maduro regime as the legitimate government. So now as a result, even more people will become refugees and/or suffer from starvation, energy shortages, and a myriad of economic problems.
So in short, when gold starts getting moved around (or is prohibited) and when it also pertains to a couple of countries that are both under harsh US sanctions, while at the same time both of these countries are heavily reliant on oil and gas – it makes us wonder here at The Kapital News as to what is truly going on and where me may be headed. In addition, US naval and military forces are around both countries. We do not want war, but if history is any indicator, we’re likely headed in that direction. Stay diversified, stay vigilant, and stay with The Kapital News. #Gold #Oil #War #Economy #Recession #Debt #Bailouts #USA #Venezuela #Iran #Peace
Pick a central bank, any central bank. And pick a federal government, any federal government – as they all stand by the ready to offer unlimited amounts of “stimulus.” Of course this is not stimulus, but rather massive amounts of spending attempting to fill an ever-increasing hole across the global economy. And most, if not all of this weakness is attributable to the flawed and fraudulent policies by said central banks and governments. Now that their game has been shown for what it is, a fraud, – due to COVID19 – they are now attempting to cover it all up at warp speed. They are also giving the “people” money – which we argue at The Kapital News is, “sit down and shut up money.” Nevertheless, it is currently having that “calming” effect on the populace. We believe this will change in time as people start to wake up to the fraud that has existed and pervades every corner of Wall Street and Washington, DC. This is likely to result in civil and social unrest here in the United States – very much akin to the global protests that were taking place prior to the onset of COVID19, and we believe they will pick up again. Some major central banks conclude their meetings this week and markets will be looking to them for “guidance” since free-markets are seemingly no longer an option. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Bailouts #Recession #Debt #USA #Congress #Depression #Oil #Gold
A follow-up discussion on the oil and gas markets as well as how the exact opposite scenario may unfold with respect to gold and silver. These markets are crazy to say the least – a direct result of a decades plus asinine economic experiment that is in the process of unraveling. Congress is ready to pass another spending bill of nearly $500B and we expect that more will be coming in due time. Most of this will be an extension of the forgivable loans program to small and mid-sized companies to assist during the COVID19 lock-downs. However, we anticipate several states around the country are getting ready to line-up, if they haven’t already, to seek assistance from the Federal government. This is laughable as the Federal government is out of money as well – but hey, at least they have access to a printing press via the Fed. In addition, or perhaps in tandem with a states’ spending bill, that of infrastructure spending will also be a part of the “assistance.” The US deficit for FY2020 is already projected to hit nearly $4T and we expect this to be surpassed as even more government and Federal Reserve packages and facilities are announced.
We provide a brief update to the President’s recent call to suspend temporarily, immigration into the USA. We also note how the CDC Director is mentioning that a second wave of COVID19 is likely and that it may be worse than the first wave – since a second wave is likely to strike in tandem with the seasonal flu season this coming winter. As we have been predicting, the IMF (International Monetary Fund), is now seriously contemplating debt forgiveness, especially for third-world countries. They are also considering a near $1T loan package to assist several countries – this will not be enough funding to stave off what is coming. On a central bank note, global money printing just over the past few months has totaled nearly $23T. To put this into context, the GDP of the United States is just over $20T.
And lastly, but definitely not the least or final of problems, is that of a potential “hunger pandemic.” This is what the United Nations is now discussing and preparing for as COVID19 continues to make its way around the world and the health and economic damage that it is leaving in its wake. Given the economic downturn, especially regarding commodities prices, which many third-world and emerging economies are heavily dependent, is now dealing another blow that may lead to the starvation of millions around the world. Again, as The Kapital News has been discussing for months, many of these same countries were protesting prior to COVID19. Now that the environment on multiple fronts is even worse, what do you think these people are going to do now? These protests are not transitory – they are history in the making. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Oil #Gold #USA #Debt #Recession #Bailouts #Depression #Business #Russia #SaudiArabia #China #Protests #War #Peace
This is a day for the history books as WTI (West Texas Intermediate) entered negative territory for the 1st time ever! Settling around -$38.00/bbl, the negative price sent shock-waves around the world. Now, it must be stressed that this is for the May futures contracts that will be expiring tomorrow. But nevertheless, for prices to go negative, is a major historic event. From the demand side – there basically is none. From the supply side – the globe is awash in both oil and gas, and storage facilities are nearing max capacity. Great attention will be paid to the June futures contracts for WTI and make no mistake about it – these contracts could hit negative prices as well. If they do, then there is unquestionably something structural underneath the oil markets that is broken. Also, understand that free-markets is about price discovery and this may simply be an attempt by markets to clear. However, we think that this is something much more structural. This could be hedge fund(s) failing, energy corps failing, etc… or some combination, amongst other issues.
The geopolitics of the matter can also not be forgotten or downplayed. OPEC + just agreed to cut nearly 10 million b/d from production and despite this – prices continued their descent – which we argued would happen. This calls into question the petro-dollar system and we discuss this during our podcast. We also note the continued stress this places on energy firms that were already struggling to begin with, due to the supply and demand dynamics of the markets, in conjunction with their massive debt loads. This is far from over. Also, note that many countries protesting prior to COVID19 are heavily dependent on oil for their government revenues. This downward trend will only exacerbate any and all issues that already existed in these countries. Be prepared for more global protests – these are not transitory – they are history in the making.
Lastly, we discuss some brief articles centered around the health and life or death situation of North Korean leader, Kim Jong Un. As well as President Trump’s recent decision and Executive Order to temporarily suspend immigration. We also mention Iranian criticisms of the USA with respect to the economic sanctions that continue to cripple the country, especially in light of COVID19, from which Iran is suffering severely. And then announced earlier, there was the formation of an “emergency” government in Israel as the two sides have been unable to successfully form a government despite multiple attempts. Something tells us all of these stories are connected, but time will tell all. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Oil #Recession #Protests #War #Peace #USA #Iran #Russia #Venezuela #China #SaudiArabia #Debt #Gold #Depression
A visual follow-up to our recent podcast entitled, The Oil Conundrum. We want to take a moment to review the price action of oil (WTI) and natural gas and to discuss what it means for the global economy at-large and for the energy sector more specifically. We also discuss the recent decision rendered by OPEC to cut nearly 10 million bpd from production. As well as to note the likely geopolitical fallout from a global economy that is and has been slowing down for quite awhile. #Oil #OPEC #Economy
