Tag: Global Economy

Ep. 565 – Milgram Experiment + Global Authority
The Kapital News
The Kapital News
Ep. 565 - Milgram Experiment + Global Authority
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As the saying goes, never let a crisis go to waste. Now while we may never know the true origins of Covid-19, we do know the actions and rhetoric that have been undertaken since the pandemic began. The Milgram experiment is one that seeks to study how people respond to authority figures. In essence, it was attempting to look at how obedient people are when given instructions by an expert. The Kapital News has been noting the similarities between the Milgram experiment and what has been taking place globally with respect to the actions taken and orders given by health officials and politicians. Governments by their very nature are institutions of force and are viewed by the general public as authority. Therefore, once one understand the Milgram experiment, it becomes rather easy to make the connection that what is being undertaken right now on a global scale, is a massive Milgram experiment.

In the actual study, test subjects are led to believe that they are administering electric shocks to another participant, should that participant answer a question incorrectly. And as more questions are missed, the higher the voltage of the shock. In reality there was no shock. The purpose was to see how far the test subject would go in shocking the other participant, simply because the participant answered incorrectly, and/or was told by the authority figure, someone in a white lab jacket, to continue administering shocks. Taken to the last and largest level of voltage, if actually given, would have killed the participant! And to the surprise of Milgram, his colleagues, and students, they found that most people would simply continue to follow the orders of the authority figure, even if they wanted to halt the experiment. Now while it is a good thing that no one actually died during this experiment, because most test subjects would administer the lethal shock, the same cannot be said today.

This is because this is the real world and the lockdown and restrictions have permanently destroyed businesses of all sizes, especially small firms. Furthermore, the mental health of people being locked down and restricted for one year, is deteriorating. What effects, short and long-term may this have on society and the economy at large? In addition, the narrative continues to change as to wearing one mask or two, how far to sit or stand from one another, whether schools can reopen or remain closed, same for businesses, who gets the vaccine and when and where, and on and on. Then take into consideration the constant bombardment from various media outlets that talk non-stop about the pandemic and bring one “expert” after the next onto the airwaves to tell people what to do. Starting to get the picture? Especially when one understands the data around Covid-19 and that the survival rate is near 99.5 percent. Something just does not add up, until you connect the dots and ask yourself, might this just be a global Milgram experiment? Stay diversified, stay vigilant, and stay with The Kapital News. #Pandemic #MilgramExperiment #Control #Economy #Protests #Liberty #USA #Leadership #FireCongress

Ep. 564 – Margin Calls + Fragile Markets
The Kapital News
The Kapital News
Ep. 564 - Margin Calls + Fragile Markets
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Too much is never enough and when markets and investors are punch drunk on cheap liquidity and deficit spending, an environment gets created that places the entire system at risk. The dominoes have been set for a while and all it takes is for one to go down to commence the collapse of the others. News stories were breaking today around Archegos Capital Management, which is a family office, that ran into some problems. This firm is not a household name, which serves the point in highlighting how fragile the system is when a hedge fund or family office can cause or lead to a systemic event. In the case of Archegos, they received a margin call due to some of their equity positions losing value – namely ViacomCBS. What is interesting to note is how this is quite reminiscent to the housing crisis that led to the GFC – namely the similarities in the levels of leverage and the number of other financial institutions that were connected to these trades on a global basis. The investment banks involved, however, are household names such as Goldman Sachs, Morgan Stanley, Nomura, Credit Suisse, and Deutsche Bank. The damage done to each bank will of course differ, but the point remains – the financial system is highly interconnected, and this needs to be respected. Due to the fragility that exists, it can be the slightest wrong movement that throws equity markets off its perch. Be on the lookout for similar events to unfold. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Debt #Inflation #Markets #Bonds #USA #Liberty #Leadership #EndTheFed #bananarepublic #FireCongress #Protests #FoodPrices

Ep. 563 – Jobless Claims Remain Above GFC
The Kapital News
The Kapital News
Ep. 563 - Jobless Claims Remain Above GFC
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Despite being one full year into lockdowns and restrictions, initial jobless claims remains higher than even during the depths of the GFC. For the week ending 20 March, initial claims came in at 684,000, which happens to be the lowest reading since last year. Last week’s figure was revised upward by 11,000 to stand at 770,000. In aggregate, amongst all unemployment insurance programs, some 18.9 million Americans continue to file claims. This gives a de facto unemployment rate of 13.3 percent, which is more than double the official rate at 6.2 percent.

The Federal Reserve’s balance sheet hit another all-time high to now stand at $7.719 trillion. The Fed remains committed to its policy of QE, by purchasing $120 billion per month of US Treasuries and mortgage-backed-securities. This will likely take the balance sheet above $8.5 trillion by year end, which would be a 10x fold increase to the balance sheet since the GFC! Other monetary measures such as M1 and M2 also hit all-time highs. And lastly, the Suez Canal traffic jam continues into the weekend. Some estimates state that this blockage is costing the global economy $400 million per hour! A staggering figure no doubt and highlights the vulnerabilities that exist within some of these trading routes and the sizes of some of these vessels. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #SuezCanal #FoodPrices #Protests #Inflation #Leadership #USA #EndTheFed #bananarepublic #FireCongress #Taxes #Gold #Silver #Liberty

Ep. 561 – Climate Crisis!
The Kapital News
The Kapital News
Ep. 561 - Climate Crisis!
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If it is not a pandemic or a social justice cause, then it shall be a climate crisis. This will very likely be the next emergency that is sprung around the globe and assuredly, urgency will be stressed. We are not so concerned in today’s podcast to discuss the actual environment, but rather how policymakers act and respond.

Today the House Financial Services Committee heard testimony from Federal Reserve Chair, Jay Powell, and Treasury Secretary, Janet Yellen. A topic that was discussed by both was of course the climate. So let us understand something, these two supposed economic experts cannot even handle the economy and now they are going to help manage the climate? We are sure in their twisted world that this makes perfect sense to them, but in the real world it does not. However, the narrative cannot be destroyed. The narrative is rooted in panic, uncertainty, urgency, and crisis. This serves to provide policymakers with an environment to always do something – regardless as to what that something may or may not be. As we have clearly witnessed over the past year and continue to observe to this day, central banks stand at the ready to flood the system with liquidity and federal governments continue with their ludicrously expensive fiscal policies. These will prove destructive in time and are already having negative consequences that are being felt the world over. Protests, riots, coups, civil wars, and conflicts are not all of a sudden just happening out of nowhere. On the contrary, this is a highly predictable result from reckless and irresponsible monetary and fiscal policies.

Furthermore, we discuss the wealth inequality that exists within the United States and how a significant disproportionate amount is being accumulated by the top 10 percent. Meanwhile the middle class continues to shrink and the bottom 50 percent, while seeing an increase, continues to suffer as well. This is a direct result of a centrally planned economy, with politicians, bureaucrats, and central bankers picking winners and losers. The top 1 percent added $4 trillion to their net worth over the last year. Let that number sink in for a moment within the context of a pandemic and one of the worst global economies ever seen. Yet this should come as no surprise as the whole purpose of QE, is to inflate financial asset prices – and that is exactly what has been happening. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #ClimateCrisis #Inflation #FoodPrices #USA #Protests #Gold #Silver #Commodities #Leadership #Liberty #EndTheFed #bananarepublic #FireCongress

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

Ep. 556 – Stagflation + Social Unrest
The Kapital News
The Kapital News
Ep. 556 - Stagflation + Social Unrest
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As we discussed global food prices hitting a six-year high during yesterday’s podcast, it proved good timing as a couple news articles were published today highlighting this situation in Nigeria and Lebanon. Both of these countries have been discussed at length for a while on the podcast, and these articles serve as further evidence as to what we have been monitoring.

It is a part of the larger narrative that The Kapital News is attempting to weave. One that links together economics, politics, and society. In this instance, we are analyzing how past and current policies are leading to social unrest, political instability, and economic weakness. Highlighting the protests and riots that were sweeping the globe during 2019, The Kapital News stressed the importance of paying attention to these events, analyzing their causes, and warning that such events would likely take place in developed markets, and even the United States. In time, we were proven correct. Now, with the pandemic seemingly making its way to the rear-view mirror, and no sound solutions being implemented during 2020, has caused many people around the world to once again take to the streets against their governments. This will be a common theme throughout 2021 and beyond until there are true structural changes.

Some countries may be able to traverse these rough waters without much chaos or violence. However, such countries will likely prove the exception and not the rule. This means that a lot of geopolitical risks have not been fully discounted into the markets, which are trading at or near all-time record high valuations. The pandemic has already caused severe supply chain disruptions that will likely continue throughout this year and into the next. However, should more countries take to the streets, then this will put further pressure on global supply chains and result in higher prices for major commodities, which will further strain the economic situation. This will be a vicious cycle until the system has been exhausted, which will leave millions if not billions of people negatively impacted. The globe is awash in trillions of dollars of new debt and with little to show for it. As inflationary effects start to make their way into real goods, these problems will no longer be able to be avoided. The monetary cat-and-mouse game will be over and market forces will take charge and lead the correction. There is no easy solution to what plagues us and these market forces will be brutal – even though they are what is needed.

Other items discussed today were economic data releases for US retail sales and industrial production. Also, the daily market performance wrap-up and a brief mention of the Federal Reserve concluding their FOMC policy meeting tomorrow. Global markets will be anxiously awaiting to hear what Chairman Jay Powell has to say – because we are a centrally controlled global economy. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Inflation #Stagflation #Debt #Markets #Jobs #Protests #USA #Liberty #Gold #Silver #Revolution #EndTheFed #bananarepublic #FireCongress #Bonds #FoodPrices

Ep. 555 – Global Food Prices Rising
The Kapital News
The Kapital News
Ep. 555 - Global Food Prices Rising
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Revolutions are fought on empty stomachs and with global food prices hitting a six-year high, only serves to increase the likelihood of further protests, riots, wars, and revolutions. This is especially true for the poorest of nations as food is so crucially important, scarce, and insecure to begin with. From supply-chain disruptions due to the pandemic, to volatile weather that has harmed production, to inflationary policies from governments and central bankers, a triple-whammy has been released and spares no one in its path.

The Kapital News has been discussing the interconnectedness of economics, politics, and society since we have been online – in fact, this is the purpose and mission of The Kapital News – to educate our audience on these connections by using the news of the day as real-world case studies. It is the weakest link of the chain that breaks first and such is the case with countries. We have unfortunately been seeing these poorer nations crumble one after the next due to external and internal pressures. However, there are common traits amongst them, such as, high levels of debt, political corruption, and high levels of inflation. All of these forces combined, in addition to several others, is a recipe for instability at best, and disaster at worst.

Some countries may be able to withstand some of these pressures and find solutions – we hope this happens. However, if history is any guide, chances are that the majority of nations will resort to protests, riots, wars, and revolutions. If such actions do occur, then we can hope that things are made better once the dust settles. But hope is not a strategy and time is of the essence. The globe was awash in protests and riots prior to the pandemic and it already appears in early 2021 that they are reigniting and gaining momentum. A political sea change is underway and the months and years ahead will try our institutions, constitutions, and humanity like never before. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #FoodPrices #Inflation #Protests #Riots #USA #Gold #Silver #Commodities #Oil #Debt #Yields #EndTheFed #bananarepublic #FireCongress #Liberty

Ep. 554 – Weekly Wrap Up
The Kapital News
The Kapital News
Ep. 554 - Weekly Wrap Up
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Another crazy week is nearly in the books and so we wanted to do a weekly wrap up. Yes, we cover some market performance, central bank antics, and the passage of the $1.9 trillion spending bill, but we focus mainly on the stories that are getting all the attention. You know what we mean, those most important topics ever, of cancelling Dr. Seuss and the drama of the British Royal Family and Piers Morgan. Of course we are being sarcastic, but nonetheless we do discuss these stories. Reason being is because these are cultural stories and political stories that are capturing the attention of people (mainly because they are being blasted across the airwaves), but our focus is to highlight the dangers about them.

From all of a sudden having to stop the publishing of several Dr. Seuss books because they are apparently racist to having a British talk show host fired because he dared to question the story of Prince Harry and his wife Meghan in a recent interview with Oprah, something is amiss. This is why we discuss these topics today. We are supposed to be for free speech and should come to the defense of those who are under attack. Not because we agree or are endorsing what they are saying, but because we believe in their right to speak their minds. Many people, especially those on the Left, claim to be tolerant. Hogwash. They are tolerant of opinions and speech so long as it is in agreement with their own thinking. One deviation outside of the safe-space of group think and it is time to burn you at the stake. This utterly insane way of thinking and acting is beyond dangerous to our Republic and body politic, and it is getting worse. And it only serves as another data point that we, as a nation, are crumbling. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #DrSeuss #RoyalFamily #Jobs #Debt #Inflation #Gold #Silver #USA #Liberty #Leadership #EndTheFed #bananarepublic #FireCongress #Protest