Tag: Infrastructure

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. 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. 553 – Markets Rally, $1.9T Signed, & Jobless Up
The Kapital News
The Kapital News
Ep. 553 - Markets Rally, $1.9T Signed, & Jobless Up
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The $1.9 trillion spending bill was signed today by President Biden, even though it was expected to be signed on Friday. The White House claims that checks/direct deposits may begin to go out as early as this weekend. Meanwhile on Wall Street, the major indexes made all-time highs, apparently happy to see another $2 trillion that we do not have being borrowed, printed, and thrown into the system. However, this sort rally of calls into question the recent narrative of investors and traders rotating out of tech names and growth stocks and into value plays, because tech stocks rallied big during the trading session. Again, we note how this is one of the shortest rotations ever. Of course we also argue that this is and was a bogus narrative to begin with. The real narrative is all about liquidity. So long as this relationship remains positive, meaning more liquidity equals higher equity prices, then this will continue. However, nothing lasts forever and once this relationship breaks, and it will, it will be utterly devastating.

In other news, the initial jobless claims report was released today, and another 712,000 Americans filed an initial claim for the week ending 6 March. The prior week’s figure was revised higher by 9,000 to now stand at 754,000. These numbers still remain well above the numbers seen during the GFC, which saw 650,000 for a couple of weeks. As we are now in the second week of March, this means we have been experiencing initial jobless claims worse than the depths of the GFC for one full year! All persons claiming some form of unemployment insurance for the week ending 20 February, stands at 20.1 million. This represents a week-over-week increase of nearly 2.1 million and gives us a de facto unemployment rate of 14 percent. This is more than double the official unemployment rate at 6.2 percent and 40 percent higher than what the Federal Reserve claims is the real unemployment rate, which is closer to 10 percent. Any way you want to look at it, this is not a good picture. All of this structural unemployment and underemployment is occurring while the country spends and has spent several trillions of dollars. So it begs the question, where is all the money going? Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Debt #Spending #USA #Liberty #Inflation #Gold #Silver #Commodities #Oil #Leadership #EndTheFed #bananarepublic #FireCongress

Ep. 550 – $1.9 Trillion Mayhem
The Kapital News
The Kapital News
Ep. 550 - $1.9 Trillion Mayhem
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With the $1.9 trillion spending bill all but certain to pass through Congress this week and make it to President Biden’s desk, we wanted to take a moment to provide some context. It was only a little over a decade ago when we were in the midst of the Great Financial Crisis or GFC. It was here that Congress decided to pass the Troubled Asset Relief Program or TARP. It had a price tag of $700 billion. According to those who drafted the legislation and came up with the number, apparently this was large enough to save the US financial system, and thus the US economy. Fast-forward to where we are today, and just looking at a handful of spending measures that Congress has passed in one year’s time – it takes us to roughly $6.4 trillion! This is nearly 10x the amount of the TARP funds during the GFC, which was the worst financial and economic crisis since the Great Depression.

The $6.4 trillion figure comes from the Nobody CARES Act 1.0, which was around $2.2 trillion. The Nobody CARES Act 2.0, which was passed last December as the spending from 1.0 was coming to an end, cost another $900 billion. This was accompanied by a $1.4 trillion spending measure just to “keep the lights on,” as this was for ordinary government expenditures. And now finally, at least for now, we have the $1.9 trillion monstrosity. This gives us a total of $6.4 trillion. This is nearly two full years of federal government revenues! It is thus easy to understand why the country is running multi-trillion dollar deficits. And to place this into further perspective, any one of those aforementioned spending measures would be one of the top 20 economies in the world by GDP. The total of $6.4 trillion would be the third largest behind the US and China. And more than $1 trillion above the GDP of Japan!

To add insult to injury, the $1.4 trillion spending bill was only good for through Q1 2021, which means another round will have to be passed or the government may have to shut down. This also does not take into consideration any further spending with respect to infrastructure, which is needed, healthcare policies, environmental policies, or the like, which are likely to be brought up with Democrats in control of the White House and Congress. So one of the saddest things about all of this is that all of this money is being borrowed and printed into existence and then spent, but with very little to show for it. All of this spending could have rebuilt this country’s infrastructure 2x or 3x over. And you can use your imagination on all the other items that may have been improved with that kind of money…Of course none of this is free. The inflation that has thus been created and unleashed is now underway and the costs will be historic and devastating. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Inflation #Debt #Markets #Spending #EndTheFed #bananarepublic #FireCongress #Jobs #Bailouts #Liberty #USA #Gold #Silver

Ep. 547 – Jobless Up + Yields Up
The Kapital News
The Kapital News
Ep. 547 - Jobless Up + Yields Up
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Initial jobless claims continue to remain stubbornly high, as 745,000 initial claims were filed for the week ending 27 February. Last week’s figure saw an upward revision of 6,000 filers, to now stand at 736,000. Since restrictions have been in place, claims have been well above those witnessed during the depths of the GFC, which were around 650,000 for a couple of weeks. We are now at the one year anniversary of lockdowns and this is the type of economic carnage that still exists. For all Americans that continue to claim some form of unemployment insurance, now rests at 18 million. Giving us a de facto unemployment rate of around 12.7 percent. This is double the official rate that stands at 6.3 percent. The official jobs report for February will be released tomorrow morning by the Bureau of Labor Statistics.

Other items discussed today were the Federal Reserve’s balance sheet and M1 and M2 money stock. All monetary measures are at or near all-time highs. This is expected to remain the trend on a weekly basis as the Fed remains committed to purchasing $120 billion worth of US Treasuries and mortgage-backed-securities on a monthly basis. This alone should elevate their balance sheet to north of $8.5 trillion, which is 10x higher than where it was prior to the GFC! The Kapital News projects that the balance sheet will be closer to, if not above, $10 trillion by the end of the year, as Congress continues to pass large-scale spending measures.

Earlier today the Chairman of the Fed, Jay Powell, made some remarks that apparently spooked the markets and caused a sell-off on the major indexes. The Chairman apparently believes that inflation will run hot for a short period of time, but will only be transitory, and that the Fed is monitoring closely, and has the tools to contain inflation. This led to yields on Treasuries moving higher, which was cause for concern last week and earlier this week, and has been placing downward pressure on global equities. The same upward effect was seen in the dollar index, as it now trades near levels not seen since last Nov/Dec. Commodities, however, is more of a mixed bag for the time being, with oil prices climbing higher, while precious metals continued their downward trend. In short, the markets are broken and heavily manipulated. All that is left are the narratives that central bankers can tell. The major question is, will markets continue to buy it? If yes, then equity and bond prices may continue higher. If no, then this may be the beginning of the end of central bank control over markets. If this is the case, then it could be a scenario of, look out below. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Inflation #Debt #Spending #Gold #Silver #USA #Liberty #Commodities #EndTheFed #bananarepublic #FireCongress #Markets #Leadership

Ep. 546 – America’s Infrastructure, C-
The Kapital News
The Kapital News
Ep. 546 - America's Infrastructure, C-
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The American Society of Civil Engineers (ASCE), released their report card for the state of America’s infrastructure, and gave it a grade of C-. This is the best grade yet handed out by the ASCE since the report cards have been produced going back to 1998. However, despite the slight improvement from the last report card of 2017, there still remains much work ahead. Expected costs will differ between various groups, but needless to say, in order for the US to earn a grade of B+/A- will take trillions of dollars. It may be prudent for Congress to actually pass some significant legislation on this matter in order to take advantage of near record low interest rates.

The nation’s infrastructure has been neglected for too long and quite frankly is an embarrassment for a country of our wealth. If done properly, such legislation can prove advantageous and serve as a true investment in the future of this country. We are in the 21st century and we need coast to coast infrastructure that meets and exceeds our needs. If this is not done properly, or at all, then this will serve as further evidence that our country is in decline and decaying. There are 17 categories that the ASCE reviews and the best grades were that of a B and B- for rail and ports, respectively. The next report card will be released in 2025. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Infrastructure #Jobs #Debt #Liberty #USA #Inflation #Gold #Silver #Spending #Markets