A modern day Bay of Pigs on our hands in Venezuela? Criss-crossing messages from the DoD and State Department with their “intelligence” assessments surrounding the genesis of COVID19. And Israel vowing to continue to bomb targets in Syria until Iran leaves. These are just a few of the items on the agenda during today’s podcast. After all, never let a good crisis go to waste.
In Venezuela, two former US special forces operators have been arrested by the Maduro regime during what they are referring to as a plot to overthrow the Venezuelan government. The US government denies any and all involvement with the matter. However, a private security firm in the US has taken responsibility and the company’s founder has claimed those arrested are “his men.” Venezuela has been a hot spot for US saber rattling over the last couple of years. Recall, just a few months ago during the President’s State of the Union Address, that Juan Guiado, was an honored guest of the President’s. Guiado is the opposition leader in Venezuela, who is also recognized by the US, UK, and several South American countries as the “real” President of Venezuela. Questions remain as to how this matter will be treated with respect to an American response to get these men back into the United States. Questions also remain as to how the Maduro regime will handle the situation. It’s these “little” skirmishes that can turn into something much larger – let us pray this does not happen.
A case of good cop-bad cop? When it comes to intelligence assessments and talking points around the genesis of COVID19, it would appear that the US government is working two different messages. On one hand, we have the broader intelligence community in addition to the Defense Department stating that the US does not know where the COVID19 pandemic actually started – meaning in a wet market in China, a lab, what have you. Yet according to General Mark Milley, Chairman of the Joint Chiefs of Staff, the virus appears to not have been man-made. This is in stark contrast to the recent comments made by Secretary of State, Mike Pompeo, where he insists that there is strong intelligence that the virus was made in a lab in China. Regardless of which may prove to be the case, it appears that the US government continues to plays its games of misinforming and dis-informing the American public. Reminiscent of so many other instances – such as the lead up to the invasion of Iraq.
We conclude the podcast with a discussion of Israel’s defense forces regarding their Syrian operations, African locusts updates, and the German Supreme Court’s ruling on actions undertaken by the European Central Bank (ECB), and what this may mean for the European Union. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #War #Peace #USA #Venezuela #Debt #EU #Recession #Gold #COVID19
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
Another week and an additional 4.4 million Americans have filed for unemployment insurance. This take the five week total to nearly 26.5 million. These last five weeks of job losses have entirely outstripped the job gains since the end of the Great Financial Crisis (GFC).
PMI figures have also been published globally and we are witnessing levels in both manufacturing and services that are nearing levels not seen since the GFC. In some cases, they are even worse.
The Federal Reserve has updated its balance sheet, which now stands at nearly $6.6T and counting. This represents an increase of around $200 from the week prior. If this rate of increase remains, then we are talking about an increase of $10T on an annualized basis. If this happens, the Fed’s balance sheet would be around $14T. This would then represent about 70% of US GDP. Most of the gains on the balance sheet were from purchases of US Treasuries and mortgage-backed securities. Of course, there is little outside demand for US Treasuries, which is even why a recent analysis by Goldman Sachs suggested that nearly 70% of new Treasury issuance will be purchased by the Federal Reserve. This is virtually debt monetization and more reminiscent of a banana republic as opposed to a Constitutional Republic. There is no free lunch and per a previous podcast, “Free Was Never So Expensive.”
We lastly discuss some recent surveys that highlight the economic and behavioral changes that we’re likely to see once the economy is “opened” up for business. When asked about receiving government spending money directly and what would you do with it, the largest responses were the following – savings, everyday expenses, and payoff debt(s). A handful of other options, primarily centered around spending, all received a response around 5%. Then there was another survey that asked if stay-at-home orders were lifted, how comfortable would you be going to bars and restaurants, getting on an airplane, and going to a large event – by factors of 3 to 1, people would not feel comfortable with those options. This simply confirms what we have been discussing here for weeks – and that is how people will be changing their spending habits and behavioral “norms” for the foreseeable future, which will translate negatively with respect to the economy on a short and mid-term basis. On a longer-term basis, this kind of deleveraging is healthy for an economy and is part of the broader correction. This is a process and will take time. And the more the government tries to “help” the worse the outcomes will be and the longer it will take to recover. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Recession #Debt #Gold #Depression #USA #EndTheFed #Congress #Bailouts #Oil
Ep. 361 - State Bailouts Next + Market Manipulation?
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We have been talking about it for weeks and now there appears to be an appetite from President Trump and the Democrats to work on another bailout program that incorporates the States and cities. Yet, now, after various spending programs in the trillions of dollars, Mitch McConnell, Senate Majority Leader, is now drawing a line in the sand when it comes to assisting the States. May it be known that The Kapital News is against all forms of bailouts. But isn’t it interesting that Wall Street and Corporate America can receive trillions of dollars within the blink of an eye from Senator McConnell, yet when the States ask for assistance, now hes’ all of a sudden concerned about debt levels and future generations paying for it. This is exactly what is wrong with our political system – amongst many other issues. Perhaps the States do not contribute to the Senator’s campaign fund(s) and is therefore of little significance to him? We digress. Some numbers that have been noted when it comes to “assisting” the States may amount to $500B and if including cities, this can be another $250B. So, just for the States and cities, we could be talking a near $1T spending program. Also note, as far as we know as of today, these figures are to make up for tax revenue shortfalls, pension plan assistance, and other responsibilities of State and local governments. Therefore, these figures are absent any major type of infrastructure spending, which has already been rumored to amount to nearly $2T! Where is all of this money coming from? Because Uncle Sam is as broke as a joke – which makes it ironic that broke States are asking a broke Federal government for assistance. So who comes to the “rescue?” That’s right, the Federal Reserve will have to continue its counterfeiting, oops, we mean, money printing operations. Just for a FYI – US national debt is $24.5T and the deficit as of now is $2.3T and expected to double – at least, by end of FY2020. Ain’t you proud to be an American?
We also continue our discussion of the oil markets, since history was made earlier this week when WTI went negative and settled at nearly -$38 per barrel. Well, this of course raises a lot of questions, and now Continental Resources, is asking the Chicago Mercantile Exchange (CME), to look into market manipulation. In their request, they provide a timeline of events which they argue gives the appearance of market manipulation and/or a flaw in a new computer model. Either way, these are legitimate questions and they require thoughtful and truthful answers. We will keep you posted as updates become available. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Oil #Bailouts #Gold #USA #Recession #Debt #Depression #Congress #War #Peace
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
As we enter corporate earning’s season, we’re already beginning to see the effects of an ailing economy coupled with COVID19. Many of the banks are reporting numbers that are through the floor – this is no surprise. They are also readying themselves for a wave of defaults across the spectrum of financial products. Whether that’s mortgages, autos, credit cards, you name it. Another interesting data point to note is that nearly 17% of S&P 1500 companies can now be classified as a “zombie” company. This means that their interest expenses exceed their cash flows. Now perhaps you understand the title of today’s podcast? This is especially true against the backdrop of one of the largest rallies in market history over the last few weeks. So strong, you have many in the media and Wall Street, already declaring that the bear market is over and that everything is fine and off to to the races we go. This is pure lunacy. But this is also a reflection of the market mentality and of the times. So many have been conditioned over the last decade that easy money, printed at will, can solve any problem. Well, we believe that Junior is about to find out the hard way that money printing is not a panacea. As such, we expect the markets to sell off significantly over the coming years that will be reminiscent of the NASDAQ in 1999-2001 and the DOW in 1929 through the early 1930’s. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Recession #Bailouts #Debt #USA #Oil #Gold #Liberty
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
Day III of the impeachment trial of President Trump concluded today with the House Managers concluding their opening arguments. The floor will now be turned over to the Counsel of the President. It is highly likely that their “defense” will be based off of attack, deny, and repeat. There will be little defense if any of the President’s actions themselves. Why? Because there is little to defend if anything and they know it. This is why they are likely to attack and distract. It remains unknown as to how many days and hours they will use, but we do know that the President via twitter claims that arguing on Saturday is bad for TV ratings. Of course, let us not focus on the facts of the case and seek the truth. No, no. Let us simply worry about TV ratings. Should we be surprised?
The House Managers did a thorough job over the last few days making their argument. Given the evidence of the case as of today – the President is guilty as charged on both counts: an abuse of power and obstruction of Congress. However, since so many documents have yet to be released by the Executive Branch, there remains room for questions. However, if this information is not released, then the President is showing his guilt once again on the charge of obstruction of Congress. If acquitted with the facts and evidence we have thus far, a dangerous precedent will have been established. And this President and those to come will be able to go unchecked by Congress. This in itself is a travesty. At the very least, the Senate must vote for further witnesses and documents. The whole truth must be known. Justice deserves it and so do the American people. May the truth be known and justice served. Impeachment is not simply about conviction and removal or acquittal. It’s also about prevention. Will the President engage in this type of action again, is a serious question to ask oneself. We will soon find if the Senate places the truth, justice, their oaths, our country, and our Constitution above party and politics. If they do not, then the Republic and the Senate has failed. Stay diversified, stay vigilant, and stay with The Kapital News. #Impeachment #Truth #Justice #Peace #War #Congress #Constitution #USA #Republic #Economy #Politics
The weeks that lie ahead are ones of historic importance for the United States. The impeachment trial of President Donald J Trump is set to commence on Tuesday, 21 January 2020. Many of the rules that are to guide the process in the US Senate are still yet to be determined. It is imperative that the Senate places the US Constitution above partisan politics. It is their duty. It is their solemn obligation to uphold and defend the Constitution. Let the truth be know and may justice be served. This is what the American people deserve and it is what the Constitution requires. This then means that the process must be open, transparent, and fair. And that relevant fact witnesses and documents need to testify and be entered into the record. If not, then the US Senate has failed and with it – the health of the Republic remains in the balance.
On a global front, worldwide protests continue with violence escalating in Lebanon. So many people around the world are at the “end of their ropes,” and have nothing left to lose – so they’re protesting. We’ve been saying two things for quite awhile regarding these protesters – they are the only leaders in the world and these protests are not transitory, but rather history in the making. This is a global sea change and the people of the world are tired of the abuse, fraud, nepotism, and corruption that has for too long reigned in their respective governments. This will get much worse before it gets better. Stay diversified, stay vigilant, and stay with The Kapital News. #Impeachment #Truth #Justice #Peace #Economy #Politics #Recession #EndTheFed
