Politicians and central bankers the world over have been boxed-in for some time. The road to responsibility, accountability, and leadership is not one they want to take. Therefore, they continue to implement the same asinine policies that led us to this point. And despite all of these artificial attempts to prop up the system and despite how powerful these institutions may be separately or combined, they are not larger than or more powerful than the markets. This means the day of reckoning awaits us. The question is when does this happen? Policymakers know this, but will never admit to it. However, by reading between the lines and listening carefully to their remarks, it is quite clear that they are getting nervous. They know the global economy is extremely fragile right now, as are whole countries from a political and societal perspective. They know this will not end well and they know they will be the ones who will be blamed.
Initial jobless claims for the week ending 15 May came in at 444,000. The lowest reading since the pandemic. The prior week was revised higher by 5,000 to now stand at 478,000. In aggregate, there remains nearly 16 million Americans that continue to claim some form of unemployment insurance. This gives us a de facto unemployment rate of 11.5 percent. The official rate is 6.1 percent.
The Federal Reserve’s balance sheet has hit a new all-time high at $7.922 trillion! This is a week-over-week increase of $90 billion. This is a sign that the Fed is worried about the recent price action in the equity markets that has been trending lower, and this is a clear attempt at cushioning the blow in the least and sparking a rally at best. The Fed remains committed to their QE program of purchasing at least $120 billion per month in US Treasuries and mortgage-backed securities. The Fed is also starting to admit that they are paying closer attention to crypto and digital currencies, and announced that they will be publishing a report on this matter in the summer months.
In other news, the 11 day conflict between the Israelis and Palestinians has come to halt, at least for now as both sides have agreed to a cease-fire that went into effect early Friday morning. The deal was brokered by Egypt. At least 232 Palestinians, including 65 children have been killed. On the Israeli side, twelve people were killed, including two children. Let us pray that the ceasefire holds and turns into a more peaceful situation between the two sides. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Inflation #Jobs #Gold #Silver #FoodPrices #Protests #USA #Israel #Palestine #Commodities #Riots #Peace #Liberty #EndTheFed #bananarepublic #FireCongress #Leadership #Debt #Revolution
In the 24/7 news cycle, there is always a moving target. So it is not uncommon for there to be a new narrative from week to week or even day to day to hold the attention of their viewers. The Kapital News does not play this game and has called out most, if not all of these narratives as of late for being what they are – phony. The main narrative to focus on with respect to markets is the liquidity injections by central banks into the system. It is the funny money that is conjured up out of thin air that continues to prop up these markets. Simply ask yourself where would bond prices, bond yields, interest rates, and equity prices be if it were not for these actions undertaken by central banks? The answer is quite simple, yields and interest rates would be higher, and bond and equity prices lower. This is a house of mirrors and one which is built upon a foundation of sand. Nonetheless, the markets continue to buy into this narrative and policy and so they march onward and upward to new highs. Yes, there have been some minor pullbacks here and there, but they then go on to make new highs. As long as this is the case, then markets move higher. But once this relationship breaks down, and The Kapital News believes that it is only a matter of time, then these liquidity injections will no longer matter and will be impotent in propping up the markets. This will likely result in a great unraveling, whose force cannot be stopped by any kind of monetary or fiscal intervention. At this juncture, market forces are in complete control and they will rid the system of malinvestments and fraudulent businesses. Look out below.
Other news discussed pertained to updates on the Colonial pipeline situation, the Israeli and Palestinian conflict that has been intensifying, and an update on the tensions between Russia and Ukraine. Much of these geopolitical events are not receiving the news coverage they deserve and furthermore, the equity markets do not seem to be pricing in the types of risks that can rapidly develop if any of these global issues escalate more seriously than where they currently stand. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Inflation #Fraud #FoodPrices #Debt #Spending #EndTheFed #bananarepublic #FireCongress #USA #Israel #Palestine #Russia #Ukraine #Protests #Riots #Peace #War #Gold #Silver #Commodities #Liberty #Leadership
In today’s podcast we continue to discuss the Derek Chauvin trial, the conviction, and the political fallout. We then continue with various articles pertaining to geopolitical risks. The focus of these news stories are centered around US and Turkish relations, rising tensions between Russia and Ukraine, and tensions among Israel, Syria, and Iran. To put it simply, the world is in chaos. Stay diversified, stay vigilant, and stay with The Kapital News. #DerekChauvinTrial #Geopolitics #War #Peace #USA #Israel #Russia #Ukraine #Turkey #China #Iran #Syria #Liberty #Leadership #Justice
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
The Chinese trade delegation did make their way to Washington, DC for two-days of talks, however, their trip was cut short. It was expected that the trade delegation would be visiting some US farms, which was seen by many as an act of “goodwill.” These farm visits have been cancelled. This led to a market sell-off with the major indexes closing in the red. The question is, was this a planned action or perhaps a power-play by China? Basically saying to the US, look, we’re in control and we know that if we walk away the markets will sell-off and they did – a direct shot at the President due to his focus on markets. Or is this a power-play by President Trump, because earlier in the day, he stated that he wants a complete deal with China, not a partial deal. Recall, only a week ago, the President claimed that he was willing to consider a partial deal. Well that appears to be off the table for now, but the President is known to change his mind quickly – so time shall tell. The President also noted that he does not need a trade deal before the 2020 election. While the President has hinted at this before, he is now explicitly making this claim. So, did the Chinese cancel their farm field-trip because of the President’s comments, or was it already planned? Also, The Kapital News has been saying for quite some time that the President is going to want as many bogeymen as he can get during the 2020 campaign. With no trade deal, the President can cite the Chinese as a continuing problem, as well as the Federal Reserve, amongst others – allowing him to play the “strong-man,” which his base loves. If he signs a deal with China, the President has to be concerned with China backing away or pulling out, right before the election. Which we imagine would cause a market sell-off and provide ammunition to the Democratic nominee to exploit the lack of a deal and its subsequent volatility. So we are perhaps in a shifting paradigm with these trade negotiations, but we’ll have to wait and see what transpires during the next round of talks in October when higher-level discussions take place. In other news, the Fed has continued with repo market operations for the 4th straight day and is now extending the program until at least 10 October. There has also been an increase of $75 billion to the Fed’s balance sheet over the last week – begging the question, is this stealth QE? And if so, then it’s only a matter of time before they make QE4 official. The repo market has not been utilized since the Great Financial Crisis of 2008. And with $1.3 trillion in excess reserves in the system, why are financial firms needing to seek out refuge from the Fed? Could this be a lack of trust and confidence in the system? And if so, then something serious may be brewing just beneath the surface. Additionally, the President has authorized US forces to be sent to Saudi Arabia for “defensive” purposes only – at least for now. Recall that there are already US military forces in the area – so this is an additional installment of forces. Lastly, the UN General Assembly gathers in New York next week and we imagine quite a bit of breaking news will be made. Stay diversified, stay vigilant, and stay with The Kapital News. #USChina #TradeWar #EndTheFed #Recession #Economy #Invest #Finance #Peace #WakeUpAmerica
Ep. 118B - Cass Freight Index Predicts Negative GDP
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Despite the fact that the Federal Reserve was out yesterday providing their GDP forecasts for 2019 and 2020, 2.2% and 2% respectively, the Cass Freight Index report says otherwise. In their August report, the Cass Freight Index, which is seen by many analysts as a reliable leading indicator, is stating that given both lower freight volumes and prices, GDP is likely to turn negative by the end of 2019. August marks the ninth month in a row of negative YoY growth for the index. Citing the global slowdown and the ongoing trade war between the US and China, the report notes that the headwinds abroad are making their way to the US. Consistent with what we discuss here on a daily basis at The Kapital News, the transportation sector is a simple, yet reliable leading indicator – which is why we highlight the price action of the Dow Jones Transportation Average. The Cass Freight Index, in agreement with the DJT, is showing a disconnect/divergence between the major indexes and the broader economy. The question remains, will the transports play a game of “catch-up” and make or near all-time highs, or will the major indexes reverse course, which could make for a sizable correction? It’s anyone’s guess, but the major indexes are approaching strong resistance levels as they near all-time highs. In other news, the President is mired in another political/legal situation where a whistleblower appears to be claiming that the President made very concerning comments to a foreign leader. Facts are clearly lacking as this is a new story and pertains to perhaps highly classified information, but what the reports are claiming is that the foreign country in question is, Ukraine. This story is sure to be the focus of the Democrats for some time and will lead to more divisiveness until their is a conclusion – and who knows when that will be? We just want the truth to be known and for justice to be served, regardless of the parties involved. Stay diversified, stay vigilant, and stay with The Kapital News. #Recession #Economy #Justice #Truth #EndTheFed #Politics #WakeUpAmerica #Peace
From all corners of the world, political leaders are undergoing investigations. Whether it’s the Trump-Russia collusion delusion, Canada’s PM nepotism scandal, UK’s PM w/ Brexit, or Netanyahu’s corruption allegations – is this leadership?
Political investigations, nuclear bombs, and failed negotiations. Just a few regular stories for a world spinning in multiple directions. At least the Spring is on its way!
