So with another month in the books the Bureau of Labor Statistics (BLS), released the jobs report for the month of August. Headlines would tell you that the unemployment rate declined to 8.4%. However, what you’re not likely going to hear is that permanent job losers increased by 534,000 to 3.4 million. This is a figure not seen since 2013 still coming off the highs seen during the GFC. What the headlines also will not tell you is that when you look at the Department of Labor’s report, which is a part of our typical Thursday data review podcast, it noted that for the week ending 15 August, some 29.2 million Americans were claiming some form of unemployment insurance – a week-over-week increase of nearly 2.2 million. Well if one takes this number and divides it by 160 million (size of labor force), you get 18.25%! This is nowhere near the headline 8.4% figure. Now of course there also still exists many distortionary effects when it comes to the jobs numbers, in addition to other variables, and these distortions come from the “Nobody Cares Act,” the PPP loans/grants, and various “emergency” programs from the Federal Reserve, and states’ moratoriums and the like.
These policies make it very difficult to gain a full-picture of the true jobs situation. This is why we highlight the permanent job losers stats, along with the total number of Americans claiming unemployment insurance benefits. If one wants to come up with the 8.4% figure, simply take the continuing claims data and divide by the 160 million labor force (of course account for rounding). Still the point is made, because continuing claims data does not take into consideration those who claim various federal programs that have been implemented due to the pandemic – which again, goes to show the distortionary effects in real-time. If you want the fuller picture, then stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Unemployment #Inflation #Gold #Silver #USA #BananaRepublic #EndTheFed #Protests #Recession #Depression #Liberty #Revolution
During our discussion today we recap the Republican National Convention, the Federal Reserve’s new policy stance with respect to inflation and employment, and we also cover economic data pertaining to jobless claims and the money supply. Hint, hint, inflation is here, stagflation is here, and hyperinflation is even a possibility in the not too distant future, even here in the USA. Stay diversified, stay vigilant, and stay with The Kapital News. #RNC #DNC #Politics #Economy #USA #BananaRepublic #EndTheFed #Inflation #Stagflation #Hyperinflation #Gold #Silver #Recession #Depression #Protests #Liberty #Revolution
With the additional $600 weekly benefit having come to an end, many questions remain as to what happens next? For many, this may have been the only income received over the past several months. For others, the $600/week was additional income on top of what they may have been receiving from their State’s unemployment office. In addition to this Federal assistance expiring, there are also serious concerns pertaining to what can be considered the eviction moratoriums. A couple of months ago, The Kapital News discussed experts projecting some 20-28 million Americans could be evicted in the coming months. Now, an analysis from the Aspen Institute suggests that it may be closer to 30-40 million Americans facing evictions in the coming months. For context, some 10 million Americas were evicted over a couple of years in the midst of the GFC. In addition to the expiring unemployment benefits and moratoriums, hunger is also a major concern. With surveys put out by the Census Bureau and others stating that some 30 million Americans are underfed and/or concerned about where their next meal will come from.
These issues are structural and the massive amounts of spending, borrowing, begging, and printing has only kicked the can down the road for a little. Now the chickens are coming home to roost and the piper wants paid. But hey, don’t worry, because the Fed and the Congress and the White House via the Treasury Department are purchasing corporate debt of the world’s largest companies. So don’t worry where your next meal is coming from. Don’t worry about not getting that extra $600/week, and don’t worry about being evicted. You know why? Because our government is buying corporate debt of the world’s largest firms, among other “assistance” programs and bailouts. Billions and trillions to the bigs and corporations and screw the little guy. Welcome to your banana republic. #Economy #Debt #Bailouts #Jobs #Gold #BananaRepublic #Congress #USA #Silver
Since the President wanted to sign executive orders to extend unemployment benefits and to suspend the payroll tax cut, among others, which is unconstitutional, we wanted to discuss the unfunded liability situation in the US. The payroll tax is responsible for funding the social security fund as well as that of medicare. Understand that at this juncture, the payroll tax cut is really just a suspension, meaning that the tax will have to be paid at a later date – by the tax deadline in 2021. This could prove to be a big shock to many people who may decide to spend the extra income as oppose to saving it. Of course, many employers will be hesitant to comply with this executive order since it is unconstitutional and because it will likely cause obstacles with respect to their bookkeeping. But hey, it’s an election year, so who cares about the details and the US Constitution?
In other news, we also discuss the decision by the Lebanese government today to resign their post. The weakest link of any chain is the first to break and the dominoes are set as we continue to see countries in economic collapse and others on the brink. The global protests and riots that were occurring prior to COVID-19 were not and are not transitory, but rather history in the making. They will continue and likely escalate as we continue through 2020 and beyond. The world is lacking leadership and direction. Governments are unaccountable and corrupt and central bankers are in a currency war to the bottom where the true costs of these fraudulent acts are borne by the people – and the lower on the income scale, the worse the effects. People around the world are sick and tired of being sick and tired, and thus we are witnessing history in the making with these global protests. Some are violent, some will turn violent, others will demand government resignations, others will overthrow their governments, civil war(s) may ensue, as wars between nations. Let us pray for a peaceful resolution, but if current policies are implemented, then we are sealing our fate to a dim future. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Recession #Debt #Gold #Depression #BananaRepublic #Silver #Bailouts #USA #Lebanon #Protests
Another Thursday is in the books and as such it’s a data dump of initial jobless claims and an update to the Federal Reserve’s balance sheet. Despite being several months into the COVID-19 pandemic and the Greatest Depression, we are still unfortunately witnessing over 1 million Americans filing for initial unemployment benefits for the week ending 18 July, as the number was 1.4 million – an increase from the prior week. This is not in agreement with any kind of V-shaped economic recovery. In fact, as we continue to see several states across the country close, re-close, or slow their re-openings, it is likely that the jobs report for the month of July will paint an ugly picture. While the White House may want to cheer the June jobs report, which they did, it may prove to be a premature victory lap, as the reality of the pandemic and depression starts to set in.
As we have noted in previous podcasts, the actions taken by governments and central banks can aid the liquidity issues (at least for awhile), but they cannot alleviate the coming insolvency crisis. The insolvency crisis is waiting in the wings and with it will be the loss of hundreds of thousands, if not millions of more jobs – many of which will be classified as permanent job losses. This was an inevitable outcome for living off of debt and thinking that it was all real and sustainable. Unfortunately, we’re repeating the mistakes of the past, which will only prove to make any economic recovery slower and more painful than what otherwise could have happened.
In other news, the Fed’s balance sheet increased “minimally” by $6 billion from the previous week. However, with Congress set to pass new legislation to extend unemployment benefits and spending to help states and local governments, amongst others, will send the Fed’s balance sheet north of $7 trillion and beyond in short order. In a tit-for-tat response to yesterday’s order from the US State Department ordering Chinese diplomats to close down their consulate in Houston, Texas, the Chinese have ordered US diplomats to leave a US consulate in China. This is the new cold war and tensions will likely remain high for the foreseeable future and this issue will also become center stage politically here in the US during the 2020 Presidential election. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Gold #Debt #Recession #USA #China #Depression #BananaRepublic #EndTheFed #Congress #Silver #Protests #Bailouts
While the price of gold has been moving up steadily over the past few years, silver on the other hand, has been more range bound. That is until recently. Today the price of silver moved up by several percentage points taking the metal to a spot price of over $22/oz – this is a level not seen since late 2013. So, the question becomes – is this a temporary spike in price or the beginning of what could prove to be a massive bull market? This of course remains unknown. However, with the current state of affairs from policymakers, politicians, and central bankers around the world, it would suggest that there are a lot of tailwinds behind gold and silver. The printing press is no panacea as the world is soon going to discover and the people are also going to become well aware that “free” money was never so expensive. Add to this the geopolitical uncertainties, the upcoming US Presidential election, more talks of government spending, higher inflation expectations, and a further deterioration in the overall economy, places the precious metals market in a ripe environment for perhaps the next several years as a means of diversifying, protecting, and adding to your wealth. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Debt #Recession #BananaRepublic #USA #EndTheFed #Depression #Inflation #Gold #Silver
Where to even begin? The excessive and abusive taxation across federal, state, and local jurisdictions. The theft of our savings and purchasing power through the effects of inflation. The two-tiered justice system.The endless wars and interference and meddling in other countries’ affairs. The trillions of dollars spent on social and corporate welfare programs. The poor state of our infrastructure and education systems. How much further must we go? Oh, yes, and how can we forget the protests and riots from coast to coast.
This has been years in the making and this country along with several others are taking to the streets to demand change. To hold their respective governments and officials accountable for years, if not generations’, worth of failed, flawed, fraudulent, and corrupt policies. The end game is near and unfortunately, millions, if not billions of people around the world are going to experience the severe consequences of these policies. And most don’t even know they’re coming. The sad thing is, at least here in the United States is that we have the answer, but choose to ignore it. The answer is a return to our constitutional republic and to free-market capitalism. If we restore ourselves to these principles and adhere to them, then we can turn this decline around and our best days may very well be ahead of us. But if we do not and continue with the same policy prescriptions, then our decline and demise is just around the corner. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Depression #Debt #Bailouts #EndTheFed #BananaRepublic #USA #Revolution #Liberty #Gold #Deficits #Protests #War #Peace #Truth #Recession #Jobs
As Q2 earnings season gets underway, major banks reported today. With the likes of JP Morgan Chase, Wells Fargo, and Citigroup, there were a couple common threads throughout. First, all banks expect that the worst of the economic fallout is yet to come as they amend their forecasts from the prior quarter to a more bleak outlook for the months ahead.
As such, their collective loan loss provisions take us back to levels not seen since the GFC. Despite this negative bit of news, however, with respect to JP Morgan and Citigroup, their trading desks did phenomenally well. Gee, we wonder why that could be? Oh, that’s right – thank you Federal Reserve and all your banana republic funny money. The industries hardest hit when it comes to the banks are retail, real estate, and oil and gas. The very industries that we have been discussing here for months. It was also quite interesting to hear from the banks that all of the “stimulus” spending and other policies that have been implemented has simply delayed the inevitable – protracted economic growth. The problem of course with this is that there is no free lunch. So all we get are a few extra months at the expense of trillions of dollars that we do not have, only to end up where we would’ve ended up anyways, but now with a higher debt load. Only the arrogance and fraudulent behavior of bureaucrats, politicians, and central bankers could have come up with such a scheme. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Bailouts #Debt #Depression #USA #Recession #EndTheFed #Gold #Liberty #Silver
Today, the National Bureau of Economic Research (NBER), announced that the United States economy has officially entered recession. The monthly peak occurred in February 2020, while the quarterly peak occurred in Q4 2019. They noted that this was the longest business cycle expansion in US history, lasting 128 months. It surpassed the previous record of 120 months that was set from March 1991 to March 2001. Records go back to 1854.
This should come as no surprise to this audience, or anyone paying attention to what has been going on – especially as it relates to the pandemic of COVID-19. However, as we have be saying here at The Kapital News for some time, the fundamentals of the economy were starting to crack throughout late 2018 and 2019. We posit that even without a global pandemic, 2020 was likely to be the year that a recession would be officially scored. Check out our videos on this topic.
It must also be understood that recessions are an opportunity for businesses and individuals to strengthen their balance sheets. To deleverage. To save. And to invest prudently for the longer-term. Also, during these times, weaker companies are to go through bankruptcy, potentially emerge leaner and stronger, or perhaps go out of business and liquidate. While this may be a painful experience for these respective companies and their employees and other stakeholders, it is nevertheless the right course of action – stronger companies need to survive and thrive, and weaker companies need to cease operations. This natural ebb and flow of the business cycle is a healthy process and should result with better outcomes for businesses, governments, employees, and consumers. Unfortunately, what we’re witnessing is an attempt by policymakers (government and central banks), to keep everything “afloat.” This will prove disastrous is due course.
Recessions and even depressions, are corrections – and corrections are healthy – despite how painful they might be. However, that pain can be quick or it can be prolonged. Given the policies thus far enacted and those likely to come are likely to turn this now official recession into another depression – perhaps the Greatest Depression. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Recession #Depression #NBER #USA #Gold #Peace #Debt #Bailouts #Protests #Jobs #EndTheFed
Being the first Friday of the month, the jobs report was released. According to the official headline U-3 figure, unemployment fell to 13.3%. This was unexpected as unemployment was expected to go up for the month of May. Expectations were for job losses of some 8 million, but were shocked by a gain of 2.5 million jobs. Now, when one looks at the broader U-6 measure of unemployment, we are still north of 20%. Given the huge beat of market expectations, stocks rallied, and the NASDAQ made a new all-time high. Meanwhile, Americans are skipping meals and utilizing food banks, and protesting coast to coast – for some perspective.
However, if one actually reads the entire BLS jobs report, yes, you have to read to the end (or just scroll down), they note that there are calculation errors and had the numbers been accurately tallied, then the unemployment rate would have been 3% points higher – taking the unemployment rate above 16%. Makes sense? Also, it must be understood that the Payment Protection Plan, a Federal government plan to assist businesses, will turn loans into grants (meaning forgivable), if employers keep their employees on payroll and/or bring them back if they were already laid off. This may very well mean that people are “employed” on payroll, but actually not working – per the PPP. So, as we have been explaining for weeks, that these jobs numbers were going to be fishy and all over the place – well here we have it! Of course, this does not stop the President from coming out to proclaim this is the best report ever and blah blah blah – all hat and no cattle – he sales the sizzle and not the steak. We discuss many other data points and read the jobs report in its entirety during today’s podcast. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Depression #USA #Recession #Bailouts #Debt #Protests #Liberty #EndTheFed #Peace
