Tag: Peace

Ep. 622 – Empty Stomachs Bring Revolutions
The Kapital News
Ep. 622 - Empty Stomachs Bring Revolutions
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The FAO Food Price Index report for February 2022 was recently released and it has hit a new all-time high. The previous high was back in February of 2011 – which was also the beginning of the Arab Spring. Coincidentally, oil prices are back to 2011 levels as well. The cause of increase in world food prices is multi-faceted. There is of course the major fiscal and monetary policies that were implemented over the past two years and continue to this day – their very actions are inflationary by definition. Global supply chain disruptions persist adding chokepoints and contributing to upward price pressures. Growing conditions and crop production is also of concern – the FAO cites issues with corn production in Argentina and Brazil. Corn is not just used for human consumption, but also for livestock and ethanol – thus contributing to further downstream price increases. Lastly, the uncertainties that exist due to the Russia-Ukraine conflict. These two nations account for 25 percent of global wheat production and 20 percent of global corn production. Ukraine exports the bulk of their exports to Asian and Middle Eastern nations – as such, the stage is set for a redux of the Arab Spring – as bread is a main staple of the diet in the region. The conflict is also leading to some countries beginning to hoard their food production and limit or halt entirely the export of foodstuffs – Hungary just halted all grain exports. Other countries may very well follow suit and others, such as China, may go on a buying binge to obtain and store as much as possible in fear of continued rising prices – which if happens, such buying will continue to put upward price pressure on agricultural commodities. Further, in retaliation to economic and financial sanctions that have been placed on Russia, President Putin is retaliating by telling Russian fertilizer firms to stop exporting their products. This will have huge ramifications as Russia and Belarus, an ally of Russia, are two of the world’s top producers and exporters of fertilizers. In addition to this, natural gas prices have been rising, which is an input good and thus a cost to manufacturing fertilizers. It is easy to connect the dots and realize that higher food prices are likely the norm for the foreseeable future.

US gasoline prices are now averaging over $4 per gallon, a level not seen since 2008. The price increase is also the largest increase over a 10-day period, where the prior 10-day record high occurred following Hurricane Katrina in 2005. Transportation costs have already been on the move higher through the pandemic and rising fuel prices will only exacerbate the concerns. Stay diversified, stay vigilant, and stay with The Kapital News. #Inflation #FoodPrices #Revolution #USA #Russia #Ukraine #Gold #Silver #Wheat #Corn #Oil #Commodities #Protests #Liberty #Peace #Stagflation

Ep. 600 – A Financial Storm A Brewin’?
The Kapital News
Ep. 600 - A Financial Storm A Brewin'?
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Global markets have been distorted for a long time, but never before have we witnessed such obvious market manipulation alongside the implementation of distortionary policies. What this ultimately translates into is a system that is over-indebted, over-leveraged, and extremely fragile. It can take the slightest of pin-pricks to burst one bubble after the next. The causes of the bursting of the bubbles are near limitless. They can arise from within the financial and economic systems or they can take the form of an exogenous shock to the system. In any event, one bursting bubble will trigger the bursting of others. The economic, financial, political, and societal fallout will be enormous. In such an event, the blame game and finger pointing will ensue almost immediately.

The reason for today’s discussion is due to the ever-changing and shifting narrative that we hear from the mainstream media and policymakers alike. The Kapital News believes this to be a somewhat coordinated effort to distract the people from the bigger picture. Best to keep the people occupied with circuses than the actual truth of what is actually happening around the globe. In this vein, it is quite evident that the narrative around COVID-19, the Chinese, and their Wuhan laboratory are making headlines. Last year, such connections and questions were not allowed to be asked, otherwise you were labeled a conspiracy theorist. Today, it is front page news. So what shifted? What has changed? While The Kapital News does not specifically know the reasoning or the cause behind the sudden change in narrative, we do question why now and may this be used as part of an excuse as to why markets may breakdown? This is a serious question and it needs to be pondered. Because it may provide the perfect cover for policymakers to put the blame on China, thus deflecting any scrutiny of themselves and the asinine and criminal policies that they have been implementing. There will be more to come on this situation. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Inflation #Gold #FoodPrices #Housing #Silver #Debt #Spending #Protests #Liberty #Riots #Leadership #Revolution #EndTheFed #bananarepublic #FireCongress #Bubbles

Ep. 599 – Higher Housing Prices + Lower Sales
The Kapital News
Ep. 599 - Higher Housing Prices + Lower Sales
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The S&P/Case-Shiller US national and 20-city home price indexes, saw year-over-year increases of 13.2 percent each. These types of increases have not been since either 2013 or prior to the GFC in 2005. Now while mortgage rates have also ticked up with housing prices, they are still near all-time lows. However, due to such rapidity in housing price increases, buyers are stepping away from the market. They simply cannot afford to purchase these homes. Furthermore, builders are reluctant to sign offers from buyers because they are concerned with the rapid rise of construction material costs. Should they sign a deal and then costs continue higher, their margins will take a hit and it could be significant. This in turn reduces sales.

Yet despite all of this, we are constantly told that there is no inflation and that the Federal Reserve continues to purchase $40 billion per month in mortgage-backed securities. These monthly purchases are a part of the Fed’s QE program which came about during the GFC. So let us understand this, the purchasing of MBS during and after the GFC was done because it was an “emergency” due to housing prices falling. Now we have prices at all-time highs and they continue with QE and the purchasing of MBS. How does this make sense? They buy when prices are falling and they buy when prices keep going up. Something does not make sense and it is likely that a massive correction in housing and/or construction materials is on the horizon. However, the Fed will do everything in their power to prevent this from happening or at least cushion the blow. And not only is this an economic story, but also a political and social story because home-ownership is a very emotional topic. So if prices should continue higher and more and more people are priced out of the market, while at the same time also having to contend with rising rents, and other cost increases, then something is likely to break and give way. Expect political movements, protests, and the like because of this reality. Stay diversified, stay vigilant, and stay with The Kapital News. #Housing #Inflation #Gold #Economy #Silver #EndTheFed #bananarepublic #Debt #Liberty #USA #Leadership #Commodities #Protests #FoodPrices #Revolution #FireCongress

Ep. 597 – Policymakers Getting Nervous?
The Kapital News
Ep. 597 - Policymakers Getting Nervous?
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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

Ep. 593 – Jobless Claims Down, Producer Prices Up
The Kapital News
Ep. 593 - Jobless Claims Down, Producer Prices Up
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The initial jobless claims figure for the week ending 8 May, came in at 473,000. The lowest figure in over a year and continuing its downward trend as the economy reopens. Data from the prior week was revised upward by 9,000 to now stand at 507,000. The Pandemic Unemployment Assistance program saw 104,000 Americans file for the first time, also during in the week ending 8 May. In aggregate, across all forms of unemployment insurance, some 16.9 million Americans continue to file claims. This is for the week ending 24 April and gives us a de facto unemployment rate of 12.8 percent, which is more than 2x the official rate. The official unemployment rate is now 6.1 percent.

Also released today was the Producer Price Index Summary, which showed that producer prices for the final demand index rose by 6.2 percent in April on a year-over-year basis. This is the highest figure since records were kept on a yearly basis going back to November of 2010. Stripping out food, energy, and trade services, the index stands at 4.6 percent, which is also a record-high going back to August of 2014. As we witnessed yesterday in the CPI report, these figures released today were higher than market expectations. The question becomes just how long these price increases will continue. Will they be transitory as the Federal Reserve claims, or will they be longer-lasting and more structural for a few years or more to come? This is a crucial question, as markets, economies, political processes, and societies will all be greatly impacted.

The Federal Reserve’s balance sheet has hit a new all-time high and now stands at $7.83 trillion. This is a week-over-week increase of $20 billion. The Fed remains committed to their QE program of purchasing at least $120 billion per month of US Treasuries and mortgage-backed securities. So far, the Fed has brushed off the recent higher than expected inflation figures, as they continue with their transitory remarks. They also appear to want to wait and see what future data points suggest is underway throughout the economy. Chances are they will be too late to respond to any structural problem and thus their efforts will likely prove futile. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Inflation #FoodPrices #Bitcoin #Bitcon #EndTheFed #bananarepublic #FireCongress #Gold #Silver #Commodities #Liberty #USA #Leadership #Jobs #Bailouts #Protests #Riots #Revolution #Peace

Ep. 592 – There’s No Inflation, But There IS!
The Kapital News
Ep. 592 - There's No Inflation, But There IS!
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The Bureau of Labor Statistics, BLS, released their Consumer Price Index Summary for the month of April. The headline figure came in at 4.2 percent on a year-over-year basis, which was above market consensus. This is the highest reading since September of 2008. Speaking of no inflation, used cars and trucks saw an increase of 10 percent in the month of April! With people moving out of the cities and into the suburbs, they are also bidding up the prices of new and used vehicles. Also, with the impact of the pandemic, many people may also be concerned with utilizing public transportation and are thus opting for their own vehicles. This one-month increase of 10 percent is the highest on record since the series began in 1953. Also, notable was the all items less food and energy category rose by 0.9 percent, which was the largest monthly increase since 1982.

On a year-over-year basis, some of the notable increases were the following: food is up 4.2 percent, energy is up 25.1 percent, gasoline is up 49.6 percent, utilities (gas) is up 12.1 percent, new vehicles are up 2.0 percent, and used vehicles are up 21.0 percent. Speaking of vehicles, Q4 2020 average prices for new and used vehicles came in at $40,107 and $27,689, respectively. Down payments also increased, but still puts the average monthly payment at $581! And here you were thinking that all that free money from Uncle Sam was actually free – well, bless your heart. There is no free lunch and this is one of the worst economic policies that has ever been implemented and on a global scale to boot. Now some may say that this is all transitory. Perhaps the degree to which these prices are rising may be transitory, but the overall inflation and its effects, are anything but temporary. This is a structural shift that is going to wreak havoc around the globe for years to come. Pay attention! Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Inflation #FoodPrices #CarPrices #Debt #Spending #Gold #Silver #Commodities #Oil #Liberty #EndTheFed #bananarepublic #FireCongress #Leadership

Ep. 591 – The Ever-Changing Narrative
The Kapital News
Ep. 591 - The Ever-Changing Narrative
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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

Ep. 590 – Nation Against Nation
The Kapital News
Ep. 590 - Nation Against Nation
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The Kapital News has been talking at length since 2019 about the protests that were taking place globally. While there is always something that triggers such movements, it is rarely ever just that one issue making the headlines. Typically, it is a series of structural flaws and failures that have been tolerated for far too long, and now the people are making a stand. Due to the pandemic and the subsequent lockdowns, many of these protests and movements were paused. Now, with vaccines being rolled out and people anxious to get back to their lives, these protests are once again taking place and gaining international momentum. Furthermore, much of the problems from 2019 and prior were not contended with in 2020, and in fact, many of these issues were made worse. And due to the pandemic and all of the fallout, many new issues now exist.

Revolutions are fought on empty stomachs and The Kapital News is projecting a structural, long-lasting inflation. Of course inflation means an increase in the money supply, which has and is occurring in spades, but the effects of inflation, higher prices, will be here to stay for some time. The focus on the price increases are on items that people need to live and survive, such as food, energy, medical products/services, shelter, and other commodities. We are not so concerned with items that people do not need to live. It is actually quite simple to see – are all of these people protesting and rioting because the cost of living is so affordable, or otherwise? And yet this is only the beginning of these price increases. We saw what happened in the Middle East only a decade ago with the Arab Spring. Much of this was caused by inflation and high food prices. This happened only a couple years after major central banks began their monetary experiment of QE following the GFC. An inflationary policy that had ripple effects around the world and later contributed to such a movement. The actions undertaken by central banks and governments around the world today dwarf the efforts during and shortly following the GFC – so what can one reasonably conclude? That the fallout from these policies will be even worse and far more reaching. Throw in wealth inequality, tax increases, and political corruption with these higher prices and you have one dangerous and volatile cocktail.

News stories discussed today pertain to the escalation between Israel and Gaza. Actions between these two have not been this bad since 2014. This comes on the heels of rising tensions between Israel and Syria, where Syria is playing middleman for Iran. Another common story now seems to be run-ins at sea between Iranian naval forces and US naval forces. Just last month, US forces fired warning shots at Iranian speedboats for conducting dangerous maneuvers and getting too close to US vessels. Well the same thing just occurred whereby US forces fired 30 warning shots at Iranian speedboats. The frequency of such actions is setting itself up for something to go wrong – let us pray that it does not. In the US, the Colonial pipeline was hacked over the weekend. According to the FBI, it was at the hands of a Russian hacker group. The pipeline is one of the most crucial in the states, especially for the east coast as it supplies a major portion of gasoline. Gas prices were already anticipated to be higher in the spring and summer months, and this setback only adds to those price pressures. Restoration of the pipeline has yet to be fully restored at this time. The longer it takes, the worse the outcome. Other items mentioned, were the tensions between Russia and Ukraine, Australia and China, China, Taiwan, and the Philippines, Scotland and the UK, and civil war mentions in France, amongst others. It is nation against nation. Pray for peace, yet be prepared for war. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Inflation #Protests #FoodPrices #Commodities #Revolution #USA #Liberty #Leadership #War #Peace #FireCongress #EndTheFed #bananarepublic #Gold #Silver #Debt

Ep. 589 – April Fools Jobs Report
The Kapital News
Ep. 589 - April Fools Jobs Report
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The market consensus was looking for a gain of one million jobs in the month of April. Instead, the figure came in at +266,000. This was quite the miss. However, it certainly gives at least another month of cover for fiscal and monetary authorities to continue with their narrative that more policy intervention is needed. From the White House, both the President and Treasury Secretary were stating how there is still a long road ahead. They also mentioned how the extension of unemployment benefits has no impact on this dismal jobs number. Instead, they cite the effects of the pandemic and the costs and lack of availability of child care. Interesting to note, however, is that members of the Federal Reserve did mention that the extension to unemployment benefits likely did impact the jobs number for April. As many people are getting paid just as much to stay home as compared to actually working. This belief by some Fed members was stated because, first of all, it is true, and then secondly, those extensions are a fiscal measure, not a monetary one. So the Fed is more than happy to throw a fiscal policy under the bus and shift the blame from themselves onto Congress and the White House, even though they are the ones financing such fiscal policy nonsense.

Clearly, both fiscal and monetary policy authorities want the “gravy-train” to continue as do the markets. And despite this dismal number, markets rallied and made new highs on the DJIA and the S&P500. This is a function of central bank liquidity, which continued to march higher this week and with it equity prices. This is the true narrative to monitor. If markets continue to buy into the rising liquidity injections, then they climb higher, if they cease to buy these actions, then it is game over, as this is the only thing that is propping these markets up. And it is not just the equity markets, but the bond market, and others as well.

The fiscal and monetary policies introduced last year and this year will continue to drag future economic growth downward, while also leading to increased costs across the board in commodities, and items needed to live. Housing and rents continue climbing higher, as do construction and building materials, as do commodities, from base metals, to agricultural products. These price increases will translate into great economic, political, and social strife in the coming months and years and this will be a global phenomena. Some of this fallout is already being witnessed in smaller countries, where they are near collapse or are already there. This trend will continue to make its way up the chain impacting larger economies and countries. This funny money coming from Uncle Sam is anything but a gift from the government, and it is anything but free. The costs of which will be some of the most expensive in human history in terms of price increases, social and political impact, lower living standards, and lost opportunities. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Inflation #USA #Liberty #Protests #FoodPrices #EndTheFed #bananarepublic #FireCongress #Bailouts #Debt #Spending #Revolution #Leadership

Ep. 587 – Is Social Unrest Contagious?
The Kapital News
Ep. 587 - Is Social Unrest Contagious?
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More than several countries around the globe were protesting throughout 2019. In comes the pandemic and the subsequent lockdowns and the protests are tampered down. However, the reasons for the protests were never truly dealt with and due to the negative fallout from the pandemic, many of these issues have actually gotten worse. So here we are in 2021, and many of these protests are once again taking shape.

Whether it is income inequality, tax hikes or the mention of tax increases, a raise in bus or metro fares, a decrease in governmental benefits, or political abuses of power, one thing is certain, people around the world are sick and tired of being sick and tired. The cost of living is increasing by the day and more and more people are spending larger portions of their incomes on the basic necessities to live. This is why it becomes laughable if not disrespectful for those who argue about a deflationary environment. People around the world are not protesting and rioting because the cost of living is so affordable – they are protesting because they cannot afford to live!

Furthermore, these types of protests and movements can prove contagious as they may inspire other people around the world to take to the streets in their respective countries. Cost of living increases, tax hikes, and political corruption are not unique to only a few countries, but rather most, if not all of them. Depending on the outcomes, some may be resolved peacefully, while others may turn violent. In the latter scenario, the global economy should be watchful of further supply-chain disruptions. A country at war with itself will produce fewer items and thus less to be offered on the global stage. The global economy is continuing to contend with supply-chain issues, and social strife will only add to these pressures and bottlenecks, which ironically will only serve to further increase prices. There is no easy way out of this mess, but it is encouraging to see people stand up for themselves, their families, and their countries. Major changes are needed, and let us pray that they take the form of liberty and free-market capitalism. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Protests #FoodPrices #Inflation #USA #Colombia #Peace #Gold #Silver #Commodities #Jobs #Housing #Fraud #Bubbles #Zombies #EndTheFed #bananarepublic #FireCongress #Liberty #Leadership