It is a central banker’s world and we are the lucky ones to be living in it (sarcasm). If you find yourself reading an article on a particular central banker or central bank then you will know all too well how these figures and institutions are praised as opposed to scrutinized. You will also notice a trend of these figures gaining more power in politics. Janet Yellen for one, was the former Chair of the Federal Reserve, and is now the Treasury Secretary. And with the collapsing government coalition in Italy, the Italian President is tapping the shoulder of Mario Draghi, the former President of the European Central Bank for assistance. If Mr. Draghi’s efforts are successful in pulling together a coalition, then he may very well find himself as the next Prime Minister of Italy.
Last week we highlighted the meetings at the World Economic Forum and talks of “The Great Reset.” We also highlighted the global economic projections by the IMF. Is it just coincidental that the same people who are invited to the WEF and serve as members on panel discussions and as keynote speakers, are also people in positions of power to move these types of agendas forward? The recent market volatility has of course caught the attention of politicians and regulators alike and we can be all but certain that more laws and regulations will be placed on the markets and the people. Recent market activity and movements on social media platforms were not organic. Rather, these were sinister ploys to achieving an end – and we are going to find out soon what that is. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Markets #Liberty #EndTheFed #Revolution #Debt #Inflation #bananarepublic #Gold #Silver #USA #Protests
Myanmar, India, and Russia, oh my! To all of those out there who were ecstatic to see 2020 come to and end and to usher in 2021 – be careful what you wish for. This weekend saw protests in Russia, and India, and a military coup take place in Myanmar. The Myanmar military has seized power, and declared a state of emergency that will last at least one year until new elections are held. This is a fluid situation and major countries and the United Nations are condemning the actions of the military. The cause for the coup was none other than allegations of election fraud in Myanmar’s November elections. Doesn’t this story sound familiar?
In India, farmers from across the country marched and drove their tractors to the capital of New Delhi. This is on the back of new legislation whereby farmers believe that their land will be devalued and they will no longer be able to receive higher guaranteed prices for their goods from the government market. Instead, they will have to trade in the open market and fear corporations will hurt them with respect to prices. Despite the recent growth in India, a significant portion of the population still relies on agriculture for their livelihood.
In Russia, for the second consecutive weekend, protesters took to the streets. Some 5,300 protesters were arrested nationwide. While most were released later that day, this shows the scope of these protests and their movement. Much of this stems from anti-corruption protester, Aleksei Navalny, who was poisoned last year and spent weeks in a German hospital. Navalny returned to Russia, despite the attempt on his life. Upon his arrival to Russia, Navalny was arrested and sentenced to 30 days. Protesters are calling for his release. Meanwhile, the Kremlin is calling for strict punishments, most likely to send a message to current and future protesters. At this juncture, strong-handedness may very well serve to increase tensions and prolong the protests.
The geopolitical climate is hot and most financial markets are not factoring in the slightest of wrong moves that could trigger several eruptions worldwide. In a global economy that remains on shaky ground, any political instability will simply add to the uncertainties, cause further supply disruptions, thus contributing to higher costs for goods and services, at a time when millions around the world are unemployed. This scenario in and of itself can likely lead to further political instability as costs rise, wages drop, jobs are lost, and people cannot find recourse in their countries and within their governments they will likely protest and seek change. 2020 was just the appetizer. Will 2021 be the main course, or just another appetizer for what is to come? Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Protests #Revolution #Markets #Peace #Liberty #USA #Russia #India #Myanmar #Inflation #Gold #Silver #bananarepublic #EndTheFed #FireCongress #Debt #Recession #Depression #Jobs
Another wild week in politics and the markets as the “GameStop” et al frenzy continues onward. Yesterday, the Department of Labor informed us that another 847,000 Americans filed for initial jobless claims during the prior week. There was also an upward revision to last week’s figures, which now stands at 914,000. All in for all programs gives us nearly 18.3 million Americans claiming benefits. Roughly speaking, this translates into an unemployment rate of nearly 13 percent, which is much higher than the official stats. A slight decrease was witnessed with respect to the Federal Reserve’s balance sheet and M1 money stock, both of which hit record highs last week. However, M2 money stock continued its ascent and hit a new all-time high at $19.56 trillion. The Fed concluded their first FOMC meeting of the year and remain on guard to do what it takes to lend support to the economy. The Fed continues to make calls for further fiscal policy measures from the Congress and is an advocate for everyone getting vaccinated against Covid-19. Despite the dovish stance from the Fed, the markets suffered their worst week since October. This may very well be a typical market correction in the making, which is usually defined as a drop in prices from recent highs of 10 percent. Or, perhaps this is the start of a bigger sell-off. Time will tell, but on a valuations front, the stock market is at or near all-time highs across several metrics. Earlier discussion this week focused on “The Great Reset” and the IMF’s world economic outlook, so be sure to check out those podcasts as well. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Markets #Fraud #Jobs #Liberty #Revolution #Justice #Inflation #Gold #Silver #USA #Debt #EndTheFed #bananarepublic #FireCongress
With the continued market frenzy and pandemonium occurring again today in the likes of GameStop, Bed, Bath, and Beyond, AMC Entertainment, and BlackBerry, it is time to step back and gain a better understanding as to what is really going on. The media and social media narrative is that a bunch of “little guys” on message boards are banding together to take down the “big guys” (a couple hedge funds). While the narrative plays very well and there is no doubt that there are separate rules between the smalls and the bigs, this does not mean that two wrongs make a right. The Kapital News discusses on a near daily basis the amount of market rigging and manipulation that takes place and talk about all of the fines and deferred prosecution agreements that are given to the major banks whom engaged in such fraud. Of course if anyone else engaged in such behavior, they would be locked up and they would throw away the key. So, this makes the narrative compelling and allows people to justify the current actions that are underway with respect to these stocks. An eye for an eye is not the solution. In fact, this is likely going to cause more short and long-term damage to the markets and society at large.
What is failing to be understood by many on these message boards, is that going after a hedge fund, does not mean that they are only going to do financial damage to the managers alone. What they fail to grasp, is the fact that these funds on many occasions are managing money for the little guy through pension funds, university endowments, hospital chains, non-profits, and charities et cetera. There is going to be collateral damage and the group mostly likely to the suffer the greatest losses is ironically going to be the little guys.
The Kapital News is gravely concerned with these actions on both sides of the trade as well as with the brokerage houses that halted trading on these stocks today with respect to the buy side. This seems more likely that this is a pump and dump scheme, which is illegal, as opposed to some sort of organic uprising of new day-traders against hedge funds. Unfortunately, most of these little guys, do not understand financial statements and fundamental analysis. So how is one to believe that all of a sudden they go after a company that is heavily shorted by a couple of hedge funds, and prove somewhat successful in hurting the hedge funds’ position – at least momentarily? Furthermore, what does not pass the smell test is the fact that we have some strange bedfellows in Congress right now with the likes of AOC, Ted Cruz, Elizabeth Warren, and Maxine Waters joining forces to investigate what is going on in this matter.
So let us understand something, for years there has been open and blatant market manipulation, tweets from the former President, massive amounts of money printing from the Federal Reserve and spending from the Congress juicing asset prices, deferred prosecution agreements being handed out like candy to the largest financial firms on the planet, and now all of a sudden these politicians are concerned with market manipulation? This does not pass the smell test. Something is afoot. The Kapital News suspects that there will be a concerted effort in Congress to clamp down further on the markets. This will likely pertain to financial institutions as well as to the individual investor. So be careful what you wish for, because this is not just a story about David v Goliath. Oh no, there is much more underway and it is not going to be for the best. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Fraud #Markets #Debt #Liberty #EndTheFed #USA #Revolution #Justice #Inflation #Gold #Silver #bananarepublic #FireCongress
The Federal Reserve concluded their first FOMC meeting of the year and they kept the Fed Funds Rate unchanged at 0-25 basis points. This was in line with market expectations. However, the markets were more centrally focused on forward guidance coming from the Fed. During his afternoon press conference, Fed Chairman, Jay Powell, gave another horrendous performance. It is typical for him to dodge some of the tougher questions, but today he even did a run around with respect to the softball inquiries.
Furthermore, as far as The Kapital News is concerned, Mr. Powell admitted today that the Fed is trapped and out of ammunition. He was citing how asset prices have been rising recently due to the optimism surrounding the vaccine rollout and future rounds of fiscal spending. This is ridiculous. While these news headlines on these topics may help contribute to the rise in asset prices, the main culprit is the printing press and global liquidity. It was only recently in previous conferences that Mr. Powell readily admitted that asset prices were rising due to monetary policies. In fact, when quantitative easing, QE, was first unleashed onto the scene, it was open knowledge that its purpose was to juice asset prices in order to generate a wealth effect.
Therefore, one can conclude that the reason for the change in tune, is for the purpose of damage control. If stocks no longer keep climbing, then it must be because the vaccine does not work and/or the Congress cannot get its act together. Setting up a convenient excuse that it is not the Fed’s fault, but something else. While it is true that the printing press can print US dollars, it cannot print jobs, solvency, and sustainable business plans. If printing money was the cure, then the likes of Venezuela, Argentina, Zimbabwe, Turkey, and Iran would be the kings of the hill. But they are not. And the reason, is because printing money does not create wealth as it is not true production. This is a morphine high, and once it wears off, the pain is going to be excruciating. A prime example of this as of late pertains to the meteoric rise in the share price of GameStop and AMC Theaters. This type of behavior does not happen in a well functioning market. These are not the first two stocks that this has happened to and they are likely not the last either. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Debt #Liberty #USA #Inflation #Markets #Gold #Silver #Recession #Depression #Revolution #bananarepublic #EndTheFed #FireCongress
The International Monetary Fund (IMF), released their world economic outlook (WEO), report and are predicting global GDP growth for 2021 at 5.5 percent. This is slightly higher than their previous forecast. Most of the increase is due to the optimism surrounding the release and adoption of the Covid-19 vaccines. While the report does highlight other concerns and uncertainties, the IMF is apparently giving more weight to the potential positive outcomes.
The IMF has been and remains a strong vocal advocate for a collective and coordinated global effort to adopt “stimulus” spending. Of course, from a basic mathematical approach, GDP is calculated by adding government spending, investment, consumption, and net exports. If government spending increases exponentially, which has been the case in many countries, then GDP will either rise or at least not decline as severely as it otherwise would have minus the spending measures. What this does not take into consideration, however, is that debt does not equal growth. In fact, in many countries, the added debt loads will become a net-net drag to real economic growth. The US for example is currently running a $28 trillion national debt. At current rates, this number will balloon to over $49 trillion just four years from now! Meanwhile, GDP is only expected to increase by some $3 trillion. This is a debt-to-growth ratio of 7-to-1! This is completely irrational and unsustainable, yet this is what is happening. Furthermore, most of this additional spending is taking the form of transfer payments as opposed to prudent long-term investments. This is just asking for a major inflationary event to occur – and The Kapital News would argue that it is already well underway.
Later this week, we will be discussing the Federal Reserve’s FOMC meeting and their decisions; initial jobless claims, updates to the Fed’s balance sheet, M1 and M2 money stock; and a continuation of our conversations with respect to “The Great Reset,” the IMF’s outlook, and perhaps, China’s President Xi mentioning a new cold war. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #IMF #Debt #Bailouts #Liberty #Revolution #bananarepublic #USA #EndTheFed #Jobs #Inflation #FireCongress
Something tells us that we will be seeing “The Great Reset,” more and more over the coming months as 2021 is now underway. It is something that has been discussed since last year during the pandemic and is becoming more mainstream by the day. The theme of this year’s World Economic Forum summit, in Davos, Switzerland, is The Great Reset and it reads like another utopia. While it is big on bullet points and general ideas, it is short on details. However, the devil is in the details and The Kapital News is concerned that the same people who led us into this economic, political, and social quagmire, are not the ones fit to get us out of it and to rebuild from it. Even within the article(s) we cover during today’s discussion, there are contradictions as to what the “right” policies should look like. These contradictions and hypocrisies will become the common theme amongst these “ideas” and the people advocating on their behalf. So in short, it is nothing new.
Another key phrase that is likely to gain some traction is “stakeholder capitalism.” While this too may sound good on paper, it is really nothing more than an attempt to centrally plan and control governments, economies, societies, and the environment. The author and authors of The Great Reset fail to understand, as so many do, that if what they say and write is really what they want, then they should know there is already a system that can achieve such growth, innovation, opportunity, and collaboration, and it is called free-market capitalism! Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Liberty #Markets #USA #Revolution #Inflation #Recession #Depression #Gold #Silver #Jobs #EndTheFed #bananarepublic #FireCongress
An outgoing Trump administration, an incoming Biden administration, executive orders, another 900k Americans file jobless claims, all-time highs hit in the markets, the Fed’s balance sheet, and in M1 and M2 money stock. We also learned that the impeachment process will be continuing, however, there will be a slight delay as it will not begin until the week of 8 February. Just because there is a new administration in office, does not mean that all of the political division has gone away or that it will go away. Most likely, it will be quite the contrary. There will be more spending, more money printing, and more politics to be played. The end result is a declining nation that is going the way of a banana republic. The solution is freedom and the restoration of our constitution and free-market capitalism. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Liberty #Jobs #Markets #FireCongress #bananarepublic #EndTheFed #Inflation #Gold #Silver #Debt #Bailouts #Protests #USA #Recession #Depression #Revolution
Another week and another 900,000 Americans filed an initial jobless claim for the week ending 16 January. This puts that prior two initial claims reports at 900k and above. For context, during the depths of the GFC, claims peaked around 660k. We have not seen a number in the 600k range, since last year when the pandemic led restrictions were put into place. This is a major structural problem with respect to the jobs markets and will take years to work itself out. There will be behavioral and spending changes once the economy is “re-opened.” In turn, this will affect the economy and old correlations may break down and new correlations and patterns established.
It is difficult to believe that with so much uncertainty that remains, that the markets are accurately capturing all of this as reflected in current prices. With respect to US equity markets, we are witnessing one valuation method after the next that is in the 95th to 99th percentile. These are ranges not scene since 1929 and the “Roaring 20’s,” the dot-com era, and in the lead up to the GFC. Some metrics are even at all-time highs. And another tidbit of information that came across the wires today is that insiders, such as CEOs, are selling their company shares at an all-time high rate, meanwhile, retail investors have never been so bullish. Something tells us that this is not going to end well. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Liberty #Revolution #Inflation #Gold #Silver #Recession #Depression #EndTheFed #bananarepublic #USA
Joe Biden became the 46th President of the United States of America as he was sworn into office this afternoon by Chief Justice, John Roberts. Kamala Harris was also sworn in as the Vice President, becoming the first woman, black and Asian American to become the VP. So whatever your political leanings and thoughts are of VP Harris, this was nonetheless an historic day on those fronts.
President Biden struck the right cord, tone, and balance in his speech today. This is typically the case for any incoming President as this is the first message to the nation as the new Commander-in-Chief. It is an all hands on deck effort to craft and deliver an inspirational and memorable address to the country. While words may motivate, it is action that ultimately counts. This is where reality meets optimism. This country has been and is torn apart for a number of reasons that The Kapital News discusses on a daily basis. So it is difficult to believe that the same cast and crew of yesteryear who are partially responsible for such decay, decline, and calamity, are now somehow going to be the people to rectify and structurally reform our economic and political systems.
We know well the math behind our fiscal situation and we know the trends and trajectory. And what we have already heard from the new Biden administration, is more of the same policies that are all but guaranteed to make matters even worse. This is true, especially with respect to the middle class and lower wage earners. We will soon witness and be in the midst of the largest transfer of wealth in human history – surpassing the one we experienced following the GFC and the one we are going through now. While we do not wish the new administration any ill-will, we do however, wish that they would change course and restore our constitution and free-market capitalism. Stay diversified, stay vigilant, and stay with The Kapital News. #Biden #Trump #USA #Liberty #USA #Revolution #Leadership #FireCongress #Economy #Inflation #Gold #Silver #EndTheFed #bananarepublic
