#Inflation #Stagflation #Housing #FoodPrices #Revolutions #Riots #Protests #Freedom #Liberty #Debt #Bubbles #Jobs #Gold #Silver #Commodities #Oil #USA
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The official unemployment rate is now 5.8 percent, this is according to the Bureau of Labor Statistics, BLS, as they released the jobs report this morning. For the month of May, 559,000 jobs were added to the roles. This figure was below market expectations, which was looking for a gain of 650,000. Recall that last month, analysts were looking for jobs gains near one million and fell way short of that number. The April figure was revised upward by 12,000 and now stands at 278,000. It would stand to reason that markets would be looking once again for a one million figure or close to it, considering more parts around the country have been re-opening. If one million was good enough for April, then it should have been good enough for May. This was not the case, however, and this was most likely due to the fact that analysts were so far off target in April. And not wanting to make the same mistake twice, they collectively lowered their estimates. It is a joke of an economy and it is a joke of markets. We are in a first world banana republic where the numbers seemingly do not even matter anymore. All that matters is how much central bank liquidity is being thrown into the system. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Inflation #Gold #Silver #Protests #FoodPrices #Revolution #Liberty #USA #Leadership #EndTheFed #bananarepublic #FireCongress #Bailouts #Debt #Spending
From one economic figure to the next, it is never really good enough. At least not for the Federal Reserve and other major central banks to truly begin normalizing their respective balance sheets, let alone even discuss the topic. They are concerned how tapering and/or any subsequent increase to interest rates will impact global equity, bond, and currency markets. And rightly so. The Fed attempted to taper and increase interest rates only a few short years ago and it ended with equity markets dropping nearly 20 percent in the fourth quarter of 2018. The economy and equity markets could not digest a Fed’s balance sheet below $4 trillion or the Federal Funds Rate just north of 2 percent. Fast-forward to a balance sheet near $8 trillion and the FFR at the zero bound, and you can surely see their predicament. Equity and bond prices have been able to increase over this pandemic period for one reason and one reason only and that is due to the major liquidity injections by central banks and federal government programs. Remove these items and prices are nowhere near these levels. Policymakers are trapped, they know it, and they are getting more and more nervous by the day.
Initial jobless claims came in at 385,000 for the week ending 29 May. This is the lowest figure since 14 March of 2020 when the number was 256,000. The number from last week was revised slightly lower by 1,000 to now stand at 405,000. In aggregate, some 15.4 million Americans continue to claim some form of unemployment insurance. This gives a de facto unemployment rate of 11.1 percent. The official unemployment rate is currently 6.1 percent. The May jobs report will be released tomorrow morning by the Bureau of Labor Statistics, BLS, and it will be watched closely by global markets. Analysts are looking for nearly 1 million jobs having been added to the roles for the month of May. A recent report released by ADP has stated that 978,000 private sector jobs were added in the month of May. Recall that last month, expectations were for nearly 1 million job gains for April, however, the official statistic came in at 266,000. Will May be a repeat of April or more in alignment with market forecasts?
The Federal Reserve’s balance sheet has hit another all-time and now currently stands at $7.935 trillion. This is a week-over-week increase of some $32 billion. It is somewhat laughable how the Fed stated only yesterday that they will begin to taper their holdings of corporate bonds, which amount to $14 billion. And even this is supposed to be a process that could take until the end of the year. Meanwhile, they added $32 billion to their balance sheet in one week alone! The Fed also remains committed to their QE policy of purchasing at least $120 billion per month in US Treasuries and mortgage-backed securities. M1 and M2 money stock has also been updated and both currently stand at all-time highs, as of April. Coming in at $18.935 trillion and $20.109 trillion, respectively, really puts things into perspective, especially when considering that M1 was at $4 trillion prior to the pandemic and M2 was at $15.5 trillion. So what exactly did we get for all of this funny money? Because we can assure you that this is no free lunch. Jay Powell, Chair of the Fed is expected to speak tomorrow. Most likely this will be some form of damage control for the jobs report whether the number is good looking or ugly. These markets need continued hand-holding in order to grind higher. Talk about a command and control economy. Land of the free, eh? Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Inflation #FoodPrices #Gold #Silver #Protests #Riots #Liberty #USA #Leadership #Revolutions #EndTheFed #bananarepublic #FireCongress #Jobs #Bailouts #Debt
With politicians and central bankers attempting to solve or alleviate the impact from the pandemic, they are in actuality making the problem worse. This is because one cannot expect to solve a global debt crisis by adding record amounts of debt onto the system. Furthermore, the massive printing press operation that is being conducted globally does not translate into productivity. Rather, it translates into inflation, which is an increase in the money supply. Sure, printing presses can print currency, but they cannot print productivity, jobs, or innovation. Yet, what will result from all of this, and it is already being felt across the world, are higher prices. Whether it is in energy, commodities, food, housing, transportation, medical expenses, or more, prices are moving up and will likely stay there for some time. The Kapital News believes that we will be entering a period of structural inflation – meaning that the effects of inflation, higher prices, will be sustained due to central bank and federal government policies, supply-chain disruptions, and geopolitical events.
In fact, much of this is already well underway and many smaller nations are suffering from high rates of inflation. This will lead, if it has not already, to political fallout, protests, riots, conflicts, and revolutions. These events will likely first take root in weaker economies, but will make their way to more developed and diversified economies as well. Inflationary policies can greatly distort reality whereby people think that rising asset prices means that there is a strong underlying economy causing such price movements. However, nothing could be further from the truth. It is not a growing economy that is leading to such price increases, but rather a growing money supply. Another way of looking at it, is to say that it is a weakening currency or a devaluing of the US dollar that is causing prices to rise. Meaning it takes more dollars to purchase the same amount of goods because those dollars have been devalued. This does not occur in a strong economy, but rather a weak one.
If one wants to look at some of the distortionary effects of these policies, then look no further than US retail sales. The trend line has been completely decimated. It can be understood when looking at this data series that there would be a downward deviation to retail sales during the GFC and during the pandemic. However, there is a notable difference when comparing these two time periods. In the former, during the GFC, retail sales peaked in late 2007 and did not recover to that peek until early 2011. This makes intuitive sense that it would take awhile to regain the previous trend. Yet, when we review the pandemic, we see a massive drop-off in retail sales, which makes sense given the lockdowns and restrictions. However, we see a huge V-shaped recovery back to where retail sales were prior to the pandemic in only a few short months, and beyond this, we now see retail sales well above the previous trend. In fact, even if we were to remove the GFC and pandemic deviations, we would likely still not be at the high levels we are currently witnessing. Peak sales prior to the pandemic were around $525 billion in early 2020. In March, the most recent data point, now stands at $620 billion. What this data series suggests is that a couple to a few years’ worth of spending has been pulled forward to today! This is all thanks to Uncle Sam spending money that we do not have and the Federal Reserve printing up the money out of thin air like some 3rd world banana republic. In essence, future growth and prosperity has been stolen from the future in order to make today look better than what it actually is. This is the moral of the story on how debt distorts reality. This is completely unsustainable and when the bottom falls out, it will cause tremendous amounts of damage across the spectrum and around the globe.
Initial jobless claims for the week ending 22 May came in at 406,000. This is the lowest figure since the pandemic began and is a continuation of trend with falling claims figures. The prior week saw no change, thus remaining at 466,000. The Pandemic Unemployment Assistance program saw 93,000 filing, thus taking the total to just shy of 500,000. In aggregate, some 15.8 million Americans continue to claim some form of unemployment insurance. This gives us a de facto unemployment rate of 11.4 percent. The official unemployment rate stands at 6.1 percent. The May jobs report will be released on the first Friday in June. The Federal Reserve’s balance sheet came down by $19 billion and now stands at $7.903 trillion. The Fed remains committed to their QE policy whereby they are purchasing at least $120 billion per month in US Treasuries and mortgage-backed securities. Their balance sheet is likely to make new all-time highs on a near weekly basis. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Inflation #Jobs #Gold #Silver #FoodPrices #Housing #Debt #Bailouts #Protests #Liberty #USA #Revolution #EndTheFed #bananarepublic #FireCongress #Spending #Commodities
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
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
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
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