Monthly Archives: April 2021

Q-1 Economic Update (May 2021)

As a result of actions taken by the previous administration, the US economy and markets performed very well in the first quarter of 2021.  The current administration, however, has already taken detrimental action that will eventually damage the US economy.  The tax hikes being proposed could cost a million jobs, the cancellation of the pipeline will cost over 8,000 jobs, raising corporate taxes and increasing regulation would cause many companies to find more business-friendly nations for their corporate headquarters and production facilities.  What legislation or parts of the spending bills will pass the Senate is still unclear.

According to CNC: “First-time claims for unemployment insurance rose more than expected last week despite other signs of healing in the jobs market, the Labor Department reported Thursday.  The declining headline unemployment rate ignores over 10 million able-bodied Americans between the ages of 25 and 54 who do not have jobs, but are not counted as unemployed because they haven’t looked for a job recently.” 

The future is looking less bright economically, but there are also all kinds of social, constitutional, and international concerns looming as well, with no clear resolution insight.  Even former Clinton appointed Treasury Secretary has criticized Biden’s economic policies. The Epoch Times reported, “Economists, including Larry Summers, the former Treasury secretary of President Bill Clinton, raised concerns earlier about President Joe Biden’s $1.9 trillion relief package and warned that excessive government spending could overheat the economy and fuel inflation.

Behind Biden’s Big Spending Plans, the Waning Sway of Economic Caution (4.29.21) WSJ

U.S. Economy Grew Robustly in First Quarter (4.29.21) WSJ

Fed Holds Interest Rates Near Zero, Expects Temporary Rise in Inflation (4.28.21)

Tax Hikes to Cause 1 Million Job Losses by 2023 (4.11.21)

Weekly Jobless Claims Higher Than Expected (4.8.21)

US Taxation & Regulation Not Business Friendly Anymore
Biden’s tax plan will not generate sufficient revenue to pay for the administration’s spending proposals.  In regard to the plan, Reuters wrote, “This bill would help foot the bill for Biden’s ambitious economic agenda. The proposal calls for increasing the top marginal income tax rate to 39.6% from 37%, the sources said this week. It would also nearly double taxes on capital gains to 39.6% for people earning more than $1 million.  That would be the highest tax rate on investment gains, which are mostly paid by the wealthiest Americans, since the 1920s. The rate has not exceeded 33.8% in the post-World War Two era.” 

The US future outlook from a taxation, cost of living and cost of doing business stand point, does not look good.  The outlook of states like California and New York and cites like NY, LA, Portland and Minneapolis are worse because of their mishandling of Covid-19 and the violent riots in 2020 and 2021.  According to a NYT article: 

No man’s life, liberty or property are safe while the Legislature is in session.”  That’s how Gideon Tucker — a New Yorker who knew Albany as a former legislator, secretary of state and judge — put it back in 1866. Yet there is something different, and especially troubling, about this time. The possibility of permanent decline and the ultimate destruction of the New York we know is unmatched in modern memory.  Socking New York’s businesses and wealthy residents with $7 billion in new taxes will likely trigger the worst exodus since the Big Apple flirted with bankruptcy in the 1970s, a huge group of major employers and small business owners warned Tuesday…, In a letter to Gov. Andrew Cuomo and the state’s legislative leaders.”

Most business periodicals give New York City a ten to thirty-year recovery timeline, if they can fully recover at all.  NY and CA are the top exit states in the nation for both businesses and population.  In fact, both states lost one representative in the US House after the 2020 Censes, while Texas and Florida each increased by their US representatives by one.

Biden to Float Historic Tax Increase on Investment Gains for The Rich (4.23.21)

What’s in Biden’s Tax Plan (4.7.21) NYT

White House Sends Mixed Message on Higher Taxes (4.11.21)

$7B in Proposed Tax Hikes Could Wreak Havoc on NY, 250 Business Leaders Warn (3.23.21) NYP

Quality of Life Plummets, Taxes Rocket & New York City Faces Doom (4.6.21)

Tax Hikes to Cause 1 Million Job Losses by 2023 (4.11.21)

NYC’s Ultra-Rich Face 52% Combined Top Income Tax Rate, Highest in U.S. (4.7.21)

Quality of Life Plummets, Taxes Rocket & New York City Faces Doom (4.6.21)

Banks & Central Banks

Most Central Banks have continued to print stimulus money and keep interest rates artificially low.  America’s central bank, the Federal Reserve, has continued in this vein as well, with the Epoch times reporting:

The Federal Reserve announced on April 28 that it would keep U.S. interest rates near zero as the pandemic “continues to weigh on the economy.” The Fed officials expect a temporary spike in inflation due to strong consumer spending as the economy continues to reopen.” The WSJ wrote, “The Fed has said it will hold rates near zero until it sees the labor market return to full employment and inflation rise to 2% and is forecast to moderately exceed that level for some time. Mr. Powell reiterated that he thinks it is highly unlikely that the Fed would raise interest rates this year and noted that most central-bank officials see rates remaining near zero through 2023. He also went on to say they expect to reduce bond purchases.”

A new area central banks are venturing into is climate control.  In the past year we have seen the judiciary politicized, and now we are seeing central banks being driven by progressive political agendas instead of economics and monetary policy.  Project Syndicate wrote:

Monetary authorities are increasingly expected to address issues such as climate change and inequality, over the objections of those who insist that central banks’ narrow mandate is what sustains their operational independence. But ignoring these issues, or saying they’re someone else’s problem, is no longer an option.  “We are used to thinking about the remit of central banks as focusing narrowly on price stability, or at most as targeting inflation while ensuring the smooth operation of the payment system. But with the global financial crisis of 2008 and now COVID-19, we have seen central banks intervening to support a growing range of markets and activities, using instruments that extend well beyond interest rates and open market operations.

This, clearly, is not your mother’s central bank.

Fed Holds Interest Rates Near Zero, Expects Temporary Rise in Inflation (4.28.21)

Powell Pledges to Maintain Easy-Money Policies Until Economy Recovers (2.24.21) WSJ

New-Model Central Banks (2.9.21)

Central Bank Will Begin Reducing Bond Purchases Well Before Raising Interest Rates, Powell Says (4.14.21)


The world is moving rapidly toward digital currency replacing paper currency.  China declared, last year, that the yuan will go digital Jan 1, 2022, just seven months from now.  Other major global currencies are preparing for that time as well.  Reuters reported:

China proposed a set of global rules for central bank digital currencies on Thursday, from how they can be used around the world to highly sensitive issues such as monitoring and information sharing.  Global central banks are looking at developing digital currencies to modernise their financial systems, ward off the threat from cryptocurrencies like bitcoin and speed up domestic and international payments. China is one of the most advanced in its effort.

Not all countries are supportive of digital currencies.  According to Reuters: “India will propose a law banning cryptocurrencies, fining anyone trading in the country or even holding such digital assets, a senior government official told Reuters in a potential blow to millions of investors piling into the red-hot asset class.  The bill, one of the world’s strictest policies against cryptocurrencies, would criminalize possession, issuance, mining, trading and transferring crypto-assets, said the official, who has direct knowledge of the plan.” 

The reason for this is the way India taxes its citizens, which is based on the amount of Indian currency they have in the bank; they can’t tax digital currency, so they’re attempting to ban it, emphasis on “attempting.”

Bloomberg sums it up this way: “The financial services industry, braced for what could be its biggest disruption in decades, is about to get an early glimpse at the Federal Reserve’s work on a new digital currency.  Banks, credit card companies and digital payments processors are nervously watching the push to create an electronic alternative to the paper bills Americans carry in their wallets, or what some call a digital dollar and others call a Fedcoin.  As soon as July, officials at the Federal Reserve Bank of Boston and the Massachusetts Institute of Technology, which have been developing prototypes for a digital dollar platform, plan to unveil their research, said James Cunha, who leads the project for the Boston Fed.  A digital currency could fundamentally change the way Americans use money, leading some financial firms to lobby the Fed and Congress to slow its creation — or at least ensure they’re not cut out.   Seeing the threat to their profits, the banks’ main trade group has told Congress a digital dollar isn’t needed, while payment companies like Visa Inc. and Mastercard Inc. are trying to work with central banks to make sure the new currencies can be used on their networks.  A U.S. digital dollar could also put the final nail in the coffin for Bitcoin as a means of exchange, Brito said. Crypto enthusiasts have already started to acknowledge that’s happening anyway, and instead tout the currency as a store of value or “digital gold.”

China may test its digital currency with foreign visitors at the 2022 Beijing Winter Olympics (4.18.21)

Federal Reserve’s Digital Dollar Push Worries Wall Street (3.22.21) Bloomberg

China Proposes Global Rules For Central Bank Digital Currencies (3.25.21) Reuters

Bitcoin Hits $60,000 in Record High (3.13.21)

India to Propose Cryptocurrency Ban, Penalizing Miners, Traders (3.21.21) Reuters

Billionaire hedge fund manager urges diversification out of the dollar (3.29.21) SMC


The new administration has spent more in its first hundred days than any other before it.  The Hill wrote, “No sooner did Biden sign the $1.9 trillion COVID relief bailout bill in March, than his administration proposed another $4 trillion of deficit spending for “infrastructure.” The Democrats are in a super rush to get this done.”  

A common misconception is that you can print your way out of a financial crisis, but every county that’s tried has failed.  Albert Einstein said “The definition of insanity is doing the same thing over and over again, but expecting different results,” and Winston Churchill said, “A nation that forgets its past has no future.”  However, the current administration doesn’t remember history, which shouldn’t surprise us, considering who is advancing this agenda.

Pelosi wants Biden infrastructure bill done by August (4.8.21)

White House Eyes Sweeping $3T Spending Proposal (3.22.21)

Some Clear Thinking on the Yesterday’s Massive Deficit Announcement (4.13.21) SMC

It Took 25 Years For Stocks To Recover Inflation Losses From the 1970s (3.14.21)) SMC

Gold & Silver

Gold, silver and precious metals have risen rapidly over the last year, and it is unlikely that trend will subside in 2021. has expressed concerns that, if the rapid rate of precious metal purchases continues, it could create shortages.  Simon Black also shared his thoughts on the rapid ascendancy of gold & silver saying, “It appears that the Federal Reserve has landed itself in this position.  In its efforts to boost the economy during the pandemic, the Fed slashed interest rates so much that the average 30-year mortgage rate for homebuyers reached an all-time low of 2.65% earlier this year.  Similarly, AAA-rated corporate bond yields reached record low 2.14% last summer.  The US government 10-year Treasury Note dropped to a record low 0.52%.  And the 28-day US government Treasury Bill rate actually turned negative for a brief period– something that has never happened before.  The effects of such cheap rates are obvious.”

LBMA acknowledges Buying Frenzy in Silver Market and silver shortage Fears (4.14.21)

Gold vs. the Stock Market (3.17.21) SMC

World Economies

Political leadership is changing globally, and in some cases, like the US and Germany, the new leadership is radically different than the old.  The leaders in three of the four largest export economies in the world Japan, Germany and the US, have changed or are about to change.  The WSJ wrote:

With Merkel retiring, surging Greens challenge German orthodoxy on debt and government spending.  A decade ago Germany’s intransigence over bailouts and borrowing prolonged the eurozone’s sovereign debt crisis, one reason the region’s economic recovery lagged behind the U.S.’s.  Another crisis, another lagging recovery for Europe, and again the size of fiscal stimulus is a factor. But Germany isn’t the obstacle it once was, and the rise of its Green Party could further push both country and continent toward the U.S. model of aggressive government stimulus.”

The WSJ also wrote that “Meeting President Biden’s goal of sharply reducing U.S. greenhouse-gas emissions by 2030 would require dramatically reshaping key sectors of the economy.  While U.S. industries are already transitioning to a lower-carbon future, Mr. Biden’s target would require companies in industries from energy to transportation to agriculture to greatly speed the pace of change.  Some segments of the economy appear to be ready. Others would face extraordinary challenges. All would face significant new costs—exactly how much is unknown—and it is unclear how much would be subsidized by government tax policies or incentives, since the Biden administration has yet to detail how it would seek to reach the aggressive new goal.” 

The current US administration is always short on details and their math leaves much to be desired.  Many nations of the world are worse off than the US however, like Zambia which just defaulted and may look to China to bail them out, the price of which will likely be their national sovereignty.

A Green Germany Could Pump Up Europe’s Fiscal Push (4.28.21)

After Default, Zambia’s Outsized Bet on Copper Could Play Into China’s Hands (4.27.21) WSJ

Biden’s Pledge to Slash Emissions Would Require Big U.S. Changes (4.23.21)

Japan’s Stock Market Finally Surpasses Its Level From 30+ Years Ago (2.15.21) SMC

Political Unrest – Especially in China

The world is still trying to find its footing in the aftermath of the restrictions and disruption caused by the CCP originated virus.  Just as with the virus they caused, the entire world is also reacting to an increasingly aggressive Chinese government that is threatening and intimidating others with economic and military actions, not to mention their severe and inhumane treatment of their citizens who profess faith in God and not the CCP.  The Epoch Times reported:

The UK and the West in general may be forced to capitulate “without a shot being fired” if they continue “ceding the strategic initiative” to rivals such as China and Russia, a senior British military commander has said.  “While we drained our strength in interventions like Iraq, others used the time and space to further their interests more strategically,” General Sir Patrick Sanders, commander of the UK’s Strategic Command, wrote in The Times of London on Saturday. … China has pursued a strategy of winning without fighting, changing the terms of the international order,” he said.”

Epoch Times also reported, “The Chinese regime is on its way to becoming a “near-peer competitor” for the United States and is the “unparalleled priority” for the country’s intelligence community, the U.S. Director of National Intelligence (DNI) said on April 14.”

China is threatening so many nations, individuals, companies, groups and organizations, that, rather than list them all, I’ve included links to articles below that you can read for yourself.  Other areas of political unrest are Iran, Chad, Egypt and Russia, however, it is becoming increasingly difficult to determine who the bad guys and good guys are in all of these situations.   France and other nations are beginning to deploy AI in their quest to monitor and identify those they see as aggressors within in their country, with the WSJ reporting, “The government of French President Emmanuel Macron aims to deploy algorithms and other technology to monitor the web-browsing of terror suspects amid growing tensions over a group of retired generals who recently warned the country was sliding toward a civil war.” 

France’s Macron Eyes Artificial Intelligence to Monitor Terrorism (4.29.21) WSJ

Strongman’s Death Spotlights Complexity of Africa’s Desert Wars (4.29.21)

U.S. Warship Fires Warning Shots in Encounter With Iranian Vessels (4.27.21) WSJ

Iranian Ships Swarmed U.S. Coast Guard Vessels in Persian Gulf, Navy Says (4.26.21) WSJ

West Faces Moment of Reckoning Over Chinese Tech Threat UK Intelligence Chief (4.23.21)

China Threat an Unparalleled Priority for US Intelligence Community (4.14.21)

Vladimir Putin Issued Stark Warning to US, NATO (4.21.21) Video 2.5 mins

Putin Warns West of Rapid & Harsh Response From Russia if it Crosses Red Lines (4.21.21) BBC News  (Video)

Beijing Accelerating Timeline for Possible Invasion of Taiwan, Expert Warns (4.4.21)

Communist China’s No. 1 Goal; India China Standoff Fall of Hong Kong (3.3.21) CPAC 2021

West Must Stop Ceding Strategic Initiative to China, Russia UK Commander (3.13.21)

US Military Official China and Russia May Be Collaborating South of US Border (3.17.21)

In closing, Simon Black wrote: “Last week I wrote to you about billionaire hedge fund manager Ray Dalio’s most recent advice for people to diversify their investments OUT of the US dollarDalio didn’t pull any punches when he laid out his analysis for America’s economic future.  He warned readers of the very real risk of stagflation (starting “late this year”) and tax increases that could be even “more shocking than expected”.  He also advised people to anticipate the possibility of capital controls and prohibitions against assets like gold and cryptocurrency.”

JP Morgan CEO Acknowledges Something has Gone Terribly Wrong in America (4.8.21) SMC

When the Lord Protector Turned Out to Be the Worst Tyrant of All (4.26.21) SMC

Digital & Cryptocurrency Basics

Bitcoin is a crypto/digital currency, its money much like paper currency and it fluctuates against other currencies, both paper and digital.  It’s a method of legal tender to whoever agrees to accept it, no different than any other currency.  There are over 7,800 crypto currencies, with Bitcoin being the most recognizable because it was the first, and in many ways, acts as the unofficial world reserve digital currency.    

Most governments have concerns about cryptocurrencies because they can’t effectively control, track or tax them, but many people consider that to be one of cryptocurrency’s most attractive features.  Peer to peer crypto transactions enable people to anonymously purchase things with no paper trail, a feature that applies to cash as well.  Crypto currency transactions made on digital exchanges which group companies, purchasers and sellers together on platforms can be regulated or banned.  Some nations such as China, Algeria, Bolivia, Morocco, Nepal, Pakistan and Vietnam have banned crypto currency exchanges, but cannot control individual/private peer to peer transactions.  In 2017, the IRS ordered Coinbase, the largest crypto currency depository\electronic wallet, to report to them the names and amounts of Bitcoin purchases over $20K.

Initially, crypto currencies were not intended to be an investment, but that is widely how the public and markets are treating them today.  When you purchase/exchange your currency into cryptocurrencies, you are getting a digital representation of a currency that has a specific value at that moment.  Digital currencies go up and down against other digital currencies, like the USD goes up and down against other paper currencies. 

Many people are interested in purchasing crypto currencies, but are uncertain about how to do it and how these currencies really work.  There are many companies and crypto brokers who hire themselves out for a fee to instruct people in how to do it.  When Bitcoin goes up it really goes up and when it goes down it really goes down.  Some people have made a lot of money purchasing it, but most have lost a lot, because, like stocks & bonds, most people have no idea what they’re doing.  A prudent investor ought not to buy what they don’t understand, because they won’t know what to buy or when to buy or sell it, may be taken advantage of or simply make a poor decisions.  Unfortunately, too many only look at the rapid gains and jump on the band wagon. 

Regardless of the volatility, crypto currencies are here to stay and corporations, the markets, the regulators, the IRS and even the banks know it.  Physical cash will eventually be replaced by digital currencies and this could happen within as little as two years.  China has said they are going digital Jan 1, 2022. The European Central Bank said they have been preparing a digital currency and will be ready to make the change at the right time. The Federal Reserve has one ready to go as well.  

There are many pros and cons to going digital for companies, global markets, banks, governments and individuals.  In a nutshell, the positive side for corporations and governments is the convenience, control and cost effectiveness, as well as making it very difficult for criminal operations like money laundering, drug and human trafficking to transact business. On the negative side, your personal anonymity would be all but eliminated, and if there was a banking and\or economic crisis, you can’t withdraw your money and bring it home. The greatest change would be that governments would now be in complete control of everyone’s money with no checks & balances or oversight; anyone could be labeled a threat at any time and have their ability to transact instantly blocked.  One way to prepare for this change could be to open your own crypto currency account, while there are few regulations.  After the change from paper to digital currency occurs, the three main ways to hold cash and transact outside your digital bank account would be gold & silver, bartering goods & services and having an alternative crypto currency account.

How do you get crypto currency?

The process of opening a crypto currency account, converting your cash into digital currency, purchasing specific cryptos and then storing them, can be somewhat complicated and cumbersome.  You have to methodically complete every step to protect your transaction.  If you’re not technically inclined, the learning curve is steep.  This is why people are willing to pay for someone to do it for them.  The first step in opening a cryptocurrency account is establishing an electronic wallet which becomes your digital depository. There are many options, but Coinbase is the largest and most widely accepted.  I am not advising anyone to buy/convert to cryptocurrency, but I have listed the basics steps below for information’s sake.

  • Go to click “Get Started” and complete account opening process
  • Once account is open, complete test deposit from your bank account, debit card or credit card (confirmation of this transaction will vary depending on your financial institution)
  • Once transaction is confirmed, repeat the process to complete your actual transfer
  • Then choose one of the digital currency options your electronic wallet offers (i.e., Bitcoin, Ethereum, Litecoin)
  • Once transfer is complete and confirmation is received, it is possible to transfer into other digital currencies or currency platforms
  • After completing your first purchase, you must place it in a “digital wallet,” which is usually a part of the digital platform company you chose
  • Only one currency may be purchased at a time, so a majority of the process must be completed each time you purchase a different crypto

You must have a smart phone or computer or you cannot complete the process.  Anyone who is not proficient on the computer and smart phone should think twice before attempting to purchase crypto currency. 

Most crypto currencies are even more fiat than paper currency, because they are not even backed by the “good faith” of a government (whatever that’s worth).  The question is: who is really in control of it?  Billions have been lost when various Bitcoin exchanges have been hacked, and because transactions are difficult to track, there was no recourse.  The exchanges claim they have fixed the problem, but that begs the question: who fixed it and how did they fix it?  It is claimed that peer to peer transactions can’t be hacked, which so far seems to be true, but there is still much uncertainty surrounding this new market.

Cryptocurrencies that have a greater technological functionality in transaction and exchange of goods and services have a greater chance of success.  The most widely used digital currencies in the U.S. to transact business are Ripple and Ethereum.

My greatest concern in regard to digital currency is how easy it makes it to shift into a national, and, ultimately, a one world currency.  Everyone would be forced to participate in this new system, but could also be blocked from it with the click of a button.  Once in place, this kind of system could destroy people’s ability to buy things privately and anonymously, as well as block individuals from transacting with others in the system.  While there are many benefits to digital currency, there are also potential dangers and unanswered questions, anyone considering participating in crypto should proceed with caution and be very well informed about what they are doing and the potential risks.